Company Overview
| Company Name |
GUIDEWIRE SOFTWARE, INC. |
| Company Address |
1001 E. HILLSDALE BOULEVARD
FOSTER CITY, CA 94404 |
| Company Phone |
650-357-9100 |
| Company Website |
www.guidewire.com |
| CEO |
Marcus S. Ryu |
| Employees (as of 10/31/2011) |
684 |
| State of Inc |
DE |
| Fiscal Year End |
7/31 |
| Status |
Priced (1/25/2012) |
| Proposed Symbol |
GWRE |
| Exchange |
New York Stock Exchange |
| Share Price |
$13.00 |
| Shares Offered |
8,850,000 |
| Offer Amount |
$115,050,000.00 |
| Total Expenses |
$4,000,000.00 |
| Shares Over Alloted |
0 |
| Shareholder Shares Offered |
-- |
| Shares Outstanding |
48,892,951 |
| Lockup Period (days) |
180 |
| Lockup Expiration |
7/23/2012 |
| Quiet Period Expiration |
3/5/2012 |
| CIK |
0001528396 |
We estimate that the net proceeds from our sale of 8,850,000 shares of common
stock in this offering at an initial public offering price of $13.00 per
share, and after deducting underwriting discounts and commissions and
estimated offering expenses, will be approximately $103.0 million, or $119.0
million if the underwriters’ over-allotment option is exercised in full.
The principal purposes of this offering are to create a public market for our
common stock and to facilitate our access to public equity markets, as well
as to obtain additional capital. Except as set forth in this section, we
have no specific plans as to the use of a specific portion of the proceeds
of this offering. However, we anticipate that we will use the net proceeds
of this offering primarily for general corporate purposes, including working
capital. We also intend to use certain of the net proceeds to satisfy tax
withholding obligations related to the vesting of RSUs held by current or
former employees, which will begin to vest 180 days after the completion of
this offering. We do not currently know the amount of net proceeds that will
be used to satisfy these tax withholding obligations because it will be
dependent on a number of factors, including our stock price on the date of
vesting and the number of shares underlying RSUs that vest on such date. At
the initial public offering price of $13.00 per share, 1,210,702 shares
underlying RSUs vesting on such date and the statutory minimum income tax
rate for our employees, we would use $5.6 million to satisfy these tax
withholding obligations. A $1.00 increase (decrease) in the assumed price of
our common stock on the date of vesting would increase (decrease) the amount
we would be required to pay to satisfy these tax withholding obligations by
$0.4 million.
In addition, we may use a portion of the net proceeds to acquire or invest
in complementary companies, product lines, products or technologies. However,
we have no understandings or agreements with respect to any such acquisition
or investment.
Pending their use, we plan to invest our net proceeds from this offering in
short-term, interest-bearing obligations, investment-grade instruments,
certificates of deposit, or direct or guaranteed obligations of the U.S.
government.
The market to provide core system software to the P&C insurance industry is
highly competitive and fragmented. This market is subject to changing
technology, shifting client needs and introductions of new products and
services. Our competitors vary in size and in the breadth and scope of the
products and services offered. Our current principal competitors include:
Internally developed Many large insurance companies have sufficient IT
software . . . . resources to maintain and augment their own
proprietary internal systems, or consider
developing new custom systems;
IT services firms . . . Firms such as Accenture, Computer Sciences
Corporation, MajescoMastek and Tata Consultancy
Services Limited offer software and systems or
develop custom, proprietary solutions for the P&C
insurance industry;
P&C insurance software Vendors such as AQS, Inc., Duck Creek Technologies
vendors . . . (recently acquired by Accenture), OneShield, Inc.
and StoneRiver, Inc. provide software solutions that
are specifically designed to meet the needs of P&C
insurance carriers; and
Horizontal software Vendors such as Oracle Corporation, Pegasystems
vendors . . . . . Inc. and SAP AG offer software that can be
customized to address the needs of P&C insurance
carriers.
The principal competitive factors in our industry include total cost of
ownership, product functionality, flexibility and performance, customer
references and in-depth knowledge of the P&C insurance industry. We believe
that we compete favorably with our competitors on the basis of each of these
factors. However, many of our current or potential competitors have greater
financial and other resources, greater name recognition and longer operating
histories than we do.
Company Description
Guidewire Software is a leading provider of core system software to the global
property and casualty, or P&C, insurance industry. Our solutions serve as the
transactional systems-of-record for, and enable the key functions of, a P&C
insurance carrier’s business: underwriting and policy
administration, claims
management and billing. Since our inception, our mission has been to empower
P&C insurance carriers to transform and improve their businesses by replacing
their legacy core systems with our innovative modern software platform.
We have developed an integrated suite of highly configurable applications
that are delivered through a web-based interface and can be deployed either
on-premise or in cloud environments. A key advantage of our architecture
over that of legacy core systems is that our solutions enable extensive
configurability of business rules, workflows and user interfaces without
modification of the underlying code base, allowing customers to easily make
changes in response to specific, evolving business needs. Our Guidewire
InsuranceSuite includes Guidewire PolicyCenter, Guidewire ClaimCenter and
Guidewire BillingCenter applications, which enable a broad range of core P&C
insurance operations. According to Gartner, Inc., as of January 2011,
ClaimCenter, our first application, is the P&C insurance industry’s most
widely used web-based claims system.
Strong customer relationships are a key component of our success given the
long-term nature of our contracts and the importance of customer references
for new sales. Our customers range from some of the largest global insurance
carriers or their subsidiaries such as Tokio Marine & Nichido Fire Insurance
Co., Ltd. and Zurich Financial Services Group Ltd. to national carriers such
as Nationwide Mutual Insurance Company to regional carriers such as AAA
affiliates. As of October 31, 2011, we had 103 customers.
We primarily generate software license revenues through annual license fees
that recur during the multi-year term of a customer’s contract. The average
initial length of our contracts is approximately five years, and these
contracts are renewable on an annual or multi-year basis. We typically bill
our customers for license and maintenance fees annually in advance. We
primarily derive our service revenues from implementation and training
services performed for our customers. A significant majority of services are
billed on a time and materials basis and recognized as revenues upon delivery
of the services. We generated revenues of $144.7 million and $172.5 million
in fiscal years 2010 and 2011, respectively, and $52.4 million for the three
months ended October 31, 2011. We generated net income of $15.5 million and
$35.6 million in fiscal years 2010 and 2011, respectively, including a benefit
of $27.2 million related to the release of a significant portion of our tax
valuation allowance during fiscal year 2011, and $4.8 million for the three
months ended October 31, 2011.
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We were incorporated in Delaware in 2001. Our principal executive offices
are located at 2211 Bridgepointe Parkway, San Mateo, California 94404,
and our telephone number is (650) 357-9100. Our website address is
www.guidewire.com.