Key Highlights

  • Guidewire agreed to acquire hyperexponential (hx) for $1.7 billion in cash plus up to $400 million of contingent consideration.
  • The company will fund the deal with $1.0 billion of new term Loan financing plus existing cash, with completion expected in the second quarter of fiscal 2027.
  • Fiscal 2026 Revenue was $1,475.4 million, up 23%, and ARR was $1,237 million.

The deal announced on 27 October

Guidewire Software, Inc. (NYSE:GWRE) announced on 27 October 2026 a definitive agreement to acquire Hyperexponential Ltd, known as hx, a London-based provider of AI-native Underwriting and pricing software for commercial property and casualty insurers. The base price is $1.7 billion in cash, subject to adjustments, plus up to $400 million of contingent consideration tied to specified Recurring Revenue targets.

The company said it will fund the purchase with $1.0 billion of new term loan financing plus existing cash, and that Bank of America and Citibank have provided a binding Debt commitment. Completion is expected in the second quarter of its fiscal 2027. The announcement cautioned that the deal may not close on time or at all.

Strategic rationale and guidance effect

Guidewire said hx's platform covers submission triage, risk assessment, pricing, rating and portfolio steering, and has supported underwriting decisions for more than $75 billion of annual commercial premium. It described the deal as a step towards agentic underwriting, in which AI agents work alongside underwriters and actuaries.

Guidewire expects at least 650 basis points of inorganic fiscal 2027 annual recurring revenue growth, followed by at least 150 basis points of durable organic ARR growth from fiscal 2028. There is no expected effect on first-quarter guidance, and full-year guidance will be updated in December.

Latest reported results

The Acquisition follows fourth-quarter and fiscal 2026 results published on 3 September 2026 for the year ended 31 July. Annual revenue was $1,475.4 million, up 23%, with subscription and support revenue up 33% to $970.9 million. ARR was $1,237 million, up 19% in constant currency. GAAP Operating Income was $149.9 million and free Cash Flow $358.7 million.

Fourth-quarter revenue rose 15% to $411.1 million, while licence revenue fell 18%. GAAP Net Income was $31.4 million, or $0.38 per diluted share, down from $52.0 million as foreign currency losses of $24.0 million weighed on the quarter. For the full year, licence revenue of $234.6 million fell 7% and services revenue of $269.9 million rose 23%.

Guidance and balance sheet

For fiscal 2027, management guided to ending ARR of $1,450 million to $1,460 million, total revenue of $1,707 million to $1,727 million, non-GAAP operating income of $403 million to $423 million and Operating Cash Flow of $445 million to $465 million. For the first quarter it guided to revenue of $372 million to $378 million. These ranges pre-date the acquisition and are forecasts, not results.

Cash, cash equivalents and investments were $1,215.3 million at 31 July 2026, down from $1,483.2 million a year earlier, mainly because the company repurchased shares worth $606.3 million. A $1.7 billion base price exceeds that cash balance, which is consistent with the new borrowing.

What to watch

An investor call was scheduled for 27 October at 8:30 a.m. Eastern Time. Points to follow include regulatory and closing progress, any approvals the announcement did not specify, the interest cost of the new term loan, integration progress, and December's updated full-year guidance.