Guidewire Software, Inc. (NYSE:GWRE) Q4 2020 Earnings Conference Call - Final Transcript
Sep 02, 2020 • 05:00 pm ET
still working from home and not traveling. The company continues to operate effectively, as you will see in our product and sales momentum in Q4. One of the positives I've personally experienced is that social norms now allow me to connect with customers virtually a lot more than I might have before using airplanes and hotels. This has given me an opportunity to do almost 50 checkpoints with insurance technologies executives across our customer base and around the world. These conversations even more than the objective measures of our progress in Q4 have validated to me that we are on the right path. As we execute on our product vision for Guidewire as a cloud service, I believe it's just a matter of time before each customer makes the decision to upgrade to Guidewire Cloud. So while I was excited when I joined a year ago, I'd say, I'm feeling much more confident now that we are on the right path.
Turning to our financial results, we ended fiscal 2020 beating our guidance for revenue and profitability with ARR finishing the year at $514 million. Driving this performance was very strong momentum in Guidewire Cloud products with 10 InsuranceSuite Cloud deals and three InsuranceNow deals closed in Q4, combined with sales of on-premise add-ons, expansions and new sales that exceeded our expectations. Subscription revenue grew 84% to $120 million in the fiscal year, and we are positioned well for subscription growth into fiscal 2021. We were pleased to see customers and prospects transact in a meaningful way in Q4, despite a degree of uncertainty due to COVID. Overall, the insurance industry remains a strong market and continues to be focused on the digital transformation projects that drive our business. We are in a great position to be the technology and cloud platform leader that powers the P&C industry's digital transformation for decades to come, as we extend our leadership position and transition the industry to our cloud platform.
Last quarter, I mentioned that we were poised to release Aspen, our first cloud-optimized product release for InsuranceSuite. In June, we did exactly that with a virtual public launch attended by more than 1,500 people. Aspen unifies digital analytics, AI and our core transaction system into one platform delivered as a cloud service. Aspen introduced our cloud services architecture featuring new cloud-native services for rating and business rules, and a new cloud data pipeline, which provides access to core system data in real time. It's truly the next-generation P&C cloud platform.
We've already seen existing Guidewire Cloud customers upgrade to Aspen with EMC completing the first stage of their upgrade to Aspen in only a week. USAA and American Family have started their Aspen implementations. Aspen is already contributing to our momentum of cloud upgrades and new customer adoption with 10 customers selecting InsuranceSuite Cloud in the fourth quarter. This brings the total number of InsuranceSuite Cloud customers to 26, doubling since the end of last year. InsuranceNow, our full suite cloud