Guidewire Software Inc. grew revenue and concluded a major acquisition in its 2017 fiscal third quarter, but losses spiked.

The California-based insurance software operation booked more than $1.8 million in net losses during the quarter ending April 30, results that equated to minus-$0.02 cents per share. That compares to a $404,000 net loss over the same period a year ago, or about minus-$0.01 per share.

Guidewire’s licensing and other revenue surpassed $58.9 million during the quarter, up from nearly $45.8 million in the same year-ago-quarter. Its research and development spending surpassed $34 million in Q3, versus $29.27 million in the 2016 fiscal third quarter.

Net cash, equivalents and investments on hand surpassed $591 million, compared to $735.8 million in the 2016 fiscal third quarter. Guidewire attributed the change to $154.1 million in cash used to acquire ISCS, and $33.5 million that fueled its acquisition of FirstBest.

Guidewire announced plans to buy FirstBest last August, a move it said helps boost its capacity to serve property/casualty insurers focused on complex commercial risks. FirstBest produced an underwriting management system for P/C insurers. In February, Guidewire completed a $160 million acquisition of ISCS, a cloud computing technology outfit focused on areas including policy administration, underwriting, claims, billing, business intelligence, reinsurance and mobile products.

Guidewire’s full 2017 fiscal-year outlook includes a projection of between $499 million and $503 million in revenue, which includes between $258 million and $262 million in license and other revenue. Maintenance revenue projections for the year range between $67.5 million and $68.5 million.

Guidewire also projects it will end its fiscal year with a small profit, of between $3.4 million and $5.5 million in net income.

As well, Guidewire said it will continue to target term license revenue growth of 20 percent or higher for the current fiscal year.

In a statement, Guidwire CEO Marcus Ryu noted milestones during Q3 including going live with the first cloud-based launch of its InsuranceSuite system in May. The company, he added, has also advanced the delivery of its software as a cloud-based product with the sale of InsuranceNow, its all-in-one cloud-based system.

Source: Guidewire Software