Shares of Guidewire (GWRE) soared 7.28% in after-hours trading on Tuesday following the company's release of its third-quarter fiscal year 2025 financial results, which significantly exceeded analyst expectations.

The software provider for the insurance industry reported adjusted earnings per share of $0.88, handily beating the Wall Street estimate of $0.46. Revenue for the quarter came in at $293.5 million, surpassing the expected $284.4 million. This performance represents a substantial improvement from the same quarter last year when the company reported earnings of $0.26 per share.

Guidewire's strong showing was underpinned by record Q3 sales activity, including 17 cloud deals. The company's CEO highlighted the growing adoption of Guidewire's cloud solutions among insurers, demonstrating the firm's strong market position in the evolving insurance technology landscape.

Adding to investor optimism, Guidewire provided an upbeat outlook for both the fourth quarter and the full fiscal year 2025. The company projected Q4 total revenue between $332 million and $340 million, aligning with analyst expectations. For the full year, Guidewire anticipates total revenue in the range of $1,178 million to $1,186 million, surpassing the current FactSet analyst consensus of $1.17 billion.

The combination of strong quarterly results, continued cloud adoption, and positive forward guidance appears to have boosted investor confidence, driving the significant after-hours stock price increase. As Guidewire continues to demonstrate its ability to execute in the competitive insurtech space, investors will be watching closely to see if this momentum can be maintained in the coming quarters.