Guidewire (GWRE) shares jumped 11.64% in pre-market trading on Wednesday following the company's impressive third-quarter fiscal 2025 results and raised full-year guidance. The insurance software provider demonstrated strong momentum in its cloud business and record sales activity, instilling confidence in investors and analysts alike.

The company reported total revenue of $294 million for Q3, representing a 22% year-over-year increase. Subscription and support revenue, a key metric for Guidewire's cloud transition, grew by 32% to $182 million. Annual Recurring Revenue (ARR) reached $960 million, surpassing expectations and prompting management to raise its full-year ARR outlook to between $1.012 billion and $1.022 billion, indicating 17-18% year-over-year growth.

Guidewire's CEO, Mike Rosenbaum, highlighted the company's record Q3 performance, noting significant cloud deal momentum across all tiers and regions. The company closed 17 cloud deals in the quarter, including seven core system deals with Tier 1 insurers. This success underscores Guidewire's strengthening position in the insurance software market and its ability to attract large enterprise customers.

The strong results and positive outlook triggered a wave of analyst upgrades and price target increases. JPMorgan raised its price target on Guidewire to $271 from $231, maintaining an Overweight rating. RBC Capital, Oppenheimer, and Raymond James also increased their price targets, citing the company's robust cloud transition and market leadership position. These positive reactions from Wall Street further fueled investor enthusiasm, contributing to the stock's pre-market surge.