Answer

Analysis of ARR Growth Contribution in Q2: Net-New Wins vs. Migrations and Expansions

Guidewire Software reported robust ARR growth of 22% year-over-year in Q2 fiscal 2026, reaching $1.121 billion. This growth was driven primarily by new sales activity, which included a healthy mix of:

New customer wins
Migrations from on-premise to cloud
Expansions into new lines of business within existing customers

Management emphasized that the outperformance in ARR growth was mostly attributable to new sales activity rather than backlog or attrition variations, which were largely in line with expectations. Specifically, the "deal volume in the quarter" translated strongly into year 1 ARR, indicating active times for both net-new customers and expansion efforts ¹².

Key Points on Contributions:

Net-New Customer Wins:
- Q2 included 3 new customer wins.
- The largest new win was from one of Canada’s largest private insurers with over $8 billion in direct written premium, marking the biggest new customer win in the quarter ³.
- New customers are accelerating their modernization from legacy systems to Guidewire Cloud, driving ARR growth.
Migrations (On-prem to Cloud):
- Continuing trends show significant migrations of existing customers from on-premise InsuranceSuite to the Guidewire Cloud Platform.
- Donegal Insurance and Tokio Marine North America are among key customers making cloud migrations, often with increased premium commitments and expanded footprints as part of strategic moves ⁴³.
- These migrations are also accompanied by alignment with Guidewire’s AI roadmap, enhancing product stickiness and customer lifetime value.
Expansions (Cross-Sell/Up-Sell within Existing Customers):
- Several large existing customers increased their ARR commitments by expanding into additional lines of business and consolidating legacy core systems (e.g., a top 20 commercial insurer expanding ClaimCenter usage significantly) ⁴³.
- Large customers with fully ramped ARR over $5 million grew to 96 at quarter-end from 35 in 2021, illustrating growth in the large account segment which typically drives expansions ⁵.
- The company noted expansions as a meaningful part of the new sales momentum, showing broad-based activity across geographies and lines of business ¹⁶.

Commentary on Relative Contribution:

Management did not provide a detailed numeric split explicitly breaking out how much of the 22% ARR growth came from net-new wins versus migrations and expansions.
However, it was stated that the new sales activity "was a very healthy mix" including new customer wins, migrations, and expansions, and the outperformance was “pretty broad-based” ¹.
The emphasis on larger deals and longer contract terms, especially from Tier 1 and Tier 2 insurers, points to expansions and migrations as substantial contributors alongside net-new business ⁷⁵⁴.
Deal volume and pipeline strength indicate broad efforts rather than isolated wins in any single category ¹⁸.

Additional Context:

The rising contract duration to over 6 years on average for new deals, weighted by fully ramped ARR, underscores both expansions and migrations as customers commit to longer terms ⁷⁹.
True-up activities (revenue adjustments based on actual premiums) also provided a modest tailwind, though this is more of an ongoing account activity rather than new ARR growth per se ¹⁰.
Growth in services revenues and field engineering activities supporting migrations and cloud implementations further reinforce the role of migrations and expansions in driving ARR growth ⁵.

Summary Table

ARR Growth Driver	Commentary/Indicators
Net-New Customer Wins	Key large deals including Canada’s largest private insurer, 3 new wins total, foundational growth.
Migrations to Cloud	Multiple large customers migrating from on-premises to cloud, with increased premium commitments.
Expansions	Existing customers expanding to new lines/business units, more customers exceed $5M ARR threshold.
Backlog and Attrition	In line with expectations, not major contributors to growth outperformance in Q2.
True-Up Activity	Provided some tailwind, considered as part of existing customer revenue adjustment.

Conclusion

The 22% ARR growth in Q2 was driven by a broad-based combination of net-new customer acquisitions, migrations from on-premise to the cloud platform, and expansions within existing customers—without disproportionate reliance on any single one of these categories. Management highlighted the "very healthy mix" of these components fueling strong new sales momentum and continued large deal activity with longer contract terms supporting the durable and predictable growth profile of the business ¹²⁴³.

While exact quantitative breakdowns are not disclosed in these excerpts, it is clear that net-new wins, migrations, and expansions all substantively contributed to ARR growth in Q2, with new sales activity being the dominant driver behind outperformance relative to backlog or attrition factors.

References

Guidewire Software, Inc. (GWRE) earnings transcript 2026 - Q2

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Guidewire Software Q2 2026 ARR Growth Driven by Wins, Migrations, Expansions

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Research question

Answer

Key Points on Contributions:

Commentary on Relative Contribution:

Additional Context:

Summary Table

Conclusion

References

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