Guidewire Software Inc. (Guidewire (GWRE)) reported its fiscal third-quarter results after Thursday's closing bell, and on paper, they looked pretty good. But the market didn't seem to care — the stock dropped sharply in extended trading.

The Numbers

Guidewire posted adjusted earnings of $0.82 per share, beating the analyst consensus of $0.74. Revenue came in at $372.54 million, topping the Street estimate of $355.95 million. So far, so good.

Breaking down the revenue: subscription and support revenue hit $244.7 million, up 35% from the same quarter last year. Services revenue was $71.8 million, up 32%. License revenue, however, slipped 2% to $56 million. That's a mixed bag, but the overall picture is one of growth.

CEO Mike Rosenbaum sounded confident: "Third-quarter results reinforce our confidence in the strength and continuing momentum of our business, and set us up well for what should be a record fourth quarter." He added that the company's strategy is resonating with insurers modernizing core systems and adopting AI.

The Market Reaction

Despite the beat, Guidewire stock fell 14.66% to $129 in Thursday's extended trading. That's a classic case of "buy the rumor, sell the news" — or maybe investors were hoping for even more. Either way, it's a reminder that earnings beats don't always translate into stock gains.