After-Hours Earnings: Guidewire Plunges 16% on Slightly Below-Expected Full-Year ARR Guidance; Lululemon Drops 10% After Lowering Guidance
Claire Weston
US after-hours trading split sharply Thursday — Guidewire plunged 16% because its full-year ARR midpoint missed by just $2 million, Lululemon fell 10% on a guidance cut, while ServiceTitan surged 12% on a raised outlook, showing the market now prices stocks on full-year guidance revisions, not quarterly beats.
Guidewire beat on every quarterly metric — why did it still drop 16%?
Fiscal Q3 adjusted EPS came in at $0.82, above the $0.74 consensus. Revenue rose 27% year-over-year to $372.5 million, beating the $355.9 million estimate — no weakness in the quarter itself.
The sell-off trigger was full-year ARR (annual recurring revenue — the predictable subscription income a software company can count on each year) guidance: the midpoint of $1.233 billion fell $2 million short of Wall Street's $1.235 billion expectation.
This means → for richly valued software stocks, the market no longer asks "how much did you earn this quarter?" It asks "can you keep raising next year's subscription revenue outlook?" A $2 million gap is trivial in dollar terms, but the signal it sends — growth momentum may be slowing — was enough to trigger a 16% drop.
In plain terms = the student aced every exam this quarter, but the teacher's full-year projection came in a hair below the class expectation — and the market struck the name off the honor roll.
Lululemon and Docusign: what does missing guidance cost?
Lululemon fell 10% after cutting its full-year earnings and revenue outlook. Current-quarter guidance also came in below consensus. Intensifying competition in athleisure and difficult pricing-power recovery continue to weigh on profit expectations.
Docusign dropped 4%. Its Q2 revenue guidance of $865–$869 million barely brackets the $866 million consensus, offering no upside room.
This means → in today's market, "meeting expectations" counts as a negative — investors demand upside surprises, and a flat guide gets sold.
Rubrik slipped 2% after the cloud-data-security company's Q1 billings fell short of the StreetAccount consensus.
Which companies rallied on raised guidance?
ServiceTitan surged 12%, the biggest after-hours gainer. The contractor-software platform raised its full-year adjusted operating-profit guidance to $142–$147 million, well above the prior $128–$133 million range and the $131.6 million FactSet consensus.
Argan jumped 10%. The construction-engineering firm posted Q1 EPS of $3.24 on revenue of $291 million, far above estimates of $2.31 and $256 million respectively.
Cooper Companies edged up 1%. The medical-device maker reported Q2 adjusted EPS of $1.21 and revenue of $1.08 billion, both above consensus.
What does this after-hours session tell us?
This reflects a fundamental shift in how the market prices "beats": a strong quarter is no longer enough — whether full-year guidance moves higher is now the decisive variable for post-earnings stock moves.
Guidewire is the starkest example — quarterly beats across the board, yet a $2 million ARR midpoint miss triggered a 16% plunge. ServiceTitan, by contrast, earned a 12% rally by meaningfully raising its full-year profit outlook.
In plain terms = the market's attitude now is: I expect you to beat this quarter — what I'm watching is whether you dare raise the full-year target. Raise it and you're rewarded; hold it flat and you're punished; lower it and you're hammered.
This means → for investors holding high-valuation software and consumer names, the key metric to watch during earnings season is not the size of the quarterly EPS beat but the direction of full-year guidance revisions — up or down, that alone drives the post-earnings trade.
Content is for reference only, not financial advice.