ServiceNow makes history
ServiceNow, the enterprise software company founded in 2003, reported its first $2 billion quarter and raised its full-year guidance for subscription sales. The company's fiscal first-quarter net earnings were $150 million, or 73 cents a share, compared with net earnings of $75 million, or 37 cents a share, in the year-ago quarter. Adjusted earnings were $2.38 a share.
Revenue also jumped 22% to $2.096 billion, compared with $1.72 billion a year ago. ServiceNow's CEO, Bill McDermott, stated in an interview, "We're the fastest enterprise software company to reach that milestone. We are the platform for end-to-end digital transformation. We have hit a new gear."
The company's increased annual subscription-sales forecast is now between $8.47 billion and $8.52 billion. This news comes as shares of ServiceNow have gained 17% so far this year, while the broader S&P 500 has increased 5.6%.
Analysts surveyed by FactSet had expected, on average, quarterly net earnings of $2.04 a share on revenue of $2.09 billion. While the stock initially rose in after-hours trading, it closed the extended session down 2%.
"While a lot of focus has been on the cutting edge of generative [artificial intelligence], it's hard not to see a company like ServiceNow as the more pragmatic part of the AI continuum," said Daniel Newman, principal analyst at Futurum. "Probably the most interesting thing is how well ServiceNow is situated to aggressively layer on generative capabilities to enable its customers to disrupt old and antiquated software stacks to deliver greater value and become an even more disruptive force in the software marketplace."
In conclusion, ServiceNow's first $2 billion quarter and raised subscription sales guidance demonstrate their continued success in the enterprise software industry. While competitors and external factors may pose challenges, the company's focus on digital transformation and potential AI capabilities position them for future growth.
