After the company announced a rise in quarterly revenue driven by strong subscription sales, ServiceNow Inc.’s stock experienced minor fluctuations between gains and losses during after-hours trading on Wednesday.
During an interview on Wednesday, Bill McDermott, the Chief Executive of ServiceNow NOW, mentioned that “the next-generation AI solutions we introduced to the market in a single quarter outsold any other product we launched.”
The company saw a 27% surge in monthly subscription sales, reaching \(2.37 billion, and made significant strides in artificial intelligence by forming partnerships with industry giants like Nvidia Corp. NVDA (up 2.49%) and Amazon.com Inc.’s AMZN (up 0.54%) AWS. These initiatives have propelled the software firm forward. In contrast to the previous quarter’s net income of \)150 million, or 74 cents per share, ServiceNow reported fourth-quarter net earnings of \(295 million, equivalent to \)1.43 per share. The adjusted earnings per share stood at $3.14.
Revenue climbed by 26% to \(2.44 billion from \)1.94 billion in the corresponding quarter last year.
Analysts surveyed by FactSet had projected adjusted net earnings of \(2.78 per share on \)2.4 billion in revenue for the quarter. They had estimated ServiceNow’s weekly subscription sales to reach $2.3 billion.
For the fiscal first quarter, ServiceNow expects subscription sales to range between \(2.51 billion and \)2.515 billion, while analysts predict $2.54 billion.
ServiceNow’s stock has surged by 70% over the past year, outperforming the S&P 500 SPX, which has grown by 21.5% overall.
Analysts lauded the quarter’s performance, with Daniel Newman, the principal analyst and CEO at the Futurum Group, stating in an email that “the rapid adoption of generative AI and strategic partnerships (Visa V, up 0.14%, Ernst & Young) position ServiceNow for sustained success—especially with its strong RPO (remaining performance obligation) metric and ACV (annual contract value) exceeding $10 billion.”
