- ServiceNow posted strong first-quarter results, with an adjusted earnings per share (EPS) of $4.04, surpassing the estimated $3.83.
- The company’s total revenue for the first quarter was $3.09 billion, a 19% increase from the previous year, slightly above the $3.08 billion estimate.
- Subscription revenue grew by 19% year-over-year to $3.01 billion, exceeding the estimated $3 billion.
- Professional Services & Other revenue was $83 million, a growth of 3.8% year-over-year, but below the expected $86.5 million.
- Adjusted gross profit reached $2.54 billion, marking a 17% increase from the previous year and slightly exceeding the $2.53 billion estimate.
- Adjusted gross margin came in at 82%, slightly below the previous year’s 83%, yet above the estimated 81.8%.
- Subscription adjusted gross margin was 84.5%, down from 86% the previous year, but surpassed the 83.9% estimate.
- Professional Services & Other adjusted gross margin declined significantly to 4% from 16% last year, missing the 11.1% estimate.
- The company’s remaining performance obligations stood at $22.1 billion, reflecting a 25% increase year-over-year.
- Current remaining performance obligations were $10.31 billion, up 22% year-over-year, exceeding the $10.1 billion estimate.
- Adjusted free cash flow was $1.48 billion, a 21% increase year-over-year, significantly outperforming the $1.32 billion estimate.
- For the second quarter, ServiceNow forecasts subscription revenue between $3.03 billion and $3.04 billion, above the $3.02 billion estimate.
- The first quarter benefited from a weakening U.S. dollar, providing a favorable currency impact.
- Despite strong performance, ServiceNow remains cautious about the full-year outlook due to geopolitical risks.
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Servicenow Inc on Smartkarma
Analyst coverage of Servicenow Inc on Smartkarma has been positive, with research reports from Baptista Research highlighting key drivers propelling the company forward. In one report titled “ServiceNow: Go-To-Market Strategy & Platform Innovation To Drive Transformative Business Solutions Globally!”, the analyst praises Servicenow’s strong financial and operational performance in the fourth quarter of 2024. The company’s subscription revenue grew by 21% year-over-year, demonstrating its ability to capture and sustain customer interest in its services.
Another report from Baptista Research, titled “ServiceNow Inc.: The NVIDIA Partnership & Other Factors To Capitalize On GenAI!”, commends CEO Bill McDermott and Servicenow for strong performance in the third quarter of 2024. The company exceeded financial forecasts with a 22.5% growth in subscription revenue, attributed to widespread customer adoption and expansion of integrated platforms. These reports underscore the positive sentiment surrounding Servicenow’s strategic direction and financial outlook among independent analysts on Smartkarma.
A look at Servicenow Inc Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 1 | |
| Growth | 5 | |
| Resilience | 4 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
ServiceNow Inc, the provider of enterprise IT management software, is poised for strong long-term growth according to Smartkarma Smart Scores. With a high Growth score of 5, the company is expected to expand significantly in the coming years. Additionally, Servicenow Inc has a solid Resilience score of 4, indicating its ability to weather economic uncertainties.
However, there are areas of concern as indicated by the Smart Scores. The Value score of 2 suggests that the stock may not be undervalued, potentially limiting immediate gains for investors. Furthermore, the low Dividend score of 1 means that the company may not be a reliable source of dividend income. In terms of Momentum, Servicenow Inc scores a 3, signaling a moderate performance in this aspect. Overall, while the company shows promise in growth and resilience, investors should consider the valuation and dividend aspects carefully before making investment decisions.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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