- ServiceNow’s 2025 subscription revenue forecast is between $12.64 billion and $12.68 billion, which is lower than the estimated $12.87 billion.
- For the first quarter of 2025, ServiceNow expects subscription revenue of $3.00 billion, below the estimated $3.04 billion.
- In the fourth quarter of 2024:
- Adjusted earnings per share (EPS) were $3.67, slightly below the estimate of $3.68.
- Adjusted revenue was $2.95 billion, with a year-over-year increase of 23%, close to the estimate of $2.96 billion.
- Subscription revenue grew 21% year-over-year to $2.87 billion, marginally missing the estimate of $2.88 billion.
- Professional Services & Other revenue increased 26% year-over-year to $91 million, exceeding the estimate of $79.7 million.
- Adjusted gross profit was $2.42 billion, meeting estimates, with a gross margin of 82%.
- Subscription adjusted gross margin was 84.5%, above the estimated 83.7%.
- Professional Services & Other adjusted gross margin dropped to 8.5% from 15% year-over-year, still beating the estimate of 7.51%.
- The current remaining performance obligation stands at $10.27 billion, up 19% year-over-year, but less than the estimate of $10.43 billion.
- Free cash flow reached $1.40 billion, a 4.2% increase year-over-year, surpassing the estimate of $1.36 billion.
- The U.S. dollar’s strengthening adds a foreign exchange headwind of about $175 million for 2025 subscription revenues, with $40 million impacting Q1 2025 specifically.
- ServiceNow’s board approved up to $3 billion in additional common stock repurchases to manage dilution.
- In 2025, ServiceNow will shift to a consumption-based monetization model for AI and data solutions, aiming to drive adoption and monetize through increased usage.
- The company plans to optimize its go-to-market approach and will announce more integrated solutions at Knowledge 2025.
- ServiceNow’s financial outlook anticipates continued free cash flow growth, building on its 2024 success.
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Servicenow Inc on Smartkarma
On Smartkarma, Baptista Research provides insightful analyst coverage of ServiceNow Inc. in their report titled “ServiceNow Inc.: The NVIDIA Partnership & Other Factors To Capitalize On GenAI! – Major Drivers.” The report highlights the strong performance of ServiceNow, under the leadership of CEO Bill McDermott, in the third quarter of 2024. The company exceeded financial forecasts, showcasing resilience and strategic acumen in a challenging economic environment. ServiceNow reported a significant 22.5% growth in subscription revenue, surpassing expectations by 200 basis points. This growth was driven by widespread customer adoption and the expansion of ServiceNow’s integrated platforms across various enterprise functions, resulting in a rise in annual contract value from customers.
A look at Servicenow Inc Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 1 | |
| Growth | 5 | |
| Resilience | 4 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.4 |
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, a provider of enterprise IT management software, is positioned for strong long-term growth and momentum based on Smartkarma Smart Scores. With a high score of 5 in Growth and Momentum, the company is showing robust potential in expanding its market presence and maintaining positive stock performance. Additionally, scoring a 4 in Resilience indicates a level of stability and ability to withstand economic uncertainties. However, the company lags in Value and Dividend scores at 2 and 1 respectively, suggesting that investors may need to prioritize growth opportunities over immediate returns.
ServiceNow Inc’s overall outlook, as depicted by the Smartkarma Smart Scores, paints a picture of a company with a solid growth trajectory backed by strong momentum. While investors may note the lower Value and Dividend scores, the company’s focus on innovation and market expansion could lead to significant long-term gains. ServiceNow’s offerings in IT management software, cloud services, and IT service management platform position it well to cater to the evolving needs of customers in the United States and beyond.
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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