ServiceNow's Stock Soars to All-Time High Amid AI-Driven Growth and Strong Q3 Results

Up 1,300% in the Past Decade, Can This Hot Stock Continue Its Momentum? | The Motley Fool

ServiceNow (NOW 0.85%) has quietly been one of the best-performing stocks of the past decade, gaining more than 1,300% during that span. That momentum has continued this year with the stock up about 35% in 2024. Meanwhile, investors recently cheered the company's third-quarter earnings results. Let's take a closer look at those results to see if the stock can continue its momentum. For those unfamiliar with ServiceNow, it's a software-as-a-subscription (SaaS) company whose platform allows customers to connect and bring together siloed systems to better manage workflows. It originally started out in the IT service management (ITSM) market to help IT departments manage their networks, but it has since moved into other areas such customer service and human resources. It also has a platform for such things as automation and procurement. The company has been an early software leader in artificial intelligence (AI), with its Now Assist AI the fastest-growing solution in company history. However, it still thinks the best days are ahead of it, and it just made its biggest generative AI release to date in Xanadu, which can do such things as assist with analytics generation, custom skills development, and Microsoft Copilot integration. It is also moving into agentic AI, which can solve problems and complete tasks autonomously. ServiceNow has consistently put up strong revenue growth, and that continued in Q3, with revenue rising 22% to $2.8 billion. That topped the average estimate of $2.75 billion, as compiled by FactSet. Subscription revenue jumped 23% to $2.7 billion. Professional services revenue rose 14% to $82 million. Adjusted earnings per share (EPS) of $3.72, meanwhile, easily beat average analyst estimates of $3.45. The company ended the quarter with 2,020 customers with net annual contract value (ACV) of $1 million or more, an increase of 14%. The average ACV of these customers, meanwhile, rose to $4.8 million compared to $4.4 million a year ago, a 9% increase. This shows it is both adding more large customers and seeing the size of these customers grow. One metric investors like to follow with ServiceNow is RPO growth, which is deferred revenue plus backlog growth. This can be an indication of future revenue growth. In the quarter, the company saw RPO rise 26% to $19.5 billion, while current RPO (cRPO) jumped 23.5% to $9.4 billion. This indicates that revenue growth of more than 20% should continue. Turning to the balance sheet, the company ended the quarter with $9.1 billion in cash and investments and $1.5 billion in debt. Looking ahead, ServiceNow forecast fourth-quarter subscription revenue to grow between 21.5% and 22%. It is expecting cRPO to rise by 21.5%. For the full year, the company projected subscription revenue of $10.655 billion to $10.660 billion, representing growth of 23%. That's up from a prior outlook for subscription revenue to increase 22%. If software becomes the next big AI category winner for stocks, ServiceNow looks well positioned to be one of the companies leading the way. It is moving from generative AI to agentic AI, which Nvidia has called the next frontier in AI. Meanwhile, the company believes it has a strong first-mover advantage in generative AI. ServiceNow's goal is to help improve productivity through AI, which is something organizations are always looking to do to save time and money, and they are certainly willing to spend to achieve this. This should set up the company for continued and sustained growth. From a valuation perspective, the stock now trades at a forward price-to-sales multiple of about 15 based on 2025 analyst estimates. Its multiple has now about doubled over the past two years. If ServiceNow can take advantage of the AI opportunity in front of it, it can more than grow into its current valuation. However, such a high valuation also leaves less room for error. As such, I'd probably try to keep positions in the stock on the smaller side at the moment.

ServiceNow stock soars to all-time high of $950.65 By Investing.com

ServiceNow (NYSE:NOW) Inc. has reached an impressive milestone, with its stock price soaring to an all-time high of $950.65. This peak reflects a significant surge in investor confidence, marking a substantial 71.21% increase in the company's stock value over the past year. The remarkable ascent to this record price level underscores the robust performance and optimistic outlook for the cloud computing company, which specializes in digital workflow solutions. Investors and analysts alike are closely monitoring ServiceNow's trajectory, as its shares continue to outperform market expectations and set new benchmarks for success in the tech sector. In other recent news, ServiceNow has seen several analyst firms raise their price targets following robust Q3 results. TD Cowen, Piper Sandler, Stifel, Baird, and RBC Capital Markets all expressed increased optimism for ServiceNow's growth trajectory. The company's Q3 performance outperformed expectations with a 22.5% year-over-year increase in subscription revenue, reaching $2.715 billion. ServiceNow also raised its full-year 2024 subscription revenue forecast to between $10.655 billion and $10.66 billion. ServiceNow's GenAI technology, specifically the Now Assist tool, has been instrumental in securing high-value contracts, contributing to the company's solid performance. The upcoming introduction of new agentic network capabilities is anticipated to further solidify ServiceNow's competitive edge in the AI industry. In addition to financial growth, ServiceNow has announced extended collaborations with industry leaders NVDA and SNOW, and the appointment of Amit Zavery as President, COO, and CPO. Despite concerns about ServiceNow's partnership with Carahsoft, the company's U.S. Federal business remains unaffected. These recent developments are part of ServiceNow's ongoing strategy as it targets a trajectory towards $30 billion in revenue. ServiceNow's recent stock price surge to an all-time high is supported by several key financial metrics and industry trends. According to InvestingPro data, the company boasts a market capitalization of $186.85 billion, reflecting its significant presence in the software industry. ServiceNow's impressive gross profit margin of 79.07% for the last twelve months as of Q2 2024 underscores its operational efficiency and pricing power. The company's strong financial performance is further evidenced by its robust revenue growth of 24.17% over the same period, with quarterly revenue growth of 22.19% in Q2 2024. This growth trajectory aligns with an InvestingPro Tip highlighting ServiceNow as a prominent player in the Software industry. Investors should note that ServiceNow is trading at a high earnings multiple, with a P/E ratio of 162.2. This valuation suggests high growth expectations from the market, which is consistent with the company's recent stock performance. Another InvestingPro Tip indicates that the stock has shown a high return over the last year, corroborating the 71.21% increase mentioned in the article. For those seeking a deeper understanding of ServiceNow's potential, InvestingPro offers 17 additional tips, providing a comprehensive analysis of the company's financial health and market position.

ServiceNow Stock Hits All-Time High on AI Demand

ServiceNow also said former Google Cloud and Oracle executive Amit Zavery would become the new CPO and COO. Shares of ServiceNow (NOW) traded at an all-time high Thursday, a day after the software and IT services provider posted better-than-expected results and boosted its guidance as demand for its artificial intelligence (AI) platform boomed. The company reported third-quarter adjusted earnings per share (EPS) of $3.72, with revenue rising 22% year-over-year to $2.80 billion. Both exceeded forecasts. Subscription revenue gained 23% to $2.72 billion, and professional services and other revenue was up 14% to $82 million. Chief Executive Officer (CEO) Bill McDermott said both existing and new customers are "doubling down on their investments in ServiceNow as the AI platform for business transformation." Chief Financial Officer (CFO) Gina Mastantuono added that the release of its new Xanadu platform "marks our most comprehensive set of new AI innovations yet, further fueling our durable topline growth and margin expansion." The company now sees full-year subscription revenue in the range of $10.655 billion to 10.660 billion, up from its previous outlook of $10.575 billion to $10.585 billion. Along with the financial news, ServiceNow announced that former Google (GOOGL) Cloud and Oracle (ORCL) executive Amit Zavery would become the new Chief Product Officer and Chief Operating Officer beginning on Oct. 28. ServiceNow shares recently were up 5.5% to $957.47 after earlier touching an all-time high of $979.78. They have added more than a third of their value this year.

ServiceNow Q3 Earnings: Revenue Beat, EPS Beat, 'Remarkable' Momentum Driven By AI And More - ServiceNow (NYSE:NOW)

ServiceNow reports third-quarter adjusted earnings of $3.72 per share, beating analyst estimates of $3.46 per share. ServiceNow Inc NOW reported third-quarter financial results after the market close on Wednesday. Here's what stands out in the report. Q3 Earnings: ServiceNow reported third-quarter revenue of $2.797 billion, beating the consensus estimate of $2.743 billion. The company reported third-quarter adjusted earnings of $3.72 per share, beating analyst estimates of $3.46 per share, according to Benzinga Pro. Total revenue was up 22% on a year-over-year basis. Subscription revenues were up 23% year-over-year. ServiceNow said it had remaining performance obligations of $9.36 billion at the quarter's end, up 26% year-over-year. The company noted that it now has 2,020 customers with more than $1 million in annual contract value, representing 14% year-over-year growth. "ServiceNow raised our full-year topline guidance on the strength of our Q3 results, once again going beyond expectations. This remarkable momentum stems from both existing and new customers doubling down on their investments in ServiceNow as the AI platform for business transformation," said Bill McDermott, chairman and CEO of ServiceNow. "The mandate to put AI to work for people represents a generational technology shift. We have never been more confident in ServiceNow's team, our platform and our position as the ultimate growth company in enterprise software." Don't Miss: Wall Street Slumps For Third Straight Day As Investor Sentiment Fades, Dollar Strength Resumes, Boeing Disappoints: What's Driving Markets Wednesday? The company noted that it repurchased $225 million of its common stock during the quarter and has $562 million remaining under its current share repurchase program Outlook: ServiceNow expects fourth-quarter subscription revenue of $2.875 billion to $2.88 billion. The company expects full-year subscription revenue of $10.655 billion to $10.66 billion versus estimates of $10.806 billion. ServiceNow said it appointed software industry veteran Amit Zavery as president, chief product officer and COO of the company to lead product and engineering, effective Oct. 28. Management will hold a conference call to discuss the company's second-quarter results with analysts and investors at 5 p.m. ET. What Else: ServiceNow also announced a series of partnerships in multiple press releases issued around the same time earnings came out. The announcements include partnerships with Nvidia, Snowflake, Databricks, Rimini Street and Person. NOW Price Action: ServiceNow shares were down 0.88% in after-hours, trading at $900 at the time of publication Wednesday, according to Benzinga Pro. Photo: Shutterstock. Market News and Data brought to you by Benzinga APIs

Piper Sandler increases ServiceNow shares price target, noting impressive Q3 results and GenAI capabilities By Investing.com

On Thursday, Piper Sandler updated its outlook on ServiceNow (NYSE:NYSE:NOW) shares, raising the price target to $1,000 from the previous $850 while maintaining an Overweight rating. The firm's analysis follows ServiceNow's third-quarter performance, which was marked by robust results, significant large deal momentum, and solid adoption of artificial intelligence (AI) technologies. ServiceNow's AI tool, Now Assist, was particularly highlighted as a growth driver, having secured 44 customers with expenditures exceeding $1 million during the third quarter. This customer engagement is seen as evidence of the growing traction for ServiceNow's broader AI offerings. The analyst from Piper Sandler expressed confidence in ServiceNow's third-quarter execution, emphasizing that the company's GenAI capabilities are likely to further enhance its strategic position within large enterprise markets. The endorsement of the company's AI-driven strategy is reflected in the increased price target. ServiceNow's market performance and strategic initiatives, particularly in AI, have led to a positive outlook from analysts. The updated price target of $1,000 signifies an expectation for the company's continued growth and dominance in providing enterprise solutions that leverage AI technology. In other recent news, ServiceNow has had a notable performance in its third quarter, with subscription revenue marking a 22.5% year-over-year increase to reach $2.715 billion. Analyst firms Stifel, Baird, RBC Capital Markets, Canaccord Genuity, and Goldman Sachs (NYSE:GS) have all raised their price targets for ServiceNow, reflecting confidence in the company's growth trajectory. The company's GenAI technology, particularly the Now Assist product, has been instrumental in securing high-value contracts. ServiceNow has also increased its full-year 2024 subscription revenue forecast to between $10.655 billion and $10.66 billion. The company's recent developments include extended collaborations with industry leaders NVDA and SNOW and the appointment of Amit Zavery as President, COO, and CPO. Despite concerns about ServiceNow's partnership with Carahsoft, the company's U.S. Federal business remains unaffected. These recent developments are part of ServiceNow's ongoing strategy as it targets a trajectory towards $30 billion in revenue. The company's execution was described as impressive, with the company showing significant upside in the third quarter of 2024. ServiceNow's impressive third-quarter performance and growing AI adoption, as highlighted in Piper Sandler's analysis, are further supported by key financial metrics and insights from InvestingPro. The company's revenue growth of 24.17% over the last twelve months as of Q2 2024 aligns with the strong momentum observed in large deals and AI tool adoption. ServiceNow's gross profit margin of 79.07% is particularly noteworthy, reflecting the company's efficiency in delivering its services. This aligns with one of the InvestingPro Tips, which points out ServiceNow's "impressive gross profit margins." This high profitability could be a key factor in the company's ability to invest in and develop AI technologies like Now Assist. The stock's strong performance is evident in its 63.73% price return over the past year, trading at 95.59% of its 52-week high. This performance supports another InvestingPro Tip indicating a "high return over the last year." However, investors should note that the stock is trading at a high P/E ratio of 162.2, suggesting high growth expectations are already priced in. For those interested in a deeper analysis, InvestingPro offers 15 additional tips for ServiceNow, providing a comprehensive view of the company's financial health and market position.

ServiceNow forecasts quarterly subscription revenue above estimates as AI boosts demand

Oct 23 (Reuters) - ServiceNow (NOW.N), opens new tab forecast fourth-quarter subscription revenue above Wall Street estimates on Wednesday, indicating a robust demand as businesses turn to its AI-driven products for managing their IT services. The Santa Clara, California-based company also raised annual subscription revenue forecast, driven by demand from both new and existing customers. Enterprise clients use AI-powered software offered by companies such as ServiceNow to automate and manage IT processes in a bid to cut costs associated with manual work. Advertisement · Scroll to continue ServiceNow introduced AI agents in September, designed to autonomously manage tasks. Beginning in November, these agents will be available in a limited release for IT and customer service applications, allowing clients to tailor them to their specific requirements. Rivals Salesforce (CRM.N), opens new tab and software giant Microsoft (MSFT.O), opens new tab are also rolling out similar autonomous AI agents, which some analysts say could provide companies with an easier path to monetizing the billions of dollars they are pouring into AI. Advertisement · Scroll to continue ServiceNow's customers include telecom giant AT&T (T.N), opens new tab, data center firm Equinix (EQIX.O), opens new tab, video conferencing software provider Zoom Video Communications (ZM.O), opens new tab, and ride-hailing company Uber Technologies (UBER.N), opens new tab. The company forecast fourth-quarter subscription revenue to be between $2.875 billion and $2.880 billion, compared with analysts' average estimate of $2.85 billion, according to data compiled by LSEG. ServiceNow now expects annual subscription revenue to be between $10.655 billion and $10.660 billion, up from its prior forecast of $10.575 billion to $10.585 billion. Third-quarter revenue came in at $2.80 billion, beating estimates of $2.74 billion. On an adjusted basis, the company earned $3.72 per share for the quarter ended Sept 30, compared with estimates of $3.46. Separately, ServiceNow named former Google Cloud executive Amit Zavery as president, chief product officer, and chief operating officer of the company, effective Oct. 28. Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid Our Standards: The Thomson Reuters Trust Principles., opens new tab

ServiceNow delivers another earnings beat, but stock dips as guidance disappoints - SiliconANGLE

ServiceNow delivers another earnings beat, but stock dips as guidance disappoints Fast-growing enterprise software company ServiceNow Inc. maintained its momentum as it delivered another solid earnings and revenue beat today, but unlike in previous quarters, the stock moved lower following guidance that underwhelmed investors. The company reported third-quarter earnings before certain costs such as stock compensation of $3.72 per share, easily beating analysts' projections of $3.45 per share. Revenue rose 22%, to $2.8 billion, above the consensus estimate of $2.75 billion. In addition, ServiceNow notched $2.715 billion in subscription revenue, up 22.5%, ahead of the analysts' $2.66 billion target. All told, ServiceNow delivered net income of $432 million, up from a $242 million profit one year earlier. ServiceNow Chief Executive Bill McDermott (pictured) said the company's ongoing momentum stems from new and existing customers doubling down on their investments in its artificial intelligence capabilities. "The mandate to put AI to work for people represents a generational technology shift," he added. The company is a provider of applications that help enterprises to organize and automate their information technology environments. Like many of its peers, it has been working hard to bake in various generative AI capabilities into its products, with a higher-priced tier for companies that want to access those tools. In a conference call, McDermott said enterprises are increasingly looking for ways to make their employees more productive, and they see generative AI as one of the most promising solutions. He explained that the average worker uses 17 applications a day, which has a negative impact on productivity, but much of that work can be automated with AI. "AI is doing the soul-crushing work so humans don't have to," McDermott said. The CEO said ServiceNow's flagship generative AI offering, Now Assist AI, has become the fastest-growing product in its history, enticing more customers to subscribe to its platform. In addition, the company is seeing a lot of interest in its new "AI agents," which were announced in September and are designed to complete tasks on behalf of workers without supervision. According to McDermott, some customers are already seeing good results from their experiments with ServiceNow's agents in preview. He expects that to continue when the agents are released more broadly next month. Rebecca Wettemann, an analyst with Valoir, told SiliconANGLE that ServiceNow's main pitch in terms of AI is that it can help enterprises to avoid any mess. She said it can do this by leveraging its technical foundations as an information technology service management provider for critical IT processes as the control point for governing AI agents. "ServiceNow is positioned to leverage agentic AI momentum," Wettemann said. "It plans to release its first AI agents for customer service and ITSM in November, and although Salesforce beat it to the punch by a few weeks with its Agentforce autonomous agents, its focus on customer service workflows signals its ambitions in Salesforce's core market." ServiceNow also reported remaining performance obligations of $19.5 billion at the end of the quarter, ahead of the Street's estimate of $18.4 billion. RPO is a metric that measures the total amount of money a company expects to collect from its existing contracts with customers, including revenue that has already been invoiced but not yet earned, and future amounts for goods and services not yet delivered. Despite the solid numbers, ServiceNow's guidance appeared to disappoint some investors. The company is forecasting fourth-quarter subscription revenue of between $2.875 billion and $2.88 billion, which sits just above the Street's consensus estimate of $2.855 billion. The company also increased its full-year subscription revenue forecast to a range of $10.655 billion to $10.660 billion, up from $10.56 billion to $10.575 billion previously. ServiceNow's stock fell just over a percentage point in extended trading, suggesting that some investors were a tad disappointed by the guidance. Still, the stock is still up 28% in the year to date. "It looks like a case of high expectations," analyst Anurag Rana of Bloomberg Intelligence said. Evercore ISI analyst Kirk Materne told Bloomberg that ServiceNow's guidance was "good, but not great," adding that the company often tends to be somewhat conservative in its forecasts for the fourth quarter. Also today, ServiceNow announced that it's hiring former Alphabet Inc. executive Amit Zavery, who will take on the roles of president, chief product officer and chief operating officer at the company. He replaces CJ Desai, who suddenly quit the company in July in the wake of an investigation into a complaint over the sales process for a government contract, which revealed serious policy violations. McDermott said Zavery, who served as vice president, general manager and head of platform at Google Cloud, will primarily focus on ServiceNow's product and engineering efforts. Wettemann said Zavery is a key hire for ServiceNow. "His experience and expertise in packaging and pricing will be important as ServiceNow and others navigate the AI pricing challenges ahead, particularly as SaaS providers look at moving from per-seat models to more consumption and value-based models," she pointed out.

ServiceNow delivers another earnings and revenue beat, but its stock dips as guidance disappoints - SiliconANGLE

ServiceNow delivers another earnings and revenue beat, but its stock dips as guidance disappoints Fast-growing enterprise software company ServiceNow Inc. maintained its momentum as it delivered another solid earnings and revenue beat today, but unlike in previous quarters, the stock was moving lower following guidance that underwhelmed investors. The company reported third quarter earnings before certain costs such as stock compensation of $3.72 per share, easily beating analysts' projections of $3.45 per share. Revenue rose 22% to $2.8 billion in the quarter, above the consensus estimate of $2.75 billion. In addition, ServiceNow notched $2.715 billion in subscription revenue, up 22.5%, ahead of the analysts' $2.66 billion target. All told, ServiceNow delivered net income of $432 million, up from a $242 million profit one year earlier. ServiceNow's chief execution officer Bill McDermott said the company's ongoing momentum stems from new and existing customers doubling down on their investments in its artificial intelligence capabilities. "The mandate to put AI to work for people represents a generational technology shift," he added. ServiceNow is a provider of applications that help enterprises to organize and automate their information technology environments. Like many of its peers, it has been working hard to bake in various generative AI capabilities into its products, with a higher pricing tier for companies that want to access those tools. In a conference call, McDermott said enterprises are increasingly looking for ways to make their employees more productive, and they see generative AI as one of the most promising solutions. He explained that the average worker uses 17 applications a day, which has a negative impact on productivity, but much of that work can be automated with AI. "AI is doing the soul-crushing work so humans don't have to," McDermott said. The CEO said ServiceNow's flagship generative AI offering, Now Assist AI, has become the fastest-growing product in its history, enticing more customers to subscribe to its platform. In addition, the company is seeing a lot of interest in its new "AI agents", which were announced in September and are designed to complete tasks on behalf of workers without supervision. According to McDermott, some customers are already seeing good results from their experiments with ServiceNow's agents in preview. He expects this to continue when the agents are released more broadly next month. ServiceNow also reported remaining performance obligations of $19.5 billion at the end of the quarter, ahead of the Street's estimate of $18.4 billion. RPO is a metric that measures the total amount of money a company expects to collect from its existing contracts with customers, including revenue that has already been invoiced but not yet earned, and future amounts for goods and services not yet delivered. Despite the solid numbers, ServiceNow's guidance appeared to disappoint some investors. The company is forecasting fourth quarter subscription revenue of between $2.875 billion and $2.88 billion, which sits just above the Street's consensus estimate of $2.855 billion. The company also increased its full-year subscription revenue forecast to a range of $10.655 billion to $10.660 billion, up from $10.56 billion to $10.575 billion previously. ServiceNow's stock fell just over a percentage point in extended trading, suggesting that some investors were a tad disappointed by the guidance. Still, the stock is still up 28% in the year to date. "It looks like a case of high expectations," analyst Anurag Rana of Bloomberg Intelligence said. Evercore ISI analyst Kirk Materne told Bloomberg that ServiceNow's guidance was "good, but not great", adding that the company often tends to be somewhat conservative in its forecasts for the fourth quarter. Also today, ServiceNow announced that it's hiring former Alphabet Inc. executive Amit Zavery, who will take on the roles of president, chief product officer and chief operating officer at the company. He replaces CJ Desai, who suddenly quit the company in July in the wake of an investigation into a complaint over the sales process for a government contract, which revealed serious policy violations. McDermott said Zavery, who served as vice president, general manager and head of platform at Google Cloud, will primarily focus on ServiceNow's product and engineering efforts.

ServiceNow Forecasts Quarterly Subscription Revenue Above Estimates as AI Boosts Demand

(Reuters) - ServiceNow forecast fourth-quarter subscription revenue above Wall Street estimates on Wednesday, indicating a robust demand as businesses turn to its AI-driven products for managing their IT services. The Santa Clara, California-based company also raised annual subscription revenue forecast, driven by demand from both new and existing customers. Enterprise clients use AI-powered software offered by companies such as ServiceNow to automate and manage IT processes in a bid to cut costs associated with manual work. ServiceNow introduced AI agents in September, designed to autonomously manage tasks. Beginning in November, these agents will be available in a limited release for IT and customer service applications, allowing clients to tailor them to their specific requirements. Rivals Salesforce and software giant Microsoft are also rolling out similar autonomous AI agents, which some analysts say could provide companies with an easier path to monetizing the billions of dollars they are pouring into AI. ServiceNow's customers include telecom giant AT&T, data center firm Equinix, video conferencing software provider Zoom Video Communications, and ride-hailing company Uber Technologies. The company forecast fourth-quarter subscription revenue to be between $2.875 billion and $2.880 billion, compared with analysts' average estimate of $2.85 billion, according to data compiled by LSEG. ServiceNow now expects annual subscription revenue to be between $10.655 billion and $10.660 billion, up from its prior forecast of $10.575 billion to $10.585 billion. Third-quarter revenue came in at $2.80 billion, beating estimates of $2.74 billion. On an adjusted basis, the company earned $3.72 per share for the quarter ended Sept 30, compared with estimates of $3.46. Separately, ServiceNow named former Google Cloud executive Amit Zavery as president, chief product officer, and chief operating officer of the company, effective Oct. 28. (Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid)

ServiceNow Reports Third Quarter 2024 Financial Results

ServiceNow exceeds guidance across all Q3 2024 topline growth and profitability metrics; raises 2024 subscription revenues guidanceSubscription revenues of $2,715 million in Q3 2024, representing 23% year‑over‑year growth, 22.5% in constant currencyTotal revenues of $2,797 million in Q3 2024, representing 22% year‑over‑year growth, 22% in constant currencyCurrent remaining performance obligations of $9.36 billion as of Q3 2024, representing 26% year‑over‑year growth, 23.5% in constant currencyRemaining performance obligations of $19.5 billion as of Q3 2024, representing 36% year‑over‑year growth, 33% in constant currency15 transactions over $5 million in net new ACV in Q3 2024, up 50% year‑over‑year ServiceNow (NYSE: NOW), the AI platform for business transformation, today announced financial results for its third quarter ended September 30, 2024, with subscription revenues of $2,715 million in Q3 2024, representing 23% year‑over‑year growth and 22.5% in constant currency. "ServiceNow raised our full year topline guidance on the strength of our Q3 results, once again going beyond expectations," said ServiceNow Chairman and CEO Bill McDermott. "This remarkable momentum stems from both existing and new customers doubling down on their investments in ServiceNow as the AI platform for business transformation. The mandate to put AI to work for people represents a generational technology shift. We have never been more confident in ServiceNow's team, our platform, and our position as the ultimate growth company in enterprise software." As of September 30, 2024, current remaining performance obligations ("cRPO"), contract revenue that will be recognized as revenue in the next 12 months, was $9.36 billion, representing 26% year‑over‑year growth and 23.5% in constant currency. The company now has 2,020 total customers with more than $1 million in annual contract value ("ACV"), representing 14% year‑over‑year growth in customers. "Q3 was another spectacular quarter driven by robust demand for the Now Platform and exceptional team execution," said ServiceNow CFO Gina Mastantuono. "With Now Assist already delivering fantastic results, our latest Xanadu release marks our most comprehensive set of new AI innovations yet, further fueling our durable topline growth and margin expansion." ServiceNow also named enterprise software industry veteran Amit Zavery as president, chief product officer (CPO), and chief operating officer (COO) to lead product and engineering, effective October 28, 2024. With more than three decades in enterprise technology and previous leadership roles at Google Cloud and Oracle, Zavery is a visionary leader who brings extensive experience in enterprise innovation, transformation, and scale. Zavery's responsibilities will include ServiceNow's platform, products, engineering, cloud infrastructure, user experience, and enterprise‑wide operations, ensuring all solutions meet the real‑world business needs of ServiceNow customers. Recent Business Highlights Innovation ServiceNow is putting AI to work for customers. In Q3, the Now Platform Xanadu release, ServiceNow's largest AI release to date, introduced hundreds of additional, new AI capabilities including Now Assist Skill Kit and purpose‑built GenAI industry solutions for telecom, media, and technology; financial services; the public sector; and more.Alongside Xanadu, the company announced its plans to integrate Agentic AI into the ServiceNow platform and unlock 24/7 productivity at massive scale. With advanced reasoning and grounded in cross‑enterprise data through the Now Platform, ServiceNow AI Agents evolve from the more familiar prompt‑based activity to deep contextual comprehension, keeping people in the loop for robust oversight and governance. First use cases will be available in November for Customer Service Management (CSM) and IT Service Management (ITSM).Today, the company announced ServiceNow Workflow Data Fabric, an integrated data layer that unifies business and technology data across the enterprise, powering all workflows and AI agents with real‑time, secure access to data from any source. Powered by Automation Engine and RaptorDB Pro high‑performance database, Workflow Data Fabric unlocks value with orchestration and automation at ultra‑speed and scale.At the United Nations General Assembly last month, ServiceNow demonstrated its commitment to building a better world through greater access to technology, knowledge, and opportunity. Through efforts such as ServiceNow.org and others, ServiceNow has set a bold ambition to partner with nonprofits and customers to accelerate impact and reach 1 billion people. This includes the company's ambition to positively reach 20 million people through its philanthropy efforts. Partnerships Today, the company made several partnership announcements designed to expand the ServiceNow ecosystem and accelerate business transformation. ServiceNow and NVIDIA will co‑develop native AI Agents using NVIDIA NIM Agent Blueprints within the ServiceNow platform, creating use cases fueled by business knowledge that customers can simply choose to turn on; ServiceNow and Siemens announced a collaboration designed to bolster industrial cybersecurity and integrate GenAI into shop floor operations; ServiceNow and Rimini Street announced a partnership to help enable organizations to unlock value in legacy ERP systems; and ServiceNow and Pearson announced plans to supercharge workforce development and employee experiences in the age of AI.Earlier in October, ServiceNow and Zoom announced an expanded strategic alliance to integrate the companies' GenAI technologies - ServiceNow Now Assist and Zoom AI Companion - to offer organizations advanced workflow automation for tasks and activities. Global Expansion Continuing efforts to expand AI and technology skills, during the quarter, ServiceNow announced a new National Academic Partnership with Singapore's Republic Polytechnic to provide hundreds of early‑in‑career and lifelong learners access to emerging AI and cloud computing roles in support of the government's Smart Nation agenda.Later this month, the company plans to launch a new data center pair located in Milan and Rome in response to growing demand for data center infrastructure in the region. The data center pair will help enhance customer agility, boost productivity, and promote innovation.In October, ServiceNow announced plans to invest $1.5 billion cumulatively in its UK business over the next five years. This includes plans to increase headcount, office space, and AI skills programs. Investment ServiceNow repurchased approximately 272,000 shares of its common stock for $225 million as part of its share repurchase program, with the primary objective of managing the impact of dilution. Of the original authorized amount, approximately $562 million remains available for future share repurchases under the existing program. Recognition As a testament to ServiceNow's workplace culture, ServiceNow was awarded 10th place on the Fortune Best Workplaces in Technology list1, in addition to placing on the TIME World's Best Companies, PEOPLE Companies that Care, Fast Company 100 Best Workplaces for Innovators, and more.

ServiceNow is off to the races with another strong quarter and AI growth

The mandate to put AI to work for people represents a generational technology shift. So said ServiceNow CEO Bill McDermott as he announced another strong set of quarterly numbers for the firm. For Q3, total revenue rose 22% year-on-year to $2.8 billion, of which $2.715 billion was subscription revenue, up 22.5%. Net income of $432 million was up from $242 million for the comparable period last year. Here's the headline - many companies have struggled to execute in what has been a complex macro environment. ServiceNow has delivered consistently beyond the Rule of 50. We are the benchmark for elite level execution. He returned to a familiar ServiceNow theme - that of 'tidying up' the enterprise systems mess, but took it into its next phase: When public cloud solutions came online as the last secular shift in the enterprise, they created sprawling governance challenges. CIOs at the direction of their CEOs were asked to get things under control, the cost, security and integration. And ServiceNow played that role. Now the C-suite is looking to ServiceNow to prevent another mess with AI. We do see the risk that every vendor's bots and agents will scatter like hornets fleeing the nest and they trust ServiceNow as the governance control tower, which is a privileged position for our platform And he pitched ServiceNow's agentic credentials as seen in Xanadu, ServiceNow's biggest gen AI release to date: Xanadu showcased ServiceNow's leadership with Agentic AI. Until now, generative AI and the enterprise require human prompts to initiate action. We're now deploying autonomous AI agents that work with people, not just for them. Using ServiceNow single architecture platform and cross enterprise data, ServiceNow AI agents can uniquely advance beyond pro-based activity to deep contextual comprehension. This is like hiring an additional workforce to support people by doing the jobs they've never wanted to do in the first place. We intend to be the control point that governs the deployment of Agentic AI across enterprise. He added: I think a lot of people will benefit from ServiceNow agents working together with each other and with humans to proactively and predictively resolve almost any task you can possibly think of. And these partnerships that we've established with great companies like NVIDIA and building market-making solutions, for example, taking on some of the enterprise security challenges that have existed out there for years and years on an out-of-the-box type solution, I think, it is really pretty breathtaking. And at an architectural level, we don't have to try to translate between our gen AI models and some third-party system, which most people have to since everything is on one platform with one architecture and one data model, so this has given us an opportunity to innovate faster, but also integrate better. As I said many times, 85% of digital transformation ROI never came to for our customers because they couldn't integrate those old systems. Now everything integrates into one platform, and you turbocharge it with Now Assist in a Agentic AI and you're off to the races. The market is really excited about AI. It's going from experimentation to actually choosing the platforms that matter. It's remarkable to note that McDermott is now five years into his tenure as CEO. He continues to deliver on execution for the company on a grand scale as he aims to build what he calls "a defining enterprise software company in the 21st century". And there's lots more to do, he adds:

ServiceNow Reports Strong Sales Growth, New AI Agent Strategy

ServiceNow Inc. reported strong sales and bookings but failed to clear high investor expectations for AI to boost the software company's results. Third-quarter subscription sales, which account for the bulk of ServiceNow's revenue, increased 23% to $2.7 billion, ServiceNow said Wednesday in a statement. Current remaining performance obligation, a measure of booked sales, increased 26% in the period ending Sept. 30. Both exceeded analysts' estimates.