ServiceNow's Q1 Earnings Surge Driven by AI Integration and Strong Subscription Growth

ServiceNow Stock Surges On Q1 Earnings Beat: Company Says It's Positioned As The 'Platinum Standard' For Enterprise-Grade AI - ServiceNow (NYSE:NOW)

Feel unsure about the market's next move? Copy trade alerts from Matt Maley -- a Wall Street veteran who consistently finds profits in volatile markets. Claim your 7-day free trial now. ServiceNow Inc NOW reported first-quarter financial results Wednesday after the bell. Here's a rundown of the software solutions company's report. Q1 Earnings: ServiceNow reported first-quarter revenue of $3.09 billion, beating the consensus estimate of $3.08 billion, according to Benzinga Pro. The company reported first-quarter adjusted earnings of $4.04 per share, beating analyst estimates of $3.84 per share. Total revenue was up 18.5% year-over-year, while Subscription revenues climbed 19% year-over-year. ServiceNow said it had remaining performance obligations of $10.31 billion at quarter's end, up 22% year-over-year. The company noted that it now has over 500 customers with more than $5 million in annual contract value. "ServiceNow's position as the platinum standard for enterprise-grade AI drove these outstanding first quarter results," said Bill McDermott, chairman and CEO of ServiceNow. "Our platform is delivering real business transformation to empower CEOs with speed and agility to lead through this fast-changing environment. ServiceNow is meeting the moment, driving immediate value creation for customers and shareholders." ServiceNow said it repurchased approximately 316,000 shares of its common stock in the quarter for $298 million. The company had approximately $3 billion remaining on its buyback at quarter's end. ServiceNow also noted that Paul Smith, president of global customer and field operations, decided to resign from his role at the company, effective on Wednesday. Smith will be replaced by Paul Flipps, who is a U.S. Army veteran and has a track record as a C-level technology leader. ServiceNow has historically announced partnerships in connection with earnings. This quarter was no different. The company announced partnerships with Aptiv, Vodafone Business and Devoteam in multiple press releases issued just ahead of the report. Looking Ahead: ServiceNow expects second-quarter subscription revenue of $3.03 billion to $3.035 billion. The company expects full-year subscription revenue of $12.64 billion to $12.68 billion, up slightly from prior guidance of $12.635 billion to $12.675 billion. ServiceNow executives will talk about the quarter on a conference call scheduled for 5 p.m. ET. NOW Price Action: ServiceNow shares were up 10.13% in the after-hours session, trading at $895 at the time of publication Wednesday, according to Benzinga Pro. Read Next: Bessent Blasts China's Economic Model, Calls For Global Reset, IMF Refocus Stocks Surge On China Tariff Hopes, Tesla Jumps, Gold Loses Shine: What's Driving Markets Wednesday? Photo: JHVEPhoto/Shutterstock. NOWServiceNow Inc$885.2415.4%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum51.16Growth88.30Quality71.69Value8.44Price TrendShortMediumLongOverviewGot Questions? AskWhich AI software companies could follow ServiceNow's lead?How will enterprise AI solutions impact tech stocks?Which IT service providers may benefit from ServiceNow's growth?Are there investment opportunities in AI-driven firms?How could partnerships with Vodafone affect competitors?What trends should investors watch in AI subscription models?Will ServiceNow's stock buyback influence shareholder value?Which tech stocks may see gains from ServiceNow's success?How might leadership changes at ServiceNow affect its strategy?What market shifts could arise from ServiceNow's earnings beat?Powered ByMarket News and Data brought to you by Benzinga APIs

What's Going On With ServiceNow Shares Thursday? - ServiceNow (NYSE:NOW)

Feel unsure about the market's next move? Copy trade alerts from Matt Maley -- a Wall Street veteran who consistently finds profits in volatile markets. Claim your 7-day free trial now. ServiceNow, Inc. NOW shares are trading higher Thursday after the company reported better-than-expected first-quarter financial results. What To Know: The company reported adjusted earnings per share of $4.04, beating analysts' estimate of $3.84. In addition, the company reported sales of $3.09 billion, beating analysts' estimate of $3.08 billion and representing an 18.5% year-over-year increase. The company reported $10.31 billion in current remaining performance obligations and a total of $22.1 billion in remaining performance obligations. During the first-quarter, the company repurchased roughly 316,000 shares for $298 million. It still has about $3 billion remaining under its buyback authorization. "ServiceNow's position as the platinum standard for enterprise-grade AI drove these outstanding first quarter results," said ServiceNow Chairman and CEO Bill McDermott. "Our platform is delivering real business transformation to empower CEOs with speed and agility to lead through this fast-changing environment. ServiceNow is meeting the moment, driving immediate value creation for customers and shareholders." Analyst Changes: Following the earnings report, multiple analysts raised their price targets. Canaccord Genuity analyst Richard Davis maintained a Buy rating on ServiceNow and raised the price target from $900 to $1075. Baird analyst Rob Oliver maintained an Outperform rating on ServiceNow and raised the price target from $1010 to $1150. Evercore ISI Group analyst Kirk Materne maintained an Outperform rating on ServiceNow and raised the price target from $925 to $1000. Wells Fargo analyst Michael Turrin maintained an Overweight rating on ServiceNow and raised the price target from $1100 to $1150. See Also: Jenga And Monopoly Maker Hasbro CFO Says Cost Savings And Margin Growth Will Offset Tariff Impact NOW Price Action: At the time of publication, ServiceNow shares are trading 13.6% higher at $922.55, according to data from Benzinga Pro. Image: via Shutterstock NOWServiceNow Inc$924.8113.8%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum51.16Growth88.30Quality71.69Value8.44Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

ServiceNow Tops Q1 EPS, Revenue Goals | The Motley Fool

ServiceNow reported strong Q1 2025 earnings, surpassing analyst consensus estimates. Digital workflow solutions specialist ServiceNow (NOW 6.34%) reported financial results for fiscal 2025's first quarter on Wednesday, April 23, that exceeded analysts' consensus expectations. Adjusted earnings per share (EPS) of $4.04 beat the forecasted $3.83, driven by strong subscription revenue growth. Overall revenue of $3.09 billion was just ahead of expectations and rose 18.5% year over year. These results reflect a positive quarter for ServiceNow, underscoring its strategic initiatives in AI and subscription-based services. Source: ServiceNow. Note: Analysts' consensus estimates for the quarter provided by FactSet. YOY = Year over year. cRPO = current remaining performance obligation. ServiceNow specializes in enterprise cloud computing, providing platforms that streamline and automate digital workflows. Its Now Platform delivers solutions for IT service management, operational efficiency, and enhanced user experiences enterprise-wide. The company emphasizes AI-driven enhancements, where its AI-powered solutions have been crucial in maintaining competitive advantage and driving new growth avenues. ServiceNow focuses on expanding its AI capabilities and strategic partnerships to bolster its services. It successfully integrates AI technologies to enable operational efficiencies and increase its market reach across various sectors. These initiatives reflect ServiceNow's commitment to innovation and meeting the evolving demands of digital transformation in enterprises. ServiceNow posted $3.005 billion in subscription revenue in Q1, just above the $2.998 billion that analysts tracked by FactSet forecast. ServiceNow's current remaining performance obligation (cRPO), which measures future subscription and services revenue, increased by 22% in Q1 to $10.31 billion. This aligns closely with broader strategic objectives to nurture subscription and AI competencies. Highlights from the quarter include significant advancements in AI integration with the launch of its agentic AI service, a platform designed to enhance service management solutions. Strategic partnerships, notably with Aptiv and Vodafone Business, played a pivotal role in ServiceNow's continued AI-driven transformation efforts. The company also addressed one-time external factors depicting cautious navigation through geopolitical uncertainties. Achievements during Q1 2025 underscore ServiceNow's robust positioning and adaptive strategy. The outlook for Q2 2025 is optimistic, with ServiceNow forecasting subscription revenue in the range of $3.03 billion to $3.035 billion, translating into 19%-19.5% year-over-year growth. ServiceNow raised full-year subscription guidance and now expects $12.64 billion to $12.68 billion (its prior forecast called for $12.635 billion to $12.675 billion). Management said it remains committed to other full-year guidance metrics and plans strategic initiatives and investment in AI leadership. Looking further, key areas for investor attention include the ongoing execution of its hybrid pricing model and the impact of macroeconomic conditions such as geopolitical events. ServiceNow also flags its goal to exceed $15 billion in revenue by 2026 and aspires to reach $30 billion, supported by AI-driven workflows and strategic growth plans.

ServiceNow Stock Soars on AI Momentum. Is It Too Late to Buy? | The Motley Fool

Share prices of ServiceNow (NOW 0.74%) popped after the software company reported strong revenue growth to start the year and raised its guidance. While it's still trading down about 10% year to date, as of this writing, the stock is up about 27% over the past year. Meanwhile, it has been a huge winner over the past decade, up more than 1,150% during that span. The software-as-a-subscription (SaaS) company is best known for its information technology (IT) management platform, which is widely used by IT departments to manage networks and support tasks. And now, with its workflow automation and digital processing tools, it is expanding into other areas such as human resources and customer service. The core value of its platform lies in connecting siloed departments and helping organizations digitize and streamline their operations. It also made some acquisitions, including Moveworks and Logik.ai, to enhance its customer relationship management (CRM) offerings. It is also leaning into artificial intelligence (AI), incorporating both generative AI and agent-based AI into its platform. Its Now Assist, a generative AI assistant, helps customers in several ways, including providing an AI chatbot to handle questions, a text-to-code generator, and a case summarization tool. More recently, it introduced AI agents to automate workflows and provide support without the need for human intervention. AI was one of the biggest drivers of ServiceNow's first-quarter revenue growth. Its number of Pro Plus deals, which includes its AI solutions, more than quadrupled year over year. And 15 of its 20 largest deals included Pro Plus products. In addition, it signed 39 deals that had three or more Now Assist products. Overall, revenue rose 18.5% year over year to $3.09 billion, while adjusted earnings per share (EPS) also climbed 18.5% to $4.04. That topped the analyst consensus, which was looking for EPS of $3.83 on revenue of $3.08 billion, as compiled by the LSEG. Subscription revenue climbed 19% year over year to $3 billion, while professional services revenue increased 5% to $83 million. The company continues to do well in adding large customers, increasing its number of customers with a net annual contract value (ACV) or $20 million or more by nearly 40%, and customers with ACVs of $5 million or more by nearly 20%. It had 72 deals greater than $1 million in net new ACV in the quarter, up from 63 a year ago. The company called out the manufacturing and healthcare/life sciences sectors as being bright spots. It also said its U.S. government business was solid. Another metric investors like to follow with ServiceNow is growth in remaining performance obligations (RPO), which is deferred revenue plus backlog growth. The reason for this is that it can be an indication of future revenue growth. In the quarter, the company saw RPO climb 25% to $22.1 billion, while current RPO (cRPO) increased by 22% to $10.3 billion. This is a good indication that revenue growth should remain around 20% in the near term. In fact, that is around where the company forecast its second-quarter revenue growth. It projected its subscription revenue to grow between 19% to 19.5% to a range of $3.03 billion to $3.035 billion. It is expecting cRPO to also increase by 19.5%. For the full year, the company slightly increased its subscription revenue guidance. It now expects subscription revenue of between $12.64 billion to $12.68 billion, up from a prior forecast of $12.635 billion to $12.675 billion. The updated forecast represents growth between 19% to 19.5%. As a company that helps its customers create operational efficiency and enhance their digital platforms, ServiceNow is well-positioned even in a more cautious and uncertain economy. It's also expecting significant opportunities in the federal sector after budget cuts. It has even introduced a new government transformation suite that has been purpose-built to help accelerate digital transformation, increase transparency, and improve public service delivery. The company is looking like an AI software winner, and the combination of generative AI and agentic AI should only solidify its position. It's already seeing strong AI growth, and that should continue. From a valuation perspective, the stock now trades at a forward price-to-sales multiple of 14.8 based on 2025 analyst estimates. For a high-margin SaaS business with about 20% revenue growth, that valuation is reasonable, although not in the bargain bin. As such, I wouldn't chase the rally in the stock, but I think it still has solid upside from here over the long term. In the meantime, I would be on the lookout to buy the stock if it gets caught up in any market dips.