ServiceNow Reports Strong First Quarter Earnings
ServiceNow, Inc. (NOW) reported its first-quarter financial results after the bell on Wednesday, exceeding analyst expectations. The company delivered earnings per share of $3.41, surpassing the consensus estimate of $3.14 by 8.6%. Quarterly sales also exceeded expectations, reaching $2.6 billion compared to the anticipated $2.59 billion, representing a 24.19% increase year-over-year.
Subscription revenue, a key metric for ServiceNow, grew by 25% year-over-year to $2.523 billion. This growth was driven by strong demand for the company's GenAI offerings, which are the fastest-selling products in ServiceNow's history. The company also highlighted securing eight transactions over $5 million in net new ACV during the quarter, a 100% increase compared to the previous year.
"ServiceNow is off to a fast start with an outstanding first quarter," said ServiceNow CEO Bill McDermott. He emphasized the company's leadership in AI technology and talent, positioning them to capitalize on the growing demand for productivity improvements. McDermott also expressed gratitude for the trust customers are placing in ServiceNow's platform.
Despite the strong performance, the company's guidance for 2024 was impacted by the strengthening of the U.S. Dollar. This resulted in a negative 2-point impact on its second-quarter cRPO growth.
Following the earnings release, ServiceNow shares experienced a decline of 4.91% in after-hours trading, reaching $709.75 at the time of publication.