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ServiceNow delivers another earnings beat, but stock dips as guidance disappoints
- ServiceNow Q3 earnings beat projections with net income of $432m, up from $242m year-on-year.
- It also saw revenue rise by 22% to $2.8bn, ahead of analysts’ estimates of $2.75bn.
- The company’s chief executive, Bill McDermott, attributed ongoing momentum to generative AI capabilities.
- New and existing customers are doubling down on ServiceNow's AI offerings that automate and organise their IT environments.
- The average worker uses 17 applications a day, but much of this work can be automated with AI, said McDermott.
- ServiceNow’s generative AI offering, Now Assist AI, has become its fastest-growing product, said McDermott.
- While investors welcomed results, the firm's Q4 subscription revenue guidance did disappoint some.
- ServiceNow projects $10.655bn to $10.660bn in full-year subscription revenue, up from $10.56bn to $10.575bn forecast previously.
- The company also announced its hiring of former Google Cloud exec Amit Zavery as pivot towards product and engineering growth.
- Zavery's expertise in packaging and pricing will be vital for SaaS providers looking to move beyond per-seat models.
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