- ServiceNow’s adjusted revenue for Q3 was $2.79 billion, surpassing the estimate of $2.75 billion.
- Subscription revenue reached $2.72 billion, beating the estimated $2.67 billion.
- Professional Services & Other revenue came in at $82 million, above the forecasted $79.9 million.
- Adjusted earnings per share (EPS) were $3.72, outperforming the estimate of $3.46.
- Adjusted gross profit hit $2.31 billion, above the expected $2.25 billion.
- The adjusted gross margin was 83%, higher than the estimated 82.1%.
- Subscription adjusted gross margin stood at 85%, exceeding the 84.1% estimate.
- Professional Services & Other adjusted gross margin was 7%, below the estimate of 11.3%.
- Remaining performance obligations were valued at $19.5 billion.
- Current remaining performance obligation was $9.36 billion, ahead of the $9.1 billion forecast.
- The free cash flow for the quarter was $471 million, significantly above the $351.4 million estimate.
- ServiceNow has updated its year forecast for subscription revenue to $10.655 billion to $10.66 billion, previously projected at $10.58 billion to $10.59 billion.
- The company still expects the subscription adjusted gross margin to be around 84.5%.
- ServiceNow repurchased approximately 272,000 shares for $225 million to manage dilution, with $562 million remaining in their repurchase program.
- Amit Zavery has been appointed as chief operating officer, chief product officer, and president effective October 28, 2024.
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Servicenow Inc on Smartkarma
Analysts at Baptista Research on Smartkarma have closely monitored Servicenow Inc. and provided positive insights on the company’s recent financial performance and growth prospects. In their report titled “ServiceNow Inc.: Expanding Market Reach Through Partnerships and Cloud Solutions & Other Major Drivers,” they highlight the company’s strong second quarter of 2024 results, showcasing operational and financial momentum. Despite internal challenges, Servicenow reported a 23% year-over-year growth in subscription revenue at constant currency, exceeding their own expectations. The management’s emphasis on growth strategies like the GenAI approach has notably contributed to the company’s success.
In another report by Baptista Research titled “ServiceNow Inc: How Will The Adoption of GenAI Technology Impact Their Future Revenues & Profitability? – Major Drivers,” analysts praised Servicenow’s performance in the first quarter of 2024, surpassing guidance on key financial metrics. The company experienced a significant 24.5% year-over-year growth in subscription revenue at constant currency, along with a 21% increase in current remaining performance obligations (CRPO) year-over-year. These positive outcomes have raised expectations regarding Servicenow’s future revenue and profitability potential, supported by the adoption of innovative technologies like GenAI.
A look at Servicenow Inc Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 1 | |
| Growth | 5 | |
| Resilience | 4 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.2 |
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 has a mixed outlook based on the Smartkarma Smart Scores. While the company scores high in Growth, Resilience, and Momentum, its Value and Dividend scores are lower. This suggests that the company is positioned for strong long-term growth and has shown resilience in the face of challenges. ServiceNow provides IT management software, cloud services, and an IT service management platform, primarily serving customers in the United States.
With a solid score in Growth, ServiceNow Inc is expected to continue expanding and innovating within the enterprise IT management software industry. Its high scores in Resilience and Momentum indicate a company that is adaptable and gaining positive momentum in the market. However, the lower scores in Value and Dividend suggest that investors may need to closely evaluate the company’s financials and dividend policy for a more comprehensive investment decision.
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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