ServiceNow Stock: Earnings Top Estimates, Guidance Meets Views

ServiceNow stock popped Wednesday after the enterprise software maker reported March-quarter earnings and revenue that topped analyst estimates. Revenue guidance for the company met expectations amid volatility in software growth stocks.

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Santa Clara, Calif-based ServiceNow (NOW) reported first-quarter earnings after the market close. ServiceNow stock popped 7.2% to near 500 in extended trading on the stock market today.

ServiceNow earnings climbed 16% to $1.76 per share on an adjusted basis. Revenue rose 27% to $1.72 billion, the software maker said.

A year earlier, ServiceNow earned $1.52 a share on sales of $1.36 billion. Analysts expected ServiceNow to report earnings of $1.70 a share on revenue of $1.7 billion for the quarter, which ended March 31.

In addition, ServiceNow said subscription revenue for the period rose 26% to $1.63 billion, topping estimates of $1.62 billion.

ServiceNow Stock: Revenue Guidance In Line

Heading into the earnings report, ServiceNow stock had declined 27% in 2022.

The enterprise software maker said first-quarter current remaining performance obligations, or CRPO bookings, rose 29% to $5.69 billion. That topped analyst estimates of 28% CRPO growth. CRPO bookings are an aggregate of deferred revenue and order backlog.

ServiceNow said it expects June-quarter subscription revenue in a range of $1.67 billion to $1.675 billion. ServiceNow stock analysts predicted subscription revenue of $1.675 billion.

“Subscription revenue guidance for Q2 was slightly below vs. consensus while full-year 2022 guidance moved slightly higher,” said RBC Capital analyst Matthew Hedberg in a report to clients.

What ServiceNow Does

The company’s software tracks and manages services provided by information-technology departments. Its self-service tech portal enables company employees to access administrative and workflow tools.

Further, ServiceNow has expanded from its core business into software for human resources, customer service management and security.

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Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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