ServiceNow reported first-quarter earnings and revenue that topped Wall Street estimates ahead of a much anticipated investor day for ServiceNow stock. In Q1, some key financial metrics edged by expectations while guidance came in slightly below views.
ServiceNow will host an investor day on May 6 in tandem with its Knowledge customer conference. It's expected to update its artificial intelligence strategy and discuss financial goals.
Reported after the market close on Wednesday, ServiceNow said earnings for the quarter ending March 31 rose 44% to $3.41 per share on an adjusted basis from the year-earlier period. Also, revenue rose 24% to $2.6 billion, the Santa Clara, Calif-based enterprise software maker said.
ServiceNow stock analysts had expected the company to report earnings of $3.14 a share on revenue of $2.59 billion.
ServiceNow Stock: Subscription Revenue Outlook
For the current quarter ending in June, ServiceNow forecast subscription revenue in a range of $2.525 billion to $2.53 billion. Analyst consensus estimate is $2.533 billion.
"The incremental currency headwinds on the Q2 revenue guide and the lack of a bigger raise in the out-quarters is weighing on the shares this morning," said Evercore ISI analyst Kirk Materne in a report. "We believe the long-term trends around ServiceNow's business remain intact and ServiceNow is in the early days of monetizing Gen AI."
Additionally, ServiceNow said subscription revenue rose 25% to $2.52 billion, edging by the consensus estimate of $2.51 billion.
Current remaining performance obligations, or CRPO, for ServiceNow came in above expectations. CRPO rose 21% to $8.45 billion. Analysts had projected CRPO of $8.41 billion.
CRPO bookings are an aggregate of deferred revenue and order backlog and serve as a sales growth metric.
Meanwhile, on the stock market today, ServiceNow stock fell 4.1% to 715.50 in morning trading.
NOW Stock Buyback
In Q1, ServiceNow repurchased $175 million of its own stock. About $787 million remains in a repurchase authorization by the company's board of directors.
Further, heading into the ServiceNow earnings report, the software stock had gained 6% in 2024 and 59% over the past 52 weeks.
The company's software tracks and manages services provided by information-technology departments. Also, its self-service tech portal enables company employees to access administrative and workflow tools.
In addition, ServiceNow has expanded from its core business. It's branched into software for human resources, customer service management and security.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
