Bill McDermott, Chairman and CEO of ServiceNow, talked about CNBC's “Squawk Box” at the World Economic Forum Annual Meeting in Davos, Switzerland on January 17, 2024.
Adam Galici | CNBC
ServiceNow Strong second quarter results were released and Wednesday's guidance was canceled. Stocks climbed 7% after the report.
Compared with LSEG estimates, the company's execution method is as follows:
- Earnings per share: $4.09 adjusted with expected $3.57
- income: US$3.22 billion versus US$3.12 billion expected
Subscription revenue accounts for the majority of enterprise technology companies’ revenue, reaching $3.1 billion, up from StreetAccount’s $3.03 billion forecast.
The company raised its full-year subscription revenue guide to between $12.775 billion and $12.795 billion as it benefits from artificial intelligence adoption.
“Every business process in every industry will be restructured as Agesic AI,” Bill McDermott, chairman and CEO of ServiceNow, said in a press release.
Net income rose 47% to $385 million, or $1.84 per share, from $262 million or $1.26 per share a year ago. Revenue rose nearly 23% to $3.22 billion.
ServiceNow said it is expected to hit the remaining obligations by 2 percentage points in the third quarter due to seasonality and an increasing number of customers renewing contracts in the last quarter of the year. The company also said that changes in budgets in U.S. government agencies could impact results.
“While today’s federal business is a little uncertain with what we were a year ago, we are browsing it well and we are confident that our guidance reflects any potential changes we see,” financial director Gina Mastanuono told CNBC.
ServiceNow said in its 2024 annual revenue report that a U.S. federal government client accounts for 11% of revenue.
McDermott said in the last reporting period that its public sector operations grew 30% in the first quarter.
The estimated subscription revenue range is between $3.26 billion and $3.27 billion, ahead of the estimate of $3.21 billion. The remaining performance obligations for the quarter have increased by nearly 25% to $10.92 billion.