ServiceNow Q3 Earnings: Revenue Beat, EPS Beat, 'Remarkable' Momentum Driven By AI And More

ServiceNow Inc NOW reported third-quarter financial results after the market close on Wednesday. Here’s what stands out in the report.

Q3 Earnings: ServiceNow reported third-quarter revenue of $2.797 billion, beating the consensus estimate of $2.743 billion. The company reported third-quarter adjusted earnings of $3.72 per share, beating analyst estimates of $3.46 per share, according to Benzinga Pro.

Total revenue was up 22% on a year-over-year basis. Subscription revenues were up 23% year-over-year. ServiceNow said it had remaining performance obligations of $9.36 billion at the quarter’s end, up 26% year-over-year.

The company noted that it now has 2,020 customers with more than $1 million in annual contract value, representing 14% year-over-year growth.

“ServiceNow raised our full-year topline guidance on the strength of our Q3 results, once again going beyond expectations. This remarkable momentum stems from both existing and new customers doubling down on their investments in ServiceNow as the AI platform for business transformation,” said Bill McDermott, chairman and CEO of ServiceNow.

“The mandate to put AI to work for people represents a generational technology shift. We have never been more confident in ServiceNow’s team, our platform and our position as the ultimate growth company in enterprise software.”

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The company noted that it repurchased $225 million of its common stock during the quarter and has $562 million remaining under its current share repurchase program

Outlook: ServiceNow expects fourth-quarter subscription revenue of $2.875 billion to $2.88 billion. The company expects full-year subscription revenue of $10.655 billion to $10.66 billion versus estimates of $10.806 billion.

ServiceNow said it appointed software industry veteran Amit Zavery as president, chief product officer and COO of the company to lead product and engineering, effective Oct. 28.

Management will hold a conference call to discuss the company’s second-quarter results with analysts and investors at 5 p.m. ET.

What Else: ServiceNow also announced a series of partnerships in multiple press releases issued around the same time earnings came out. The announcements include partnerships with Nvidia, Snowflake, Databricks, Rimini Street and Person.

NOW Price Action: ServiceNow shares were down 0.88% in after-hours, trading at $900 at the time of publication Wednesday, according to Benzinga Pro.

Photo: Shutterstock.