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A dream time
ServiceNow
Shares gained ground in trading after Wednesday’s hours of better-than-expected financial results – and strong guidance for the cloud-based workflow management software company. The strong growth could be seen as a good sign for other enterprise cloud software providers.
For the quarter,
ServiceNow
(ticker: NOW) has raised revenue of $ 1.25 billion, up 31% from a year ago and ahead of Wall Street analyst consensus at $ 1.21 billion, with non-GAAP profits of $ 1.27 a share, ahead of the Street at $ 1.05.
In presenting financial results, ServiceNow likes to emphasize membership revenues and bills – the basis on which the company provides guidance. Membership revenue in the quarter was $ 1.18 billion, up 32%, ahead of the lead range of $ 1.155 and $ 1.16 billion. Membership bills were $ 1.8 billion, ahead of the projected range of $ 1.63 billion and $ 1.65 billion.
For the fourth quarter, the company plans a membership revenue of $ 1.275 billion to $ 1.28 billion, ahead of the Street consensus as followed by FactSet at $ 1.244 billion. ServiceNow sees billions of $ 1.31 billion to $ 1.315 billion, again ahead of consensus at $ 1.24 billion.
For the whole of 2021, ServiceNow sees membership revenues in the $ 5.48 billion to $ 5.5 billion range, above the previous consensus at $ 5.35 billion, with membership bills of $ 6.205 billion to $ 6.225 billion, ahead of the Street at $ 5.977 billion.
In an interview with Barron’sChief Executive Bill McDermott said the company is benefiting from “the perfect intersection of digital transformation, cloud computing and business model innovation.” He sees the company’s role as “managing the future of operations,” and believes that ServiceNow is one of the biggest benefits of the move to cloud computing.
It is noteworthy that the company added more net new customers in the quarter than ever before, and secured the largest single contract ever. “We fire on every cylinder,” McDermott says. “Our platform is taking over the C-suite everywhere we go. “He notes that even though GDP in 2020 was contracting, investment in digital transformation is growing.
Citi analyst Walter Pritchard reveals in a research note that membership revenue was 12% ahead of the Street, “the most important thing we have seen ServiceNow report in at least three year. ”He notes that the number of contracts was over $ 1 million around a year ago, suggesting that the upside came from smaller businesses.
ServiceNow is in late trading up 1.5%, to $ 524.
Write to Eric J. Savitz at [email protected]