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ServiceNow Earnings: What To Look For From NOW


Jabin Bastian /
2022/04/26 7:09 am EDT
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Enterprise workflow software maker ServiceNow (NYSE:NOW) will be reporting earnings tomorrow after the bell. Here's what to expect.

Last quarter ServiceNow reported revenues of $1.61 billion, up 29% year on year, in line with analyst expectations. It was a solid quarter for the company, with accelerating growth in large customers and a strong top line growth. The company added 93 enterprise customers paying more than $1m annually to a total of 1,359.

Is ServiceNow buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting ServiceNow's revenue to grow 24.9% year on year to $1.69 billion, slowing down from the 30% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.70 per share.

ServiceNow Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing one upward and four downward revisions over the last thirty days. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.38%.

With ServiceNow being the first among its peers to report earnings this season, we don't have anywhere else to look at to get a hint at how this quarter will unravel for software stocks, but the whole sector has been hit hard on fears of higher interest rates, with stocks down on average 9.34% over the last month. ServiceNow is down 18.9% during the same time and is heading into the earnings with analyst price target of $680.3, compared to share price of $472.23.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.