ServiceNow beats estimates and raises outlook as AI passes $1B in bookings
Shares in ServiceNow Inc. rose more than 3% in late trading today after the enterprise software company beat Wall Street targets across every headline metric in its fiscal second quarter and raised its full-year subscription revenue outlook, as its artificial intelligence products crossed $1 billion in annual contract value for the first time.
For the quarter that ended on June 30, ServiceNow reported adjusted earnings of 90 cents per diluted share, up from a split-adjusted 82 cents in the same quarter a year earlier, on revenue of $3.99 billion, up 24% year-over-year. Both topped the 86 cents per share and revenue of $3.93 billion expected by analysts.
Subscription revenue, the bulk of the total, rose 24.5% to $3.88 billion, or 23% in constant currency. Adjusted operating margin came in at 29.5%. Current remaining performance obligations, booked revenue the company expects to recognize over the next 12 months, climbed 21%, to $13.2 billion and total remaining performance obligations reached $29 billion, also up 21%.
The AI business was the figure investors had been waiting on. ServiceNow said its AI portfolio passed $1 billion in annual contract value during the quarter and Chairman and Chief Executive Bill McDermott said agentic deployments of the software climbed ninefold over the past nine months.
