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SANTA CLARA, Calif. - ServiceNow (NYSE: NYSE:NOW) has reported a strong finish to 2024, with its fourth-quarter earnings showcasing a 21% year-over-year increase in both subscription and total revenues, amounting to $2,866 million and $2,957 million respectively. The company, known for its AI platform for business transformation, also noted a significant rise in its performance obligations, with current remaining performance obligations (cRPO) reaching $10.27 billion, up 19% from the previous year. With a market capitalization of $236 billion and impressive gross profit margins of 79.2%, ServiceNow continues to demonstrate robust financial performance. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.22 out of 5, with 17 additional ProTips available to subscribers.
The firm’s customer base has expanded, with nearly 500 customers now generating over $5 million in annual contract value (ACV), marking a 21% increase year-over-year. ServiceNow’s Board of Directors has also authorized additional repurchases of up to $3 billion of common stock under its share repurchase program. The company’s strong revenue growth of 23.5% over the last twelve months reflects its expanding market presence.
Innovation has been a key driver for ServiceNow, with the announcement of new AI Agent Orchestrator capabilities and a suite of pre-built AI agents set to be available in March 2025. These advancements aim to streamline enterprise AI agent adoption and enhance productivity. The company’s GenAI innovations have also surged, with over 150 new features introduced in the fourth quarter alone.
Strategic partnerships and acquisitions have played a significant role in ServiceNow’s growth strategy. Collaborations with Google (NASDAQ:GOOGL) Cloud, Oracle (NYSE:ORCL), SoftwareOne Holding AG, and Visa (NYSE:V) have been expanded to integrate and streamline various technological capabilities and services. The acquisition of AI-native conversation data analysis platform Cuein and operational technology services provider Mission Secure further bolster the company’s offerings.
ServiceNow’s leadership in the industry has been recognized with several accolades, including a place on the Fortune® World’s Most Admired Companies 2025™ list and high rankings on the American Opportunity (SO:FTCE11B) Index and the Forbes Most Trusted Companies in America 2025 list.
Looking ahead, ServiceNow is focusing on optimizing its go-to-market approach and incorporating consumption-based monetization elements into its AI and data solutions. While the company faces challenges such as foreign exchange headwinds and a shift in U.S. Federal business seasonality, it remains confident in its ability to generate further free cash flow and expand its market lead. Trading near its 52-week high of $1,198, InvestingPro’s Fair Value analysis suggests the stock is currently overvalued. For detailed insights and comprehensive analysis, investors can access the full ServiceNow Pro Research Report, part of InvestingPro’s coverage of over 1,400 US equities.
This report is based on a press release statement and reflects the company’s performance as of the fourth quarter ended December 31, 2024.
In other recent news, ServiceNow has made significant strides in the realm of artificial intelligence (AI). The company has introduced its AI Agent Orchestrator, designed to enhance the coordination of AI agents across various business tasks, systems, and departments. The new feature is part of the latest advancements on the ServiceNow platform, aiming to streamline enterprise operations. ServiceNow has also expanded its partnership with Google Cloud, which will see the integration of ServiceNow’s Workflow Data Fabric with Google Cloud’s BigQuery. This collaboration aims to enhance Customer Relationship Management (CRM), IT Service Management (ITSM), and Security Incident Response (SIR) solutions by adding AI Agent capabilities.
ServiceNow has also entered a strategic alliance with Visa to modernize Visa’s Dispute Management Service using ServiceNow’s AI technology. This collaboration is expected to streamline the resolution of payment card disputes, improving compliance adherence and the overall cardholder experience.
In terms of financial performance, ServiceNow has demonstrated robust revenue growth of 23.5% over the last twelve months, with total revenue reaching $10.46 billion. This strong performance has led to positive feedback from financial analysts. Cantor Fitzgerald has maintained an Overweight rating on ServiceNow stock, while analysts from TD Cowen and Goldman Sachs have expressed positive outlooks on the company. These are recent developments in ServiceNow’s strategic growth and expansion.
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