The huge growth story of ServiceNow continues. The company has achieved record performance in the past quarter and therefore exceeded analyst expectations. In particular, the important cloud business recorded significant growth.
Overall, the company’s sales increased by 33% to US$1.05 billion (previous year: US$788.9 billion). Subscription sales increased by 34% to $995 million. Earnings per share were US$0.24 (previous year: loss per share of US$0.01). Both cases are beyond the consensus of analysts.
Optimistic outlook
In the second quarter of 2020, cloud providers from California expect subscription sales to grow 27% to 28% over the same period last year.
“Despite our financial health, many customers are currently in very difficult conditions, especially in industries that are severely affected by Covid-19. Therefore, our forecast is based on the following assumptions: In general, the greatest resistance will occur.
CEO Bill McDermott was very satisfied with the results and insisted on his mid-term sales target of $10 billion per year: “Due to the pandemic, it may not happen this year, but it will happen.”
Strategic acquisition
According to the “Forbes” ranking, ServiceNow is a leader in enterprise service management and the most innovative company in the world. The company has a very loyal customer base and knows how to grow organically through strategic and smart acquisitions. Recently, many companies from the AI field have been taken over, such as Appsee, Loom Systems and Passage AI.
ServiceNow’s quarterly report can be found here
Investors were ecstatic about the quarterly results, which caused the note to rise about 7% before it went public. This means that the record high since February is near. DERAKTIONÄR believes in cloud providers and hopes that the future business development will be very strong. The investor puts the file on his watch list and prepares to re-enter it.
Notice of conflict of interest
The author Emil Jusifov directly took a position on the following financial instruments mentioned in the publication or related derivatives that could benefit from any resulting price increases: ServiceNow.
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