Shares in ServiceNow (just nowIT Cloud reported that despite the increased expectations, revenue and revenue exceeded expectations, rising 2.3% in after-hours trading on Wednesday.
Specifically, non-GAAP earnings per share in the third quarter were US$1.21, which exceeded market expectations of US$0.18, while GAAP earnings per share was US$0.06, which also exceeded market average expectations of US$0.04. Revenue of $1.14B increased by 26.8% year-on-year, exceeding market average expectations by $30 million.
In the current quarter, NOW’s non-GAAP operating margin was 26%, compared with a consensus of 22.3% and a guidance value of 22%.
ServiceNow also reported 41 new annual transactions with a net contract value of more than $1 million in the third quarter of 2020, with a total of 1,012 customers and an annual contract value of over $1 million.
ServiceNow CEO Bill McDermott cheered: “Our outstanding third-quarter results exceeded everyone’s expectations, and we are increasing the level of guidance for the whole year.” “The COVID is redefining the future of work, accelerating digital transformation, and expanding the system , Silos and processes are unified into the requirements of the overall enterprise workflow. ServiceNow is a platform for digital business.”
Looking ahead to FY20 guidance, management has improved the outlook for revenue and profitability indicators. Management raised the subscription bill to $4.790B at the midpoint, an increase of 27% from 23.5% in the same period last year.
As for the guidance for the fourth quarter of 20, the median income was $1.158B, which was 2.7% higher than market expectations.
After the financial report was announced, Alex Zukin of Royal Bank of Canada reiterated his NOW buy rating and was optimistic about the target stock price of $600 (upside potential is 24%).
“Now we have a strong earnings report for the third quarter of the 20th quarter. The focus is on accelerating new ACV net growth, cRPO growth of more than 30%, and winning in all guiding indicators. We believe the company’s advantage in taking advantage of post-COVID customer plans stronger.”
Zukin said: “The management’s positive comments on the pipeline in the fourth quarter coincide with our partner inspections entering this quarter. At the same time, the company expects to have higher sales efficiency and better pipeline coverage next year than the same period last year. Rate.” (Please refer to the current TipRanks stock analysis)
In general, NOW now has a “strong buy” analyst consensus, with a buy rating of 16 and a hold rating of 3. At the same time, analysts’ average target stock price indicates that there is still room for 12% upside in the future. So far this year, the stock price has risen more than 70%.
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