Delivered by ServiceNow Inc. the financial results in today’s fourth quarter, beating expectations on earnings and earnings as it closed with a large number of large transactions. The company also promoted a number of its senior executives as its stock gained nearly 10% in extended trading.
ServiceNow reported earnings before certain expenses such as stock compensation of $ 1.49 per share on revenue of $ 1.629 billion in the quarter, up 30% from a year ago. That was better than expected, with Wall Street modeling revenues of just $ 1.43 per share on sales of $ 1.6 billion.
In the quarter, the company said it closed 135 transactions with more than $ 1 million in net new annual contract value, up 52% from a year ago. ServiceNow said it now counts 1,359 customers with more than $ 1 million in ACV, up 25% from the same period last year.
ServiceNow President and Chief Executive Bill McDermott (pictured) said the company “beat the high end of expectations” in its fourth quarter results, adding that customer demand was “stronger than ever”.
“Our unique culture has made us one of the best places to work,” McDermott added. “We’re growing like a fast -moving startup with the profitability of a global market leader.”
ServiceNow’s growth was also evident in its subscription revenue, which rose 29% from a year ago to $ 1.523 billion. In addition, it reported outstanding performance obligations of $ 5.7 billion in the quarter, up 29%. The RPO represents the total future performance obligations arising from the company’s contractual relationships. More specifically, it is the sum of the invoiced amount and the future amounts that have not been invoiced for a contract with a customer.
ServiceNow sells software used by enterprise information technology departments to monitor and manage the services they provide. Its platform also provides administrative and workflow management tools, and in recent times it has expanded from core business to provide human resources, customer service management and IT security tools.
The company has been successful recognizing this in helping to popularize workflow as a concept. It is also hugely ambitious, aiming to make more than $ 15 billion in annual revenue by 2026.
ServiceNow chief financial officer Gina Mastantuono today said the company remains on track to reach that target.
“The company is firing all the cylinders and we’re going into 2022 with tremendous momentum,” he said. “We expect continued currency subscription revenue growth to accelerate year-over-year in Q1, which sets us up for another strong year and puts us well on our way to becoming a $ 15 billion and company revenue. “
It still has some way to go though. For the entire 2021 fiscal year, ServiceNow reported revenue of $ 5.831 billion, up 28% from the previous year.
However, McDermott told MarketWatch in an interview that he has reason to be confident in ServiceNow’s future growth prospects.
“In this macro environment of a Great Resignation, supply-chain disruption and inflation, digital technologies are a growth-stimulating deflationary force,” he said. “These results show that ServiceNow’s business model is set to thrive in any economic environment.”
In its executive reshuffle, ServiceNow said it is promoting Chief Product and Engineering Officer Chirantan “CJ” Desai to be its new chief operating officer. As COO, Desai’s expanded responsibilities include industry and solution sales, with the goal of accelerating customer adoption of the company’s range of products.
Elsewhere, the company said its chief revenue officer Kevin Haverty has been promoted to a new strategic role as senior advisor at McDermott. Meanwhile, ServiceNow’s president of Europe, Middle East and Africa, Paul Smith, has been appointed as its new chief commercial officer. Finally, ServiceNow said it will take over the former Salesforce.com Inc. and executive of Coca-Cola Co. that Ulrik Nehammer as its new president of EMEA.
For the next quarter, ServiceNow said it estimated subscription revenue to be between $ 1.61 billion and $ 1.615 billion. The midpoint of that forecast is ahead of Wall Street’s projection of $ 1.62 billion in subscription revenue.
Photo: World Economic Forum/Flickr
Show your support for our mission by joining our Cube Club and Cube Event Community of experts. Join the community that includes Amazon Web Services and Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger and many more luminaries and experts.
.