ServiceNow Expands Wallet Share, Brings Strong Fourth Quarter Results

Due to strong demand, ServiceNow’s fourth-quarter revenue increased by 31%, and earnings were better than expected.

The company reported revenue of $1.25 billion in the fourth quarter and non-GAAP earnings per share of $1.17 (GAAP earnings per share of 8 cents).

Wall Street expects revenue of US$1.21 billion in the fourth quarter and non-GAAP earnings per share of US$1.05.

CEO Bill McDermott said that ServiceNow has completed 89 transactions with a new annual contract value worth more than $1 million. In total, ServiceNow has 1,093 customers and its annual contract value exceeds $1 million.

McDermott added that ServiceNow is reaping benefits due to the “long-term tailwind of digital transformation, cloud computing and business model innovation.” In fact, ServiceNow’s goal is to become a $10 billion company. With the expansion of its platform, it has expanded from IT service management to human resources to industry and COVID-19 vaccine management.

Developments in the fourth quarter include:

ServiceNow stated that it has been adopted in IT, employee and customer workflow businesses, and has gained advantages in artificial intelligence and machine learning.

The following is the outlook for ServiceNow.

In 2020, ServiceNow achieved revenue of US$4.52 billion, an increase of 31%, and net profit of US$119 million, or 59 cents per share.

In the conference call, McDermott said:

The workflow revolution is taking place, and the pandemic is accelerating digital transformation. Every business needs speed, agility and flexibility. Every top leader wants to provide an excellent experience for their employees and customers. Companies are changing the way they operate. They need to provide strong customer loyalty and deep employee involvement to win. All this has to do with people, and large-scale empathy is a top priority for business in the 21st century. The long-term tailwinds of digital transformation, cloud computing, and business model innovation all intersect at a perfect moment. Paradigm shifts are happening all over the world. In 2020, despite the decline in global GDP, for the first time in history, we will see an acceleration in digital transformation spending. Digital investment is at the highest level in history and is expected to continue to grow.