ServiceNow forecasts strong sales based on workflow software demand

(Bloomberg)-ServiceNow Inc. expects subscription sales this quarter to slightly exceed Wall Street’s expectations, indicating that the company will continue to invest in upgrading its business workflow software while employees remain at home.

The Santa Clara, California-based company said in a statement on Wednesday that subscription revenue will be between $1.15 billion and $1.16 billion for the period ending December. The average analyst estimate is $1.13 billion. The company raised its fiscal year subscription sales forecast from approximately $4.23 billion to $4.26 billion.

CEO Bill McDermott promised to transform the 17-year-old ServiceNow into a “software giant.” The company plans to achieve $10 billion in revenue in an unspecified time frame, which includes sales of applications that can help the company organize people, customer service and IT operations and transition to more online jobs. Like competitor Salesforce.com Inc., ServiceNow provides customers with a set of software tools to help them safely return to the office during the coronavirus pandemic.

After the New York stock market closed at $484.05, the stock rose more than 3% in extended trading. The stock has risen 71% this year.

In the third quarter, ServiceNow reported a 31% increase in subscription revenue, reaching $1.09 billion, compared with analysts’ expectations of $1.06 billion. As of September 30, the company’s total sales increased by 30% to 1.15 billion US dollars. Excluding certain items, the profit was $1.21 per share. Analysts expect it to be $1.03.

ServiceNow also appointed Apple executive Larry Jackson (Larry Jackson) as a member of its board of directors, which has now expanded to 11 seats. Jackson, the global creative director of Apple Music, will become the first black director of ServiceNow. McDermott said in a statement that Jackson will focus on customer experience.

The software maker said earlier on Wednesday that it had appointed Gabrielle Toledano, who was before Keystone Strategy LLC and Comcast Ventures, as its chief talent officer effective January.

McDermott said in the statement: “Covid is redefining the future of work, accelerating digital transformation, and expanding the need for unified systems, silos and processes.” “Customers are using Now Platform to create workflows, these workflows Provide an excellent experience for brave veterans, students, knowledge workers, consumers and many others around the world.”

(The update on company appointments starts from paragraph 6.)

©2020 Bloomberg LP