ServiceNow Inc (NYSE:NOW) stock is up 11.79% (As of October 27, 11:54:56 AM UTC-4, Source: Google Finance) after the company posted mixed results for the third quarter of FY 22 .The company also reported subscription revenue of $1.74 billion in the quarter, up 22% from a year ago. As of September 30, 2022, current outstanding performance obligations (“cRPO”), contract revenue to be recognized as revenue over the next 12 months, was $5.87 billion, representing 18% year-over-year growth and 25 % adjusted for consistency. money The company now has 1,530 total customers with more than $1 million in annual contract value, representing 22% year-over-year customer growth. The number of customers paying more than $10 million in annual contract value in Q3 2022 grew 60% year-over-year. The company closed 69 deals of more than $1 million in net new ACV during the quarter, including five with new logos. Operating margin was 26%, driven by top line beat and operating efficiencies. The free cash flow margin is 6%. The company ended the quarter with a healthy balance sheet, including $5.5 billion in cash and investments.
NOW in the third quarter of FY 22 reported adjusted earnings per share of $1.96, beating analysts’ estimates for adjusted earnings per share of $1.85. The company reported adjusted revenue growth of 21 percent to $1.83 billion in the third quarter of FY 22, missing analysts’ estimates for revenue of $1.85 billion.
For the fourth quarter, ServiceNow expects subscription revenue to come in at $1.83 billion to $1.84 billion. That was below Wall Street’s forecast of $1.87 billion in subscription revenue. The company also lowered full-year subscription revenue guidance to $6.87 billion, down from a prior target of $6.92 billion.
ServiceNow had a busy quarter on the product front, announcing a major refresh of its flagship workflow automation platform with the Now Platform Tokyo release. It also strengthened its observability platform Lightstep with the addition of Unified Query Language to enable observability-as-code. Lightstep will likely get some additional new capabilities soon, following ServiceNow’s acquisition of a startup called Era Software Inc.
In addition, ServiceNow’s board of directors gave McDermott a solid vote of confidence, appointing him as the company’s new chairman. He takes over from ServiceNow founder Fred Luddy, who will remain on the company’s board.