ServiceNow shares 10% in extended trade: here’s the catalyst

Shares of ServiceNow Inc (NYSE: NOW) jumped 10% in extended trading after the software reported market-beating results for its fiscal fourth quarter.

Q4 financial results

ServiceNow said its net revenue printed in Q4 was printed at $ 26 million which translates to 13 cents per share. On an adjusted basis, it earned $ 1.46 a share compared to last year’s value of $ 1.17 a share, according to the earnings statement.

The cloud company generated $ 1.61 billion in the recent quarter – an increase from $ 1.25 billion last year. According to FactSet, experts predicted $ 1.43 of adjusted EPS on $ 1.60 billion in revenue. According to CEO Bill McDermott:

In this macro environment of Great Resignation, supply chain disruption and inflation, digital technologies are a stimulating deflationary force. These results show that ServiceNow’s business model is set to thrive in any economic environment.

Guidance for the future

For the full financial year, ServiceNow estimates $ 7.02 billion to $ 7.04 billion in subscription sales, of which, approximately $ 1.615 billion is expected in the current quarter. Subscription sales in Q4 reached $ 1.52 billion.

In comparison, analysts called $ 1.62 billion in Q1 subscription revenue and $ 7.02 billion for the full year. According to Daniel Newman of Futurum Research:

ServiceNow continues to benefit from the rapid investment needed for businesses to keep pace with digital transformation. With strong growth in the top line, so many large customers winning, and a 99% customer retention rate, it’s hard not to dislike ServiceNow prospects both in the short and long term.

Also on Wednesday, ServiceNow promoted its chief product and engineering officer, CJ Desai, as chief operating officer.