ServiceNow (NYSE 🙂 reported stronger-than-expected earnings in Q1, driving its shares to rise more than 10% in premarket trading on Thursday.
The enterprise software maker EPS before some particular cost $ 1.76, higher than analyst estimates of $ 1.70 per share. Revenue reached $ 1.72 billion, up 27% YoY and compared to consensus estimates of $ 1.7 billion.
Net income for the quarter reached $ 75 million, according to the financial report. Subscription revenue grew 26% during the period to $ 1.63 billion, just above analyst expectations of $ 1.62 billion. CRPO bookings rose 29% to $ 5.69 billion in the quarter.
Going forward, ServiceNow expects Q2 subscription revenue to range from $ 1.67 billion to $ 1.675 billion, compared to analyst estimates of $ 1.675 billion.
“We are in a sustained demand environment. Companies are investing with a sense of urgency in technologies that bring them the right results, fast, “said CEO Bill McDermott.” It’s very clear that businesses can never go back to the ‘status quo.’ We are now in the tech-to-compete world. ”
BofA analyst Brad Sills said Q1 and outlook showed “resilient strength.” The analyst repeated a Buy rating and Top Pick designation.
“The channel’s feedback suggests a very robust pipeline being built for the creator, suggesting possible incremental growth as we go through the year. The guidance for 28% cc cRPO growth suggests that 30%+ will be achieved again, with commentary citing separate deals driving Q2 out of the war with Russia (most of which have already closed), ” said Bills.
Barclays Analyst Raimo Lenschow lowered the target price to $ 613.00 per share from $ 652.00 while the Overweight rating reflects his belief in the strength of the company’s business.
“ServiceNow followed in the footsteps of MSFT and delivered solid Q1 results. True, beat levels were slightly lower than normal due to macro and FX headwinds, but management still delivered better than expected results. In normal markets, this may be seen as insufficient but investor sentiment is very negative going into earnings and therefore, we will see how the shares will start to work again from here, especially considering the upcoming analyst day and customer conference (May 24), ”the analyst wrote in a note.
By Senad Karaahmetovic