ServiceNow stock jumped as earnings beat expectations

Shares of ServiceNow Inc. jumped more than 8% in extended trading Wednesday after the software company reported fiscal third-quarter earnings that topped Wall Street analysts’ forecasts.

ServiceNow NOW,
reported earnings of $398 million, or 39 cents a share, compared with earnings of $63 million, or 32 cents a share, in the prior quarter. After adjusting for stock-based compensation and other effects, ServiceNow reported earnings of $1.96 per share, up from $1.55 per share a year earlier. Revenue climbed 21% to $1.83 billion from $1.51 billion a year earlier.

Analysts polled by FactSet expected, on average, earnings of $1.85 per share on revenue of $1.85 billion.

“The platform remains the center of gravity for companies moving digital-forward” during tricky macroeconomic headwinds, ServiceNow Chief Executive Bill McDermott told MarketWatch.

Subscription sales rose 22% to $1.74 billion from $1.43 billion on the strength of the FAA and NEC Corp. deals. 6701,

ServiceNow guided for fourth-quarter subscription revenue of $1.83 billion to $1.84 billion. Analysts on average had expected fourth-quarter subscription revenue of $1.87 billion, according to FactSet. ServiceNow also cut its guidance for full-year subscription revenue to $6.87 billion, after previously indicating about $6.92 billion.

In a message to MarketWatch, Daniel Newman, principal analyst at Futurum Research, cited ServiceNow’s 60% growth in accounts of at least $10 million.

Shares of ServiceNow are down 43% this year. The broader S&P 500 index SPX,
is down 23%.

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