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Service Today (NYSE:NOW) stock is moving higher on Thursday after releasing its earnings report for the third quarter of 2022.
The positive news for NOW stock starts with its adjusted earnings per share of $1.96. That’s more than the $1.85 per share Wall Street was expecting for the quarter. It’s also better than the $1.55 per share reported in the third quarter of 2021.
To go along with that, ServiceNow reported revenue of $1.83 billion. Unfortunately, that misses analysts’ revenue estimate of $1.85 billion. Although this was a 21% increase year-over-year from $1.51 billion.
Brad Zelnick, an analyst for Deutsche Bank, pointed to ServiceNow’s federal business as the reason for the strong Q3 results while talking to Daily Business Investor.
“Management reiterated that they continue to operate against an uncertain market backdrop similar to what they reported at the end of last quarter. However, execution was clearly solid and likely helped by an all-time record quarter in their federal business in the US which we think is less economically sensitive.”
NOW Also Offers Q4 Guidance
The latest earnings report includes ServiceNow’s expectations for Q4 2022. It includes subscription revenue from $1.834 billion to $1.839 billion. That represents a 20% to 21% growth compared to the fourth quarter of 2021.
This has shares of NOW stock seeing heavy trading on Thursday. As of this writing, more than 3 million shares of stock have changed hands. That’s nearly double the company’s daily average trading volume of about 1.7 million shares.
NOW stock was up 12.4% on Thursday afternoon.
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At the date of publication, William White does not have (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writers, subject to InvestorPlace.com Publishing Guidelines.