Tech

ServiceNow reports stellar Q3 financials amid pandemic

ServiceNow chief Bill McDermott has won this week’s game of buzzword bingo for his address to financial analysts during last night’s Q3 earnings conference call.

The workflow software biz reported [PDF] a 31 per cent year-on-year jump in revenue to $1.512bn, with $1.427bn of that coming from subscriptions and $85m from professional services. Operating income was $74m, up from $69m.

Never one to shy away from hyperbole, McD said:

“We again have raised our guidance for the full year, strengthening our clear path to $15n-plus in revenue by 2026. I was introduced to ServiceNow as CEO more than two years ago. We’ve all seen a lot since then. What we’ve never seen, is such consistent innovation and execution at global scale.

“Thanks to our customers, employees, and partners, we’re well on our way to becoming that defining enterprise software company of the 21st century. And we’re only getting started.”

The stellar quarter saw subscription revenue and billing grow 32 per cent and 28 per cent respectively. The number of deals greater than $1m was 63, up 50 per cent on a year ago. 10 deals worth more than seven figures were booked for IT operations management, including with the US Inland Revenue Service.

ServiceNow has fingers in multiple pies – IT service management, IT operations management, employee workflows, and more. The company said the top 20 biggest sales in Q3 included four or more products.

“Don’t forget the creator workflows,” said McDermott. “500 million net new applications will be developed in the next two-plus years, and that will be developed for companies by companies in their own technology departments and there’s not enough engineers to do that in the world.”

Q4 guidance was raised by $32m to between $5.565bn and $5.57bn but Wall Street was expecting more and so ServiceNow’s share price fell 4 per cent last night in extended trading.

We’ll leave the last word to McDermott: “Our customer base is expanding, just as our customer NPS (net promoter score) is increasing. Our partner ecosystem is fired up. We help businesses drive their own ESG initiatives on our platform with a major release. The list goes on and on.

“Overall, our message to the market couldn’t be any clearer. Whatever systems, challenges, or opportunities you have, however fast you need to move, you have a trusted innovator in ServiceNow. We want to make the world work better for everyone, and we’ll never lose our focus on the privilege that comes with saying, ‘The world works with ServiceNow’.”

Full house. ®


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