ServiceNow up 10% in extended trading: 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 income printed in Q4 printed at $26 million that translates to 13 cents per share. On an adjusted basis, it earned $1.46 a share versus the year-ago figure of $1.17 a share, as per the earnings press release.

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

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

Guidance for the future

For the full financial year, ServiceNow forecasts $7.02 billion to $7.04 billion in subscription sales, out of which, about $1.615 billion are expected in the current quarter. Subscription sales in Q4 came in at $1.52 billion.

In comparison, analysts had called for $1.62 billion in Q1 subscription revenue and $7.02 billion for the full year. As per Futurum Research’s Daniel Newman:

ServiceNow continues to benefit from the rapid investments needed for businesses to keep up with digital transformation. With strong growth on the top line, a plethora of large customer wins, and 99% customer retention rates, it’s hard not to like ServiceNow’s prospects both short and long term.

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