ServiceNow demonstrated strong growth and execution across key financial metrics, particularly in subscription revenue and large deal momentum. The company is well-positioned in the AI market with its Now Assist product, and its expansion into data platforms could significantly increase its market opportunity. There were some concerns about the federal business and increased operational costs, but these were addressed and largely mitigated in the call.

Company Guidance

During ServiceNow's Q3 2024 earnings call, the company provided strong guidance for the upcoming quarter and full year, reflecting their confidence in continued growth. For Q4, ServiceNow anticipates subscription revenues between $2.875 billion and $2.88 billion, representing a 21.5% to 22% year-over-year increase, or 20.5% on a constant currency basis. The company expects current remaining performance obligations (CRPO) to grow by 21.5% year-over-year on both a reported and constant currency basis. Additionally, ServiceNow projects a Q4 operating margin of 29%. For the full year 2024, the company has raised its subscription revenue outlook to a range of $10.655 billion to $10.66 billion, representing 23% year-over-year growth, or 22.5% on a constant currency basis, while maintaining expectations for a subscription gross margin of 84.5%, a free cash flow margin of 31%, and a GAAP diluted weighted average outstanding share count of 208 million.

Record Subscription Revenue Growth

Q3 2024 subscription revenues were $2.715 billion, growing 22.5% year-over-year in constant currency, exceeding the high end of guidance by 200 basis points.

Strong CRPO Growth

Current RPO was $9.36 billion, representing 23.5% year-over-year constant currency growth, a 150 basis point beat versus guidance and a 100 basis point acceleration from Q2.

Large Deal Momentum

In Q3, ServiceNow closed 96 deals greater than $1 million in net new ACV, including 15 deals over $5 million and 6 deals over $10 million.

AI Platform Leadership

ServiceNow's Now Assist has 44 customers spending more than $1 million in ACV, with 6 over $5 million and 2 over $10 million, continuing to be the fastest-growing product.

Operational Efficiency

Non-GAAP operating margin was over 31%, more than 150 basis points above guidance, driven by top-line outperformance and operating expense efficiencies.

Expansion of Total Addressable Market

ServiceNow's new workflow data fabric and Raptor DB have the potential to nearly double the TAM to $0.5 trillion.

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ServiceNow (IT:1NOW) Earnings, Revenues Date & History

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IT:1NOW Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Jan 22, 2025	2024 (Q4)	3.50 / -	2.982	―	―	―
Oct 23, 2024	2024 (Q3)	3.31 / 3.57	2.8	27.40% (+0.77)
Jul 24, 2024	2024 (Q2)	2.71 / 3.00	2.273	32.07% (+0.73)
Apr 24, 2024	2024 (Q1)	3.01 / 3.27	2.273	43.88% (+1.00)
Jan 24, 2024	2023 (Q4)	2.67 / 2.98	2.186	36.40% (+0.80)
Oct 25, 2023	2023 (Q3)	2.45 / 2.80	1.879	48.98% (+0.92)
Jul 26, 2023	2023 (Q2)	1.97 / 2.27	1.553	46.30% (+0.72)
Apr 26, 2023	2023 (Q1)	1.96 / 2.27	1.659	36.99% (+0.61)
Jan 25, 2023	2022 (Q4)	1.94 / 2.19	1.4	56.16% (+0.79)
Oct 26, 2022	2022 (Q3)	1.77 / 1.88	1.486	26.45% (+0.39)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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IT:1NOW Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Oct 23, 2024	€842.80	€888.10	+5.37%
Jul 24, 2024	€685.60	€763.10	+11.30%
Apr 24, 2024	€695.40	€659.40	-5.18%
Jan 24, 2024	€706.40	€717.60	+1.59%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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