ServiceNow earnings and revenue for the March quarter topped Wall Street estimates on Wednesday. But ServiceNow stock fell as the enterprise software maker added fewer big contracts than the previous quarter as the coronavirus outbreak continues.
Santa Clara, Calif-based ServiceNow said first-quarter earnings climbed 45% from a year earlier to $1.52 an adjusted share. Revenue rose 30% to $1.36 billion, the software maker said.
A year earlier, ServiceNow earned $1.05 a share on sales of $1.05 billion. Analysts expected ServiceNow earnings of $1.34 a share on revenue of $1.34 billion for the period ended March 31.
In addition, ServiceNow said subscription revenue rose 30% to $1.29 billion, topping estimates of $1.28 billion. In a release, ServiceNow said it will provide guidance on its earnings call with analysts.
ServiceNow stock fell 7.2% to 517 in after-hours trading on the stock market today. Heading into the ServiceNow earnings report, the software stock had forged a cup-with-handle entry point of 560.89.
ServiceNow Stock Adds Fewer High Spending Customers
Amid the coronavirus lockdown, ServiceNow said it added 53 deals with more than $1 million in net new annual contract value in the March quarter. In the December quarter, it added 89 similar contracts with high-spending customers. ServiceNow had 1,146 customers with over $1 million in annual contract value as of March 31, up 23% from a year earlier.
In addition, ServiceNow said current remaining performance obligations, or contract revenue that will be recognized as revenue in the next 12 months, was $4.4 billion as of March 31, representing 33% year-over-year growth.
Analysts say demand in financial services, health care and government agencies has been a bright spot.
The company's software tracks and manages services provided by information-technology departments. Its self-service tech portal enables company employees to access administrative and workflow tools.
Further, ServiceNow has expanded from its core business into software for human resources, customer service management and security.
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