ServiceNow Q1 2024 financial results beat EPS expectations by $0.28
ServiceNow (NYSE: NOW) has demonstrated remarkable performance in the first quarter of 2024, surpassing analysts’ expectations with impressive financial results. However, despite the positive Q1 earnings report, the ServiceNow stock plummeted −36.79 (4.93%) in the after market hours, immediately after the earnings release, negating the +5.34 (0.72%) gains it had made on Wednesday.
The company reported a Non-GAAP EPS of $3.41, outperforming expectations by $0.28. Additionally, the company’s revenue for the quarter stood at $2.6 billion, marking a significant 23.8% year-over-year increase and exceeding forecasts by $10 million.
Subscription revenue Growth
According to financial results, ServiceNow’s subscription revenues reached $2,523 million in Q1 2024, reflecting a robust 25% year-over-year growth.
This growth trend is consistent with the company’s strategy to expand its subscription-based services, catering to the increasing demand for its innovative solutions.
ServiceNow’s expanding market presence
ServiceNow’s consistent performance highlights its strong position in the market and its ability to capitalize on the growing demand for AI-driven solutions.
With a focus on innovation and customer satisfaction, the company continues to attract new clients, evident from the eight transactions over $5 million in net new ACV recorded in Q1 2024, marking a remarkable 100% year-over-year increase.
The company’s current remaining performance obligations, amounting to $8.45 billion as of Q1 2024, reflect a 21% year-over-year growth, underscoring ServiceNow’s expanding market presence and its commitment to delivering value to its customers.
ServiceNow Q2 guidance
Looking ahead, ServiceNow provided optimistic guidance for the second quarter, expecting subscription revenues to range between $2.525 billion and $2.53 billion.
Additionally, the company anticipates a margin from operations of 25%. For the full fiscal year, ServiceNow forecasts subscription revenues to range from $10.56 billion to $10.575 billion, with a margin from operations of 29% and a free cash flow of 31%.
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