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 (NOW) 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.
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 customers with more than $1 million in annual contract value — or the amount a customer pays the company each year under existing contracts — in the March quarter. In the December quarter, it added 82 such customers. ServiceNow had 1,146 customers with more than $1 million in annual contract value as of March 31, up 23% from a year earlier.
In the March quarter, ServiceNow also added 37 deals with more than $1 million in net new annual contract value versus 89 in the previous quarter. Net new annual contract value deals with the net change in annual pact worth.
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.
ServiceNow On IBD Leaderboard
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.
Also, ServiceNow stock belongs to the IBD Leaderboard. The Leaderboard is IBD’s curated list of leading stocks that stand out on technical and fundamental metrics.
In addition, ServiceNow stock holds a Relative Strength Rating of 61 out of a best-possible 99.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
Editor’s Note: This story was updated May 6 to correct the number of customers with more than $1 million in annual contract value in the company’s December quarter.
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