ServiceNow reported a strong Q3 beat up and down.
The company can now boast that more than 1,000 customers pay at least $1 million per year.
The company’s CEO says ServiceNow is “the standard” for digital transformations.
The shares of ServiceNow (NYSE: NOW), a service provider of cloud-based platforms and solutions designed to help businesses improve employee productivity, reported an encouraging third quarter report, with shares rising more than 6% on Thursday.
Third Quarter Highlights
ServiceNow reported earnings per share of $1.21 for the third quarter on revenues of $1.14 billion. Both figures were better than the $1.03 per share and $1.11 billion expected by Wall Street analysts. The company reported very strong growth indicators, including a 31% year-on-year increase in subscription revenues to $1.091 billion.
The company recorded 41 transactions worth more than $1 million in net annual new contract value and now has a total of 1,012 customers paying more than $1 million in fees.
As CNBC “Squawk on the Street” co-host Jim Cramer noted, ServiceNow reports on the kind of growth metrics that are reserved for small start-ups. But ServiceNow is worth more than $100 billion, and this makes it clear that ServiceNow’s platform is now “the standard” for digital transformation in businesses, responded CEO Bill McDermott.
Many of ServiceNow’s new customers are struggling to adapt to the sudden need to transform their businesses in the face of the new realities created by the COVID 19 pandemic. For example, companies may not even meet new employees in person, creating new challenges in their digital management.
ServiceNow also offers services to help companies better attract and meet the needs of their customer base.
“The ServiceNow platform is at the epicenter of all this,” he said. “And more and more developers are building new innovations on the Now platform on the fly”.
‘The essence of it all’.
ServiceNow’s business has expanded to include federal government agencies such as the U.S. Department of Veterans Affairs, the Air Force and the Senate. This is in line with management’s goal of being “The Essence of Everything”.
The management wants to help the Air Force to build its vision for the future of space on its platform. The same applies to supporting teachers who feel safe in the classroom and act as the official workflow partner of the National Basketball Federation to ensure that the playoffs run smoothly.
“The digital transformation was the opportunity of our generation before COVID,” he said. “Now with COVID, it has accelerated and exasperated all the problems: broken systems, operations in the silo, people working in teams across different organizations that can’t get anything done”.
Even before COVID, thousands of years old workers did not want to work in office cubicles, he said. This will not change after COVID, and the majority of the workforce will work digitally, but still expect to get the best possible tools for their work.