[ad_1]
ServiceNow (NYSE:NOW) shares gained 14% Thursday morning because the cloud-computing software program firm exceeded analyst estimates with its third quarter earnings.
Late Wednesday, ServiceNow (NOW) reported adjusted earnings of $1.96 per share on income of $1.83B that grew 21.2% Y/Y however fell wanting estimates.
Subscription revenues $1.74B topped the excessive finish of the agency’s personal steerage, rising 28.5% Y/Y in fixed foreign money. Present RPO was ~$5.87B, representing 25% Y/Y fixed foreign money development, a 150 foundation factors beat versus the agency’s FX-adjusted steerage.
Pushed by high line beat and working efficiencies, working margin of 26% got here 1 level above the agency’s personal steerage. The agency ended the interval with $5.5B in money and investments.
Nonetheless, ServiceNow (NOW) revised its 2022 subscription income steerage to $6.865B-$6.87B from a earlier vary of $6.915B-$6.925B amid FX headwinds. For This fall, its expects subscription revenues between $1.834B and $1.839B, representing 26% to 27% Y/Y development on a relentless foreign money foundation, excluding a 600 foundation level FX headwind.
The corporate reiterated prior FY22 working margin steerage of 25%, whereas concurrently absorbing an incremental 1% of headwind from FX.
Analysts appeared impressed by the outcomes, with Morgan Stanley praising the administration’s tone on the spend atmosphere, a better-than-expected Q3 cRPO development, giant deal metrics and a document quarter for federal enterprise.
“NOW shares are positioned to carry out extra durably going ahead,” stated Morgan Stanley, including that, “A robust focus by enterprises on Automation and a document Federal quarter mixed to yield a stable Q3 print and higher than feared This fall information. Whereas macro issues might linger, we proceed to see a sturdy 25%+ FCF development profile at NOW medium-term, framing a pretty threat/reward at 19X EV/CY24 FCF.”
Mizuho reiterated its Purchase ranking on the inventory, sating that: “We proceed to imagine that NOW is properly positioned for top development over the subsequent few years, fueled partially by strong demand for workflow automation, robust cross-sell alternatives, and better penetration of newer markets.”
Learn NOW’s earnings name transcript right here
Source link
