ServiceNow reported its first-quarter financial results, exceeding analyst expectations for both earnings and revenue and offering an optimistic outlook for the coming months. The performance comes amid a volatile market and uncertain macroeconomic environment.
The enterprise software firm posted adjusted earnings of $4.04 per share. Revenue reached $3.09 billion. This surpassed the consensus estimate of $3.83 per share in earnings and $3.08 billion in sales. Revenue grew approximately 19% from a year ago.
The company reported net income of $460 million, or $2.20 per share. This marks an increase from $347 million, or $1.67 per share, in the year-ago period.
Current remaining performance obligations, a measure of future revenue from existing contracts, reached $10.3 billion. This represents a 22% jump year over year.
ServiceNow also raised its full-year financial forecast. Management noted they are flowing through only part of the quarter's benefits into the outlook, citing potential risks from the geopolitical environment.
Subscription revenue, a significant portion of the company's sales, came in at $3.01 billion, slightly above a $3 billion estimate. For the second quarter, the company expects subscription revenues between $3.03 billion and $3.04 billion, ahead of projections.
Heading into the report, investors watched how companies managed the Trump administration trade tariffs and government cost-cutting efforts, such as the Department of Government Efficiency (DOGE) campaign.
The company's public sector business saw growth of 30% during the quarter, including 11 federal deals valued at over $1 million each. CEO Bill McDermott stated the company has had "very positive" discussions with DOGE, led by Elon Musk.
ServiceNow ended the quarter with 508 customers with contracts valued at $5 million or more annually, up 20% from the previous year. The company reported 72 customer transactions over $1 million in net new annual contract value during the quarter.
Shares of Servicenow Stock had declined about 12% this year before the earnings release. The strong results sent shares higher in early trading following the report.
CEO Bill McDermott commented on the interaction with government efficiency initiatives. "Both DOGE and ServiceNow have a shared ambition to transform government and the way it interacts with citizens," he said. "The common thread is that ServiceNow is set up for sustainable growth as the market’s leading enterprise AI platform."
