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Shares of ServiceNow Inc. jumped more than 8% in extended trading Wednesday after the software company reported fiscal third-quarter earnings that beat Wall Street analysts’ forecasts.
ServiceNow
NOW,
rang up earnings of $398 million, or 39 cents a share, compared with earnings of $63 million, or 32 cents a share, in the year-ago quarter. After adjusting for stock-based compensation and other effects, ServiceNow reported earnings of $1.96 a share, up from $1.55 a share a year ago. Revenue climbed 21% to $1.83 billion, from $1.51 billion a year ago.
Analysts surveyed by FactSet had expected, on average, earnings of $1.85 a share on revenue of $1.85 billion.
“The platform is taking hold as the center of gravity for digital-forward-moving companies” during treacherous macroeconomic headwinds, ServiceNow Chief Executive Bill McDermott told MarketWatch.
Subscription sales jumped 22% to $1.74 billion, from $1.43 billion a year ago, on the strength of deals with the FAA and NEC Corp.
6701,
ServiceNow guided for fourth-quarter subscription revenue of $1.83 billion to $1.84 billion. Analysts on average were expecting fourth-quarter subscription revenue of $1.87 billion, according to FactSet. ServiceNow also reduced its guidance for full-year subscription revenue to $6.87 billion, after previously stating roughly $6.92 billion.
In a message to MarketWatch, Daniel Newman, principal analyst at Futurum Research, noted ServiceNow’s 60% growth in accounts of at least $10 million.
Shares of ServiceNow have dropped 43% this year. The broader S&P 500 index
SPX,
has declined 23% year to date.
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