By Jaspreet Singh <\/p>\n
July 22 (Reuters) – ServiceNow on Wednesday raised its forecast for annual subscription revenue for the second time after beating second-quarter revenue \u200cand profit estimates, driven by growing demand for its AI-powered software. <\/p>\n
Shares of \u200cServiceNow rose nearly 4% in extended trading, easing investor concerns as software giants grapple with concerns of \u200ba “SaaSpocalypse” – a term reflecting the gloom around software-as-a-service companies amid growing capabilities of new AI tools from startups like OpenAI and Anthropic. <\/p>\n
ServiceNow is expanding its AI agent portfolio across domains like IT and customer service, helping enterprise clients to automate complex, time-consuming workflows. \u200cThe company stock has fallen \u2060about 38% so far this year. <\/p>\n
Earlier this year, ServiceNow launched Otto, an AI experience designed to handle requests from employees and \u2060complete complex cross-department workflows. It also enhanced its capabilities by acquiring cybersecurity startup Armis and AI startup Moveworks. <\/p>\n
CEO Bill McDermott said he has not seen any change to sales \u200bcycles from \u200bincreased hardware and AI spending. <\/p>\n
ServiceNow said its \u200bAI platform has seen widespread \u200cadoption across the public sector, with nearly all 50 U.S. states now using it to improve citizen services and modernize operations. The company crossed $1 billion in annual contract value for its AI offerings. <\/p>\n
CFO Gina Mastantuono said outperformance in the second quarter came from federal clients, but this was partly due to on-premises revenue pulled forward \u200cfrom the third quarter. <\/p>\n
The company now expects 2026 \u200bsubscription revenue of $15.760 billion to $15.780 billion, up from \u200bits earlier projection of $15.735 billion to $15.775 \u200bbillion. <\/p>\n
Second-quarter subscription revenue of $3.88 billion and adjusted profit per share \u200cof 90 cents exceeded LSEG-compiled analysts’ average \u200bestimates of $3.82 billion \u200band 85 cents, respectively. <\/p>\n
The company’s forecast for third-quarter subscription revenue of $3.975 billion to $3.980 billion came in below the average estimate of about $4 billion. <\/p>\n
ServiceNow’s current remaining \u200bperformance obligations, contract revenue expected \u200cto be recognized within the next 12 months, hit $13.20 billion as of \u200bJune 30, a 21% increase from a year earlier. <\/p>\n
(Reporting by Jaspreet \u200bSingh in Bengaluru; Editing by Shailesh Kuber) <\/p>\n","protected":false},"excerpt":{"rendered":"By Jaspreet Singh July 22 (Reuters) – ServiceNow on Wednesday raised its forecast for annual subscription revenue for…\n","protected":false},"author":2,"featured_media":778815,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,78474,107405,29884,113682,74],"class_list":["post-778814","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-investor-concerns","tag-profit-estimates","tag-servicenow","tag-subscription-revenue","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/778814","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=778814"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/778814\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/778815"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=778814"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=778814"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=778814"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}