ServiceNow Surges After Boosting Subscription Revenue Forecast

Santa Clara, California — ServiceNow shares soared in after-hours trading on Wednesday following the company’s announcement of stronger-than-expected quarterly results and a positive outlook for subscription revenues. The software provider reported earnings per share of $4.04, exceeding analyst predictions of $3.83.

In the first quarter, ServiceNow’s revenue reached $3.09 billion, slightly above Wall Street’s forecast of $3.08 billion. The company’s subscription revenue climbed to $3 billion, marking a 19% year-over-year increase, consistent with analyst estimates. Looking ahead, ServiceNow expects its subscription revenue for the second quarter to be between $3.03 billion and $3.04 billion, surpassing the $3.02 billion analysts had projected.

Despite fears of a slowdown due to governmental budget restraints, ServiceNow’s Chief Financial Officer Gina Mastantuono expressed confidence in the company’s resilience. “We are very confident in our ability to navigate these rapidly evolving times,” she stated, emphasizing strong demand signals from business leaders.

ServiceNow’s shares increased more than 10% in after-hours trading, reaching approximately $898. The announcement marks a significant turnaround, as shares had previously fallen nearly 25% since the beginning of the year, impacted by investor concerns regarding potential revenue impacts from the Trump administration’s budget cuts.

Company officials noted that the ongoing demand for their AI-powered software solutions for IT service management remains robust, with CEO Bill McDermott mentioning a 30% growth in the U.S. public sector business year-over-year.

Looking at the implications for the stock, analysts maintain a consensus Strong Buy rating and anticipate an upside of 26% from current levels, with several key price points to monitor in the near term. ServiceNow continues to adapt to a challenging economic environment while aiming to meet the needs of both private and public sector clients.