ServiceNow Reports Strong Q4 Earnings but Stock Declines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Benzinga
- Earnings Beat: ServiceNow reported Q4 revenue of approximately $3.57 billion, exceeding the consensus estimate of $3.53 billion, with adjusted earnings of 92 cents per share, surpassing analyst expectations of 88 cents, indicating robust performance in both revenue and profitability.
- Sustained Growth: Total revenue increased by 20.5% year-over-year, while subscription revenue rose by 21%, with remaining performance obligations reaching $28.2 billion, up 26.5% year-over-year, highlighting a strong foundation for future revenue.
- Forward Guidance: The company expects first-quarter subscription revenue between $3.65 billion and $3.655 billion, with full-year 2026 subscription revenue projected at $15.53 billion to $15.57 billion, reflecting a year-over-year growth of about 21%, demonstrating confidence in future growth.
- Share Buyback Plan: During the quarter, ServiceNow repurchased approximately 3.6 million shares for $597 million, and the board authorized an additional $5 billion in share repurchases, aimed at enhancing shareholder value and stabilizing the stock price.
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Analyst Views on NOW
Wall Street analysts forecast NOW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NOW is 222.81 USD with a low forecast of 172.00 USD and a high forecast of 263.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
32 Analyst Rating
30 Buy
2 Hold
0 Sell
Strong Buy
Current: 131.800
Low
172.00
Averages
222.81
High
263.00
Current: 131.800
Low
172.00
Averages
222.81
High
263.00
About NOW
ServiceNow, Inc. provides an artificial intelligence (AI) platform for business transformation. The Company’s AI platform connects people, processes, data, and devices to increase productivity and maximize business outcomes. Its intelligent platform, the Now Platform, is a cloud-based solution that helps enterprises and organizations across public and private sectors digitize workflows. The workflow applications built on the Now Platform are organized into four primary areas: Technology, CRM and Industry, Core Business and Creator. Its products include IT Service Management, IT Operations Management, HR Service Delivery, ServiceNow AI Agents, AI Experience, Build Agent, ServiceNow AI Control Tower, AI Agent Fabric, RaptorDB, Workflow Data Fabric, Workplace Service Delivery, ServiceNow Platform Encryption, Telecommunications Service Operations Management, and others. The Company also offers identity security, helping organizations secure access across the enterprise.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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ServiceNow Reports Strong Q4 Earnings but Stock Declines
- Earnings Beat: ServiceNow reported Q4 revenue of approximately $3.57 billion, exceeding the consensus estimate of $3.53 billion, with adjusted earnings of 92 cents per share, surpassing analyst expectations of 88 cents, indicating robust performance in both revenue and profitability.
- Sustained Growth: Total revenue increased by 20.5% year-over-year, while subscription revenue rose by 21%, with remaining performance obligations reaching $28.2 billion, up 26.5% year-over-year, highlighting a strong foundation for future revenue.
- Forward Guidance: The company expects first-quarter subscription revenue between $3.65 billion and $3.655 billion, with full-year 2026 subscription revenue projected at $15.53 billion to $15.57 billion, reflecting a year-over-year growth of about 21%, demonstrating confidence in future growth.
- Share Buyback Plan: During the quarter, ServiceNow repurchased approximately 3.6 million shares for $597 million, and the board authorized an additional $5 billion in share repurchases, aimed at enhancing shareholder value and stabilizing the stock price.
Continue Reading