ServiceNow reported better-than-expected second quarter earnings and announced that president and chief product officer CJ Desai will leave the company after an internal investigation.
Long-time ServiceNow executive Chris Bedl will serve as interim chief product officer. Bedl had previously served as Chief Digital Information Officer and Chief Customer Officer.
Here's what ServiceNow had to say about Desai's departure and its internal investigation that stemmed from an employee complaint:
"As a result of the investigation, the Company’s Board of Directors determined Company policy was violated regarding the hiring of the former Chief Information Officer of the U.S. Army. As such, the hired individual, who led the company’s public sector thought leadership and business development efforts since March 2023, departed the company. In addition, the Company and CJ Desai, President and Chief Operating Officer, came to a mutual agreement that Desai would resign from all positions with the Company effective immediately. The company believes this was an isolated incident."
ServiceNow reported second-quarter earnings per share of $3.13 a share on revenue of $2.627 billion, up 22% from a year ago. Wall Street was expecting second quarter earnings of $2.84 a share on revenue of $2.61 billion.
As for the outlook, ServiceNow said third quarter subscription revenue will be between $2.66 billion to $2.665 billion, up about 20%. For 2024, ServiceNow said subscription revenue will be between $10.57 billion to $10.58 billion, up 22%.
ServiceNow earlier in the day announced the acquisition of Raytion, a genAI search tool that will be integrated into the Now Platform. Boomi and ServiceNow also formed a strategic partnership that will blend Boomi's application programming interface management and automation platform with ServiceNow's Now Platform. In addition, Salesforce and Workday said it will combine data to enable employee workflows in a move aimed at ServiceNow.
Speaking on an earnings conference call, ServiceNow CEO Bill McDermott said the company has signed 11 NowAssist deals more than $1 million in ACV. "Enterprises are investing in business transformation. They are investing in AI. They are building a new reference architecture for the decades to come. This is the largest, most compelling business opportunity in the world. We are bullish on what's ahead," said McDermott.
