ServiceNow posted strong first quarter results and said its genAI offerings are the "fastest selling in the company’s history."
ServiceNow reported first quarter net income of $347 million, or $1.67 a share. Non-GAAP earnings were $3.41 a share. Revenue for the first quarter was $2.6 billion, up 24% from a year ago. Wall Street was expecting ServiceNow to report earnings of $3.13 a share on revenue of $2.59 billion.
CEO Bill McDermott said: "Our GenAI offerings are the fastest selling in the company’s history. We are humbled by the trust our customers are investing in our platform."
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The company said its current remaining performance obligations contract revenue to be recognized over the next 12 months was $8.45 billion. The company had 1,933 total customers with more than $1 million in annual contract value. ServiceNow said it had 8 deals in the quarter worth more than $5 million and four worth more than $10 million.
Speaking on a conference call with analysts, McDermott said "GenAI adoption remained on a tear in Q1. Companies are leaning into GenAI as a powerful deflationary force to drive productivity." He added that the pipeline for Pro Plus, which features GenAI is strong.
McDermott added:
"Process optimization is the number one Gen AI use case in the global economy today. This is why ServiceNow's strategic relevance as the AI platform for business transformation has never been higher. Every business workflow in every enterprise will be engineered with Gen AI at its core. We are the single pane of glass that enables end-to-end digital transformation."
As for the outlook, ServiceNow projected second-quarter subscription revenue of $2.52 billion to $2.53 billion, up 21.5% to 22% from a year ago. For 2024, ServiceNow projected subscription revenue of $10.56 billion to $10.57 billion.
The company ended the quarter with 23,362 employees, up from 22,668 as of Dec. 31.
