Earlier this week, ITSM provider ServiceNow (NYSE: NOW) reported its third quarter results that surpassed market expectations. But the market was not pleased with the performance and the stock slid nearly 5% post the announcement. It is a small bump considering that the stock has climbed nearly 60% since the start of the year.
Revenues for the quarter grew 35% over the year to $498.5 million, ahead of the market’s expectations of $491.6 million. Non GAAP EPS of $0.38 was also higher than the Street’s forecast earnings of $0.32 for the quarter.
By segment, Subscription revenues grew 43% to $455.4 million. Professional services and Other segment revenues grew 10% to $42.7 million.
While the overall performance was impressive, the market was disappointed by the billings numbers. For the quarter, billings grew 35% to $546 million, falling short of the market’s estimated $544 million.
For the current quarter, ServiceNow projected revenues of $531–$536 million, ahead of the analyst estimate of $528.5 million. Subscription revenues are expected to grow to $440-$444 million and Professional services and other revenues are expected to grow to $45-$46 million. The company forecast billings to grow 34%-35% to $540-$545 million. Analysts are projecting revenues of $480.1 million for the quarter.
For the full-year, ServiceNow forecast revenues of $1.918-$1.923 billion, compared with the Street’s estimates of $1.91 billion.
ServiceNow continued to build its portfolio through acquisitions. This week, it announced the acquisition of San Mateo-based mobile platform company SkyGiraffe. Terms of the deal were not disclosed. SkyGiraffe was founded in 2012 in Israel by Itay Braun and Boaz Hecht. Prior to the acquisition, SkyGiraffe had raised $10.5 million. It offers a secure, code-free platform that can extend enterprise data directly to mobile devices. Its platform thus provides customized, job-specific moments that can synchronize real-time data to existing backend systems. The acquisition will help ServiceNow become a truly native mobile enterprise cloud platform.
This was ServiceNow’s second acquisition during the month. Earlier in the month, it had announced the acquisition of San Diego-based Telepathy Inc. Telepathy, earlier known as Digital Telepathy, was a design studio focused on improving the user experience for computers. Terms of the deal were not disclosed. ServiceNow plans to leverage Telepathy’s UI skills to deliver improved design and a consumer-like experience to its enterprise products.
Together, the two acquisitions will help ServiceNow offer better consumer-styled apps to its enterprise customers and allow them to access information on mobile devices anywhere, anytime.
Its stock is currently trading at $124.62 with a market cap of $21.3 billion. It had touched a 52-week high of $129.56 earlier this month. The stock has been on the rise since the 52-week low of $72.80 it had fallen to in December last year. I continue to be a huge fan of the company.
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