Earlier this week, ServiceNow reported its quarterly results that surpassed market expectations. Despite the COVID-19 crisis, it crossed a milestone of $4 billion ARR for subscriptions in the quarter. And, it shows no signs of slowing down.
For the second quarter of the year, ServiceNow’s revenues grew 28% to $1.071 billion, ahead of the market’s forecast of $1.05 billion. EPS grew 73% to $1.23, significantly ahead of the market’s estimates of $1.01.
By segment, subscription revenues grew 30% to $1.016 billion and professional and other services revenues grew 5% to $55 million.
During the quarter, it closed 40 transactions with more than $1 million, including two transactions of more than $10 million, in net new annual contract value (ACV). It now has 964 total customers with more than $1 million in ACV, up by 26%.
For the third quarter, ServiceNow forecast subscription revenues of $1.055-$1.06 billion versus market estimate of $1.04 billion. It raised its full year guidance for subscription revenues to $4.185-$4.2 billion.
ServiceNow’s Expanding Partnerships
In the recent quarter, ServiceNow expanded its partnerships to drive growth. Recently, it announced an enhanced agreement with Zoom that will allow Zoom to run its new Hardware-as-a-Service offering on ServiceNow. Zoom’s Hardware-as-a-Service offering allows customers who use the Zoom Phone and Zoom Rooms software to acquire hardware from Zoom for a fixed monthly cost. Zoom will run this service on ServiceNow’s Now platform that will help it manage service requests as they come in. In return, ServiceNow has standardized on the Zoom platform for its internal communications tool for its 11,000 plus employees. ServiceNow also plans to replace its current phone system with Zoom Phones.
Earlier this month, ServiceNow also entered into an enhanced agreement with Deloitte. As part of the agreement, ServiceNow and Deloitte will conduct joint go-to-market activities to support ServiceNow’s HR solution. Together the companies will drive global sales, enablement, and training activities and collaborate with each other on expanding product features and functions that can create more business value at scale.
Its stock is currently trading at $431.4 with a market capitalization of $82.27 billion. It had climbed to a 52-week high of $454.70 earlier this month. The stock has recovered from the 52-week low of $213.99 that it was trading at in March this year when most stocks had tumbled.
This segment is a part in the series : Cloud Stocks