Despite the COVID-19 crisis, ServiceNow (NYSE:NOW) continues to outpace all market expectations. It is doubling down on tying up with other technology partners to provide solutions needed to accelerate digital transformations of organizations.
For the third quarter of the year, ServiceNow’s revenues grew 30% to $1.15 billion, ahead of the market’s forecast of $1.11 billion. EPS of $1.22 was also significantly ahead of the market’s estimates of $1.03.
By segment, subscription revenues grew 31% to $1.091 billion and professional and other services revenues grew 19% to $60.6 million.
During the quarter, it closed 41 transactions with more than $1 million in net new annual contract value (ACV). It now has 1,012 total customers with more than $1 million in ACV, up by 25% over the year.
ServiceNow has seen strong growth in core ITSM, Customer and Employee Workflow solutions, and Platform. Customer and Employee Workflow solutions accounted for 26% of new ACV and Platform solutions accounted for 12% of new ACV.
For the fourth quarter, ServiceNow forecast subscription revenues of $1.141-$1.146 billion and raised its full year guidance for subscription revenues to $4.257-$4.262 billion. The market was looking for revenues of $1.18 billion for the quarter with an EPS of $1.13 and revenues of $4.41 billion for the year with an EPS of $4.45.
ServiceNow’s Expanding Partnerships
During the quarter, ServiceNow announced its partnership with IBM to enhance employee productivity. The partnership will integrate IBM Watson AI with ServiceNow’s ITSM and its ITOM to reduce risk and uncertainty in the IT operations. Joint customers will have full visibility into their operational footprint and will be able to respond to incidents and issues faster by combining AI-powered hybrid cloud software and IBM’s professional services with self-learning workflows on the Now Platform.
AI driven insights from data will help create a baseline of a normal IT environment and provide recommendations for actions to prevent and fix IT issues at scale, even before they become problematic. Overall, the solution will help customers reduce time and IT resources from necessary maintenance activities and focus on creating and developing transformation projects to support the digital demands of the business. The solution is expected to be available later this year from IBM and will be available through a joint go-to-market strategy.
More recently, ServiceNow also expanded its digital partnership with Accenture. The two companies jointly announced the Accenture ServiceNow Business Group, which is a new solution focused on helping both private and public sector customers to accelerate their digital transformation and delivering industry and domain-specific solutions and services.
Together, they will initially help accelerate digital transformation programs for customers in telecom, financial services, government, manufacturing, healthcare, and life sciences by innovating across employee engagement, customer service and operations, artificial intelligence for IT operations, and security and risk management.
ServiceNow is cementing its position in the digital transformation market with these partnerships.
Its stock is currently trading at $510.59 with a market capitalization of $97.9 billion. It had climbed to a 52-week high of $533.37 earlier this month. The stock has recovered from the 52-week low of $238.29 that it was trading at in November last year .
This segment is a part in the series : Cloud Stocks