Posted on Friday, Apr 30th 2021
Earlier this week, ServiceNow (NYSE:NOW) reported its first quarter results. For the fourth consecutive quarter, the company outpaced all market expectations. ServiceNow continues to invest in acquisitions, partnerships, and integrations, thus driving high-paced market adoption.
For the first quarter of the year, ServiceNow’s revenues grew 26% to $1.36 billion, ahead of the market’s forecast of $1.34 billion. EPS of $0.24 was also slightly ahead of the market’s estimates of $1.34.
By segment, subscription revenues grew 36% to $1.3 billion and professional and other services revenues grew 27% to $67 million.
ServiceNow did not release any forecast for the current quarter or year. The market expects it to deliver revenues of $5.74 billion with an EPS of $5.47 for the year and revenues of $1.37 billion with an EPS of $1.22 for the first quarter.
ServiceNow recently announced its acquisition of Hyderabad, India-based Intellibot for an undisclosed sum. Founded in 2015 by Alekh Barli, Kushang Moorthy, and Srikanth Vemulapally, Intellibot is a robotic process automation (RPA) player. Its solutions help organizations create their own software robots that can be easily trained to deliver a secure, flexible, and reliable workforce for an organization’s daily tasks. Intellibot uses Natural Language Processing (NLP) capabilities to improve process efficiency. Its search capabilities help eliminate ineffective results and its semantic search helps provide customers with the relevant search results.
The acquisition will allow ServiceNow to use Intelibot’s capabilities to extend its own workflow offerings by allowing customers to automate repetitive tasks for intelligent, end-to-end automation. Intellibot’s capabilities will be built natively into ServiceNow’s platform, to allow customers to easily integrate both modern and legacy systems, drive productivity, and strengthen previously existing AI and machine learning efforts. Intellibot will help extend existing AI and ML, integrations, low-code development, process mining, process automation, NLX, chatbot, and other virtual agent capabilities that exist within the Now Platform.
Besides acquisitions, ServiceNow has also been working on partnerships to drive growth. Recently, it announced a partnership with Qualtrics that will provide companies with the ability to deliver next-generation employee experiences and customer service. The tie-up will integrate ServiceNow’s digital workflows with Qualtrics’ experience management technology on a single platform so that customers can bring sentiment data from Qualtrics into ServiceNow Customer and IT Workflows and act quickly on customer insights. The integrated digital workflows will help improve employee productivity and enhance customer loyalty.
Earlier this month, ServiceNow announced an integrated offering with Oracle. ServiceNow is working on making the Now Platform a centerpiece in multi-cloud deployments. Its IT Operations Management solution already integrates with AWS, Azure, and Google Cloud as well as Kubernetes, OpenShift, and CloudFoundry containers. The integration with Oracle will provide a view of Oracle’s infrastructure-, platform-, and container-as-a-service resources and allow ServiceNow to visualize changes, track incidents, and ensure that the customer is in compliance with Oracle licenses.
Its stock is currently trading at $505 with a market capitalization of $99.7 billion. It had climbed to a 52-week high of $598.37 in February and a 52-week low of $327.49 in April last year .
Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company. Photo Credit: Tomasz Miko?ajczyk from Pixabay This segment is a part in the series : Cloud Stocks . Smartsheet Acquiring Bootstrapped Startups to Drive Growth . Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups . Netflix Price Hike Ruffles Competition . 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Smartsheet Focuses on PaaS Growth . C3.ai Expands Enterprise and Public Sector Presence