I re-read Service Now’s Q3 and dug in some on the Company these last few days.
I’m wondering if anyone here has come across any red flags?
I’ll add here what I thought were some of the Call highlights:
Gina Mastantuono, CFO
… Q3 subscription revenues were $2.715 billion, growing 22.5% year-over-year in constant currency, exceeding the high-end of our guidance range by 200 basis points.
RPO ended the quarter at approximately $19.5 billion, representing 33% year-over-year constant currency growth, accelerating both quarter-over-quarter and year-over-year. Current RPO was $9.36 billion, representing 23.5% year-over-year (this does not mean at least 23.5% rev growth this year is baked into guidance) …
… (Customers spending) $20 million or more grew nearly 40% year-over-year, powered by large deal momentum.
Might be behind Seeking Alpha pay wall, here:
ServiceNow, Inc. (NOW) Q3 2024 Earnings Call Transcript
NOW reported 85% of the S&P as customers in prior Calls.
Back to Q3 a week ago,
William McDermott, CEO
Using ServiceNow single architecture platform and cross enterprise data, ServiceNow AI agents can uniquely advance beyond pro-based activity to deep contextual comprehension. This is like hiring an additional workforce to support people by doing the jobs they’ve never wanted to do in the first place.
We intend to be the control point that governs the deployment of Agentic AI across enterprise.
… We announced an expanded strategic alliance with Zoom (Nice to see a cutting edge Tech Company as one of their many examples) to integrate our Gen AI technologies, and we’re just getting started.
Together, NVIDIA and ServiceNow are developing (and selling, as seen this Q) out-of-the-box use cases for AI agents on the Now platform using NVIDIA NIM Agent Blueprints. Customers simply turn on these capabilities and start reinventing workflows across the enterprise for small single issue resolutions, all the way to entire incident response workflows.
You heard acknowledge that ServiceNow launched RaptorDB, our new ultrafast database built for AI-first enterprises, which processes transactions 12 times faster, analytics 27 times faster. Customers, including Amadeus, are already in the process of implementing RaptorDB, to supercharge processing speeds across their global systems. Our data ambition doesn’t end there. We are expanding deeper with our new workflow data fabric, which will unify business and technology data, so it flows seamlessly across the enterprise.
Workflow Data Fabric also includes zero copy partnerships with established leaders like Databricks and Snowflake so customers can turn data into instant AI-powered action, all on the ServiceNow platform.
One of the world’s leading professional services company is Cognizant became the first systems integrator taking workflow data fabric to market. These innovations open the door to massive market opportunity for ServiceNow, nearly doubling our TAM to $0.5 trillion.
With all this momentum, it’s no surprise that our recognition is also growing. The American Opportunity Index assesses how well employers develop their talent. We have learned that ServiceNow will be the highest ranking technology company again this year, ranking fifth overall among 400 brands. well we promote and build the careers of our
This brings me to the final tailwind. The best people want to be at ServiceNow. I’m very proud to announce that Amit Zavery, will join ServiceNow as our President, Chief Product Officer and COO. … With Sterling educational and career credentials, Amit is a world-class engineer and engineering leader. From commercialization perspective, he’s also an expert in packaging and pricing. With a compelling vision for AI business transformation, he is hungry and humble to his core.
QnA
Bill, CEO
“ServiceNow has become the standard platform for federal agencies as they’re looking to consolidate contracts and standardize on a single vendor to drive digital transformation.
The Gen AI race is one that we’re winning, first mover, and we intend to run the table.
And in terms of when the product is coming, they’re out. So you got Now Assist in full flight, you’ve got RaptorDB in full flight, Q4 will be a big quarter for that. You got the workflow data platform, which I explained, which works now, and it will continue to evolve and be a big part of our future and you have the front office where wins are happening every day, and we’re beautifully led there, and we’ve got amazing dreams and then take all the core stuff with the upsells and the and the cross-sells cohorts that Gina talked about, and it’s just so much in front of us, we feel like a scale company with the heart of a start-up. And that’s kind of motion that’s running through ServiceNow, now. And tomorrow, when we get to ServiceNow Live, which is an iconic cultural event that we do every quarter, I could just imagine the seats are going to be rumbling all over the world.
And then you say, what else are you going to do? And it’s really the front office, everything else is still going full pace, but the front office is getting a step function increase in terms of its focus and the innovation and the execution because it’s the biggest TAM and because we’re winning everywhere we go, we think that, that can be like a major catalyst.
It’s a lot and out of context; but, Did I say they have 85% gross margins?
Again, please let me know I any concerns.
My Portfolio:
Tesla 34.55%
Nvidia 31.54%
Pure Storage 10.16%
Service Now 9.02%
Zscaler 8%
Snowflake 6.73%
Cash 2%
Best,
Jason