TL;DR: Ex-SAP CEO McDermott is in as ServiceNow CEO, Donahoe is headed to Nike (he’s been on the Nike board of directors for some time)
The market doesn’t like this – NOW is down 11.5% after hours, and that’s on top of the -5.2% during the regular session. Earnings call still scheduled for tomorrow PM.
SANTA CLARA, Calif.–(BUSINESS WIRE)-- ServiceNow (NOW) today announced that Bill McDermott will join ServiceNow by year-end 2019 as President and Chief Executive Officer and a member of the Board of Directors. McDermott will succeed John Donahoe, who is stepping down from ServiceNow to become President and Chief Executive Officer of Nike in January 2020. To ensure a smooth transition, Donahoe will remain ServiceNow’s CEO through the transition period and will retain his seat on the company’s Board of Directors for the remainder of his current term, ending in June 2020.
Also as part of this announcement, preliminary earnings were released:
For the third quarter 2019, subscription revenues were $835 million, representing 35% year-over-year growth, adjusted for FX. Subscription revenues for the third quarter exceeded the mid-point of ServiceNow’s guidance by $9 million, excluding the impact of FX.
Subscription billings for the third quarter were $864 million, representing 29% year-over-year growth, adjusted for FX and duration. Subscription billings for the third quarter exceeded the mid-point of ServiceNow’s guidance by $10 million, excluding the impacts of FX and duration.
For full year 2019 guidance, ServiceNow is carrying forward the $9 million in subscription revenues and $10 million in subscription billings that, excluding the impacts of FX and duration, exceeded the company’s previous mid-point guidance for the third quarter.
For the full year 2019, ServiceNow expects subscription revenues between $3.240 billion and $3.245 billion, representing 36% to 37% year-over-year growth, adjusted for FX. This includes an impact of $18 million due to FX.
ServiceNow expects full year 2019 subscription billings between $3.740 billion and $3.745 billion, representing 32% to 33% year-over-year growth, adjusted for FX. This includes an impact of $23 million due to FX and $10 million due to duration.
ServiceNow is maintaining its full year 2019 margin guidance as follows: subscription gross margins of 86%, operating margin of 21% and free cash flow margin of 28%.