ServiceNow stock popped after the software maker reported earnings and revenue that topped Wall Street's fourth-quarter estimates. The 2022 revenue guidance for NOW stock edged by analyst views.
Santa Clara, Calif-based ServiceNow reported fourth-quarter earnings after the market close on Wednesday.
"Q4 posted a healthy beat across the board," said Jefferies analyst Samad Samana in a report. "Guidance had some noise, but delivered on what mattered most — the 2022 subscriber revenue growth outlook of 28% (growth) implies no deceleration from 2021. On a comparable basis, the operating margin guidance was below consensus but in line with our estimate and management's prior commentary."
ServiceNow earnings climbed 25% from a year earlier to $1.46 an adjusted share. ServiceNow said revenue climbed 29% to $1.61 billion.
A year earlier, ServiceNow earned $1.17 a share on sales of $1.25 billion. Analysts expected ServiceNow to report earnings of $1.43 a share on revenue of $1.6 billion for the period, which ended Dec. 31.
In addition, ServiceNow said subscription revenue rose 29% to $1.523 billion, edging by estimates of $1.520 billion.
ServiceNow Stock: Revenue Outlook Edges By Views
ServiceNow stock popped 12.2% to 543.53 in early trading on the stock market today. Heading into the earnings report, NOW stock had retreated 25% in 2022.
The software sector has been hard hit thus far in 2022. The iShares Expanded Tech-Software ETF has contracted 15% this year.
The enterprise software maker said it expects 2022 subscription revenue in a range of $7.02 billion to $7.04 billion. Analysts predicted subscription revenue of $7.015 billion, with operating margins of 24.7%. ServiceNow said it expects operating margins of about 25%.
In the December quarter, ServiceNow said it "closed 135 transactions with more than $1 million in net new annual contract value, representing 52% year-over-year growth. The company now has 1,359 total customers with more than $1 million in annual contract value."
The company's software tracks and manages services provided by information-technology departments. Its self-service tech portal enables company employees to access administrative and workflow tools.
Further, ServiceNow has expanded from its core business into software for human resources, customer service management and security.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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