ServiceNow (NOW) on Wednesday reported December-quarter earnings that topped views while revenue growth only met expectations. NOW stock tumbled, though 2023 subscription revenue guidance came in above expectations.
Reporting after the close, the Santa Clara, Calif-based enterprise software maker said earnings climbed 46% to $2.28 per adjusted share. Revenue climbed 20% to $1.94 billion, ServiceNow said.
Meanwhile, NOW stock analysts expected the company to report earnings of $2.02 a share on revenue of $1.94 billion for the period, which ended Dec. 31.
In addition, ServiceNow said subscription revenue rose 22% to $1.86 billion, topping estimates of $1.84 billion.
In a note to clients, RBC Capital analyst Matthew Hedberg tied ServiceNow’s after-hours sell-off to a sales growth metric called current remaining performance obligations, or CRPO bookings. CRPO bookings are an aggregate of deferred revenue and order backlog.
ServiceNow’s fourth-quarter CRPO came in at $6.94 billion vs. estimates of $6.84 billion.
“CRPO was seen as somewhat disappointing relative to expectations,” Hedberg said.
NOW Stock: Revenue Outlook Tops Views
Meanwhile, NOW stock lost 2.4% to near 438 in extended trading on the stock market today, paring earlier losses.
The enterprise software maker said it expects full-year 2023 subscription revenue in a range of $8.44 billion to $8.5 billion. Analysts predicted subscription revenue of $8.36 billion.
The company’s software tracks and manages services provided by information-technology departments. Also, 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.
Heading into the ServiceNow earnings report, NOW stock had gained 14% in 2023.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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