ServiceNow Q2 strong, fueled by big deals, multi-product customers

For 2017, ServiceNow is projecting more than $1.9 billion in revenue.
Written by Larry Dignan, Contributor

ServiceNow continues to land larger enterprise deals and that momentum boosted the company's second quarter results.

The cloud work automation platform reported a second quarter net loss of $56.5 million, or 33 cents a share, on revenue of $471.7 million, up 38 percent from a year ago. Non-GAAP earnings for the second quarter were 22 cents a share.

Wall Street was looking for second quarter non-GAAP earnings per share of 20 cents a share on sales of $461.8 million.

ServiceNow, which started out as an IT service tool and expanded into HR and other business functions, said it has 403 customers with an annual contract value topping $1 million. ServiceNow has almost 800 customers in the global 2000. Subscription revenue for the quarter was $411 million, up 41 percent from a year ago.

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Other key points:

  • The company is targeting $4 billion in annual revenue in 2020.
  • 17 of ServiceNow's top 20 deals in the second quarter included more than 3 products.
  • 75 percent of customers buy more than one product.

As for the outlook, ServiceNow said third quarter revenue will be between $488 million and $493 million with non-GAAP operating margins of 17 percent.

For 2017, ServiceNow said it will deliver sales of $1.9 billion and $1.91 billion, up about 37 percent from 2016. Non-GAAP operating margins will be about 16 percent.

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