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ServiceNow Gained Over 10% in April

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NOW’s returns

The earnings season is here, and several tech companies have reported their quarterly earnings results. In this series, we’ll take a look at the performances of high-growth tech stocks since April 2019 and what’s affected them.

ServiceNow (NOW) stock rose over 10% in April 2019. The stock is currently trading at $268.52, 82% above its 52-week low of $147.63 and 2% below its 52-week high of $273.82.

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First-quarter results

ServiceNow reported sales of $788.9 million in the first quarter, a rise of 33.9% YoY (year-over-year) and higher than Wall Street analysts’ estimate of $767 million. Its adjusted sales also rose 38% to $811.3 million in the first quarter. The company reported adjusted EPS of $0.67, 24% higher than analysts’ estimate of $0.54.

ServiceNow stock rose 10% on April 25 after its earnings and revenue beat.

Renewal rate for ServiceNow remains robust

ServiceNow’s subscription revenue rose 40% to $760.4 million after adjusting for currency fluctuations. Its total billings also increased 30% to $899.5 million. Billings are a useful metric by which to gauge a company’s future sales.

ServiceNow’s renewal rate remains high at 98%, and the company’s customer base expanded to 5,400 in the first quarter. The digital transformation of enterprises continues to provide an opportunity for ServiceNow to grow its revenue at a robust rate.

In the second quarter, ServiceNow expects its sales to grow between 35% and 36%. As we can see in the table above, ServiceNow’s sales are expected to almost triple from $306 million in 2016 to $1.01 billion in 2020.

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