ServiceNow (NOW) Stock

ServiceNow's move to a consumption-based pricing model has created some short-term uncertainty for investors, but it is anticipated to encourage long-term use of AI and revenue growth. Although the company did not meet its earnings estimates for Q4 FY24, it still achieved a 22.5% year-over-year revenue increase and saw a rise in both the number of customers with over $1 million in annual contract value and the average contract value, thanks to demand for AI products. The management's forecast for FY25 suggests a subscription revenue growth of 18.5-19% and a 30.5% operating margin, showing caution in light of foreign exchange challenges and changes in pricing strategy.

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ServiceNow's stock dropped over 10% after it reported an unusual earnings miss in the fourth quarter. The company's revenue growth decreased to 21% year-on-year, and its forecast suggests it will slow down even more in fiscal year 2025. Key problems include the possibility that AI could lower the demand for seat-based products and rapid hiring that may restrict profit growth.

ServiceNow, Lululemon Athletica, and Amphenol are showing impressive growth in their earnings right now.

ServiceNow's recent fourth quarter earnings report revealed sales that were below expectations, which affected their stock prices. Nevertheless, ServiceNow's president and CFO, Gina Mastantuono, explained to Seana Smith and Josh Schafer on Catalysts that when accounting for currency changes, the results actually surpassed expectations in several areas, such as revenue and operating margin.

The stock market follows a strict rule: If a public company does not meet investor expectations and improve its forecasts every quarter, its stock price will drop.

ServiceNow (NOW) shares dropped by 9% in premarket trading on Thursday after the company reported slower subscription revenue growth than expected and predicted a small decrease in growth for the first quarter.

ServiceNow's results for the fourth quarter of 2024 show a significant increase in the use of its Generative AI solution. Despite this, the company's shares dropped due to lower expectations for subscription revenue in 2025.

While the revenue and earnings per share (EPS) for ServiceNow (NOW) provide insight into its performance for the quarter ending December 2024, it could be helpful to look at how these important figures stack up against Wall Street predictions and last year's results.