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Key Takeaways
- ServiceNow’s second-quarter subscription revenue jumped as the company benefited from artificial intelligence (AI) product demand.
- ServiceNow also announced its president and COO resigned following a hiring probe.
- Shares of ServiceNow traded at an all-time high.
Shares of ServiceNow (NOW) soared to an all-time high after the IT services firm posted a big jump in subscriptions revenue as it benefited from soaring demand for artificial intelligence (AI) products.
ServiceNow reported second-quarter subscription revenue jumped 23% year-over-year to $2.54 billion. Overall revenue increased 22% to $2.63 billion, and adjusted earnings per share (EPS) came in at $3.13. All three exceeded estimates.
Position as ‘AI Platform for Business Transformation Remains Stronger Than Ever’
Chief Executive Officer (CEO) Bill McDermott explained that the company’s “relevance as the AI platform for business transformation remains stronger than ever as CEOs are looking for new vectors of growth, simplification, and digitization.”
ServiceNow predicted current-quarter subscriptions revenue would be up 20% to 20.5% to a range of $2.66 billion to $2.67 billion.
In addition, the company’s president and Chief Operating Officer (COO) has left following a hiring controversy. ServiceNow announced the immediate departure of CJ Desai, whom it said resigned by mutual agreement. The move came months after an internal investigation found Desai violated company policy in hiring the former U.S. Army Chief Information Officer (CIO). ServiceNow said it believed that was “an isolated incident.”
ServiceNow shares soared more than 15% to $842.42 as of 2:20 p.m. ET Thursday after hitting an all-time high $850.33 earlier in the session.