ServiceNow (NOW) to Report Q2 Results Tomorrow

Enterprise workflow software maker ServiceNow (NYSE:NOW) is set to report earnings tomorrow after market hours. Here’s what to expect.

ServiceNow met analysts’ revenue expectations in the latest quarter, reporting revenue of $2.60 billion, up 24.2% year over year. It was a weak quarter for the company, with growth slowing among large customers and missing analysts’ ARR (annual recurring revenue) estimates. The company added 36 enterprise customers paying more than $1 million annually, for a total of 1,933 customers.

Is ServiceNow a Buy or Sell in terms of Profit? Read our full analysis here, it’s free.

Analysts are expecting ServiceNow revenue to rise 21.4% year over year to $2.61 billion this quarter, down from 22.7% growth in the same quarter last year. Adjusted earnings are expected to come in at $2.84 per share.

Most analysts covering the company have reaffirmed their estimates over the past 30 days, suggesting they expect the company to maintain its course toward earnings. ServiceNow has missed Wall Street revenue estimates three times in the past two years.

With ServiceNow being the first company among its peers to report earnings this season, we have little indication of what this quarter will look like for productivity software stocks. However, investor sentiment is strong in this segment, with shares up an average of 6.5% over the past month. ServiceNow is up 2.3% in that same time frame and is on track for earnings with an average analyst price target of $852.6 (compared to the current share price of $756.7).

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading near all-time highs, we prefer lesser-known (but still profitable) semiconductor stocks benefiting from AI growth. Click here to access our free report on our favorite semiconductor growth story.