In This Article:
ServiceNow NOW is scheduled to release its first-quarter 2025 results on April 23.
The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $3.08 billion, indicating 18.37% growth from the figure reported in the year-ago quarter.
The consensus mark for earnings is pegged at $3.79 per share, indicating growth of 11.14% from the figure reported in the year-ago quarter. The earnings figure has climbed a penny over the past 30 days.
ServiceNow’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 7.02%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
ServiceNow, Inc. Price and Consensus
ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote
Let’s see how things are shaping up prior to this announcement.
NOW’s Q1 to Aid From Strong Subscription Revenue Growth
ServiceNow expects first-quarter 2025 subscription revenues between $2.995 billion and $3 billion, suggesting an improvement of 18.5-19% year over year on a GAAP basis. At constant currency, subscription revenues are expected to grow in the 19.5-20% range. Unfavorable forex is expected to hurt revenues by $40 million.
The Zacks Consensus Estimate for first-quarter 2025 subscription revenues is pegged at $2.997 billion, indicating 18.8% year-over-year growth.
ServiceNow has strengthened its portfolio with the launch of the Yokohama platform in the to-be-reported quarter. The update brings new AI agents across varied domains, including CRM, HR and IT, delivering enhanced productivity, as well as smoother and smarter functioning of workflows.
ServiceNow’s AI-powered portfolio is helping the company win clients regularly. NOW ended the fourth quarter of 2024 with 2,109 total customers, with more than $1 million in annual contract value, which represents 14% year-over-year growth in customers. The momentum is expected to have continued in first-quarter 2025.
NOW Shares Lag Sector, Industry YTD
NOW shares have dropped 27.1% year to date (YTD), outperforming the Zacks Computer & Technology sector’s fall of 17.1% and the Zacks Computers – IT Services industry’s decline of 19.5%.
NOW Stock’s YTD Performance
Image Source: Zacks Investment Research
NOW shares have suffered from a worsening macroeconomic environment following U.S. President Donald Trump’s decision to levy tariffs on trading partners, including China and Mexico. The company’s federal business is expected to suffer from DOGE-related issues.
On a trailing 12-month basis, NOW shares have returned 7%, outperforming the sector’s return of 2.8% and the industry’s decline of 6%.
Technically, ServiceNow shares are displaying a bearish trend as they trade below the 50-day and 200-day moving averages.