ServiceNow CFO Cites Strong Growth Despite Q4 Miss

ServiceNow, Inc. (NYSE:NOW) reported its fourth-quarter earnings on Wednesday, with the company's CFO, Gina Mastantuono, highlighting the company's strong growth despite missing revenue estimates. The company reported earnings before certain costs such as stock compensation of $3.67 per share, narrowly beating the Street’s target of $3.65 per share. However, its revenue came up short at just $2.957 billion, up 21% from a year earlier but trailing the analyst’s $2.963 billion estimate. Meanwhile, subscription revenue came to $2.866 billion, also up 21%, but below the $2.879 billion forecast.

Net income for the quarter came to $348 million, up from $295 million in the year-ago period.

Mastantuono attributed the revenue miss to a $175 million foreign exchange headwind due to the strengthening U.S. dollar. She also noted that the company's subscription revenue growth slowed to 21% year-over-year in Q4 2024, missing the consensus estimate of 22.44%. Additionally, ServiceNow's current remaining performance obligations (CRPO) bookings were $10.27 billion, below the analyst estimate of $10.43 billion.

Despite the revenue miss, Mastantuono emphasized the company's strong growth and its position as a leader in the digital workflow market. She also noted that ServiceNow's guidance for full-year 2025 subscription revenue growth (19.5% to 20%) and CRPO growth (20.5%) fell short of analyst estimates (20.8% and 20.4%, respectively). However, she expressed confidence in the company's long-term growth prospects and its ability to execute on its growth strategy.

ServiceNow's Strategic Initiatives

ServiceNow is undertaking several strategic initiatives to drive growth and maintain its competitive edge in the digital workflow market. These include:

1. Expanding into new markets: ServiceNow has been expanding its offerings beyond its core IT service management into new departments such as human resources, finance, legal, and procurement. This expansion allows the company to tap into new revenue streams and increase its customer base.
2. Innovation in AI and machine learning: ServiceNow is investing heavily in artificial intelligence and machine learning to create new products and enhance existing ones. The company has released over 150 new GenAI innovations for autonomous, responsible AI on the ServiceNow Platform, including expanded capabilities for AI governance, multilingual support, and purpose-built GenAI solutions for various workflows.
3. Partnerships and acquisitions: ServiceNow continues to partner with leading companies to accelerate customers' AI transformation. In Q4 2024, the company announced partnerships with Google Cloud and Oracle to expand its technology partner ecosystem and enhance its offerings.
4. Stock repurchase program: ServiceNow's Board of Directors has authorized additional repurchases of up to $3 billion of common stock under its share repurchase program. This move aims to manage the impact of dilution and potentially boost shareholder value.
5. Investment in AI agent control tower: ServiceNow is investing in the development of a powerful new AI Agent Orchestrator to harmonize teams of AI agents working across tasks, systems, and departments. This innovation, along with thousands of pre-built AI agents and the new AI Agent Studio, will be available in March 2025 as part of ServiceNow's Pro Plus and Enterprise Plus offerings.

These strategic initiatives and investments demonstrate ServiceNow's commitment to driving growth, maintaining its competitive edge, and solidifying its position as the AI platform for business transformation.



In conclusion, ServiceNow's CFO, Gina Mastantuono, cited strong growth despite the company's Q4 revenue miss. The company's strategic initiatives and investments, coupled with its strong growth prospects, position it well to maintain its competitive edge in the digital workflow market. Despite the revenue miss, ServiceNow's long-term growth prospects remain intact, and the company is well-positioned to capitalize on the growing demand for digital workflow solutions.