ServiceNow: Q4 and Full-Year 2024 Results: What to Expect

As ServiceNow (NYSE: NOW) prepares to announce its Q4 and full-year 2024 financial results on January 29, investors are eager to understand the company's performance and outlook. ServiceNow has been a leader in the enterprise software market, focusing on AI-driven transformation and delivering great experiences for its customers. Here's what investors should expect from ServiceNow's upcoming earnings report.

1. Revenue Growth: ServiceNow has consistently delivered strong revenue growth, driven by its AI platform and strategic partnerships. In Q3 2024, the company reported 23% year-over-year growth in subscription revenues and 22% in total revenues. Investors should look for similar or better growth in Q4 and the full year.
2. Remaining Performance Obligations (RPO): RPO represents the total contract value that will be recognized as revenue in the next 12 months. In Q3 2024, ServiceNow's cRPO (current RPO) grew by 26% year-over-year. A strong RPO indicates a healthy sales pipeline and future revenue growth. Investors should expect ServiceNow to maintain or improve its RPO growth in Q4 and the full year.
3. Net New Annual Contract Value (ACV): Net new ACV represents the total value of new contracts signed in a given period. In Q3 2024, ServiceNow reported 15 transactions over $5 million in net new ACV, up 50% year-over-year. This metric shows the company's ability to secure large deals and drive growth. Investors should look for continued growth in net new ACV in Q4 and the full year.
4. Operating Margin: ServiceNow's operating margin is an essential indicator of its profitability. In Q3 2024, ServiceNow reported a 29% operating margin, up from 27% in the previous quarter. Investors should look for continued margin expansion in Q4 and the full year.
5. AI Innovations: ServiceNow's AI-driven innovations have been a significant driver of its growth. In Q3 2024, the company announced its largest AI release to date, Xanadu, which introduced hundreds of new AI capabilities. Investors should expect ServiceNow to provide updates on its AI innovations and their impact on the company's financial performance.
6. Geopolitical Uncertainties: Geopolitical uncertainties can impact ServiceNow's international operations and revenue growth. Investors should pay close attention to ServiceNow's guidance on how geopolitical uncertainties may affect its business in the coming quarters.

In conclusion, investors should expect ServiceNow's Q4 and full-year 2024 results to reflect the company's strong performance in AI-driven transformation and strategic partnerships. The company's focus on delivering great experiences for its customers, coupled with its commitment to innovation, should drive continued growth and profitability. As always, investors should pay close attention to ServiceNow's guidance and any updates on its AI innovations and geopolitical risks.