ServiceNow booked a 20 percent leap in subscriptions for the final three months of 2023, causing it to hike financial forecasts for this year - but Wall Street seemingly wasn't as impressed the company maybe expected.

The workflow vendor has reported double digit revenue gains in recent years as users, who want to modernize their user experience while avoiding overhauling their enterprise applications, signed up.

The Santa Clara-based biz filed 22 percent revenue growth for 2022 and 29 percent for 2021. To put that into perspective, enterprise software rival SAP, for example, filed five percent revenue growth yesterday.

According to the latest filing, Servicenow's total revenue for 2023 reached just under $9 billion, with net income at $1.7 billion. Revenue for the final quarter of 2024 were $2.4 billion up 26 percent on the same quarter a year earlier, with net income at $295 million.

Despite the buoyant results, the company's stock fell briefly by 1 percent on the Nasdaq stock exchange.

On a call to investors, CFO Gina Mastantuono confirmed ServiceNow had upped its subscription revenue forecast by $165 million to between $10.555 billion to $10.575 billion for 2024, representing 21.5 percent to 22 percent year-over-year growth.

ServiceNow was also keen to show how it is winning bigger deals among enterprise customers. Mastantuono said the company closed 168 deals greater than $1 million in net new annual value contracts in the quarter, up 33 percent on a year earlier, including five deals over $10 million.

Nathan Jackson, Megabuyte analyst, said ServiceNow's expansion beyond its IT helpdesk origins into customer service and broader enterprise workflows is enabling it maintain revenue jumps. "This is by helping grow annual value contract to new heights with more complex multi-department subscriptions."

He said more than 20 percent of customers have annual contracts worth upwards of $1 million, with a large chunk driven by existing customers, contributing 85 percent of net new contract value in 2023.

"Existing customer accounts is also where there's a rapid integration of [data layer] Now Intelligence, helping it keep pace with industry leaders when it comes to AI-enabled enterprise software applications," Jackson said.

CEO Bill McDermott said employee workflows made up nine of out of ServiceNow's top 20 deals, which he claimed were buoyed by introducing machine learning to products.

"Every single CEO now is looking to make the people pack far more productive than it is, and with natural language to have your employees seek the data and the information they want and have it reported back to them in just a very nice paragraph of content and data, so they can do their jobs better - it's kind of like in the no-brainer category," he said.

The share price made some gains and losses in after hours trading, despite the results beating expectations and ServiceNow talking up the adoption of generativeAI.

It appears you can't please all of the investors all of the time. Still, ServiceNow's share price is up 70 percent over the past twleve months, so it's unlikely the C-suite cried into their cornflakes this morning. ®

https://www.theregister.com//2024/01/25/servicenow_maintains_20pc_revenue_growth/