Cloud-based enterprise applications provider ServiceNow (NYSE: NOW) recently announced its first quarter results. As usual, the company continued to outpace market expectations. In fact, given ServiceNow's performance, the company was recently qualified as one of the “cloud kings” by analyst Jim Cramer. It has been one of my favorites as well.
ServiceNow's Financials
ServiceNow saw its revenues grow 37% over the year to $589 million. Adjusted earnings also increased 81% over the year to $0.56 per share. The market was looking for revenues of $573 million and an EPS of $0.37 for the quarter.
By segment, Subscription revenues grew 40% to $543.3 million. Professional services and other segment revenues grew 11% to $45.9 million.
Total billings for the company grew 33% over the year to $689.4 million. Subscription billings grew 33% to $638.4 million, while Professional services and other billings grew 29% to $51 million.
For the current quarter, it expects its non-GAAP subscription revenues adjusted for constant currency to grow to $548-$553 million. It expects subscription revenues for the year to be between $2.34-$2.35 billion. Earlier, it had forecast revenues of $2.31-$2.33 billion for the year. Non-GAAP subscription billings for the year are estimated to grow to $2.76-2.77 billion, ahead of the earlier forecast of $2.74-$2.76 billion.
ServiceNow's Acquisitions
Last quarter, I had asked ServiceNow's Board about its acquisition strategy. As expected, the company is leveraging the unprecedented opportunity that the SaaS companies have today, and making acquisitions within the SaaS space.
Continuing with its small acquisition strategy of last year, it recently announced the acquisition of Seattle-based VendorHawk for an undisclosed sum. VendorHawk is a SaaS player whose cloud systems help customers discover, rationalize, and optimize SaaS subscriptions across their organization. It supports its customers by helping them manage spending on more than 36,000 SaaS applications and mapping redundant applications for them. It analyzes application utilization and optimizes SaaS subscriptions for top applications such as Salesforce, Box, and Google G Suite.
