Strong Q1 Positions ServiceNow To Weather COVID-19 Storm While Projecting Revenue Rise For Rest Of 2020

As the COVID-19 pandemic continues, uncertainty plagues the world. Though, one company confident in its long-term outlook is ServiceNow, a cloud-based company that provides software as a service (SaaS) for technical management support. In fact, many are predicting that ServiceNow will become more present than ever before as the digital transformation pushes corporations towards remote work.

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The company reported first-quarter net income of $48 million, or 24 cents a share, on revenue of $1.046 billion, up 33% from a year ago. Non-GAAP earnings in the first quarter were $1.06 a share. ServiceNow also revealed that its bookings in the quarter were up by 30% and subscription revenue in the first quarter was up by 34%.

“You've seen our earnings release. We delivered a strong Q1, beating guidance and consensus. We have shown we can deliver. In March, as the pandemic was being felt everywhere in the world. Our more than 11,000 employees seamlessly transitioned to a work-from-home environment. I'm so incredibly proud of how ServiceNow employees adjusted. Our team focused, they executed, they delivered,” ServiceNow CEO Bill McDermott said in an earnings call.

Notably, the company says it has signed off on 37 transactions worth more than $1 million in net new annual contract value.

Meanwhile, ServiceNow CFO, Gina Mastantuono, maintained that none of its customers were unable to make payments, though, the company has provided some leeway with extended payment terms for clients in industries severely impacted by the pandemic. Despite this, Mastantuono doesn’t expect payment deferrals to make an impact on revenue. McDermott added that only 20% of ServiceNow's customers are likely to be highly impacted by the COVID-19 outbreak as 80% of its customer base are large enterprises.

While it’s impossible to predict how the company will perform over the remainder of the year, ServiceNow is confident it will continue to hold strong. Mastantuono is "confident in our path to $10 billion in revenue and beyond."

For now, the company is projecting subscription revenue between $995 million and $1 billion, for 29% to 30% year-over-year growth. For the full-year 2020, it expects subscription revenue to land between $4.12 billion and $4.14 billion, representing a 28% to 29% year-over-year growth, in terms of constant currency. The company expects that it’s in a strong position to weather the economic fallout.

“We never stop pushing,” McDermott said. “We will not slow down.”