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ServiceNow Beats Estimates Amid Middle East Conflict
22 Apr
Summary
- ServiceNow's Q1 revenue grew 22% year-over-year.
- Subscription revenue saw a 75 basis point headwind.
- Company raises fiscal 2026 subscription revenue forecast.
ServiceNow exceeded Wall Street's first-quarter earnings estimates, though the ongoing conflict in the Middle East created headwinds for subscription revenue. The company reported a 22% increase in revenue compared to the previous year. Net income rose slightly to $469 million, or 45 cents per share.
The conflict in the Middle East caused approximately a 75 basis point reduction in subscription revenue growth due to delayed closings of large on-premise deals. Quarterly subscription revenues reached $3.67 billion, marginally exceeding expectations.
Despite these challenges, ServiceNow increased its fiscal 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion. Management attributed this updated guidance to a cautious assessment of the geopolitical environment, incorporating incremental conservatism regarding potential impacts on deal timing.
