Enterprise workflow automation company ServiceNow (NYSE: NOW) will be reporting earnings this Wednesday after market close. Here’s what to expect.
ServiceNow beat analysts’ revenue expectations last quarter, reporting revenues of $3.99 billion, up 24% year on year. It was a very strong quarter for the company, with an impressive beat of analysts’ adjusted operating income estimates and a decent beat of analysts’ annual recurring revenue estimates.
Is ServiceNow a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting ServiceNow’s revenue to grow 20.4% year on year, slowing from the 21.8% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. ServiceNow rarely misses Wall Street’s revenue estimates.
Looking at ServiceNow’s peers in the productivity software segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Pegasystems delivered year-on-year revenue growth of 3.1%, missing analysts’ expectations by 6.6%, and RingCentral reported revenues up 5.9%, topping estimates by 1.3%. Pegasystems traded down 2.9% following the results while RingCentral was up 5%.
Read our full analysis of Pegasystems’s results here and RingCentral’s results here.
There has been positive sentiment among investors in the productivity software segment, with share prices up 14.4% on average over the last month. ServiceNow is up 19.5% during the same time and is heading into earnings with an average analyst price target of $156.54 (compared to the current share price of $157.04).
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