ServiceNow raises annual subscription revenue forecast as AI demand surges
ServiceNow raised its annual subscription revenue forecast on Wednesday, driven by growing demand for its artificial intelligence powered software solutions.
Enterprise clients turn to AI-powered software offered by companies such as ServiceNow and Salesforce to manage their IT services and automate certain business operations in a bid to save resources.
Santa Clara, California-based ServiceNow's shares rose 3.4 per cent in extended trading.
ServiceNow expects full-year subscription revenue to be between $12.84 billion and $12.85 billion, compared with its prior projection range of $12.78 billion to 12.80 billion.
Analysts on average were estimating $12.79 billion, according to data compiled by LSEG.
ServiceNow's Now Assist offers generative AI features like case summarization, AI-powered search, and virtual agent interactions to streamline workflows and enhance productivity.
The firm, which counts telecom giant AT&T and ride-hailing company Uber Technologies among its customers, reported third-quarter subscription revenue of $3.30 billion, above analysts' estimate of $3.26 billion.
The company reported third-quarter revenue of $3.41 billion, beating estimates of $3.35 billion.
On an adjusted basis, the company earned $4.82 per share for the quarter ended September 30, compared with estimates of $4.27.
The digital workflow firm also approved a five-for-one split of the its common stock on Wednesday.
The company said in March that it would buy AI firm Moveworks for $2.85 billion in cash and stock, marking its largest-ever acquisition.
The company's planned Moveworks acquisition is under regulatory review by the U.S. Justice Department.
