Compared to Estimates, ServiceNow (NOW) Q1 Earnings: A Look at Key Metrics

ServiceNow (NOW) reported $2.6 billion in revenue for the quarter ended March 2024, representing a year-over-year increase of 24.2%. EPS of $3.41 for the same period compares to $2.37 a year ago.

The reported revenue compares to the Zacks Consensus Estimate of $2.59 billion, representing a surprise of +0.62%. The company delivered an EPS surprise of +8.25%, with the consensus EPS estimate being $3.15.

While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how ServiceNow performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• Current Remaining Performance Obligations(cRPO) - GAAP: $8.45 billion compared to the $8.41 billion average estimate based on four analysts.

• Remaining Performance Obligations (RPO) - GAAP: $17.7 billion compared to the $17.4 billion average estimate based on three analysts.

• Revenues- Professional services and other: $80 million compared to the $75.40 million average estimate based on nine analysts. The reported number represents a change of +11.1% year over year.

• Revenues- Subscription: $2.52 billion versus the nine-analyst average estimate of $2.51 billion. The reported number represents a year-over-year change of +24.7%.

• Gross Profit (Non-GAAP)- Subscription: $2.16 billion versus $2.12 billion estimated by eight analysts on average.

• Gross Profit (Non-GAAP)- Professional services and other: $13 million versus the eight-analyst average estimate of $6.26 million.

View all Key Company Metrics for ServiceNow here>>>

Shares of ServiceNow have returned -4.8% over the past month versus the Zacks S&P 500 composite's -3% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.

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