Key Takeaways ServiceNow launched Core Business Suite to automate finance and supply chain workflows using AI. Core Business Suite extends the Now platform without replacing existing ERP systems. NOW's Q1 subscriptions hit $3.01B, up 20% YoY, with 508 customers generating over $5M in ACV.ServiceNow’s (NOW) enterprise workflow automation suite has been gaining traction as enterprises increasingly adopt digital tools to streamline operations across departments. Through the Now platform, ServiceNow supports ...

Core Viewpoint - ServiceNow's stock performance shows a slight increase, with upcoming earnings expected to reflect significant growth in both EPS and revenue [1][3][4]. Company Performance - ServiceNow's stock closed at $1,012.74, up 0.18% from the previous day, outperforming the S&P 500's gain of 0.01% [1]. - Over the past month, ServiceNow shares increased by 4.73%, lagging behind the Computer and Technology sector's gain of 7.95% and the S&P 500's gain of 5.2% [2]. Earnings Expectations - The upcoming earnings report is anticipated to show an EPS of $3.53, representing a 12.78% increase year-over-year, with revenue expected to reach $3.12 billion, up 18.79% from the prior year [3]. - For the full year, analysts project earnings of $16.51 per share and revenue of $13.01 billion, indicating increases of 18.61% and 18.42%, respectively, compared to last year [4]. Analyst Sentiment - Recent changes in analyst estimates for ServiceNow are crucial, as positive revisions indicate optimism regarding the company's business and profitability [5]. - The Zacks Rank system, which reflects these estimate changes, currently rates ServiceNow as 3 (Hold), with a recent consensus EPS projection increase of 0.27% [7]. Valuation Metrics - ServiceNow is trading at a Forward P/E ratio of 61.23, significantly higher than the industry average of 19.74 [8]. - The company has a PEG ratio of 2.58, compared to the industry average PEG ratio of 2.2, indicating a premium valuation relative to projected earnings growth [8]. Industry Context - The Computers - IT Services industry, which includes ServiceNow, ranks in the top 26% of all industries, according to the Zacks Industry Rank [9].

Core Viewpoint - ServiceNow (NOW) shares are considered overvalued with a Value Score of F, trading at a forward 12-month Price/Sales ratio of 14.92X, significantly higher than the Computer & Technology sector's average of 6.21X [1][11]. Financial Performance - Year-to-date, NOW's shares have declined by 4.6%, while the Zacks Computer & Technology sector has seen a minor decline of 0.3%. The decline in NOW's shares is attributed to a worsening macroeconomic environment following tariff impositions by the U.S. government [4]. - Despite the overall decline, NOW has outperformed the Zacks Computers – IT Services industry's decline of 6.4% [4]. Growth Drivers - ServiceNow is benefiting from increased adoption of its workflows by enterprises undergoing digital transformation, supported by an expanding portfolio, strategic acquisitions, and a robust partner network [5]. - The introduction of the Core Business Suite in May 2025, an AI-powered solution aimed at streamlining core business operations, is a significant development [8]. - The launch of AI agents in Security and Risk solutions enhances enterprise security and risk management capabilities [9][12]. - The acquisition of Logik.ai in April 2025 is expected to strengthen ServiceNow's CRM offerings, particularly in sales and order management [13]. Customer and Partner Expansion - In Q1 2025, ServiceNow secured 72 transactions exceeding $1 million in net new annual contract value (ACV) and expanded its customer base to 508 customers with over $5 million in ACV, reflecting a 20% year-over-year growth [14]. - Key partnerships with major companies such as AWS, Microsoft, NVIDIA, and Vodafone have been instrumental in enhancing ServiceNow's offerings and market reach [15][16][17]. Earnings Estimates - The Zacks Consensus Estimate for Q2 2025 earnings is $3.53 per share, indicating a 12.78% increase from 2024's reported figure. Revenue estimates for the same period are pegged at $3.12 billion, suggesting an 18.79% growth over 2024 [18].

Core Insights - ServiceNow (NOW) and Pegasystems (PEGA) are key players in the workflow automation sector, leveraging automation and AI to enhance business processes [1][2] - The workflow automation market is projected to grow from $23.77 billion in 2025 to $37.45 billion by 2030, with a CAGR of 9.52% [2] ServiceNow (NOW) Overview - ServiceNow is experiencing increased adoption of its workflows as enterprises undergo digital transformation [3] - The company reported 72 transactions exceeding $1 million in net new annual contract value (ACV) in Q1 2025, with a total of 508 customers having more than $5 million in ACV, reflecting a 20% year-over-year growth [4] - In May 2025, ServiceNow launched its Core Business Suite, an AI-powered solution aimed at streamlining core business operations across various departments [5] - A strong partner ecosystem, including major companies like Amazon and Microsoft, is a significant driver for ServiceNow's future growth [6] Pegasystems (PEGA) Overview - Pegasystems is benefiting from the demand for its GenAI Blueprint solution, which utilizes AI to enhance enterprise workflow applications, with over 1,000 new Blueprints created weekly [7][10] - PEGA has expanded its platform with advanced AI capabilities to modernize legacy systems into cloud-ready applications [8] - The company introduced the Powered by Pega Blueprint solution, allowing system integrators to incorporate their expertise into Pega's AI-driven workflow designer [9] - PEGA reported a 13% year-over-year increase in ACV to $1.45 billion in Q1 2025, driven by the strong demand for its GenAI Blueprint [10] Stock Performance and Valuation - Year-to-date, NOW shares have decreased by 4.5%, while PEGA shares have increased by 4% [12] - NOW has a forward Price/Sales ratio of 14.95X, significantly higher than PEGA's 5.04X [11][15] - The Zacks Consensus Estimate for NOW's 2025 earnings is $16.51 per share, indicating an 18.61% year-over-year increase, while PEGA's estimate is $3.30 per share, reflecting an 8.91% increase [17] Conclusion - Both NOW and PEGA are positioned to benefit from the growing workflow automation market, but PEGA shows greater upside potential due to its rising adoption of GenAI Blueprint and strong partner engagement [19]

Core Viewpoint - NowVertical Group Inc. has entered into a senior secured facilities agreement with HSBC UK Bank, providing access to credit facilities of up to $26 million, which will significantly lower the company's cost of capital and enhance access to non-dilutive funding [1][2][3]. Group 1: Financing Details - The Facilities Agreement allows NowVertical UK Ltd. and NowVertical Group, Inc. to access credit facilities of up to $18 million, with the potential to increase this by an additional $8 million upon HSBC's approval, totaling up to $26 million [2]. - The financing includes a $6 million term loan, amortizing over 5 years, and a $12 million revolving credit facility with an initial 3-year term, extendable for up to 24 months [3][4]. - The interest rates on the Facilities range from 2.25% to 3.75% for the term loan and from 1.75% to 3.25% for the revolving credit facility, with an initial blended interest rate of approximately 7.25% [4]. Group 2: Strategic Implications - The financing agreement is described as transformational, simplifying the capital structure by consolidating existing debt into a single long-term facility, which will provide immediate access to capital for organic growth and strategic acquisitions [3]. - The company plans to use a portion of the funds to repay existing debt, thereby preserving cash and reducing the overall cost of capital [3][5]. - The agreement reflects institutional confidence in NowVertical's vision and growth strategy, positioning the company for scalable and strategic growth [3][6]. Group 3: Company Overview - NowVertical is a global data and analytics company that helps clients transform data into business value using AI, offering a comprehensive suite of solutions and services [8]. - The company is focused on organic growth and strategic acquisitions, aiming to optimize decision-making and improve operational efficiency for its clients [8].

Summary of ServiceNow (NOW) FY Conference Call - May 28, 2025 Company Overview - **Company**: ServiceNow (NOW) - **Industry**: Software, specifically focused on business transformation and workflow automation Core Business Segments - ServiceNow operates primarily in three business areas: - IT Service Management (ITSM) - Customer Relationship Management (CRM) - Core Business Workflows (HR, finance, procurement, legal, supply chain) [6][9][16] Key Insights and Strategies - **AI Platform for Business Transformation**: ServiceNow emphasizes its role as an AI platform aimed at transforming business processes, not just as an IT service management tool [6][7][30] - **Market Leadership in ITSM**: ServiceNow is recognized as the clear market leader in ITSM, serving as a critical tool for CIOs in managing technology portfolios [7][8] - **Integration Across Functions**: The platform's ability to integrate workflows across various departments (HR, finance, etc.) provides a competitive advantage, allowing for streamlined processes and improved efficiency [10][21][22] - **Value-Added Layer**: ServiceNow does not replace existing core systems (like HCM or general ledger) but adds a layer of value on top, enhancing processes such as employee onboarding and procurement [18][21][30] Growth Opportunities - **Expansion into Adjacent Functions**: The company is focusing on expanding its services into HR, finance, and procurement, leveraging existing ITSM capabilities to address similar challenges in these areas [11][12][29] - **Cost Savings as a Strategic Priority**: With macroeconomic uncertainties, companies are prioritizing cost savings in back-office functions, making ServiceNow's offerings increasingly relevant at the C-suite level [29][30] - **AI Integration**: The introduction of AgenTeq AI aims to enhance decision-making and automate processes across departments, further driving efficiency and value for customers [82][84] Customer Engagement and Adoption - **Customer Journey**: Typically, customers start their journey with ServiceNow by improving IT processes, which then leads to broader adoption across other departments as they recognize the platform's value [37][38] - **Tailored Solutions**: ServiceNow tailors its solutions based on specific customer pain points, whether it be reducing real estate costs or streamlining procurement processes [39][41] Competitive Advantages - **Agentic Platform**: ServiceNow's unique agentic platform allows for orchestration and reasoning over requests, differentiating it from other transactional systems [91][94] - **Data Access and Integration**: The platform's ability to integrate with over 200 systems and utilize data without duplication enhances its effectiveness in providing comprehensive solutions [94][96] - **Deterministic Workflow Leadership**: ServiceNow combines deterministic workflows with agentic capabilities, allowing for both mandated processes and intelligent recommendations [96] Financial Considerations - **CapEx Strategy**: ServiceNow's higher CapEx is attributed to its infrastructure model, which allows for customer control over upgrades and ensures strong operational margins [65][67][69] - **Pricing Model**: The company employs a hybrid pricing model for AI, allowing customers to scale their usage based on the value derived from the technology [59][60] Conclusion - ServiceNow is positioned as a leader in the software industry, focusing on business transformation through AI and integrated workflows. The company's strategy emphasizes adding value across various business functions while maintaining strong customer engagement and addressing specific pain points. The integration of AI and a robust data fabric further solidifies its competitive edge in the market.

Group 1 - The article discusses the recent upgrade of ServiceNow (NYSE: NOW) stock to a "buy" due to accelerating AI revenue from its Now Assist platform and increasing adoption of its GenAI [1] - The investment strategy of a boutique family office fund led by Amrita focuses on sustainable, growth-driven companies that aim to maximize shareholder equity [1] - Amrita has a background in high-growth supply-chain start-ups and has experience in maximizing returns for clients during the pandemic [1] Group 2 - Amrita's newsletter, The Pragmatic Optimist, emphasizes portfolio strategy, valuation, and macroeconomics, aiming to democratize financial literacy [1] - The newsletter has been recognized as the Top Newsletter in Finance on popular platforms, indicating its influence and reach in the financial community [1]

Core Viewpoint - ServiceNow shares have increased by approximately 8.2% since the last earnings report, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Estimates Movement - Estimates for ServiceNow have trended downward over the past month, with the consensus estimate shifting down by 5.72% [2] VGM Scores - ServiceNow has a Growth Score of A, a Momentum Score of C, and a Value Score of F, placing it in the bottom 20% for the value investment strategy. The overall aggregate VGM Score is C [3] Outlook - The downward trend in estimates indicates a negative shift, and ServiceNow holds a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4] Industry Performance - ServiceNow is part of the Zacks Computers - IT Services industry, where Infosys has gained 3.9% over the past month. Infosys reported revenues of $4.73 billion for the last quarter, reflecting a year-over-year increase of 3.6% [5] Infosys Earnings Expectations - Infosys is projected to post earnings of $0.19 per share for the current quarter, indicating a year-over-year change of 5.6%. The Zacks Consensus Estimate for Infosys has remained unchanged over the last 30 days, and it also holds a Zacks Rank of 3 (Hold) [6]

Financial Data and Key Metrics Changes - The meeting confirmed that 183,385,218 shares, or 88.59% of the total shares entitled to vote, were represented by proxies, indicating strong shareholder engagement [9] - The advisory vote on the compensation of named executive officers was approved by shareholders, reflecting confidence in management [38] Business Line Data and Key Metrics Changes - No specific business line data or key metrics were discussed during the meeting [0] Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the meeting [0] Company Strategy and Development Direction and Industry Competition - The board recommended votes for all proposals, indicating a unified strategy moving forward [10][11] - The company is focused on maintaining strong governance practices, as evidenced by the proposals regarding amendments to the certificate of incorporation [11][17] Management's Comments on Operating Environment and Future Outlook - Management expects a nominal impact from tariffs in 2025, indicating a stable outlook despite external pressures [44] - The company is monitoring the tariff situation closely, suggesting proactive management of potential risks [44] Other Important Information - The meeting included seven proposals, all of which were discussed, with the board recommending votes against shareholder proposals regarding the right to cure nomination defects and the removal of the one-year holding period for special meetings [18][29] Q&A Session All Questions and Answers Question: Will tariffs impact ServiceNow and how? - The CFO indicated that there is expected to be a very nominal impact from tariffs in 2025, with ongoing monitoring of the situation [44]

Core Viewpoint - NowVertical Group Inc. continues to show strong financial performance and operational improvement, achieving significant growth and stability in its business model [3][5][6]. Financial Highlights - Q1 2025 revenue reached $10.4 million, reflecting a 23% year-over-year growth when excluding recent divestitures [5][6]. - Adjusted EBITDA for Q1 2025 was $2.5 million, representing a 119% increase year-over-year when excluding the Allegient business [5][6]. - Income from Operations was $1.5 million in Q1 2025, a 1,253% increase year-over-year when excluding the Allegient business [5][6]. - Administrative Expenses decreased by 38% year-over-year to $3.6 million in Q1 2025 [6]. Business Developments - The company successfully renegotiated acquisition-related liabilities, resulting in an estimated $5.4 million in cash savings [3]. - NowVertical was recognized as Qlik Latin America Channel Growth Partner of the Year 2024, highlighting its ability to scale customer impact [7]. - The UK operations were designated as a Google Cloud Premier Partner, the highest recognition within the Google Cloud Partner Advantage program [7]. - The launch of the Data Catalyst Solution on the Microsoft Azure Marketplace reinforces the company's strategic positioning in enterprise AI and data infrastructure [7]. Upcoming Events - An investor webinar is scheduled for May 22, 2025, at 10:00 AM EST to discuss Q1 2025 results and engage with stakeholders [1][8][9].