ServiceNow(US:NOW) Forbesยท2024-10-24 13:33Core Viewpoint - ServiceNow's stock has risen 33% in 2023, with further potential for growth driven by strong financial performance, leadership in enterprise generative AI, and significant productivity gains for early adopters of its AI solutions [1][2]. Financial Performance - Q3 2024 revenue reached $2.80 billion, a 22.3% increase, exceeding Street consensus by $60 million [2] - Adjusted earnings per share for Q3 2024 were $3.72, up 27% and 80 cents above estimates [2] - Subscription revenue for Q3 2024 was $2.72 billion, up 22.5%, also exceeding consensus by around $60 million [2] - Current remaining performance obligations stood at $9.36 billion, representing 26% growth and $250 million above projections [2] - Q4 2024 subscription revenue forecast is between $2.875 billion and $2.880 billion, indicating a 22% increase year-over-year [2] Generative AI Leadership - ServiceNow's Now Assist AI is the fastest-growing product in the company's history, contributing to cross-enterprise expansion [2][4] - The company is positioned as a leader in enterprise generative AI, with partnerships with Nvidia enhancing its capabilities [4][6] - ServiceNow's generative AI solutions are designed to improve productivity significantly, with claims of increasing human productivity by up to three or four days a week [5] Productivity Gains for Customers - Customers, such as BT, have reported a 55% reduction in call resolution time due to ServiceNow's AI solutions [7] - The software reduces the need for workers to switch between multiple applications, streamlining workflows [6] - There is strong customer interest in generative AI products, with 85% of Fortune 500 companies as customers seeking rapid value realization [7][8] Market Outlook - Analysts have a positive outlook on ServiceNow's stock, with an average price target of $985, indicating potential upside [8] - The company's consistent ability to beat guidance and raise forecasts is noted as a unique strength in the market [9]