ServiceNow(NOW) ZACKS·2025-01-30 17:20Core Insights - ServiceNow (NOW) reported fourth-quarter 2024 adjusted earnings of 2.957 billion, surpassing the consensus mark by 0.13% and showing a 21.3% year-over-year growth [2] - Subscription revenues for 2024 totaled 2.866 billion, with a constant currency increase of 21% [3] - Professional services and other revenues rose 26% year over year to 10.49 billion, up 22% year over year on a constant currency basis [4] Margins and Expenses - Non-GAAP gross margin for the third quarter was 82.6%, an increase of 60 basis points year over year [5] - Subscription gross margin was 84.9%, also up 60 basis points year over year [5] - Operating expenses as a percentage of revenues decreased by 170 basis points year over year to 66% [5] Customer Growth and Product Demand - ServiceNow had 2,109 total customers with over 5 million in net new ACV during the reported quarter [6] - The Pro Plus AI product saw a 150% sequential growth, with the number of customers purchasing multiple GenAI capabilities doubling quarter-over-quarter [7] Industry Performance - Manufacturing and public sector industries grew by 50% and 40% year over year, respectively [8] - ServiceNow's renewal rate remained strong at 98% [8] Liquidity Position - As of December 31, 2024, ServiceNow had cash and cash equivalents of 5.295 billion as of September 30, 2024 [9] - The company generated a free cash flow of 471 million in the previous quarter [9] Future Outlook - For 2025, ServiceNow expects subscription revenues to be between 12.675 billion, indicating an 18.5% to 19% increase from 2024 [10] - The non-GAAP operating margin is projected to be 30.5% for 2025 [10] - For the first quarter of 2025, subscription revenues are expected to be between 3 billion, suggesting an 18.5% to 19% year-over-year improvement [11]