Core Insights - ServiceNow (NOW) reported fourth-quarter 2025 adjusted earnings of 92 cents per share, exceeding the Zacks Consensus Estimate by 5.75% and reflecting a 26% year-over-year increase. Revenues reached $3.57 billion, surpassing the consensus mark by 1.25% and increasing by 20.7% year over year [1][8]. Revenue Performance - Subscription revenues improved by 20.9% year over year to $3.47 billion, while on a constant currency basis, revenues increased by 19.5% to $3.41 billion. Professional services and other revenues rose by 12.1% year over year to $102 million, with a constant currency increase of 11% to $101 million [2]. - The current remaining performance obligations (cRPO) stood at $12.85 billion, marking a 25% year-over-year increase on a reported basis and a 21% increase on a constant currency basis. Remaining performance obligations on a constant currency basis rose 22.5% year over year to $28.2 billion [3]. Client Growth and Product Performance - The company recorded 244 transactions exceeding $1 million in net new annual contract value (ACV) in Q4 2025, representing nearly 40% year-over-year growth. ServiceNow ended the quarter with 603 customers with over $5 million in ACV, reflecting approximately 20% year-over-year growth [4]. - AI-powered products such as Now Assist and Raptor significantly contributed to the growth in net new ACV, with RaptorDB Pro tripling its net new ACV year over year. The number of workflows and transactions grew over 33%, increasing from $60 billion to $80 billion and from $4.8 trillion to $6.4 trillion, respectively [5][6]. Operating Metrics - In Q4 2025, the non-GAAP gross margin was 80.3%, down 160 basis points year over year. The subscription gross margin was 82.7%, also contracting by 160 basis points year over year. Professional services reported a gross loss of $2 million compared to a gross income of $7 million in the previous year [7]. - Operating expenses as a percentage of revenues decreased by 180 basis points year over year to 64.2%, while the non-GAAP operating margin expanded by 140 basis points year over year to 30.9% [9]. Cash Flow and Share Repurchase - As of December 31, 2025, the company had cash and cash equivalents and marketable securities totaling $6.28 billion, up from $5.41 billion as of September 30, 2025. Cash from operations was $2.24 billion, compared to $813 million in the previous quarter, with free cash flow reaching $2.03 billion, up from $592 million in the prior quarter [10]. - The company repurchased 3.6 million shares in Q4 2025 and announced a new share repurchase authorization worth $5 billion, along with plans for a $2 billion accelerated share repurchase program [11]. Guidance for 2026 - For 2026, ServiceNow expects subscription revenues to be between $15.53 billion and $15.57 billion, indicating a rise of 20.5% to 21% from 2025. The guidance includes a 1% contribution from Moveworks. The non-GAAP subscription gross margin is anticipated to be 82%, with a non-GAAP operating margin of 32% and a free cash flow margin expected to be 36% [12]. - For Q1 2026, subscription revenues are projected to be between $3.65 billion and $3.67 billion, suggesting year-over-year growth of 21.5% on a GAAP basis [13][14].

Industry Overview - Software stocks are experiencing a significant sell-off, with the iShares Expanded Tech-Software Sector ETF (IGV) dropping approximately 5% in morning trading, marking its largest one-day decline since last April [2] - The ETF is now down about 21% from its recent high, indicating that the software industry has entered bear-market territory [2] Company Performance - ServiceNow reported fourth-quarter earnings that exceeded Wall Street expectations, yet its shares fell more than 11% on the day of the announcement [2] - Analysts from Morgan Stanley commented that while ServiceNow's performance was good, it was not sufficient to change the negative narrative surrounding incumbent application vendors [3] Market Sentiment - Investor concerns regarding the potential impact of artificial intelligence on traditional software business models are overshadowing positive earnings reports [3] - The sell-off has also affected major tech companies, with Microsoft experiencing a 10% decline after reporting a slowdown in cloud growth and providing softer-than-expected guidance for operating margins [4]

Core Viewpoint - U.S. software stocks experienced a decline due to SAP's cautious outlook on cloud services and a drop in ServiceNow shares following their earnings report, highlighting investor concerns over increasing competition from artificial intelligence [1] Group 1: Company Performance - SAP provided a cautious outlook for its cloud services, which contributed to the negative sentiment in the software sector [1] - ServiceNow shares fell post-earnings, further exacerbating investor worries about competition in the software industry [1] Group 2: Market Sentiment - The decline in U.S. software stocks reflects growing investor concerns regarding the competitive landscape, particularly the impact of artificial intelligence on traditional software companies [1]

Core Insights - Omnicom has appointed Jantzen Bridges as Global President of Credera, aiming to enhance its enterprise transformation consultancy capabilities, particularly in AI-enabled transformation programs [1][3] - The company is expanding its services to help clients modernize organizations, optimize marketing and sales execution, and drive revenue growth [1][2] Company Overview - Omnicom is recognized as the world's leading marketing and sales company, focusing on intelligent growth through its Connected Capabilities that integrate various agency brands and expertise [6] - Credera, as Omnicom's enterprise transformation consultancy, specializes in designing data, cloud, technology, and operating solutions to enhance marketing and customer experiences [2][5] Leadership and Experience - Jantzen Bridges brings over 20 years of experience in leading high-growth businesses at global consulting firms, having worked with Fortune 500 clients on technology-enabled transformations [3][4] - Her approach emphasizes aligning business strategy, technology, and people to achieve sustained performance and integrated operating models [4][5] Strategic Positioning - Omnicom is positioned to meet the evolving needs of clients who require assistance in redesigning data platforms and technology strategies in an AI-driven environment [3][5] - The appointment of Bridges is seen as a reinforcement of Credera's role as a strategic partner for executives rethinking growth and operations [5]

Core Viewpoint - ServiceNow's stock price has declined significantly following the release of its financial results, raising questions about whether to buy the dip or sell the rip [1] Financial Performance - ServiceNow reported fourth quarter revenue of $3.56 billion, a 21% increase from the same period in 2024, leading to an annual revenue of $13 billion, up 20% from 2024 [1] - The company's current remaining performance obligations (cRPO) rose to over $12 billion [1] - Guidance for Q1 revenue is projected between $3.65 billion and $3.655 billion, with an expected operating margin of 31.5% [1] - For the full year, revenue is expected to increase by 20.5% to 21%, reaching between $15.3 billion and $15.57 billion, which is below analysts' expectations of $15.7 billion [1] Valuation Metrics - The forward price-to-earnings ratio has decreased to 37.8, significantly lower than the five-year average of 67 [1] - The GAAP price-to-earnings ratio stands at 75, also below the five-year average of 252 [1] - The forward PEG ratio is 1.64, slightly lower than the sector median of 1.65 [1] Analyst Sentiment - Wall Street analysts maintain an optimistic outlook, with a consensus target price of $204, indicating a potential 57% increase from the current level [1] - Target prices from analysts include $200 from Cantor Fitzgerald and $175 from Jefferies, while only one analyst, Kash Rangan from Goldman Sachs, has downgraded the stock from buy to sell [1] Technical Analysis - The stock has been in a downward trend, falling from a high of $240 in January 2025 to $122 [1] - It has breached the 61.8% Fibonacci Retracement level at $133.45 and remains below key moving averages [1] - The Relative Strength Index (RSI) and MACD indicators show continued downward movement, suggesting further declines may target the next support level at $105 [1]

Core Viewpoint - ServiceNow's stock experienced a decline despite the company reporting better-than-expected quarterly results and providing a positive outlook for its earnings [1] Group 1 - The quarterly results exceeded market expectations, indicating strong performance in the software sector [1] - The company provided an optimistic outlook for future earnings, suggesting continued growth potential [1]

Market Analysis by covering: ServiceNow Inc. Read 's Market Analysis on Investing.com ...

Core Viewpoint - ServiceNow continues to demonstrate strong financial performance and growth potential in the IT services industry, despite a recent drop in share price following its earnings report [1][4]. Financial Performance - ServiceNow reported an earnings per share (EPS) of $0.92, surpassing the estimated $0.88 and the Zacks Consensus Estimate of $0.87, marking a year-over-year improvement from $0.73 [2][6]. - The company's revenue for the quarter was $3.56 billion, exceeding the estimated $3.52 billion and the Zacks Consensus Estimate by 1.24%, reflecting a significant increase from $2.96 billion in the same period last year [3][6]. Market Position and Growth Outlook - Despite a more than 5% drop in shares post-earnings announcement, the company remains optimistic about future growth, projecting higher-than-anticipated subscription revenue for 2026 [4][6]. - Strategic acquisitions, including plans to acquire startups Armis and Veza, are expected to enhance ServiceNow's capabilities in artificial intelligence and security [4]. Valuation Metrics - ServiceNow's financial metrics indicate a strong valuation, with a price-to-earnings (P/E) ratio of approximately 77.88 and a price-to-sales ratio of 10.63 [5]. - The company's enterprise value to sales ratio is 10.60, and a debt-to-equity ratio of 0.21 suggests a relatively low level of debt, while a current ratio of 1.06 indicates modest short-term financial health [5].

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Market Overview - The stock market showed mixed performance with the Dow up 0.02% at 49,015.60, Nasdaq up 0.17% at 23,857.44, and S&P 500 down 0.01% at 6,978.03 [2] - The Federal Reserve maintained the federal funds rate at 3.5%–3.75%, contributing to cautious investor sentiment [1] Meta Platforms Inc. - Meta's stock declined by 0.63%, closing at $668.73, with an intraday high of $677.68 and a low of $666.10; after-hours trading saw a rise of 6.6% to $713.06 [3] - For Q1, Meta projected revenue between $53.5 billion and $56.5 billion, with full-year 2026 expenses forecasted at $162 billion to $169 billion and capital expenditures of $115 billion to $135 billion [4] IBM - IBM's stock increased by 0.13%, closing at $294.16, with an intraday high of $295.95 and a low of $291.26; it rose 7.7% in after-hours trading to $316.85 [5] - The company reported Q4 revenue of $19.69 billion, exceeding estimates of $19.23 billion, with adjusted EPS of $4.52 also beating expectations; revenue grew 12% year over year, driven by a 14% increase in Software and a 21% increase in Infrastructure [5] - IBM forecasts full-year 2026 revenue of $70.91 billion, with free cash flow expected to rise by about $1 billion [6] ServiceNow - ServiceNow's stock dropped by 1.64%, closing at $129.62, with an intraday high of $133.67 and a low of $129.14; it fell 5.3% in after-hours trading to $122.77 [6] - The company reported Q4 revenue of approximately $3.57 billion, surpassing estimates, with adjusted EPS of 92 cents; subscription revenue rose 21% year over year, and remaining performance obligations increased by 26.5% to $28.2 billion [7] - For 2026, ServiceNow forecasts subscription revenue between $15.53 billion and $15.57 billion, indicating roughly 21% annual growth [7] Carvana - Carvana's stock plummeted by 14.17%, closing at $410.04, with an intraday high of $477.59 and a low of $374.55; the stock's 52-week range is $486.89 to $148.25 [8] - The decline followed a short report from Gotham City Research alleging the company overstated 2023–2024 earnings by over $1 billion and relied on undisclosed related-party support [8][9] - Carvana denied the allegations, calling them inaccurate and misleading [9] Tesla - Tesla's stock slightly decreased by 0.10%, closing at $430.46, with an intraday high of $438.26 and a low of $430.10; it rose 2.16% in after-hours trading to $439.74 [9] - The company reported Q4 earnings of 50 cents per share, beating estimates of 45 cents, with revenue of $24.9 billion; fourth-quarter deliveries totaled 418,227 vehicles, down 16% year over year [10] - Tesla is preparing production ramps for the Tesla Semi and CyberCab in North America in the first half of 2026 and plans to unveil the Gen 3 Optimus robot in Q1 [10]