Core Insights - ServiceNow CEO Bill McDermott emphasized that artificial intelligence (AI) will not render enterprise software obsolete, highlighting the necessity of integrating with major hyperscalers to enhance their offerings [1][3] - The company provides essential software solutions for various industries, including asset management, operations, and security, which are critical for complex functions, particularly in sectors like financial services [2][3] - McDermott dismissed concerns that AI could replace systems of record, asserting that AI's effectiveness is limited when applied in siloed environments, and that it requires a cross-functional approach [3] Company Developments - ServiceNow proposed a five-for-one stock split to attract more retail investors, indicating a shift in focus beyond institutional investors [4] - Following a strong earnings report that exceeded expectations, ServiceNow's shares experienced a more than 4% increase in extended trading [4]

Financial Data and Key Metrics Changes - Subscription revenue for Q3 2025 was $3.299 billion, growing 20.5% year over year in constant currency, exceeding guidance by 100 basis points [20] - Remaining performance obligations (RPO) ended at approximately $24.3 billion, representing 23% year over year constant currency growth [20] - Current RPO was $11.35 billion, reflecting 20.5% year over year constant currency growth, beating guidance by 250 basis points [20] - Non-GAAP operating margin was 33.5%, 300 basis points above guidance, driven by top-line outperformance and operational efficiencies [23] - Free cash flow margin was 17.5%, up 50 basis points year over year [23] Business Line Data and Key Metrics Changes - Now Assist had 12 deals over $1 million in net new ACV, including one over $10 million, indicating strong performance [22] - IT Service Management (ITSM) and HR Plus net new ACV doubled quarter over quarter, while IT Operations Management (ITOM) Plus net new ACV surged more than 5x quarter over quarter [22] - Customer Service Management (CSM) Plus deal volume tripled year over year [22] Market Data and Key Metrics Changes - The transportation and logistics sector led growth with over 90% year over year increase in net new ACV, followed by retail, hospitality, and education sectors, both growing over 50% [21] - The U.S. Federal business grew net new ACV over 30% year over year, showcasing strong demand in the government sector [21] Company Strategy and Development Direction - The company is focusing on AI business transformation, with a target of exceeding $1 billion in AI products ACV by 2026 [7][22] - ServiceNow is positioning itself as a leader in enterprise AI, integrating various technologies to provide comprehensive solutions [10][19] - The company is raising guidance for Q4 and full-year 2025, reflecting confidence in its growth trajectory and market opportunities [7][24] Management's Comments on Operating Environment and Future Outlook - Management expressed strong confidence in the future, highlighting the significant market opportunity for the platform and the ongoing demand for AI solutions [6][7] - The company acknowledged potential impacts from the ongoing government shutdown on deal timing in the U.S. Federal business for Q4 [26] Other Important Information - The Board of Directors approved a five-for-one stock split to make shares more accessible to a broader base of investors [24] - The company ended Q3 with $9.7 billion in cash and investments, indicating a robust balance sheet [23] Q&A Session Summary Question: Integration and Implementation of Agentic Technology - Bill McDermott discussed the importance of integration expertise and the role of external partners in successfully implementing agentic technology [30][31] Question: Broader Sales Organization and AI Solutions - Amit Zavery confirmed that the sales organization is becoming more adept at selling AI solutions, with a growing number of customers live on the platform [41] Question: Federal Government Shutdown Impact - Gina Mastantuono explained that while demand remains strong, the government shutdown has led to a more prudent approach in guidance [45][46] Question: Demand Trends and AI Consumption - Bill McDermott highlighted strong demand trends and the significant growth in AI consumption, particularly in the context of customer engagement [50][51] Question: MoveWorks Acquisition Update - Gina Mastantuono provided an update on the expected closing of the MoveWorks deal, emphasizing that current successes are independent of this acquisition [75] Question: AI Control Tower Demand - Amit Zavery noted that the AI Control Tower is gaining significant interest from customers concerned about managing AI security and compliance [80]

Financial Data and Key Metrics Changes - Subscription revenue for Q3 2025 was $3.299 billion, growing 20.5% year over year in constant currency, exceeding guidance by 100 basis points [20] - Remaining Performance Obligations (RPO) ended at approximately $24.3 billion, representing 23% year over year constant currency growth [20] - Current RPO was $11.35 billion, reflecting 20.5% year over year constant currency growth, beating guidance by 250 basis points [20] - Non-GAAP operating margin was 33.5%, 300 basis points above guidance, driven by top-line outperformance and operational efficiencies [23] - Free cash flow margin was 17.5%, up 50 basis points year over year [23] Business Line Data and Key Metrics Changes - Now Assist had 12 deals over $1 million in net new ACV, including one over $10 million, indicating strong performance [22] - IT Service Management (ITSM) and HR Plus net new ACV doubled quarter over quarter, while IT Operations Management (ITOM) Plus net new ACV surged more than 5x quarter over quarter [22] - Customer Service Management (CSM) Plus deal volume tripled year over year [22] Market Data and Key Metrics Changes - The transportation and logistics sector led growth with over 90% year over year increase in net new ACV, followed by retail, hospitality, and education sectors, both growing over 50% [21] - The U.S. Federal business grew net new ACV over 30% year over year, demonstrating strong demand [21] Company Strategy and Development Direction - The company is focused on AI business transformation, with a target of exceeding $1 billion in AI products ACV by 2026 [7][22] - ServiceNow aims to integrate AI into enterprise workflows, emphasizing the importance of governance and management of AI technologies [8][10] - The company is raising guidance for Q4 and full-year 2025, reflecting confidence in market opportunities and operational execution [7][24] Management's Comments on Operating Environment and Future Outlook - Management expressed strong confidence in the future, highlighting the significant market opportunity for the ServiceNow platform [6][7] - The ongoing government shutdown may impact deal timing in the U.S. federal business, but demand remains strong [26][45] - The company is optimistic about the trajectory of its business, with a robust pipeline heading into Q4 [53] Other Important Information - The Board of Directors approved a five-for-one stock split to make shares more accessible to a broader base of investors [24] - The company ended Q3 with $9.7 billion in cash and investments, indicating a strong balance sheet [23] Q&A Session Summary Question: Integration and Implementation of Agentic Technology - Bill McDermott discussed the importance of integration expertise and the role of external partners in implementing agentic technology [30][31] Question: Broader Sales Organization and AI Solutions - Amit Zavery confirmed that the sales organization is becoming more adept at selling AI solutions, with a growing number of customers live on the platform [41] Question: Federal Government Impact on Guidance - Gina Mastantuono explained that the company has factored in prudence regarding the federal government shutdown, affecting deal timing [45][46] Question: Demand Trends and AI Consumption - Bill McDermott noted that demand is stronger than ever, with significant growth in AI consumption and utilization [50][51] Question: MoveWorks Acquisition Update - Gina Mastantuono indicated that the MoveWorks deal is expected to close towards the end of Q4, enhancing ServiceNow's AI capabilities [75] Question: AI Control Tower Demand - Amit Zavery highlighted the strong interest in the AI Control Tower, which addresses customer concerns about managing AI technologies [80]

Financial Data and Key Metrics Changes - Subscription revenue for Q3 2025 was $3.299 billion, growing 20.5% year over year in constant currency, exceeding guidance by 100 basis points [19] - Remaining performance obligations (RPO) ended at approximately $24.3 billion, representing 23% year over year constant currency growth [19] - Current RPO was $11.35 billion, reflecting 20.5% year over year constant currency growth, beating guidance by 250 basis points [19] - Non-GAAP operating margin was 33.5%, 300 basis points above guidance, driven by top-line outperformance and operational efficiencies [22] - Free cash flow margin was 17.5%, up 50 basis points year over year [22] Business Line Data and Key Metrics Changes - Now Assist had 12 deals over $1 million in net new ACV, including one over $10 million, indicating strong performance in AI products [21] - IT Service Management and HR Plus net new ACV doubled quarter over quarter, while IT Operations Management Plus surged more than 5x quarter over quarter [21] - Customer Service Management Plus deal volume tripled year over year, showcasing significant growth in CRM solutions [21] Market Data and Key Metrics Changes - Transportation and logistics led the way with over 90% year over year growth in net new ACV, followed by retail, hospitality, and education, both growing over 50% [20] - U.S. Federal business grew net new ACV over 30% year over year, demonstrating strong demand in the government sector [20] Company Strategy and Development Direction - The company is focusing on AI business transformation, with a target of exceeding $1 billion in AI products ACV by 2026 [6][21] - The introduction of the AI Control Tower aims to provide governance and management for AI initiatives, addressing customer concerns about security and compliance [76][79] - The company is enhancing its platform with industry-specific solutions, leveraging partnerships to build tailored offerings for sectors like financial services and retail [67][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future, raising guidance for Q4 and full-year 2025 based on strong Q3 performance [4][24] - The ongoing government shutdown may impact deal timing in the U.S. federal business, but demand remains strong [24][42] - The company is experiencing a cultural shift towards AI adoption internally, enhancing operational efficiencies and employee satisfaction [39] Other Important Information - The Board of Directors approved a five-for-one stock split to make shares more accessible to a broader base of investors [23] - The company ended Q3 with $9.7 billion in cash and investments, indicating a robust financial position [22] Q&A Session Summary Question: Integration and implementation of agentic technology - Management acknowledged the need for integration expertise and mentioned plans to invest in forward-deployed engineers to assist customers [28][33] Question: Broader sales organization and partner base for AI solutions - Management confirmed that the sales organization is becoming more adept at selling AI solutions, with a significant increase in customer assists [37][38] Question: Impact of government shutdown on guidance - Management noted that while demand remains strong, they have factored in prudence regarding the timing of federal deals due to the shutdown [41][42] Question: Consumption trends and AI credits - Management highlighted a 55x growth in assists since May, indicating strong customer engagement and usage of AI solutions [52][58] Question: Demand for AI Control Tower - Management reported a 4x growth in customer interest for the AI Control Tower, emphasizing its importance for managing AI initiatives [76][79]

Q3 2025 Financial Performance - Subscription revenues reached $3,299 million, representing a year-over-year increase of 21.5%, or 20.5% on a non-GAAP constant currency basis[19] - Current Remaining Performance Obligations (cRPO) totaled $11.35 billion, a 21% year-over-year increase, or 20.5% on a non-GAAP constant currency basis[19] - Remaining Performance Obligations (RPO) amounted to $24.3 billion, reflecting a 24% year-over-year increase, or 23% on a non-GAAP constant currency basis[19] - Non-GAAP operating margin was 33.5%, an increase of approximately 250 basis points year-over-year[19] - Non-GAAP free cash flow margin was 17.5%, an increase of approximately 50 basis points year-over-year[19] Q4 2025 Guidance - Subscription revenues are projected to be between $3,420 million and $3,430 million, representing a 19.5% year-over-year increase, or 17.5% to 18% on a non-GAAP constant currency basis[23] - Non-GAAP operating margin is expected to be 30%, an increase of approximately 50 basis points year-over-year[23] - Current RPO (cRPO) growth is projected at 23%, or 19% on a non-GAAP constant currency basis[23] FY 2025 Guidance - Subscription revenues are projected to be between $12,835 million and $12,845 million, representing a 20.5% year-over-year increase, or 20% on a non-GAAP constant currency basis[23] - Non-GAAP subscription gross margin is expected to be 83.5%, a decrease of approximately 150 basis points year-over-year[23] - Non-GAAP operating margin is expected to be 31%, an increase of approximately 150 basis points year-over-year[23] - Non-GAAP free cash flow margin is expected to be 34%, an increase of approximately 250 basis points year-over-year[23]

Core Viewpoint - Salesforce, Inc. (NYSE:CRM) is considered one of the best stocks for high returns heading into 2026, with mixed opinions from Wall Street analysts following its analyst day at Dreamforce 2025 [1] Group 1: Analyst Ratings - On October 17, Wells Fargo reiterated a Hold rating on Salesforce with a price target of $265 [1] - TD Cowen maintained a Buy rating with a price target of $335, highlighting the company's strength in enterprise software despite AI disruption concerns [2] Group 2: Revenue Growth and Targets - Salesforce introduced a new FY30 revenue target of over $60 billion, indicating a 10% organic CAGR growth from 2026 to 2030 [2] - The company’s strategic edge is attributed to its ability to combine deterministic business logic through its applications [3] Group 3: AI Integration and Management Confidence - Salesforce has integrated AI workflows through its Customer 360 platform across various clouds [3] - Management's confidence in enhancing the adoption curve for its Agentforce platform was noted, suggesting potential for improved valuation as AI strategies are executed [3] Group 4: Company Overview - Salesforce provides customer relationship management (CRM) technology that integrates AI to enhance sales, service, marketing, and commerce [4]

Economic Overview - The U.S. inflation rate has reached 3% in September, the highest level since January, with consumer prices rising by 0.3% in that month, up from an annual rate of 2.9% [1][9]. Investment Opportunities - Amid rising inflation, dividend growth stocks present a favorable investment option as their increasing payouts can help maintain purchasing power [2][9]. - Companies with a strong history of dividend growth tend to have robust financial health, providing a defensive hedge against economic uncertainty [4][5]. Selected Dividend Growth Stocks - Five dividend growth stocks identified as solid investment choices include: - **Vertiv (VRT)**: Expected revenue growth of 27.5% for 2025, long-term earnings growth rate of 30%, and an annual dividend yield of 0.08% [10][11]. - **Taiwan Semiconductor (TSM)**: Projected revenue growth of 33.8% for 2025, long-term earnings growth rate of 29.2%, and an annual dividend yield of 0.88% [11]. - **Oracle (ORCL)**: Anticipated revenue growth of 16.5% for fiscal 2026, long-term earnings growth rate of 17.2%, and an annual dividend yield of 0.71% [12]. - **Lam Research (LRCX)**: Expected revenue growth of 11.9% for fiscal 2026, long-term earnings growth rate of 19.6%, and an annual dividend yield of 0.69% [13]. - **Elbit Systems (ESLT)**: Projected revenue growth of 16.4% for 2025, long-term earnings growth rate of 23.3%, and an annual dividend yield of 0.51% [14]. Investment Criteria - Stocks selected for their strong fundamentals include criteria such as: - Positive 5-Year Historical Dividend Growth, Sales Growth, and EPS Growth [6][7]. - Price/Cash Flow ratio less than the industry average, indicating undervaluation [8]. - 52-Week Price Change greater than the S&P 500, ensuring better performance over the past year [8].

Group 1: Nestlé's Digital Transformation - Nestlé has successfully implemented SAP S/4HANA Cloud Private Edition, benefiting 50,000 users across 112 countries in Asia, Oceania, and Africa, with plans to complete the upgrade across the entire company within two years [1] - The new ERP system connects core business processes, enhancing operations and decision-making across manufacturing, sales, supply chain, finance, and human resources [1] - The CIO of Nestlé emphasizes the importance of a unified ERP system for visibility and efficiency, enabling faster global product rollouts and improved insights through AI and automation [2] Group 2: Industry Trends in AI and Retail - The RTIH AI in Retail Awards highlight the significance of digital upgrades and AI tools in reshaping omnichannel retail, focusing on personalized customer experiences and inventory optimization [3][4] - The awards aim to recognize companies that effectively integrate AI into their business processes by 2025, moving beyond hype to practical applications that enhance efficiency and innovation [5] - Winners will be announced at an event in London, celebrating advancements in technology and their benefits for retailers, shoppers, and employees [6]

Core Insights - Enterprises across the U.S. are increasingly adopting enterprise service management (ESM) as a foundational element for digital business transformation [1] Group 1 - The adoption of ESM is seen as a critical strategy for organizations aiming to enhance their digital capabilities [1] - ISG highlights that this trend reflects a broader shift towards integrating technology into business processes [1] - The move towards ESM is expected to drive efficiency and improve service delivery across various sectors [1]

Core Viewpoint - Strategy Inc (NASDAQ:MSTR) is recognized as one of the top American AI stocks to buy, with Citi initiating coverage and assigning a Buy rating with a price target of $485, indicating a significant upside potential based on Bitcoin forecasts [1][2]. Group 1: Company Overview - Strategy Inc (NASDAQ:MSTR) is a Digital Asset Treasury (DAT) company that has adopted Bitcoin as its primary treasury reserve asset, holding approximately 3% of all Bitcoin in circulation [2]. - The company plans to continue acquiring more Bitcoin through various financial instruments, including convertible debt, preferred equity, and MSTR stock [2]. Group 2: Analyst Insights - Citi's price target for Strategy Inc is based on a forward 12-month rolling base-case Bitcoin forecast of $181,000, suggesting a 63% upside from current levels [2]. - The firm acknowledges that while Strategy Inc can provide strong returns, it also carries high volatility and risk due to its leveraged position on Bitcoin [2]. - Citi estimates that the net asset value (NAV) premium for Strategy Inc can range from 25% to 25% [2].