ServiceNow (NYSE: NOW) is slated to report second-quarter financial results after the regular trading hours on Wednesday, July 24. Analysts expect the software-as-a-service cloud company to report earnings of 63 cents per share, compared to 49 cents per share it reported a year ago.
Revenues are projected to jump 32% to $832.37 million, helped by the robust demand for its enterprise products and high renewal rates. In the first quarter, the company boasted of a 98% renewal rate, suggesting high customer satisfaction in the products.
Wall Street loves the stock too. In the trailing 52 weeks, the stock has gained 53%, outperforming most of its peers, on the back of better-than-expected quarterly results. In the past five years, the stock has increased almost five times.
The Santa Clara, California-based firm has also benefitted from a large chunk of companies shifting their operations to cloud-based infrastructure, driving demand for its subscription products and solutions.
For the second quarter, the management expects adjusted subscription billings to grow 32-33% year-over-year.
Customers, contracts and deals
CEO John Donahoe had earlier said that ServiceNow is committed to expanding its customer base across 75% of the Fortune 500 companies. At the end of the last reported quarter, its customer base exceeded 5,400.
READ: Microsoft leads the enterprise SaaS industry, grows quickly
In the second quarter, the company continued to build on its profile by signing major partnerships and contracts, which further add confidence in the stock. It extended its partnership with Microsoft Corp. (NASDAQ: MSFT) to optimize its products and cloud capabilities, besides acquiring Israel-based Appsee, a mobile app analytics platform.
Separately, ServiceNow boasts of six federal customers with a total annual contract value of over $10 million.
The stock has a 12-month average price target of $295, which is at a 2.4% upside from Tuesday’s trading price.
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