ServiceNow (NYSE: NOW) reported a 32% jump in second-quarter revenues to $833.9 million, riding on the robust demand for its enterprise products. The top-line was better than Wall Street projection of $832.37 million.
Subscription revenues of $781 million in Q2 represented a 33% increase from last year.
Net income for the quarter rose to 71 cents per share, from 49 cents per share a year ago. Analysts had projected Q2 earnings of 63 cents per share.
NOW shares fell 5% during post-market trading hours, primarily on valuation concerns. The stock is currently trading at a 0.7% downside from its 12-month average price target.
In the trailing 52 weeks, the stock has gained 53%, outperforming most of its rivals. In the past five years, the stock has increased almost five times.
For the second quarter, adjusted subscription billings growth came in at 34%, higher than the management projection of 32-33%.
During the quarter, ServiceNow closed 39 transactions with more than $1 million in net new annual contract value (ACV). The company now has 766 total customers with more than $1 million in ACV, representing 33% year‑over‑year growth in customers.
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Outlook
The company expects subscription revenue growth of 32-33% in the third quarter and 34% for the full year. Meanwhile, subscription billings are expected to see 26-27% growth in Q3 and 30% growth in 2019.
The Santa Clara, California-based firm has benefitted from a large chunk of companies shifting their operations to cloud-based infrastructure, driving demand for its subscription products and solutions.
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. ServiceNow 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.