ServiceNow Inc. reported solid third-quarter growth, with subscription sales rising 23% to $2.7 billion and booked sales increasing 26%, both exceeding analyst forecasts. However, despite the strong performance, investor expectations for greater AI-driven growth led to a slight stock dip of 1.3% in late trading.
The Santa Clara-based company, known for its IT and personnel automation software, is heavily integrating generative AI into its products. Its Now Assist AI assistant is the fastest-growing product in the company’s history, offering users a 30% premium on average contract value, according to CEO Bill McDermott.
However, the company’s forecast for Q4 subscription revenue—estimated at $2.88 billion—only slightly exceeded analyst expectations, leading some to call the guidance “good, but not great.”
ServiceNow also announced the hiring of Amit Zavery from Google Cloud to fill key leadership roles. His focus will be on product and engineering as the company expands its AI capabilities.
With its focus on AI and plans for broader rollout of AI agents, ServiceNow remains optimistic, projecting a 21.5% increase in near-term bookings. Despite missing some investor hopes, the company continues to hire aggressively, adding 1,200 workers in the quarter.