ServiceNow expects strong revenue growth and partnerships, but faces challenges from macroeconomic conditions

From Nasdaq: 2025-04-21 14:14:00

ServiceNow (NOW) is set to release its first-quarter 2025 results on April 23. Analysts expect revenues of $3.08 billion, up 18.37% from the previous year, with earnings per share at $3.79, up 11.14%. The company has consistently beaten earnings estimates in the past four quarters.

ServiceNow expects strong subscription revenue growth in Q1 2025, with estimates at $2.997 billion, up 18.8% from last year. The company introduced the Yokohama platform, enhancing AI capabilities across various domains. ServiceNow ended Q4 2024 with 2,109 customers, a 14% increase YoY.

ServiceNow shares have fallen 27.1% YTD, outperforming the Computer & Technology sector but underperforming the industry. The company faces challenges from macroeconomic conditions and DOGE-related issues, impacting federal business.

ServiceNow benefits from a strong portfolio and partner base, including Google, Amazon, and NVIDIA. The company is leveraging AI technologies to enhance solutions and recently expanded partnerships with Google Cloud and NVIDIA to introduce AI agents for various industries.

ServiceNow’s GenAI portfolio and partnerships are expected to drive subscription revenues long-term. However, challenges from unfavorable forex and tariff issues are concerns. With a Zacks Rank #3 (Hold), investors are advised to wait for a favorable entry point before purchasing NOW stock.



Read more at Nasdaq: Should You Buy, Sell or Hold ServiceNow Stock Before Q1 Earnings?