ServiceNow “fastest ever” as it reaches $2bn revenue first

ServiceNow has surpassed the $2bn quarterly revenue barrier for the first time, as revealed by the enterprise titan’s first quarter (Q1) results on Wednesday.

ServiceNow’s financials also revealed a net income of $150m, an increase of 100 percent from Q1 2022’s $75m total.

The big news though is the breaking by NOW of the quarterly revenue barrier. The $2.096bn garnered in Q1 occurred at lightning speed according to CEO Bill McDermott, who described the results as the “fastest ever” to be achieved.

“We just eclipsed the $2bn threshold in a single quarter, and we were the fastest ever to do that on an organic basis,” McDermott said in Wednesday’s earnings call, showing ServiceNow to be on track for its $10bn+ milestone by 2024.

Wednesday’s results exceeded guidance across all Q1 2023 topline growth and profitability metrics, raising subscription revenues guidance for the year to 23 percent, maximizing at $8.52bn. This is a jump on the previous forecast of $8.44-$8.5 bn, and beat analyst expectations on Wall Street.

ServiceNow subscription revenues totaled $2.024m in Q1 2023, representing 24 percent year‑over‑year (YoY) growth, 27 percent adjusted for constant currency.

Total revenues reached $2.096m in the first quarter, representing 22 percent YoY growth, 24.5 percent adjusted for constant currency. Current remaining performance obligations (cRPO) were reported to total $7.01bn, representing 23 percent year‑over‑year growth, 25 percent adjusted for constant currency.

Earnings came to $2.38 per share when adjusted for stock compensation and other costs.

Q1 and “9s & 10s”

Moving away from the money side, McDermott spoke about “human currency” in the ServiceNow Q1 earnings call, and highlighted the company’s continued resistance to making vast workforce layoffs.

“We have been very biased towards great engineering, especially fingers on keyboards, and go-to-market folks that actually carry a quota,” said the CEO.

“We’re still managing our headcount tightly. It’s not like we’re boldly hiring… and I really believe we have a new dimension here where our culture is actually attracting people in the marketplace, and we’re hiring truly best-in-class talent. We call it 9s and 10s here. If you’re an 8.5, you don’t get in the door now.”

A February article from Fortune adds more numbers to the mix, showing ServiceNow filled 1,500 open positions with existing employees in 2022.

Therefore, even if ServiceNow may not be boldly hiring, it is bravely barreling its way to the $15bn-mark by 2026. Find out more about Bill McDermott’s vision for the company in his interview with ERP Today for our first North American edition.