The 10-second takeaway
For the quarter ended June 30 (Q2), ServiceNow beat expectations on revenues and missed expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP loss per share increased. GAAP loss per share increased.
Gross margins expanded, operating margins dropped, net margins dropped.
ServiceNow tallied revenue of $102.2 million. The 13 analysts polled by S&P Capital IQ predicted sales of $95.8 million on the same basis. GAAP reported sales were 80% higher than the prior-year quarter's $56.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at -$0.06. The 15 earnings estimates compiled by S&P Capital IQ forecast -$0.05 per share. Non-GAAP EPS were -$0.06 for Q2 versus -$0.03 per share for the prior-year quarter. GAAP EPS were -$0.16 for Q2 against -$0.07 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 64.8%, 510 basis points better than the prior-year quarter. Operating margin was -18.9%, 280 basis points worse than the prior-year quarter. Net margin was -20.9%, 550 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $101.8 million. On the bottom line, the average EPS estimate is $0.00.
Next year's average estimate for revenue is $398.3 million. The average EPS estimate is -$0.04.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 19 members out of 38 rating the stock outperform, and 19 members rating it underperform. Among 17 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), six give ServiceNow a green thumbs-up, and 11 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on ServiceNow is outperform, with an average price target of $42.33.
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