ServiceNow, Inc. (NYSE:NOW) shares are rising in premarket trading on Thursday following its second-quarter earnings report, which exceeded analysts' expectations.
The company reported second-quarter revenue of $2.627 billion, beating the consensus estimate of $2.607 billion, per a press release.
Analysts anticipate that robust U.S. federal business and increasing adoption of AI software will counterbalance the impact of economic uncertainty on the company, reported CNBC.
According to Benzinga Pro, NOW stock has gained over 25% in the past year. Investors can gain exposure to the stock via Franklin Exponential Data ETF (BATS:XDAT) and Franklin Exponential Data ETF (BATS:IGV).
Also Read: ServiceNow Q2 Earnings: Revenue Beat, EPS Beat — 'ServiceNow Intends To Reinvent Every Workflow, In Every Company, In Every Industry With GenAI'
Meanwhile, ServiceNow disclosed the immediate departure of President and Chief Operating Officer CJ Desai following an investigation into the hiring of a former U.S. Army technology leader. However, the company assured that the hiring issue was a singular incident.
Earlier, ServiceNow also announced that it acquired Raytion, a Germany-based information retrieval technology provider.
NNACV for Now Assist, ServiceNow's GenAI experience, doubled quarter over quarter and surpassed expectations significantly, with 11 deals exceeding $1 million in the quarter.
In an interview, Chief Executive Officer Bill McDermott highlighted that the adoption of the company's generative AI-oriented products is contributing significantly to the increase in earnings. McDermott stated, "I doubt you could have had these extraordinary results without generative AI," reported Bloomberg.
ServiceNow expects third-quarter subscription revenue of $2.66 billion to $2.665 billion, representing growth of 20% to 20.5% on a year-over-year basis.
ServiceNow's expansion of its product line has positioned it in more direct competition with peers like Salesforce, Inc. (NYSE:CRM) and Workday, Inc. (NASDAQ:WDAY).
McDermott emphasized that ServiceNow is experiencing significant improvement in their customer service and employee-oriented solutions, which directly compete with offerings from Salesforce and Workday, Bloomberg added.
Price Action: NOW shares are trading higher by 6.04% to $775.00 premarket at last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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