ServiceNow Inc (NYSE:NOW) shares are soaring Thursday after the company beat earnings estimates for the second quarter. CEO Bill McDermott characterized the company as the "unicorn" of AI following the print.
What To Know: Thursday on CNBC's "Squawk On The Box," McDermott highlighted ServiceNow's strong quarterly performance and said the company has become the exclusive platform for enterprise AI software.
ServiceNow beat analyst estimates on the top and bottom lines in the second quarter as revenue grew 22% and remaining performance obligations jumped 31%.
"This is one platform, one clean sheet of glass that resides above 50 years of mess, and we have powered it with Gen AI," the ServiceNow CEO said.
Customers are jumping on board with ServiceNow because they have end-to-end operations to run and ServiceNow's AI enterprise software platform helps completely transform their businesses, and they are seeing strong returns on investment, he said.
McDermott noted ServiceNow takes a different approach to AI than most by offering domain-specific large language models (LLMs) that run inexpensively, are secure and are "lightning fast."
ServiceNow has improved productivity by up to 55%, so the bottom-line improvement is evident and keeps customers coming back, he said.
The company's Now Assist business doubled on a quarter-over-quarter basis after the company inked 11 deals that were greater than $1 million in the second quarter. Most of that growth is being driven by Gen AI, McDermott said.
Related Link: ServiceNow Q2 Earnings: Revenue Beat, EPS Beat — 'ServiceNow Intends To Reinvent Every Workflow, In Every Company, In Every Industry With GenAI'
Why It Matters: The ServiceNow platform is powered by NVIDIA Corp (NASDAQ:NVDA). The two companies have been working together building models for more than five years, McDermott said.
"So this is not wet paint. We've been at this for a while," the ServiceNow CEO said.
Because the two companies connected years ago, ServiceNow's entire AI stack was built on the back of "amazing technology" from Nvidia. ServiceNow started using AI for IT, then quickly moved it into the employee experience before focusing on the customer experience, McDermott said.
The compute power coming from Nvidia is powering the ServiceNow platform and data from other companies is helping feed its RaptorDB, allowing the company to ingest massive amounts of data at scale and process analytic queries 27 times faster than any other enterprise software platform, he said.
"We're thrilled about it and our customers are loving it. That's why we're the unicorn and we're growing faster than all the other ones," McDermott said.
NOW Price Action: ServiceNow shares were up 15.39% at $843.45 at the time of publication Thursday, according to Benzinga Pro.
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Photo: Courtesy of Nvidia.