ServiceNow Stock Tumbles Premarket On Slim Q4 Beat, Soft Guidance — But Retail Eyes Buying The Dip

synopsis

ServiceNow, Inc.’s (NOW) stock slumped in Thursday’s pre-market session as traders expressed disappointment over the small quarterly beat but retail wasn’t ready to throw in the towel yet.

Santa Clara, California-based ServiceNow, which provides end-to-end intelligent workflow, automation platform solutions, reported fiscal year 2024 fourth-quarter non-GAAP earnings per share (EPS) of $3.67, a penny ahead of the consensus estimate, according to Yahoo Finance data.

Non-GAAP revenue rose 21% year-over-year (YoY) to $2.95 billion, with subscription revenue climbing at the same pace to $2.86 billion. When the company released its third-quarter results in late October, it guided subscription revenue in the range of $2.86 billion to $2.88 billion.

Current Remaining Performance Obligations (cRPO), a key operational measure, was at $10.27 billion at the end of the fourth quarter, up 21% year over year. This slightly missed the guidance for 21.5% growth.

The company said it had nearly 500 customers, which contributed more than $5 million in annual contract value (ACV).

CEO Bill McDermott said, “ServiceNow closed out the year exceeding Q4 expectations on top of our ‘beat and raise’ track record.”

“Leaders are embracing the ServiceNow Platform as their AI agent control tower to unlock exponential productivity and seamlessly orchestrate end‑to‑end business transformation.”

ServiceNow guided first-quarter subscription revenue to a range of $2.995 billion to $3.000 billion, translating to 18.5%-19% growth and cRPP growth of 19.5%.

For the full year, the company expects subscription revenue of $12.64 billion to $12.68 billion.

Analysts, on average, expect first-quarter revenue of $3.09 billion and full-year revenue of $13.11 billion.

ServiceNow’s board authorized additional repurchases of up to $3 billion of the company’s common stock.

Retail investors on Stocktwits stayed ‘bullish’ (73/100) on ServiceNow stock and message volume remained at ‘extremely high’ levels.

NOW sentiment and message volume January 30, premarket as of 9:13 am ET | Source: Stocktwits

A retail stock watcher saw the premarket slump as a “rare” buying opportunity and recommended loading up the stock.

Another said the company’s fundamentals and the stock’s technicals are good.

In pre-market trading, ServiceNow stock slumped 10.11% to $1,028. The stock has gained about 8% in January following its 35% surge in 2024.

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