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AI demand remains strong, and ServiceNow's business performance is robust despite soft guidance. The company has consistently beaten expectations, resulting in a solid foundation with nearly 1,000 AI customers and significant growth. Even with concerns regarding federal spending and a potential delay due to the new administration, ServiceNow is well-positioned with a large revenue base and improving margins. The guidance remains strong, with Software revenue growth projected at 26% year-on-year, and a resilient outlook for the AI segment driven by innovative capabilities and large deals.
Nearly 1,000 customers have adopted our AI solutions, showcasing significant demand.
Our revenue grows at 26% year-on-year with margins near 30%, reflecting strong performance.
ServiceNow's impressive growth trajectory, particularly within its AI division, illustrates a rising trend in businesses leveraging AI for operational efficiency. As ServiceNow integrates more generative AI capabilities, the potential for significant deal sizes increases, reflecting a shift toward more complex AI applications. The company’s ability to sustain a 26% year-over-year growth in software revenue places it ahead of many competitors navigating price pressures and market fluctuations.
Navigating the implications of federal spending on AI can challenge future growth. The potential for delays in government budgets associated with a new administration warrants attention, especially as public sector clients are critical to expanding AI deployment. Maintaining compliance and ethical standards will be pivotal as ServiceNow scales its AI solutions, ensuring that enhanced efficiency does not compromise accountability in government operations.
The growth to nearly 1,000 AI customers indicates the adoption and trust in our AI capabilities.
Our largest deals have involved clients purchasing generative AI capabilities, highlighting its strategic importance.
The company's strong performance in AI adoption emphasizes its role in revolutionizing operations within government and enterprise sectors.
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Parkev Tatevosian, CFA 14month
CNBC Television 11month
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