Overview
- RBC’s Lori Calvasina said software earnings estimates have stabilized rather than fallen, arguing that another leg down could come if analysts start cutting forecasts.
- Investors now see AI as a threat to classic software models, with worries about fewer paid seats, more in-house tools, and gains flowing to chip makers like Nvidia instead of app vendors.
- ServiceNow shares are down about 45% this year after its Q1 report, and Citi called the quarter a mixed start due to Middle East deal delays and noise from recent acquisitions.
- ServiceNow beat Q1 forecasts, with revenue up 22% to $3.77 billion and EPS at $0.97, and it raised subscription guidance to $15.735–$15.775 billion, with the Armis purchase expected to add about 1.25 percentage points to growth.
- Forward sales indicators slowed at ServiceNow as remaining performance obligations rose 23.5% and current RPO grew 21%, down from faster growth in the prior quarter.