ServiceNow Stock Drops Nearly 12% Amid Q4 Earnings : Lauren Metcalf

ServiceNow Stock Drops Nearly 12% Amid Q4 Earnings
by: Lauren Metcalf
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**Summary of ServiceNow's Q4 Earnings and CRM Market Entry** ServiceNow has reported disappointing fourth-quarter earnings, causing its stock to drop nearly 12%. As it enters the competitive CRM (Customer Relationship Management) market, ServiceNow has introduced an "AI Agent Orchestrator," designed to integrate specialized AI teams toward achieving common business goals. ### Key Earnings Details: - **Earnings Forecast**: ServiceNow's projected annual subscription revenue for the year is between $12.64 billion and $12.68 billion, which is below analysts' expectations of $12.83 billion. - **Impact of Currency Strength**: A strong US dollar is expected to reduce subscription revenue by approximately $175 million. - **Revenue Growth**: Despite the overall forecast being lower than expected, Q4 revenue rose by around 21% year-over-year to $2.96 billion. - **Positive Profit Report**: Profit per share increased by 28% to $1.83 in Q4. ### New Product Announcement: On the same day as the earnings report, ServiceNow announced its AI Agent Control Tower, aimed at managing artificial intelligence agents within organizations to streamline workflows and automate tasks. This move appears to be a direct challenge to Salesforce, as ServiceNow seeks to carve out its niche in the CRM sector. ### Future Prospects: ServiceNow plans to enhance its consumption-based pricing model for AI and data products and will make its new AI Agent Orchestrator and AI Agent Studio available to customers in March 2025. The company believes that integrating AI into its existing platform offers a unique advantage over competitors. ### Conclusion: While ServiceNow is positioning itself as a serious contender against Salesforce, the initial reception to its earnings report suggests it has challenges ahead. Moving forward, the company's ability to produce stronger financial results will be crucial if it hopes to gain market traction. **Additional Context**: ServiceNow has long been known for its workflow and automation solutions, and entering the CRM space shows its aggressive expansion strategy to capitalize on AI and cloud services. ### Relevant Hashtags for SEO: #ServiceNow #Q4Earnings #CRM #AI #Salesforce #TechStocks #BusinessNews #Automation #FinancialResults #StockMarket


ServiceNow has revealed disappointing Q4 earnings with its stock price dropping by nearly 12% – as it positions itself as a rival to Salesforce. 

The software company announced earlier this year that it was entering the CRM market, and it has now unveiled an “AI Agent Orchestrator” which unifies teams of specialist agents towards a common goal. 

It’s ServiceNow or Never

ServiceNow said in a statement on January 29 that, “unlike other agents tied to individual clouds or limited data sources”, their agents have a unique competitive advantage – that being ‘20 years of automation data and outcomes” from tackling complex enterprise workflow challenges. It seems the company is taking a page out of Marc Benioff’s book literally.

The Salesforce CEO wrote in Behind the Cloud: “Always ask yourself, ‘What’s my message?’ Position yourself either as the leader or against the leader in your industry.”

ServiceNow entering the CRM realm, and its mention of “other agents” in its promotional material, suggests the company is positioning itself against the leader in the industry – Salesforce. 

But it might be a bit of a rocky start for the challenger. Let’s take a look at their Q4 earnings.

ServiceNow Q4 Earnings Explained

On January 29, ServiceNow forecast annual subscription revenue below Wall Street estimates, with the company seeing its shares plummet by 11% in a week.

The Salesforce competitor expects its annual subscription revenue for this year to be between  $12.64B and $12.68B, falling shy of analysts’ average estimate of $12.83B, according to data compiled by LSEG.

ServiceNow said that the US dollar’s strength would impact its subscription revenue by about $175M this year, Reuters reported. 

The company is also expecting first-quarter subscription revenue to be in the range of $2.995B to $3B – compared with estimates of $3.04B.

ServiceNow has said it will expand its consumption-based pricing model for its artificial intelligence and data products this year.

The Q4 revenue had risen by around 21% from a year earlier to $2.96B, which was in line with estimates, and its profit per share increased by about 28% to $1.83 in the fourth quarter.

ServiceNow’s stock was down when the markets opened on January 30. Credit: Google

ServiceNow Unveils “AI Agent Control Tower”

January 29 was an eventful day for ServiceNow. Along with the earnings report, the company unveiled its own AI Agent Orchestrator, which it described as a kind of “Control Tower” for artificial intelligence agents. 

The AI platform has increasingly been stepping on Salesforce’s toes, announcing earlier this month that it would be entering the CRM market. 

California-based ServiceNow on Wednesday unveiled a series of new agentic AI innovations to autonomously solve complex enterprise challenges.

The company said in a statement: “This latest breakthrough on the ServiceNow Platform acts as the AI agent control tower – one central location to analyze, manage, and govern the rapidly evolving world of agentic AI across every corner of a business. 

“These advancements build on ServiceNow’s two‑decade expertise in driving exponential productivity across every person and every process by handling complex and ambiguous tasks that traditional automation cannot solve.”

The AI Agent Orchestrator is intended to make sure teams of specialized AI agents work together across tasks, systems, and departments to achieve a specific goal. 

ServiceNow has also made available thousands of pre‑built agents across IT, customer service, HR, and other sectors, along with the new AI Agent Studio for building fully customized agents. 

The company said: “Unlike others, ServiceNow AI Agents and their capabilities are built directly into the single, trusted ServiceNow Platform, so customers’ existing investments in workflow, automation, and data power agentic AI from day one. With access to billions of pieces of information and fueled by millions of automations, knowledge sources, and tools, ServiceNow AI Agents redefine productivity without limits.”

ServiceNow says that because they built agentic AI directly into their platform, their AI Agents have access to “billions of pieces of information” and millions of automations across customers’ instances. 

This, they say, enables their AI agents to quickly learn the company’s knowledge and start using it right away to take effective action.

“In a future with millions of AI agents acting as your new digital workforce, ServiceNow serves as the AI agent control tower, bringing order to chaos,” said Amit Zavery, president, chief product officer and chief operating officer at ServiceNow. 

“Agentic AI without unification creates more complexity within an enterprise. The ability of ServiceNow AI Agents to work together on tasks that draw from multiple systems and departments truly stands out. With a single location to orchestrate agents and prevent sprawl, our AI agents collaborate like active participants at work, acting as true extensions of their human counterparts.”  

ServiceNow AI Agent Orchestrator and AI Agent Studio will be available to customers on the ServiceNow Platform in March 2025.

Final Thoughts

ServiceNow suffered an 11% stock hit at the opening of the market on January 30 – a day after their Q4 earnings were revealed. The company appears to be positioning itself as a direct challenger to Salesforce, entering the CRM market and promoting its own agentic AI, while making sure to criticize “other” agent suites. 

No king rules forever, but if ServiceNow hopes to usurp the long-established market leader, they might be hoping their next quarterly results are a little more polished.

The post ServiceNow Stock Drops Nearly 12% Amid Q4 Earnings appeared first on Salesforce Ben.


January 30, 2025 at 11:16PM
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