Subscription revenues at ServiceNow rise 30%

Global subscription revenues at technology company ServiceNow rose 30 per cent in the first quarter of the year,while its European business grew 80 per cent.

The $1.3 billion in subscription revenues exceeded the top end of the company’s expectations for the quarter

The company, which provides digital workflow services, said its operating margin was more than 27 per cent, delivering strong profitability in the quarter. The company increased free cash flow margin 7 points year on year to 46 per cent.

ServiceNow has more than 1,100 customers doing more than $1 million in business, representing 23 per cent year on year growth in customers.

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In Europe, the Middle East and Africa, business is "smoking hot", chief executive Bill McDermott said.

Demand

“We’re seeing more demand across industries, including financial services as EU banking regulations require companies to have full visibility into their assets while also managing risk,” he said.

Among the customers in the region are HSBC, Zalando and Germany's largest state, North Rhine Westphalia, which is using ServiceNow to support vaccinations for millions of people .

Looking ahead, the company expects to see a simialr level of subscription revenue in the second quarter, and between $5.45 billion and $5.47 billion for the year.

“ Our business is resilient. Our opportunities never greater. We continue to work with some of the world’s greatest brands,” Mr McDermott said.

Last month, the company said it would add 300 jobs at its Dublin office as part of its plans to expand in Europe, the Middle East and Africa.

Development

The company said the jobs would be created over the next three years, with areas such as cloud, research and development, product and digital sales the primary target. There will also be select hiring across marketing, finance, legal, procurement and other corporate functions. Positions will be available for those starting out in their careers as well as more senior roles.

“We’re at the epicentre of the workflow revolution. Our purpose has never been more relevant. We are making the world of work, work better for people,” Mr McDermott told analysts.

“We are helping our customers dream big and to build their digital bridge to the future.”