Investing.com -- ServiceNow (NYSE:NOW) saw its shares jump after raising its annual subscription guidance as results for the fiscal Q2 came ahead of expectations. Moreover, the software maker said that COO CJ Desai had departed the company and announced Chris Bedi as interim Chief Product Officer.
ServiceNow reported adjusted earnings of $3.13 per share on revenue of $2.63B, beating Wall Street estimates for EPS of $2.82 on revenue of $2.60B.
Subscription revenues rose 23% to $2.54 billion in Q2 2024 from a year earlier amid new business wins.
NOW shares popped over 6% in premarket trading Thursday.
The company reported 88 transactions over $1 million in net new annual contract revenue, or ACV, in Q2 2024, up 26% year-over-year, boosting the firm's backlog.
The remaining performance obligations (RPO) were $18.6 billion as of Q2, representing 31% year-over-year growth.
Looking ahead, the company lifted its subscription revenue guidance to a range of $2.66B to $2.67B, from a prior range of $2.525B to $2.530B.
Analysts at Mizuho reiterated an Outperform rating on ServiceNow and raised the price target from $820 to $850 following the report's release.
"We believe NOW remains very well positioned for high growth over the next few years, fueled by ongoing demand for workflow automation, strong cross-sell opportunities, and AI monetization."
Similarly, Stifel analysts lifted their target price on NOW to $900 from $820, saying they expect the company's growing platform and pipeline, strong deal momentum, and emerging GenAI opportunity to "enable the company to maintain 20%+ revenue/fcf growth and margin expansion in coming years."
BMO (TSX:BMO) Capital Markets also raised their NOW price objective to $860.