ServiceNow (NYSE:NOW) reported its first-quarter results today with adjusted earnings per share (EPS) coming in at $3.41 from $2.37 year over year and surpassing the expected $3.16.
The company’s adjusted revenue also exceeded expectations, reaching $2.60 billion against analyst forecast of $2.58 billion.
Subscription revenue met the estimate at $2.52 billion. For the second quarter, ServiceNow anticipates subscription revenue between $2.525 billion and $2.53 billion, which falls short of the expected $2.54 billion.
As a result, ServiceNow stock fell about 5% in after-hours trade.
ServiceNow adjusted its full-year subscription revenue guidance to a narrow range of $10.56 billion to $10.58 billion, slightly below the Bloomberg consensus estimate of $10.59 billion.
ServiceNow's adjusted gross margin for the quarter was 83%, higher than the 82.6% estimate. The subscription adjusted gross margin was significantly higher at 86%, compared to the anticipated 84.7%.
Moreover, the company reported a substantial increase in free cash flow to $1.23 billion, well above the estimate of $961.1 million.
Amidst these developments, ServiceNow continued its shareholder return activities, repurchasing 225,000 shares for $175 million. Approximately $787 million remains available for future repurchases under the current authorization.