ServiceNow’s share price slid in after-hours trading despite major revenue growth being announced in the company’s fourth quarter results. Credit: Sqback / Getty Images Enterprise software and workplace management orchestrator ServiceNow announced rosy revenue numbers in its Q4 2022 earnings call Wednesday evening, saying that total revenues topped $1.9 billion, which represents a 20% year-on-year increase. IDC analyst Stephen Elliot noted strong corporate management and the company’s expansion into the workplace experience market as contributing factors in the reported growth. Most of ServiceNow’s revenue came from service subscriptions, which rose to $1.86 billion in the quarter, a 22% year-on-year rise. The company’s current remaining performance obligations, which represent contract revenue that will be recognized as such in ServiceNow’s numbers within the next 12 months, rose to nearly $7 billion as of the reporting date. That’s a 22% increase compared to the fourth quarter of 2021. Chairman and CEO Bill McDermott was bullish on the company’s performance, saying that the market conditions that have helped grow ServiceNow’s revenues should remain strong in the foreseeable future. “Our Q4 surge in new business shows that the secular tailwinds of digitization aren’t going anywhere,” he said in a statement accompanying the results. “The world works with ServiceNow as the end-to-end platform for digital transformation.” ServiceNow’s substantial growth exceeded profitability guidance, according to CFO Gina Mastantuono, who credited net-new annual contract value gains for much of the surge. “What’s more, our results were generated with a lower mix of early renewals from 2023, providing us more opportunities to drive further expansion throughout the year,” she said in the statement. Despite the growth, ServiceNow’s stock price dropped nearly 8% in after-hours trading, for reasons that weren’t immediately clear. McDermott, however, has vowed “absolutely no layoffs in 2023,” according to a report from Bloomberg, bucking a trend among technology vendors of late. IDC’s Elliot, who is group vice president of I&O, cloud operations, and DevOps, credited a healthy corporate culture for ServiceNow’s continued success, saying that, while rapid growth can sometimes cause companies to lose some of their strengths over time, ServiceNow has managed to avoid that. “I’d say that they’re hitting on all cylinders,” he said. “I also think that they have been very consistent and focused on what customers are looking for, and translating that into investments in the company.” This isn’t a surprise, Elliot added, given the strong leadership across ServiceNow’s management ranks. He credited McDermott, in particular, for helping to minimize internal politics and other distractions that can sap a company’s momentum as it expands into new business areas. “They’ve had so much success with the IT management business,” he said. “And over the course of the past five years, the expansion into field service management, HR, employee experience businesses; [their focus] has continued to drive them.” Related content news Appeal court overturns $1.6bn mainframe software ‘poaching’ ruling against IBM AT&T ‘independently decided” to replace BMC software, the appeals court found. By John Leyden May 03, 2024 3 mins Mainframes Legal news IBM and AWS forge global alliance, streamlining access to AI and hybrid cloud solutions This partnership will allow businesses in 92 countries access to IBM’s software products, including data technologies and AI, directly through the AWS Marketplace. By Gyana Swain May 03, 2024 5 mins Amazon Web Services Hybrid Cloud Artificial Intelligence feature UPS delivers customer wins with generative AI The multinational shipping company enlisted LLMs to automate customer message responses, reducing agent handle time and paving the way for genAI use across the enterprise. By Paula Rooney May 03, 2024 7 mins CIO 100 Generative AI Digital Transformation feature Scrum master certification: Top 13 certs for agile pros A Scrum master certification can prove you have the knowledge and competency to lead agile teams successfully. By Sarah K. White, Sharon Florentine May 03, 2024 16 mins Certifications Agile Development IT Skills PODCASTS VIDEOS RESOURCES EVENTS SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe