As Wall Street grappled with concerns regarding federal software spending, ServiceNow reported impressive first-quarter results that exceeded expectations. CEO Bill McDermott emphasized that their strong performance, including over 30% growth in their US public sector business and securing six new government customers, dispelled fears of being negatively impacted by government budget cuts. Furthermore, the company attributed its resilience to its ability to provide cost-saving cloud solutions that enhance efficiency across organizations. Following their successful earnings reveal, ServiceNow's stock experienced a notable after-hours uptick of 11%.
When I got on the phone with ServiceNow CEO Bill McDermott on Wednesday, one of the first things I asked was, "Have you been DOGE-ed?" The White House Office has made an ambitious effort to slash federal spending. The US government buys a lot of software, and since this efficiency drive kicked off in January, Wall Street has worried about which tech companies might lose valuable contracts.
More importantly, ServiceNow said its US public sector business grew more than 30% year-over-year, and it added six new government customers in the first quarter. The stock jumped 11% in after-hours trading.
The CEO said the company helps organizations save money by providing cloud software that automates many humdrum, but important tasks. ServiceNow's software can also make it easier to consolidate multiple different IT tools and services under one roof, another way to save.
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