Q2 2024 ServiceNow Inc Earnings Call Transcript
Key Points
- Subscription revenue grew 23% year over year at constant currency, exceeding the high end of guidance by 100 basis points.
- Operating margin was over 27%, nearly 250 basis points above guidance.
- ServiceNow Inc (NOW) raised its full-year guidance for 2024, reflecting strong performance and confidence in future growth.
- Significant growth in large deals, with 88 deals greater than $1 million in net new ACV, a 26% year-over-year increase.
- Strong adoption of AI products, with Now Assist net new ACV doubling quarter over quarter and becoming the fastest-growing new product in the company's history.
- Leadership changes due to an internal complaint, resulting in the departure of the President and COO, which may cause some short-term uncertainty.
- Potential macroeconomic uncertainties, including upcoming elections, could impact the business environment in the second half of the year.
- Despite strong performance, there is a cautious outlook on early renewals and their impact on future quarters.
- Increased CapEx in Q2, although attributed to timing, could raise concerns about future capital expenditure management.
- Continued need to educate and convince potential customers about the value of AI, as some remain hesitant due to past experiences with less effective AI solutions.
My name is Jale, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2024 ServiceNow earnings conference call. (Operator Instructions) I would now like to turn the conference over to Darren Yip, Group Vice President of Investor Relations. You may begin.
Good afternoon and thank you for joining ServiceNow second quarter 2024 earnings conference call. Joining me are Bill McDermott, our Chairman and Chief Executive Officer; and Gina Mastantuono, our Chief Financial Officer. During today's call, we will review our second-quarter 2024 results and discuss our guidance for the third quarter and full year 2024.
Before we get started, we want to emphasize that the information discussed on this call, including our guidance, is based on information as of today and contains forward-looking statements that involve risks, uncertainties, and assumptions. We undertake no duty or obligation to update such statements as a result of new information or future
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