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ServiceNow Stock Hits All-Time High After Earnings

The company’s share price skyrocketed more than $28 in Thursday trading, sending it to a record high $341 per share, adding $5.4 billion to the company’s market value since the previous day’s close.

ServiceNow closed more million dollar-plus deals than at any time in its history as the IT service management giant posted 33 percent revenue growth in its first quarter under new leadership.

After the earnings announcement, the Santa Clara, Calif.-based company’s share price skyrocketed more than $28 in Thursday trading, sending it to a record high of $341 per share, adding $5.4 billion to the company’s value since the previous day’s close.

“It is our dream to become the defining enterprise software company of the 21st century,” said CEO Bill McDermott, who took the job in November after almost two decades at SAP. “This is the limitless opportunity I saw in ServiceNow. It is why I chose to come here, and in my first three months as CEO, my belief has only become deeper, my commitment stronger, and my passion greater.”

The company announced that it had 76 deals greater than $1 million in the quarter, 49 percent more than the year ago quarter, and the most million-plus deals in its history.

On the revenue side, the company grew 33 percent for the quarter on a GAAP basis with $951.8 million in sales. For the year, top-line growth was also 33 percent higher coming in at $3.46 billion.

McDermott said the company has no plans to slow down.

“I'm truly fired up to lead the next phase of ServiceNow's journey, as we scale to $10 billion in revenue and beyond,” he said. “We will accomplish this by delivering exceptional business value to our customers. We will do so across every geography, every industry, and of course, every buying center. We will continue to create workflows that deliver great employee and customer experiences.”

In addition to deals with “one of the largest global content companies in the telecommunications,” one of the largest banks in Latin America, Bristol-Myers Squibb, and the biotech firm Roche, ServiceNow is also modernizing the U.S. Department of Veterans Affairs, McDermott said.

“ServiceNow is the core of the VA's Enterprise Service Desk, which supports more than half a million full-time employees and contractors,” McDermott said during the earnings call. “With our IT portfolio and the cross-functional capabilities of the Now platform, the VA is streamlining processes, saving time and money, improving productivity, and better managing technology assets, and of course, delivering better experiences.”

Looking at the rest of the year, the company expects revenues to hit between $975 million and $980 million in the next quarter for growth of 32 percent. For the full year, ServiceNow is projecting subscription revenue to gain 30 percent to $4.22 billion.

In October, ServiceNow’s former CEO, John Donahoe, announced he was taking a job with Nike. At the same time, he announced McDermott as his replacement.

McDermott joined SAP in 2002 as head of its North American division. He went on to lead the company's worldwide customer operations and joined SAP's executive board in 2008. Then, in 2010, he became the company's CEO, leading the company through revenue growth, increased profits and improved employee engagement for nearly a decade, according to SAP.

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