ServiceNow forecasts quarterly subscription revenue above estimates as AI boosts demand
Oct 23 (Reuters) -ServiceNow NOW.N forecast fourth-quarter subscription revenue above Wall Street estimates on Wednesday, indicating a robust demand as businesses turn to its AI-driven products for managing their IT services.
The Santa Clara, California-based company also raised annual subscription revenue forecast, driven by demand from both new and existing customers.
Enterprise clients use AI-powered software offered by companies such as ServiceNow to automate and manage IT processes in a bid to cut costs associated with manual work.
ServiceNow introduced AI agents in September, designed to autonomously manage tasks. Beginning in November, these agents will be available in a limited release for IT and customer service applications, allowing clients to tailor them to their specific requirements.
Rivals Salesforce CRM.N and software giant Microsoft MSFT.O are also rolling out similar autonomous AI agents, which some analysts say could provide companies with an easier path to monetizing the billions of dollars they are pouring into AI.
ServiceNow's customers includetelecom giant AT&T T.N, data center firm Equinix EQIX.O, video conferencing software provider Zoom Video Communications ZM.O, and ride-hailing company Uber Technologies UBER.N.
The company forecastfourth-quarter subscription revenue to be between $2.875 billion and $2.880 billion, compared with analysts' average estimate of $2.85 billion, according to data compiled by LSEG.
ServiceNow now expects annualsubscription revenue to be between $10.655 billion and $10.660 billion, up from its prior forecast of $10.575 billion to $10.585 billion.
Third-quarter revenue came in at $2.80 billion, beating estimates of $2.74 billion. On an adjusted basis, the company earned $3.72 per share for the quarter ended Sept 30, compared with estimates of $3.46.
Separately, ServiceNow named former Google Cloud executive Amit Zavery as president, chief product officer, and chief operating officer of the company, effective Oct. 28.
Reporting by Jaspreet Singh in Bengaluru; Editing by Tasim Zahid
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