- ServiceNow’s new CEO Bill McDermott started his new gig with a bang, as the cloud giant beat Wall Street’s expectations, sending the company’s stock rallying on Thursday.
- McDermott, who recently stepped down as SAP’s CEO, also offered an upbeat view of ServiceNow’s future. He highlighted the company’s plan to roll out new products geared to major industries, led by banking and telecommunications.
- “You have to make sure that it’s not just your own skills that you bring into the equation, but you bring a vast ecosystem of capabilities to help the customer win,” he told Business Insider.
- Click here for more BI Prime stories.
ServiceNow’s new CEO Bill McDermott just kicked off his tenure with bang.
ServiceNow’s shares rallied more than 9% on Thursday, a day after the software giant beat Wall Street’s expectations for the fourth quarter.
McDermott, just took over in October, after stepping down as CEO of SAP in October. ServiceNow, a major cloud player, runs a major work automation platform now used by more than 6,000 companies, most of them Fortune 500 firms. McDermott replaced John Donahoe, who became Nike’s CEO.
The leadership change sparked some concern last year, but UBS analyst Jennifer Lowe said the company appears to be going through a smooth transition.
“New faces In the C-suite, but no change in favorable growth outlook,” she wrote in a note to investors on Thursday. ServiceNow also recently named Gina Mastantuono its new chief financial officer. “We see ServiceNow closing bigger, stickier deals over time as its products enable customers’ digital transformation initiatives.”
McDermott upbeat view of the company’s future also earned positive reviews, particularly ServiceNow’s big plan to introduce new products focused on specific industries, led by banking and telecommunications.
The initiative was based on ServiceNow’s broader strategy of evolving the platform based on the needs of its customers.
“You have to be friendly with companies,” he told Business Insider. “You have to make sure that it’s not just your own skills that you bring into the equation, but you bring a vast ecosystem of capabilities to help the customer win. And that’s really what I’ve always tried to do in my career. And it’s certainly what I plan on doing at ServiceNow as we really scale this to way beyond $10 billion.”
McDermott had vowed to follow through on his predecessor John Donahoe’s vision of transforming ServiceNow into a bigger tech powerhouse bringing in $10 billion in annual revenue.
William Blair analyst Bhavan Suri said the ServiceNow’s plan to focus on specific industries is a smart move.
“We expect the company to expand to more verticals over time, as this model has been very successful for other software companies,” he wrote. “ServiceNow is seeing strong growth in its core markets, which focus largely on the IT department and CIOs office.”
ServiceNow reported a fourth-quarter profit of $598.7 million, or $3.03 share. Revenue was $951.8 million, up 33% from the year-ago quarter. Adjust income was 96 cents a share. Analysts were expecting a profit of 87 cents a share on revenue of $941.2 million.
Got a tip about ServiceNow or another tech company? Contact this reporter via email at bpimentel@businessinsider.com, message him on Twitter @benpimentelor send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
