Last week, Servicenow (NYSE:NOW) reported its fourth quarter results that soared past market expectations. ServiceNow continues to invest in building its AI services through product development, a partner network, and even acquisitions. The market is pleased with the company, and the stock is soaring at year high levels.

ServiceNow’s Financials

For the fourth quarter of the year, ServiceNow’s revenues grew 26% to $2.44 billion, ahead of the market’s forecast of $2.4 billion. EPS of $3.11 grew 36%, ahead of the market’s estimates of $2.78.

By segment, subscription revenues rose 27% to $2.37 billion, ahead of the consensus estimate of $2.32 billion. Professional and other services revenues fell 10% to $72 million. Current remaining performance obligations rose 24% to $8.6 billion, again ahead of the analyst expectations of $8.37 billion.

ServiceNow ended the year with revenues growing 24% to $8.9 billion.

For the current quarter, ServiceNow expects subscription revenues of $2.510-$2.515 billion. It expects to end the year with subscription revenues of $10.55-$10.57 billion compared with estimates of $10.5 billion.

ServiceNow’s AI Focus

AI continues to be the area of focus for ServiceNow as it pushed forward with expanded partnerships, product offerings, and even an acquisition. Last quarter was the first full quarter since the launch of Now Assist. ServiceNow claims that Now Assist delivered the largest net new ACV contribution for a first quarter of any new product family release. As part of its expanding AI capabilities, ServiceNow recently announced the launch of a major expansion to the generative AI portfolio with Now Assist in Virtual Agent, flow generation, and Now Assist for Field Service Management.

It also expanded its AI-related partnerships with a strategic partnership with DXC, AWS, and EY. As part of the tie-up with DXC, ServiceNow advanced analytics and enhanced AI capabilities will now be integrated into DXC Platform X to drive innovation for joint customers. DXC’s Platform X is a data-driven, intelligent automation platform that helps detect, prevent, and address issues before they happen. By integrating it with the Now Platform, the companies will be able to improve the ability to generate proactive insights to boost productivity and drive greater operational efficiencies for the end customers.

ServiceNow also announced a five-year Strategic Collaboration Agreement with Amazon Web Services (AWS) to offer the ServiceNow Platform and its suite of solutions in the AWS Marketplace. As part of the agreement, the two companies will also work together to develop and launch industry-specific, AI powered applications. ServiceNow also expanded its strategic alliance with EY to empower responsible AI use for enterprise customers.

ServiceNow’s Acquisition of UltimateSuite

Last quarter, ServiceNow announced the acquisition of task mining Czech-company UltimateSuite to strengthen its automation and AI capabilities. UltimateSuite’s task mining technology provides customers with access to actionable insights that can help streamline repetitive work and identify automation opportunities. Its predictive analysis and actionable prompts provide the relevant operational intelligence that can help these customers accelerate digital business transformation and improve their end customer and employee experiences.

ServiceNow plans to leverage these task mining capabilities to identify a more accurate picture of how people work and ultimately help their customers easily automate workflows and drive productivity.

Terms of the acquisition were not disclosed. Prague-based UltimateSuite was founded in 2020 by Robert Samanek. Its financial and funding details are not known. It boasted of a global customer list that included names like Société Générale, Generali, Nielsen, and Volkswagen. It was VC backed with investment from Czech VC fund Tensor Ventures, alongside Michal Poplar-Rostoc.

ServiceNow’s stock is trading at 52-week high levels of $787.24 with a market capitalization of $161.4 billion. It has recovered from the 52-week low of $405.37 that it had fallen to in March last year.

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company.

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