By Akash Sriram
(Reuters) – ServiceNow said on Wednesday its first-quarter profit more than doubled, as the software firm attracted more clients for its generative artificial intelligence-infused tools.
The cloud software provider has been deploying GenAI technologies in its products as businesses look to optimize and automate operations using such tools.
“Ten of the top 20 deals of the company have been distinguised with GenAI in mind; it is starting to show, because we have deals with $10 million and more grow 300% year over year,” CEO Bill McDermott told Reuters.
Strong adoption of GenAI has also driven gross margin higher, he added. Total gross margin stood at 80% in the first quarter, compared with 79%, a year ago.
ServiceNow posted a profit of $347 million, or $1.67 per share, for the quarter ended March 31, compared with $150 million, or 73 cents per share, a year ago.
The company provides software for use by technical support staff inside big businesses. ServiceNow said last month it used Nvidia’s tools to create a “copilot” to help solve corporate IT problems.
The company, which has 1,933 clients with more than $1 million in annual contract value, counts Zoom Video Communication, Standard Chartered Bank and Delta Air Lines among its customers.
It expects subscription revenue between $2.525 billion and $2.530 billion in the second quarter, below estimates of $2.54 billion, according to LSEG data.
The company’s quarterly revenue jumped 24% to $2.60 billion from a year earlier. Analysts, on average, expected revenue of $2.59 billion.
(Reporting by Akash Sriram and Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber)
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