ServiceNow just told Wall Street it’s going to double again. Here’s why $30 billion of revenue isn’t crazy |
ServiceNow just told Wall Street it’s going to double again. Here’s why $30 billion of revenue isn’t crazy
Bill McDermott has a habit of making promises that sound like boasts and then keeping them.
When he took the helm of ServiceNow in 2019, the company was doing $3.5 billion in annual subscription revenue. This year, it will finish at nearly $16 billion. “We are printing a new ServiceNow every year,” he told reporters at the company’s annual Knowledge conference in Las Vegas on Tuesday. It’s clearly more than a rehearsed punchline — just take a look at the math that he’s seeing.
At its Financial Analyst Day on Monday, ServiceNow told investors it intends to double the company again by 2030, reaching more than $30 billion in subscription revenue. What made analysts pay attention wasn’t the target itself — it was the framing. CFO Gina Mastantuono noted that in 2021, the company set a five-year target of $15 billion and is on track to beat it by half a billion dollars, organically. “Our momentum puts us on pace to double that target in 2030 — that’s $30 billion-plus in subscription revenue,” she said. “And it’s not a blue-sky scenario. It’s what a durable platform growth story delivers.”
The company’s pipeline supports the claim. ServiceNow currently holds $27.7 billion in remaining performance obligations — approximately double its annual revenue — a metric McDermott cited on CNBC Tuesday as evidence the........