ServiceNow’s share price slid in after-hours trading despite major revenue growth being announced in the company’s fourth quarter results. Credit: Sqback / Getty Images Enterprise software and workplace management orchestrator ServiceNow announced rosy revenue numbers in its Q4 2022 earnings call Wednesday evening, saying that total revenues topped $1.9 billion, which represents a 20% year-on-year increase. IDC analyst Stephen Elliot noted strong corporate management and the company’s expansion into the workplace experience market as contributing factors in the reported growth. Most of ServiceNow’s revenue came from service subscriptions, which rose to $1.86 billion in the quarter, a 22% year-on-year rise. The company’s current remaining performance obligations, which represent contract revenue that will be recognized as such in ServiceNow’s numbers within the next 12 months, rose to nearly $7 billion as of the reporting date. That’s a 22% increase compared to the fourth quarter of 2021. Chairman and CEO Bill McDermott was bullish on the company’s performance, saying that the market conditions that have helped grow ServiceNow’s revenues should remain strong in the foreseeable future. “Our Q4 surge in new business shows that the secular tailwinds of digitization aren’t going anywhere,” he said in a statement accompanying the results. “The world works with ServiceNow as the end-to-end platform for digital transformation.” ServiceNow’s substantial growth exceeded profitability guidance, according to CFO Gina Mastantuono, who credited net-new annual contract value gains for much of the surge. “What’s more, our results were generated with a lower mix of early renewals from 2023, providing us more opportunities to drive further expansion throughout the year,” she said in the statement. Despite the growth, ServiceNow’s stock price dropped nearly 8% in after-hours trading, for reasons that weren’t immediately clear. McDermott, however, has vowed “absolutely no layoffs in 2023,” according to a report from Bloomberg, bucking a trend among technology vendors of late. IDC’s Elliot, who is group vice president of I&O, cloud operations, and DevOps, credited a healthy corporate culture for ServiceNow’s continued success, saying that, while rapid growth can sometimes cause companies to lose some of their strengths over time, ServiceNow has managed to avoid that. “I’d say that they’re hitting on all cylinders,” he said. “I also think that they have been very consistent and focused on what customers are looking for, and translating that into investments in the company.” This isn’t a surprise, Elliot added, given the strong leadership across ServiceNow’s management ranks. He credited McDermott, in particular, for helping to minimize internal politics and other distractions that can sap a company’s momentum as it expands into new business areas. “They’ve had so much success with the IT management business,” he said. “And over the course of the past five years, the expansion into field service management, HR, employee experience businesses; [their focus] has continued to drive them.” Related content feature How CIOs align with CFOs to build RevOps Generative AI continues to blur the lines between IT and business, demanding a new breed of CIOs. So forward-thinking tech execs are upskilling in finance and building cross-functional relationships to bolster AI-driven revenue operations and corpora By Maria Korolov Apr 24, 2024 9 mins CFO CIO C-Suite case study A comparative assessment of digital transformation in Italy Italy’s AMA and Molteni are each pursuing ambitious digital transformation plans. But despite deploying a wide range of tech and AI-focused solutions, human oversight prevails, with the company CIOs prioritizing corporate culture during each st By Patrizia Licata Apr 24, 2024 8 mins CIO Business Intelligence Data Architecture feature What is a CTO? The exec who sets tech strategy The chief technology officer has emerged as a key player in the C-suite, as digital transformations become high strategic priorities for so many organizations. By Bob Violino Apr 24, 2024 10 mins CTO IT Leadership news US government extends warrantless FISA monitoring Section 702 of FISA has a new lease on life thanks to a reauthorization passed over the weekend. By Jon Gold Apr 23, 2024 3 mins Regulation Government Privacy PODCASTS VIDEOS RESOURCES EVENTS SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe