World.Alpha-News.org ➤ The news of the world is here

On Jan 29, Reuters reported that ServiceNow projected its annual subscription revenue to fall below Wall Street estimates, citing the impact of a strong U.S. dollar and a planned change in its monetization model. Consequently, the company's shares dropped by 8% in after-hours trading.

The Santa Clara, California-based firm also anticipates a slowdown in its U.S. federal business during the first half of the year "due to seasonality from the change in presidential administration." ServiceNow plans to broaden its consumption-based monetization model, extending it to its artificial intelligence and data products this year.

Companies primarily in the enterprise sector utilize AI-driven software, like that provided by ServiceNow, to efficiently manage IT services and automate various business functions.

Additionally, ServiceNow introduced its AI Agent Orchestrator tool, designed to coordinate a network of AI agents—software programs aimed at automating tasks with minimal human intervention.

Competitors like Salesforce are also banking on AI agents to fuel revenue growth. ServiceNow disclosed that it expects its annual subscription revenue for 2025 to range between $12.64 billion and $12.68 billion, slightly lower than analysts' average estimate of $12.83 billion as per data from LSEG.

The company mentioned that the strength of the U.S. dollar would reduce subscription revenue by around $175 million this year. ServiceNow's projected first-quarter subscription revenue is expected to land between $2.995 billion and $3 billion, slightly below the estimated $3.04 billion.

For the fourth quarter that ended on Dec. 31, revenue increased by approximately 21% from the previous year to $2.96 billion, aligning with projections. In the same quarter, the company reported a 28% rise in profit per share to $1.83.