Analyst Note| Dan Romanoff, CPA |
Wide-moat ServiceNow delivered strong results, including upside to revenue, remaining performance obligation, or RPO, and adjusted operating margin. We think third-quarter guidance is similarly good, as it came in better than our model and management remains upbeat about the pipeline in the second half of the year. In our view, the quarterly results reinforce our view that ServiceNow is benefitting from digital transformation efforts which are being pulled forward, as corporate IT infrastructures have often been exposed as insufficient in the current remote work environment. We believe results continue to support our thesis centering on the company’s land-and-expand strategy. ServiceNow continues to leverage its strength in workflow automation to penetrate existing customers more deeply in IT and more broadly with human resources and customer service-specific products.