ServiceNow raises annual forecast, beats profit estimates on AI strength

(Reuters) - ServiceNow raised its annual subscription revenue forecast on Wednesday, after beating third-quarter profit estimates helped by strong demand for the company's automation and artificial intelligence (AI) services.

Enterprises have been dialing up spending on generative AI products and workflow automation, attempting to gain a foothold in the nascent AI market, benefiting companies like ServiceNow.

"With the capabilities unlocked by generative AI, the window of opportunity is even more expansive, positioning us well to continue delivering a strong balance of growth and profitability," said ServiceNow CFO Gina Mastantuono.

The digital workflow software firm now forecasts full-year 2023 subscription revenues as much as $8.64 billion, up from $8.58 billion to $8.60 billion previously expected.

On an adjusted basis, the company earned $2.92 per share in the July-to-September quarter, compared with estimates of $2.56 per share, according to LSEG data.

ServiceNow, which has tie-ups with companies like Nvidia and Accenture, reported quarterly revenue of $2.29 billion, above analysts' estimates of $2.27 billion.

Subscription revenue came in at $2.22 billion, compared with estimates of $2.19 billion.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shailesh Kuber)