Looking at ServiceNow's Q4 Results

Current Hold List stock ServiceNow (NOW) reported its Q4 and fiscal year 2023 results earlier this week.

Results looked very good. Revenues for the quarter were up 20% year-over-year, 25.5% when adjusting for the strong dollar vs. last year. Subscription revenues were up 27.5% ex-currency, better than overall results as professional service demand weakened somewhat - not a big surprise given the cost-cutting we've seen in enterprise businesses the last 4-6 months. Subscription revenue growth is always going to be a key sales metric to watch with ServiceNow, and 27.5% is an outstanding figure these days.

The firm continues to add new customers. It reported 30% growth in new business from "new logos", which just means customers that are doing business with ServiceNow for the first time. We already know this is a sticky offering, with 98% customer retention, so winning new customers is something key to watch.

Big deals also are growing nicely. $1 million+ customers grew 22%. Both new $5 million and $10 million plus deals doubled this quarter. Big deals are "sticky" deals, so this is very good news.

Overall, I just don't see much to complain about. It was a very good quarter and ServiceNow continues to fulfill our thesis as a "best in SaaS" investment. Incorporating the firm's 2023 guidance and accounting for time value of money increases, I'm raising the fair value price from $516 to $560, an 8.5% increase.