Photo Credit: Donny Gonzo / Flickr.com

Last month, ServiceNow (NYSE: NOW) reported its second quarter results that outpaced market expectations. The company continues to invest in building its AI portfolio through innovation and acquisitions.

ServiceNow’s Financials

ServiceNow’s second quarter revenues grew 23% to $3.22 billion, ahead of the market’s forecast of $3.12 billion. EPS of $4.09 was also ahead of the market’s estimates of $3.57 per share.

By segment, subscription revenues rose 23% to $3.11 billion, ahead of the consensus estimate of $3.03 billion. Professional and Other Services revenues grew 18% to $102 million.

Current remaining performance obligations grew 25% to $10.9 billion.

For the third quarter, ServiceNow expects subscription revenues of $3.26-$3.27 billion, ahead of the market outlook of $3.21 billion for the quarter. ServiceNow was cautious about market conditions, but it remains confident in its ability to deliver.

ServiceNow’s AI Focus

During the quarter, ServiceNow continued to expand its AI capabilities both through innovation. It recently announced the launch of AI Control Tower and AI Agent Fabric that will provide organizations with a centralized system to govern, orchestrate, and scale AI agents across functions. These tools will also provide customers with the access to new AI Agents for security and risk to help customers proactively resolve issues and remain compliant. It also expanded its data capabilities with the launch of Workflow Data Network, a new partner ecosystem that will help unify data, improve governance, and improved AI-powered decision making with access to real-time intelligence.

ServiceNow continues to move forward in the agentic AI space and launched new CRM AI Agents with expanded CPQ capabilities that help businesses sell, fulfill, and service customers from a single AI-powered platform. The tools are expected to increase productivity across the offering. It also introduced Core Business Suite, an AI-powered solution that integrates HR, procurement, finance, legal, and facilities operations into a single experience for improved efficiency.

ServiceNow’s Acquisition of Data.World

Earlier this summer, ServiceNow announced plans to acquire Data.World, a cloud-native data catalog and data governance platform. Terms of the deal were not disclosed. Austin-based, certified B Corp., Data.World was founded in 2015 by Brett Hurt, Bryon Jacob, Jon Loyens, and Matt Laessig. The company was set up with a vision of simplifying the process of data mining to get accurate and fast answers to business questions.

Its cloud-native solution maps the organization’s siloed, distributed data to familiar and consistent business concepts to help build a single data source that is easy to access and understand. Its customer list includes names like Siemens, Associated Press, Norwegian Cruise Lines, and Penguin Random House.

As part of the acquisition, Data.World’s knowledge graph and metadata collectors will become part of ServiceNow’s platform of data for AI. ServiceNow believes that the acquisition will help it provide its AI agents with more context to be able to deliver more relevant and accurate recommendations. ServiceNow will be able to improve its agentic AI offering by incorporating the data catalog and data governance tools across its portfolio.

Prior to the acquisition, Data.World was expected to have raised over $130 million in venture funding from firms including Alumni Ventures, Prologis Ventures, and Shasta Ventures. A $50 million round held in 2022 had valued the firm at $350 million. More recent funding and financial details have not been disclosed.

ServiceNow’s stock is trading at $892.05 with a market capitalization of $185 billion. It had touched a 52-week high of $1,198.09 in January this year and has recovered from the 52-week low of $678.66 that it had fallen to in April.

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