ServiceNow Q2 2023: 23% year-on-year growth with GenAI to fore

ServiceNow has announced second-quarter 2023 revenue of $2.15bn, marking 23% growth over the same quarter last year.

During the quarter, the supplier delivered new products said to embed generative AI across its Now platform, which is a cloud-delivered platform for automating digital workflows. These are: Generative AI Controller, Now Assist for Search, and Now Assist for Virtual Agent.

The quarter also saw its annual Knowledge conference take place in Las Vegas. This featured the announcement of a partnership with NVIDIA about generative AI and the launch of ServiceNow.org, a non-profit division. At the conference, this was said to be geared towards helping with “technology, employee and customer experiences, as well as low-code app development to enable disaster deployment, refugee resettlement, volunteer and member management, resource management and research trials”.

The supplier also committed $1bn in investment capital by 2026 to ServiceNow Ventures, its venture capital arm.

Along with its Q2 results, the supplier announced more generative AI capabilities – case summarisation and text‑to‑code as well as what is calling its AI Lighthouse program with NVIDIA and Accenture, said to aid the design of generative AI use cases. The joint initiative is said to allow customers to collaborate as design partners in creating custom LLMs and applications for their particular business needs.

ServiceNow chairperson and CEO Bill McDermott said: “We’re in a powerful new ‘AI world,’ where imagination is the only limit. ServiceNow is already seeing our own significant productivity increases with the generative AI solutions we’re releasing to the market, which will rapidly accelerate breakthrough innovation for our customers.”

The company said it has 1,724 customers with more than $1m in annual contract value, representing 18% year-over-year growth in customers.

Gina Mastantuono, chief financial officer of ServiceNow, said: “Q2 was another strong quarter for ServiceNow as we exceeded the high end of our guidance range for all of our key performance metrics

“Enterprises are looking to consolidate purchasing with strategic platforms like ServiceNow. Our intelligent platform for end-to-end digital transformation uniquely positions us to seize the opportunities in front of us as we continue to deliver durable top-line growth and margin expansion on our journey to becoming the defining enterprise software company of the 21st century.”

The supplier also announced an expansion of a partnership with KPMG to “reimagine finance, supply chain, and procurement operations with a joint investment to co‑develop new offerings”, and said it has a partnership with Cognizant to speed up adoption of AI‑driven automation.

It closed the acquisition of AI‑powered platform G2K this month with the stated aim to “transform retail and other industries”, and opened two new innovation centres to serve as digital incubation hubs in India and Singapore.