ServiceNow recorded higher profit in its latest quarter as subscription revenue continued to grow double digits, a trend the company expects to continue this year.
ServiceNow shares dropped 3% in after hours trading.
The cloud-based software company said Wednesday subscription revenue rose 21% in the fourth quarter, and projected roughly the same growth rate for the year ahead, topping analyst estimates. The metric makes up the bulk of the company's topline.
The results and forecast come as a number of big deals, including plans to buy cybersecurity startup Armis for $7.75 billion, trigger worries over whether ServiceNow's organic growth is slowing as it moves into more areas outside of its core business.
Finance Chief Gina Mastantuono said ServiceNow's recent acquisitions create new opportunities, and strengthen its ability to put artificial intelligence to work securely across customers' businesses.
"Make no mistake, our strategy, complete with a disciplined focus on margin expansion, remains unchanged," Mastantuono said. "But the ambition is higher, and our confidence in sustained high organic growth has never been greater."
For the fourth quarter, ServiceNow posted a profit of $401 million, or 38 cents a share, compared with $384 million, or 37 cents a share, a year earlier.
Adjusted earnings per share were 92 cents, ahead of estimates of 88 cents a share according to analysts polled by FactSet.
Revenue climbed 21% to $3.57 billion, topping analyst estimates of $3.53 billion.
Subscription revenue was $3.47 billion.
Chief Executive Bill McDermott said the company accelerated net new business in the quarter, and had substantial growth in licensed users, workflows and transactions on its platform.
"There is no AI company in the enterprise better positioned for sustainable profitable revenue growth than ServiceNow," McDermott said.
For the full year, ServiceNow guided for subscription revenue of $15.53 billion to $15.57 billion, up about 21% from the prior year and topping analyst estimates of $15.21 billion.
For the first quarter, the company projects subscription revenue of $3.65 billion to $3.66 billion, up about 22% from the prior year. Analysts are looking for $3.58 billion.
ServiceNow also said it is expanding its partnership with Anthropic to integrate the startup's Claude models more deeply into its AI platform. The move comes after ServiceNow said earlier this month it is also working with OpenAI on its agentic AI offerings.
The company's board also authorized an additional $5 billion to its existing share repurchase program. As of the end of the recent quarter, about $1.4 billion remained available under the program for future share repurchases.