ServiceNow Inc (NYSE:NOW) stock rose 4.84% (As on October 26, 11:31:23 AM UTC-4, Source: Google Finance) after the company’s robust growth in subscription sales and the launch of 5,000 new innovations under CEO Bill McDermott’s leadership. The company reported a 27% increase in quarterly subscription sales to $2.2 billion, fuelled by a strategic shift into artificial intelligence (AI) through a partnership with Nvidia Corp. The company has secured 83 new deals worth more than $1 million each in Q2, accounting for a 20% YoY increase in net new annual contract value. The company’s current remaining performance obligations at the end of the quarter were $7.43 billion, also up 27% from the prior year. RPO is a key forward-looking metric that offers visibility into future revenue, representing the total value of contracted products and services yet to be delivered to customers.

Moreover, the company has indeed been very aggressive in pushing new generative artificial intelligence capabilities across its product portfolio as it races to help customers take advantage of the hottest trend in the technology industry today. Last month, it announced a new version of its flagship Now workflow platform that comes with generative AI features to improve security and governance. It also rolled out a number of generative AI agents known as the Now Assist family. Those bots are integrated with ServiceNow’s IT Service Management, Customer Services Management, Human Resources Services Delivery and Workflow Creator modules, and optimized for accuracy and data privacy, the company said at the time.

NOW in the third quarter of FY 23 has reported the adjusted earnings per share of $2.92, beating the analysts’ estimates for the adjusted earnings per share of $2.56. The company had reported the adjusted revenue growth of 25 percent to $2.29 billion in the third quarter of FY 23, beating the analysts’ estimates for revenue of $2.27 billion. This is despite a drop in net income from $603 million to $242 million year-on-year.

Looking ahead, ServiceNow expects annual subscription sales to land between $8.635 billion and $8.64 billion, outperforming FactSet analysts’ prediction of $8.9 billion. Looking ahead to the fourth quarter, ServiceNow offered another optimistic forecast, saying it expects subscription revenue of between $2.32 billion and $2.325 billion, ahead of Wall Street’s forecast of $2.3 billion. In addition, ServiceNow sees its current RPO growing by 21%.