ServiceNow Inc (NYSE: NOW) stock fell over 5.4% on 25th July, 2019 (As of 9:48 am GMT-4; Source: Google finance). Subscription revenues for the first quarter were $781 million, representing 36% year-over-year adjusted growth including $17 million of foreign exchange headwind. The subscription revenues were negatively impacted by a few self-hosted renewals shifting from Q2 to Q3. The Q2 operating margin was 18% driven by a shift of expenses that will be realized in Q3, and the free cash flow margin was 23%.
In the second quarter, the company closed 39 deals with ACV greater than $1 million. The company now have 766 customers doing more than $1 million in business with the company annually, which represents 33% growth year-over-year, and a renewal rate for the quarter continue to be strong at 98%.
NOW in the second quarter of FY 19 has reported the adjusted earnings per share of 71 cents. The company had reported the adjusted revenue growth of 35.9 percent to $833.9 million in the second quarter of FY 19.
Moreover, subscription billings were $817 million representing 34% year-over-year adjusted growth including $17 million of foreign exchange headwind and a $6 million duration tailwind respectively. The remaining performance obligations or RPO ended the second quarter at approximately $5.4 billion representing 36% year-over-year adjusted growth, including $53 million of foreign exchange headwind.
ServiceNow expects the adjusted subscription revenue to be in the of $836 million to $841 million in the third quarter, and $3.29 billion to $3.3 billion for the year. Analysts had forecast subscription revenue of $833.4 million for the third quarter, and $3.25 billion for the year. NOW expect subscription billings between $848 million and $853 million representing 27% to 28% year-over-year adjusted growth including approximately $6 million and $3 million of foreign exchange and duration headwind respectively. NOW has raised the raising the full year 2019 subscription billings guidance to between $3.74 billion and $3.75 billion representing 32% year-over-year adjusted growth, including approximately $47 million and $17 million of foreign exchange and duration headwind respectively. NOW is maintaining full-year 2019 margin guidance as follows. Subscription gross margins of 86%, operating margin of 21% and free cash flow margin of 28%.