@kyliesuperdupertopsecret: #onthisday

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Sunday 09 August 2026 17:19:21 GMT
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What do I think about ServiceNow? The business is genuinely strong — subscription revenue up 24.5% above the high end of guidance, 123 million-dollar-plus net new ACV deals (+40%), 658 customers paying $5M+/yr (+23%), and AI ACV crossing $1B at the halfway point. Agentic AI customers in production up 9x in nine months. They raised full-year guidance. Honestly am a fan and am tempted to buy at a premium. Here’s why I’m going to remain disciplined. Two red flags: 1. Gross margins declined. Management blames AI costs from leveraging hyperscaler compute and expects volume to fix it — but is unlikely to go back to historical highs. Need to see if their expectations actually line up, or if costs worsen. 2. GAAP operating margins fell hard, driven mostly by stock-based comp. Management promised SBC under 10% of revenue by 2029, yet it rose QoQ and YoY. This has always been an issue with $NOW, and SBC is a necessity to retain top-level talent. We need to see if management can keep their word. On a Non-GAAP Adjusted basis, it's a mid-20s P/E & EV/EBIT multiple with a ~4.7% FCF yield — very reasonable for 20%+ sticky recurring growth. On a GAAP basis, even excluding intangible amortization costs, the valuations are closer ~50x and half the free cash flow yield.   Great earnings. The stock isn't cheap — it's just less expensive. I will say during my research, amongst all of the victims of the SaaS-pocalypse, I hold the OPINION that it has one of the highest likelihoods of not being disrupted by AI - aside from $MSFT. Personally would feel better putting in money at a better price. NOT FINANCIAL ADVICE. JUST MY OPINION BASED ON MY PERSONAL READING AND UNDERSTANDING, FOR EDUCATIONAL PURPOSES. PLEASE DO YOUR OWN RESEARCH #investing #stockmarket
What do I think about ServiceNow? The business is genuinely strong — subscription revenue up 24.5% above the high end of guidance, 123 million-dollar-plus net new ACV deals (+40%), 658 customers paying $5M+/yr (+23%), and AI ACV crossing $1B at the halfway point. Agentic AI customers in production up 9x in nine months. They raised full-year guidance. Honestly am a fan and am tempted to buy at a premium. Here’s why I’m going to remain disciplined. Two red flags: 1. Gross margins declined. Management blames AI costs from leveraging hyperscaler compute and expects volume to fix it — but is unlikely to go back to historical highs. Need to see if their expectations actually line up, or if costs worsen. 2. GAAP operating margins fell hard, driven mostly by stock-based comp. Management promised SBC under 10% of revenue by 2029, yet it rose QoQ and YoY. This has always been an issue with $NOW, and SBC is a necessity to retain top-level talent. We need to see if management can keep their word. On a Non-GAAP Adjusted basis, it's a mid-20s P/E & EV/EBIT multiple with a ~4.7% FCF yield — very reasonable for 20%+ sticky recurring growth. On a GAAP basis, even excluding intangible amortization costs, the valuations are closer ~50x and half the free cash flow yield. Great earnings. The stock isn't cheap — it's just less expensive. I will say during my research, amongst all of the victims of the SaaS-pocalypse, I hold the OPINION that it has one of the highest likelihoods of not being disrupted by AI - aside from $MSFT. Personally would feel better putting in money at a better price. NOT FINANCIAL ADVICE. JUST MY OPINION BASED ON MY PERSONAL READING AND UNDERSTANDING, FOR EDUCATIONAL PURPOSES. PLEASE DO YOUR OWN RESEARCH #investing #stockmarket

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