Systems Software(IN00356.US)

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ServiceNow (NOW) Q4 2025 Earnings Call Transcript

ServiceNow (NOW) reported Q4 2025 earnings with subscription revenue of $3.47 billion, up 21% year-over-year, exceeding guidance. Key metrics included a 98% renewal rate, a 57% free cash flow margin, and significant growth in net new ACV, particularly in technology workflows and security. The company announced a $5 billion share repurchase program and provided 2026 guidance for subscription revenue between $15.53 billion and $15.57 billion. Partnerships with major tech firms were expanded to enhance AI integration and customer solutions. Monthly active users grew by 25%, indicating strong platform engagement.

Motley Fool·
US
NOW
-1.65%
US
NOWL
-2.80%
Motley Fool·
US
NOW
-1.65%
US
NOWL
-2.80%

Microsoft Q2 net income jumps 60% to USD 38.5 billion

Microsoft Corporation reported a 60% increase in net income for Q2, reaching USD 38.5 billion. Total revenue for the quarter was USD 81.3 billion, with product revenue at USD 16.5 billion and service revenue at USD 64.8 billion. For the first half of the fiscal year, total revenue was USD 158.9 billion. The cost of product revenue for the quarter was USD 3.5 billion. The company also provided forward-looking guidance during its earnings call.

Reuters·
US
XSW
-0.45%
US
MSFT
+0.22%
US
MSFU
+0.47%
Reuters·
US
XSW
-0.45%
US
MSFT
+0.22%
US
MSFU
+0.47%

Why Microsoft's stock is getting punished after earnings

Microsoft's stock fell 6.7% after earnings, marking its largest post-earnings drop in over three years. Despite beating expectations and a 38% growth in Azure cloud revenue, investors were disappointed with high capital expenditures, which rose 66% to $37.5 billion. CFO Amy Hood indicated that resource allocation decisions could impact growth, as the company faces chip supply constraints. Analysts express concerns over the return on investment from capital spending, leading to competitive fears against rivals like Amazon and Alphabet.

Dow Jones·
US
CLOU
-0.23%
US
MSFL
+0.29%
US
MSFO
+0.26%
Dow Jones·
US
CLOU
-0.23%
US
MSFL
+0.29%
US
MSFO
+0.26%

Stock market saw Meta surge after earnings, Microsoft decline, and Tesla rise with Elon Musk's presence. Dow Jones Futures impacted heavily.

The stock market experienced mixed results with Meta surging after strong earnings, while Microsoft saw a decline in its stock value. Tesla's stock rose, fueled by investor anticipation of updates from CEO Elon Musk. This reflects a blend of successes and challenges among major corporations as they respond to investor demands and financial performance expectations.

Unusual Whales·
US
XSW
-0.45%
US
IXN
+0.83%
US
IGV
-0.72%
Unusual Whales·
US
XSW
-0.45%
US
IXN
+0.83%
US
IGV
-0.72%

The quarterly report and guidance both exceeded expectations, yet the software giant ServiceNow is still being sold off by the market, overshadowed by the impact of AI

ServiceNow's quarterly performance exceeded expectations across the board, with subscription revenue increasing by 21% and the contract value of its AI product Now Assist surpassing $600 million. However, market anxiety over generative AI disrupting traditional software remains high, leading to a 6% drop in stock price after hours, which has plummeted 45% over the past year

Wallstreetcn·
US
NOWL
-2.80%
US
IGV
-0.72%
US
XSW
-0.45%
Wallstreetcn·
US
NOWL
-2.80%
US
IGV
-0.72%
US
XSW
-0.45%
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$Microsoft(MSFT.US) continues to further fade. Now down 7%.

45% of the backlog being due to OpenAI.

Source: Gene Munster

$Microsoft(MSFT.US) dips pulls back additional 3% on the call.

Stock moved on comment that Azure growth is capacity constrained and not all of the Capex capacity will go to Azure.

Source: Gene Munster

MSFT F2Q26 First Take. Overall, revenue, GP, and OP were solid, modestly ahead of prior guidance and the Bloomberg sell-side consensus.

The key watch was Azure’s unexpected slowdown, with growth at 38...

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