ServiceNow tanks on margins
Wall Street Breakfast
Seeking Alpha
4.1 • 1K Ratings
🗓️ 23 April 2026
⏱️ 6 minutes
🧾️ Download transcript
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Transcript
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| 0:00.0 | Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. |
| 0:07.7 | It's great to be with you on this Thursday, April 23rd. I'm Julie Morgan. |
| 0:14.3 | Service now is down 13% in pre-market action. The company reported its first quarter 2026 financial results, which |
| 0:22.8 | featured a lower than expected gross margin outlook. For the quarter ended March 31st, Service |
| 0:29.0 | now reported adjusted earnings per share of 97 cents, which matched the consensus estimate. Gap EPS was |
| 0:37.1 | 45 cents compared to the 53 cent estimate. |
| 0:40.7 | Revenue for the quarter increased 22% or 19% in constant currency to 3.77 billion, |
| 0:47.8 | which was more than the $3.75 billion estimate. For the full year, |
| 0:53.1 | service now expects a subscription adjusts a gross margin of 81.5 billion estimate. For the full year, service now expects a subscription adjusted gross |
| 0:55.8 | margin of 81.5% versus the estimate of 82.1%. The company attributed the lower margin to the |
| 1:04.0 | recent acquisitions, but that is expected to normalize by 2027. Moreover, during the first quarter, |
| 1:12.3 | the company said its subscription revenue growth saw an approximately 75 basis point headwind from delayed closings of several |
| 1:19.2 | large on-premise deals in the Middle East due to the ongoing conflict in the region. |
| 1:25.9 | Tesla has paired its earnings rally in postmarket trading on Wednesday, |
| 1:29.8 | as investors gauge the company's Q1 earnings report and business update. During the earnings conference |
| 1:36.6 | call, CEO Elon Musk said 2026 will be a very exciting year. He said the company's heavy capital |
| 1:44.1 | expenditure spending of about |
| 1:46.2 | $25 billion this year will pay off in the future. Cybercab and semi-truck production will begin this year, |
| 1:54.0 | although slowly at first before going exponential at the end of the year and in 2027. |
| 2:00.6 | Musk highlighted that there is a large pipeline of significant improvements for FSD, and it |
| 2:06.3 | will be possible to achieve unsupervised FSD anywhere in the world where it is legally permitted. |
| 2:12.8 | On the humanoid robot front, he said Optimus will be useful outside of the factories next year. The company will |
... |
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