ServiceNow (NYSE:) today reported first-quarter results with adjusted earnings per share (EPS) of $3.41, up from $2.37 year-over-year, and above expectations of $3.16.
The company’s adjusted revenue also beat expectations, reaching $2.60 billion versus analysts’ expectations of $2.58 billion.
Subscription revenue topped estimates at $2.52 billion. ServiceNow expects second-quarter subscription revenue to be between $2.525 billion and $2.53 billion, below expectations of $2.54 billion.
As a result, ServiceNow shares fell about 5% in after-hours trading.
ServiceNow adjusted its full-year subscription revenue forecast to a narrow range of $10.56 billion to $10.58 billion, slightly below the Bloomberg consensus estimate of $10.59 billion.
ServiceNow’s adjusted gross margin for the quarter was 83%, above estimates of 82.6%. Gross profit adjusted for subscriptions was significantly higher at 86% compared to the expected 84.7%.
Moreover, the company reported a significant increase in free cash flow to $1.23 billion, well above the $961.1 million estimate.
Amid these developments, ServiceNow continued its shareholder return efforts by repurchasing 225,000 shares for $175 million. Approximately $787 million remains available for future repurchases under the current authorization.