ServiceNow CEO downplays impact of Iran war and AI: 'Our business is doing great'
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Monday - Friday, 6:00 - 7:00 PM ETIn this articleServiceNow CEO Bill McDermott on Wednesday downplayed concerns that the Iran war is materially disrupting the company's business, even as the software provider's first-quarter results were dented by delays in the Middle East."Everything is fine.
The Middle East is opening up in talks again," McDermott told CNBC's Jim Cramer on "Mad Money" on Wednesday.ServiceNow's subscription revenue grew 19% on a constant currency basis in the quarter, including a 75 basis point headwind tied to delayed on-premise deal closings in the Middle East. However, McDermott said the impact is largely about timing, rather than demand deterioration stemming from the war. "You're dealing with sovereign clouds in the Middle East," he said. "When there's a delay ... it has an immediate impact." McDermott's comments aired Wednesday night as ServiceNow shares slid 13% in after-hours trading, even though the company beat Wall Street expectations on both total revenue and earnings. Beyond geopolitical concerns, ServiceNow shares have been under pressure for months, down roughly 30% this year, as investors grew concerned that artificial intelligence will disrupt their businesses and make them less valuable down the road. McDermott pushed back on that skepticism, arguing that AI is ultimately a "tailwind" for the company rather than a threat. ServiceNow's software is commonly used by IT and human resources departments to automate workflows and handle tasks such as ordering devices for new employees. "The more AI that happens … everything runs through ServiceNow," he said. "It thinks, but workflow acts, and that's where we come in." He added that demand trends remain strong, pointing to continued expansion in the company's user base and accelerating AI-related adoption. "Our business is doing great," McDermott said. "And it's all about AI." Click here to read Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest smarterSign up now for the CNBC Investing Club to follow Jim Cramer's every move in the market.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer's world? Hit him up!
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