📊 𝐈𝐍𝐕𝐄𝐒𝐓𝐎𝐑 𝐍𝐎𝐓𝐄: Raymond James Says $

📊 𝐈𝐍𝐕𝐄𝐒𝐓𝐎𝐑 𝐍𝐎𝐓𝐄: Raymond James Says $ServiceNow(NOW.US) ServiceNow Price Hikes Could Exceed Guidance

👉 𝐊𝐞𝐲 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬:

➤ Raymond James says 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐍𝐨𝐰 pricing increases may exceed management guidance.

➤ ServiceNow previously guided to a 𝟐𝟎-𝟑𝟎% pricing uplift from new subscription tiers.

➤ Industry checks suggest actual customer price increases are arriving 𝐚𝐛𝐨𝐯𝐞 guidance levels.

➤ New 𝐅𝐨𝐮𝐧𝐝𝐚𝐭𝐢𝐨𝐧, 𝐀𝐝𝐯𝐚𝐧𝐜𝐞𝐝, and 𝐏𝐫𝐢𝐦𝐞 tiers include embedded AI capabilities.

➤ June 30 may mark the final date for customers to purchase 𝐥𝐞𝐠𝐚𝐜𝐲 subscription tiers.

➤ Legacy offerings are expected to be retired over the next 𝟏𝟐-𝟏𝟖 months.

➤ Potential early renewals could pull forward revenue and boost near-term bookings.

➤ Raymond James says incremental pricing revenue carries 𝐦𝐢𝐧𝐢𝐦𝐚𝐥 customer acquisition costs.

➤ ServiceNow's Now Assist overages are priced at 𝐭𝐰𝐞𝐧𝐭𝐲 𝐜𝐞𝐧𝐭𝐬 per Assist.

➤ Raymond James maintains a 𝐌𝐚𝐫𝐤𝐞𝐭 𝐎𝐮𝐭𝐩𝐞𝐫𝐟𝐨𝐫𝐦 rating and 𝐔𝐒$𝟏𝟑𝟎 price target.

👉 𝐖𝐡𝐲 𝐈𝐭 𝐌𝐚𝐭𝐭𝐞𝐫𝐬:

➤ Higher-than-expected pricing could accelerate 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 growth and bookings.

➤ Price increases on existing customers may drive 𝐡𝐢𝐠𝐡-𝐦𝐚𝐫𝐠𝐢𝐧 expansion.

➤ Deep platform integration could limit 𝐜𝐡𝐮𝐫𝐧 despite aggressive pricing changes.

👉 𝐄𝐱𝐩𝐞𝐫𝐭 𝐒𝐭𝐚𝐭𝐞𝐦𝐞𝐧𝐭:

➤ "We are beginning to see early data points via customer/industry checks around ServiceNow flexing its muscles on price increases that could 1) accelerate near-term growth via early renewal activity, and 2) drive more durable longer-term growth than investors currently appreciate as these are meaningful increases." — 𝐀𝐝𝐚𝐦 𝐓𝐢𝐧𝐝𝐥𝐞, Raymond James Analyst.

➤ "We have heard this from a small cohort of plugged-in NOW investors, but don't think it is broadly understood and are attempting to get in front of the message as this could drive high-contribution margin growth as there is essentially no CAC (Customer Acquisition Cost) with these incremental dollars." — 𝐀𝐝𝐚𝐦 𝐓𝐢𝐧𝐝𝐥𝐞.

➤ "This may also create a new bear case around potential for customer churn, though we note very few viable alternatives and the core platform is deeply embedded." — 𝐀𝐝𝐚𝐦 𝐓𝐢𝐧𝐝𝐥𝐞.

➤ "While we haven't heard of Assist proliferation occurring yet, we are watching for evidence of Assist entitlements and (mis) alignment with ROI." — 𝐀𝐝𝐚𝐦 𝐓𝐢𝐧𝐝𝐥𝐞.