Cloud automation software company ServiceNow Inc. saw its stock slide in extended trading today despite posting solid third-quarter financial results that topped analysts’ expectations.

The company reported a profit before certain costs such as stock compensation of $1.55 per share on revenue of $1.512 billion, up 31% from a year ago. That was better than what Wall Street was expecting, with most analysts looking for earnings of just $1.38 per share on sales of $1.475 billion.

ServiceNow Chief Executive Bill McDermott (pictured) said his company is benefiting from enterprises’ digital transformation spending and the growing realization that, for many, “their technology architecture is their business architecture.”

ServiceNow sells software that’s used by enterprise’s information technology departments to track and manage the services they provide. Its platform also provides administrative and workflow management tools, and in more recent times it has expanded from that core business to provide human resources, customer service management and IT security tools.

ServiceNow has been so successful that it’s credited with helping to popularize workflow as a concept. The company is now hugely ambitious and is aiming to do more than $15 billion in annual revenue by 2026.

“We remain hungry and humble in our pursuit of becoming the defining enterprise software company of the 21st century,” McDermott continued. “Our focus is on value creation for our stakeholders by making the world work better for everyone.”

In the most recent quarter, ServiceNow saw its subscription revenue top $1.43 billion, above Wall Street’s estimates of $1.41 billion. It also reported it now has 1,266 customers bringing in more than $1 million each in annual contract value, up 25% from a year ago.

For the fourth quarter, the company offered a forecast of subscription revenue in a range of $1.515 billion to $1.52 billion, just above estimates of $1.51 billion.

The results were good, but investors were clearly hoping for a little bit more, as ServiceNow’s stock sank more than 3% in after-hours trading.

“ServiceNow stock is down slightly in the aftermarket as investors likely wanted more upside and feel they got paid before the print,” RBC Capital analyst Matthew Hedberg said in a report to clients.

Matt Fairhurst, CEO of productivity software provider Skedulo Holdings Inc., told SiliconANGLE he wasn’t surprised by ServiceNow’s strong performance because the company is helping to meet enterprise demands for hybrid work environments.

“Productivity itself is also evolving as organizations seek technology solutions that are flexible, scalable and robust enough to handle increasing complexity without sacrificing efficiency or ease-of-use,” Fairhurst said. “Companies like ServiceNow understand this evolution and are proving to be most successful.”

For all of the progress ServiceNow is making, it remains a long way from its stated revenue goal. But in a conference call with analysts, McDermott insisted his company is perfectly poised at the intersection of two generational opportunities.

“First, the need for a new technology foundation is supercharging our close partnership with CIOs,” McDermott said. “The second dimension fueling ServiceNow is the reordering of the enterprise application platforms for hyperautomation. Over several decades, enterprises have invested trillions into on-premise and first-generation SaaS applications. These applications satisfy the business process needs of the 20th century. Today, new business models require a fully connected value chain. Legacy environments are not adaptive enough to enable this change.”

Holger Mueller, an analyst with Constellation Research Inc., said ServiceNow had displayed strong growth yet again, fueled in part by its latest platform release and a string of acquisitions.

“ServiceNow also kept its costs under control, practically doubling its overall profit per share, a very nice achievement,” he added. “It remains to be seen if this growth will be enough to propel ServiceNow to its goal of $15 billion in revenue by 2025, but the opportunity is certainly there. It’s down to the company’s executive team to make the ambition become real.”

The third quarter was a fairly busy one for ServiceNow, with the company swooping to acquire an indoor mapping services provider called Mapwize SA for an undisclosed fee in August. ServiceNow also partnered with Citrix Systems Inc. on a virtual agent integration that can help to automate the resolution of virtual application and virtual desktop “resets.”

The company also announced a major new release of its flagship Now Platform, with new features aimed at enabling hybrid work strategies and combating employee fatigue.

Photo: World Economic Forum/Flickr