ServiceNow Inc. beat expectations on earnings and revenue today as it closed on a significant number of large transactions, sending its stock soaring almost 10% in extended trading.

ServiceNow reported a profit before certain costs such as stock compensation of $1.49 per share on revenue of $1.629 billion in the quarter, up 30% from a year ago. That was better than expected, with Wall Street modeling earnings of $1.43 per share on sales of $1.6 billion.

During the quarter, the company said it closed on 135 transactions with more than $1 million in net new annual contract value, up 52% from a year ago. ServiceNow said it now counts 1,359 customers with over $1 million in ACV, up 25% from the same period last year.

ServiceNow President and Chief Executive Bill McDermott (pictured) said the company “beat the high end of expectations” with its fourth-quarter results, adding that customer demand is “stronger than ever.”

“Our unique culture has made us one of the best places to work,” McDermott added. “We are growing like a fast-moving startup with the profitability of a global market leader.”

ServiceNow’s growth was evident in its subscription revenue too, which rose 29% from a year ago, to $1.523 billion. Further, it reported remaining performance obligations of $5.7 billion in the quarter, up 29%. RPO represents the total future performance obligations arising from the company’s contractual relationships. More specifically, it’s the sum of the invoiced amount and the future amounts not yet invoiced for a contract with a customer.

ServiceNow sells software that’s used by enterprises’ 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.

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

ServiceNow Chief Financial Officer Gina Mastantuono said today that the company remains on track to hit that target.

“The company is firing on all cylinders and we enter 2022 with tremendous momentum,” she said. “We expect constant currency subscription revenue growth to accelerate year-over-year in Q1, setting us up for another strong year and putting us well on our way to becoming a $15 billion plus revenue company.”

It still has some way to go, though. For the full 2021 fiscal year, ServiceNow reported revenue of $5.831 billion, up 28% from the previous year. Still, McDermott told MarketWatch in an interview he had reason to be confident in ServiceNow’s future growth prospects.

“In this macro environment of a Great Resignation, supply-chain disruption and inflation, digital technologies are a growth-stimulating deflationary force,” he said. “These results show that ServiceNow’s business model is set to flourish in any economic environment.”

Analyst Holger Mueller of Constellation Research Inc. told SiliconANGLE that ServiceNow is doing exceptionally well not only because it’s growing fast but because it’s producing a respectable profit while continuing to invest in its growth.

“It’s likely that little will change in the new financial year,” Mueller said. “The COVID-related uncertainty prevents enterprises from implementing alternative, wall-to-wall suites that might reduce the need for ServiceNow’s workflow capabilities. So the future looks bright for the company.”

In an executive reshuffle, ServiceNow said it’s promoting Chief Product and Engineering Officer Chirantan “CJ” Desai to become its new chief operating officer. As COO, Desai’s expanded responsibilities will include industry and solution sales, with the goal of accelerating customer adoption of the company’s suite of products.

Elsewhere, the company said Chief Revenue Officer Kevin Haverty has been promoted to a new strategic role as senior adviser to McDermott. Meanwhile, ServiceNow’s president of Europe, Middle East and Africa, Paul Smith, was appointed as chief commercial officer. Finally, ServiceNow said it will hire former Salesforce.com Inc. and Coca-Cola Co. executive Ulrik Nehammer as its new president of EMEA.

For the next quarter, ServiceNow is forecasting subscription revenue of between $1.61 billion and $1.615 billion, a bit under Wall Street’s projection of $1.62 billion.

Photo: World Economic Forum/Flickr