Moody's upgrades ServiceNow

Moody's Investors Service said it upgraded ServiceNow, Inc.'s senior unsecured rating to A3 from Baa1.

In a press release, Moody's analyst Raj Joshi said, "The A3 rating reflects ServiceNow's large addressable markets, strong product offerings with high revenue retention rates, and our expectations for approximately 24% annual growth in subscription revenues over the next 12 to 24 months."

Moody’s said it forecasts the company’s revenues to top $11 billion and free cash flow of about $3.5 billion, before taxes paid related to the net share settlement of equity awards, in 2024.

The agency noted that ServiceNow’s ability to maintain high growth rates will gradually become challenging with the growing scale and the increasing overlap of its products with competitors.

The outlook is stable.

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