Morning Commentary: ServiceNow convertible notes fall after company posts loss on higher revenue

By Stephanie N. Rotondo

Seattle, Jan. 28 – A convertible bond trader said ServiceNow Inc. was dominating early trading on Thursday.

“It’s the only bond trading,” he said. “If you aren’t trading that, you’re not doing anything.”

The action comes after the cloud computing company released earnings late Wednesday. While revenues jumped nearly 50% for the year, the company still reported a loss for year and the fourth quarter.

But given the fact that the company posted a loss despite its revenue gains, one trader wondered “have they reached critical mass?”

The trader saw the 0% convertible notes due 2018 at 103.5 against a stock price of $58.50, noting that the equity was off $15 in early trading.

“They’ve gotten better bid over the course of the day,” he added.

For the fourth quarter, revenue was $285.7 million, a gain of 44% year over year. Net loss came to $37.4 million, or 23 cents per share.

On an adjusted basis, the earnings per share was 19 cents.

Still, the quarterly figures were better than analysts had predicted.

For the year, revenues hit just over $1 billion, up 47% from 2014. Net loss was $198.4 million, or $1.27 per share.

Looking forward, ServiceNow is expecting to see first-quarter revenue of between $298 million and $303 million. Growth for the year is expected to be about 33% to 36%, with revenues between $1.34 billion and $1.37 billion.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.