What Makes ServiceNow (NOW) the Highest Quality Software Business?

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Soumya Eswaran

Tue, Apr 8, 2025, 6:19 AM 3 min read

Lakehouse Capital, a Sydney-based concern manager, released its “Lakehouse Global Growth Fund” January 2025 capitalist letter. A transcript of the missive tin beryllium downloaded here. January was a beardown period for the fund, fueled by fantabulous results from respective of portfolio companies. The Fund returned 7.3% nett of fees and expenses for the period compared to 2.6% for its benchmark. Since its inception successful December 2017, the Fund has returned 19.3%, successful annualized terms, compared to 12.8% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). In addition, delight cheque the fund’s apical 5 holdings to cognize its champion picks successful 2025.

In its January 2025 capitalist letter, Lakehouse Global Growth Fund emphasized stocks specified arsenic ServiceNow, Inc. (NYSE:NOW). ServiceNow, Inc. (NYSE:NOW) offers intelligent workflow automation solutions for integer businesses. The one-month instrumentality of ServiceNow, Inc. (NYSE:NOW) was -9.02%, and its shares mislaid 5.97% of their worth implicit the past 52 weeks. On April 7, 2025, ServiceNow, Inc. (NYSE:NOW) banal closed astatine $735.50 per stock with a marketplace capitalization of $152.25 billion.

Lakehouse Global Growth Fund stated the pursuing regarding ServiceNow, Inc. (NYSE:NOW) successful its January 2025 capitalist letter:

"US-based bundle institution ServiceNow, Inc. (NYSE:NOW) delivered different awesome quarterly result. Revenues grew 21% year-on-year successful changeless currency presumption to $2.9 cardinal and nett income grew 30% year-on-year to $384 million. The company's cardinal show indicators remained healthy, with their backlog (remaining show obligations) increasing 23% year-on-year to $22.3 cardinal (i.e. greater than 2x yearly revenue) and renewal rates held steadfast astatine 98%. As we person noted successful the past, the company’s renewal rates are singular arsenic not lone are they best-in-class, but they are besides highly consistent, typically successful the scope of 97% to 99%. These industry-leading renewal rates talk to the ngo captious quality of the level and are a cardinal operator of the semipermanent annuity worth successful the business. Zooming out, we proceed to judge ServiceNow is 1 the highest prime bundle businesses globally arsenic the operation of accordant maturation astatine scale, robust escaped currency travel procreation and a ample addressable marketplace marque it a compelling opportunity."

Jim Cramer Questions if ServiceNow, Inc. (NOW) Is “Helped oregon Hurt” - Enterprise Software Becomes a Battleground

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ServiceNow, Inc. (NYSE:NOW) is not connected our database of 30 Most Popular Stocks Among Hedge Funds. As per our database, 110 hedge money portfolios held ServiceNow, Inc. (NYSE:NOW) astatine the extremity of the 4th fourth compared to 78 successful the 3rd quarter. In the 4th fourth of 2024, ServiceNow, Inc’s (NYSE:NOW) subscription revenue accrued 21% year-over-year to $2.866 billion. While we admit the imaginable of ServiceNow, Inc. (NYSE:NOW) arsenic an investment, our condemnation lies successful the content that AI stocks clasp greater committedness for delivering higher returns, and doing truthful wrong a shorter timeframe. If you are looking for an AI banal that is arsenic promising arsenic NVIDIA but that trades astatine little than 5 times its earnings, cheque retired our study astir the cheapest AI stock.