Revenue up about 20%, shares down 20–29%: ServiceNow, Fortinet and Intel

01Three sessions, three falls

ServiceNow, Fortinet, Tenable, Microsoft and Alphabet reported on 28 October; Amazon and Intel on 29 October.^1245678 On Thursday 29 October ServiceNow closed at US$109.67, down 26.95%, and Fortinet at US$139.10, down 20.09%.⁹ CNBC called ServiceNow’s fall its “worst day on record”; the previous worst close in the daily data was −17.75%, on 23 April this year.¹⁰¹⁴ On Friday 30 October Intel closed at US$65.76, down 28.58%. The previous largest fall in Intel’s daily data, which starts in March 1980, was −26.06% on 2 August 2024.⁹¹⁴

The wider market fell on the Friday too. The Nasdaq Composite closed 2.86% lower on 30 October, the Nasdaq-100 3.46% and the iShares Semiconductor ETF 8.24%; the software ETF IGV had fallen 3.52% on the Thursday. The Composite ended its third losing week in a row.⁹ Intel’s and Amazon’s moves on 30 October include that day’s fall in the market as a whole.

02What each reported, and what the analysts said the market wanted

ServiceNow said it beat the high end of its guidance on every top-line and profit measure: revenue rose 20.5% to US$4,106m and adjusted earnings were US$1.00 a share.¹ CNBC reported revenue roughly in line with the US$4.10bn analysts expected (LSEG) and earnings two cents short of a US$1.02 forecast.¹⁰ Contracted revenue for the next twelve months (cRPO) grew 20.5% to US$13.65bn; ServiceNow guided its growth to 18.5% for the December quarter.¹ Citi’s Tyler Radke told CNBC the market “wanted to see something a little bit sooner” from its AI investments, and that “you got to wait until next year to really see that inflection”.¹⁰

Fortinet grew revenue 20% to US$2.08bn and billings 29%, and raised its full-year revenue guidance.² Product revenue grew 37% to US$765m, after 52% in the June quarter; service revenue grew about 13%, and Fortinet cut its full-year service guidance to US$5.150–5.170bn from US$5.180–5.220bn.²³ Calcalist reported services at US$1.31bn against a US$1.33bn estimate, and quoted Wells Fargo on “the narrower-than-usual gap” between results and expectations: billings beat by about 2%, against 11% in the June quarter.¹¹ TIKR reported that BofA cut the stock to Neutral from Buy over a “disappointing slowdown”.¹²

Intel grew revenue 21% to US$16.5bn, with Data Center and AI up 78% to US$7.3bn; its finance chief said revenue, gross margin and earnings per share “exceeded guidance”. It forecast US$15.0–16.0bn of revenue for the December quarter and adjusted earnings of US$0.25 a share, and David Zinsner said: “we see the PC slowdown continuing at least through the first half of next year”.⁵ Sharecast reported the forecast as “well below analyst expectations of $0.43 and $17.1bn”.¹³

Tenable grew 9.5% to US$276.4m, said it exceeded “every one of our guided metrics” and raised its full-year outlook.⁴ Its shares opened 6.1% lower on 29 October and closed 6.28% higher.⁹ We found no named analyst explaining the turn. Microsoft, Alphabet and Amazon are in our piece on cloud growth.

03What a falling share price changes for a buyer

The share price measures what investors expect next; the release shows the business today. ServiceNow generated US$822m of free cash flow in the quarter and holds US$29.7bn of contracted revenue not yet recognised.¹ Fortinet generated US$865m of free cash flow and added US$1.2bn to its buyback authorisation.² Intel generated US$5.1bn of cash from operations.⁵ None of that changed on 29 or 30 October.

What to watch. ServiceNow’s 18.5% cRPO guidance, Fortinet’s December-quarter revenue range of US$2.155–2.245bn and Intel’s US$15.0–16.0bn are the numbers the next results will be measured against, from late January.¹²⁵ Whether the market’s fall on 30 October continues is a separate question that no one quoted here answered.