‘Our business is doing great’

ServiceNow CEO Bill McDermott on Wednesday downplayed concerns that the Iran war was materially disrupting the company’s business, even as the software provider’s first-quarter results were hurt by delays in the Middle East.

“Everything is fine. The Middle East is reopening to negotiations,” McDermott told CNBC’s Jim Cramer on “Mad Money” on Wednesday.

ServiceNow’s subscription revenue rose 19% on a constant currency basis in the quarter, including a 75 basis point headwind due to delayed on-premises deal closings in the Middle East. But McDermott said the impact was largely a matter of timing rather than disruption of demand from the war.

“You’re dealing with the dominant clouds in the Middle East,” he said. “When there is a delay…it has an immediate impact.”

McDermott’s comments were released Wednesday night, as ServiceNow shares tumbled 13% in after-hours trading even as the company beat Wall Street expectations for both total revenue and earnings.

Beyond geopolitical concerns, ServiceNow shares have been under pressure for months, down nearly 30% this year as investors worry that AI will disrupt their businesses and make them less valuable in the future.

McDermott countered this skepticism, arguing that AI is ultimately a “tailwind” rather than a threat to the company. ServiceNow software is widely used by IT and human resources departments to automate workflows and perform tasks such as ordering devices for new employees.

“The more AI that happens, everything is run through ServiceNow,” he said. “He thinks, but the workflow takes action, and that’s where we come in.”

He added that demand trends remain strong, indicating continued expansion of the company’s user base and accelerating adoption of AI. “Our business is doing great,” McDermott said. “And it’s all about artificial intelligence.”