ServiceNow Inc.'s stock plummeted 11.54% in pre-market trading on Thursday, following the release of its fourth-quarter 2024 earnings results and disappointing guidance for 2025 subscription revenue.

The cloud-based software company reported strong fourth-quarter 2024 results, with a 21% year-over-year increase in revenue to $2.96 billion, beating analysts' expectations. However, ServiceNow's forecast for 2025 subscription revenue fell short of Wall Street estimates, projecting subscription revenue between $12.64 billion and $12.68 billion, lower than the consensus estimate of $12.83 billion.

The company cited the impact of a strong U.S. dollar as a key factor contributing to the lower subscription revenue outlook, with Chief Financial Officer Gina Mastantuono stating that the currency headwind is expected to reduce subscription revenue by approximately $175 million in 2025.

Despite the disappointing guidance, ServiceNow reported strong growth in its AI-powered offerings, with a 150% quarter-over-quarter increase in deals for its Now Assist service desk product. The company is focused on capitalizing on the AI opportunity and expanding its AI capabilities, including the launch of its Workflow Data Fabric and RaptorDB Pro offering.

ServiceNow also announced plans to incorporate elements of consumption-based pricing models for its AI and data solutions, aiming to drive faster adoption and monetize the "hockey stick" of usage over time. While this approach may initially forgo some upfront subscription revenue, the company believes it will position ServiceNow as the AI platform for business transformation and enable strong growth in the long run.