- ServiceNow exceeds guidance across all Q3 2023 topline growth
and profitability metrics; raises 2023 subscription revenues and
operating margin guidance
- Subscription revenues of $2,216 million in Q3 2023,
representing 27% year-over-year growth, 24.5% in constant
currency
- Total revenues of $2,288 million in Q3 2023, representing 25%
year-over-year growth, 22.5% in constant currency
- Current remaining performance obligations of $7.43 billion as
of Q3 2023, representing 27% year-over-year growth, 24% in constant
currency
- 83 transactions over $1 million in net new ACV in Q3 2023, up
20% year-over-year
- ServiceNow ended Q3 2023 with 49 customers with more than $20
million in ACV, representing 58% year-over-year increase
ServiceNow (NYSE: NOW), the leading digital workflow company
making the world work better for everyone, today announced
financial results for its third quarter ended September 30, 2023,
with subscription revenues of $2,216 million in Q3 2023,
representing 27% year-over-year growth and 24.5% in constant
currency.
“ServiceNow had another beyond expectations quarter,” said
ServiceNow Chairman and CEO Bill McDermott. “We've released more
than 5,000 new capabilities this year, including generative AI for
the use cases that matter most to our customers. Innovation drives
growth. This is a highly unique, differentiated company that is
reshaping business as the intelligent super platform for the
enterprise.”
As of September 30, 2023, current remaining performance
obligations (“cRPO”), contract revenue that will be recognized as
revenue in the next 12 months, was $7.43 billion, representing 27%
year-over-year growth and 24% in constant currency. The company now
has 1,789 total customers with more than $1 million in annual
contract value (“ACV”), representing 17% year-over-year growth in
customers.
“Q3 marks another quarter of exceptional execution as we
significantly surpassed the high end of our guidance metrics,” said
ServiceNow CFO Gina Mastantuono. “Our robust results show that the
world's best-run enterprises are choosing ServiceNow to drive their
digital transformation roadmaps. With the capabilities unlocked by
generative AI, the window of opportunity is even more expansive,
positioning us well to continue delivering a strong balance of
growth and profitability.”
Recent Business Highlights
- In Q3, ServiceNow launched its Vancouver Platform release,
which embedded generative AI across all workflows on the Now
Platform. Now Assist, ServiceNow’s generative AI experience,
expands the company’s generative AI capabilities to further
maximize productivity, improve agility, and drive cost efficiency.
Now Assist incorporates previously announced generative AI features
such as case, incident, and agent chat summarization, virtual
agent, and search capabilities, as well as the Generative AI
Controller. To power the new generative AI features in Now Assist,
ServiceNow also released a domain-specific ServiceNow large
language model (Now LLM) built for the enterprise, and released its
generative AI pricing packages with premium SKU offerings.
- In October, building on the recent announcement of its AI
Lighthouse program, ServiceNow welcomed Teleperformance, among
other leading companies, to collaborate on new generative AI use
cases that boost productivity and increase customer and employee
satisfaction in key industries.
- ServiceNow also significantly expanded its partner ecosystem
capabilities and partnerships. In Q3, the ServiceNow Ecosystem
Ventures program made investments in Japan-based Blueship Co., Ltd.
and Japan Systems Co., Ltd. Today, ServiceNow announced an expanded
partnership with Deloitte, as well as a co-investment by the
ServiceNow Ecosystem Ventures program in India-based global
capability center leader ANSR.
- During the quarter, ServiceNow repurchased 500 thousand shares
of its common stock for $282 million as part of its first-ever
share repurchase program, with the primary objective of managing
the impact of dilution from future employee equity grants and
employee stock purchase programs. Approximately, $1.2 billion
remains available for future share repurchases under the existing
program.
- As a testament to its hungry and humble culture, ServiceNow was
recognized as a Fortune Best Workplaces in Technology™(1) for the
fourth consecutive year. For the first time, ServiceNow was named a
2023 Best Places to Work for People with Disabilities and received
a perfect score of 100 on the Disability:IN 2023 Disability
Equality Index.
- Around the world, the company continued to emphasize its
environmental, social, and governance (ESG) commitments. ServiceNow
partnered with FutureSkills Prime to train 5,000 learners across
India in new digital skills and provide clear pathways to careers
within the ServiceNow network, and partnered with GivePower to
provide safe, affordable drinking water to drought-ridden Mombasa
County, Kenya.
(1)
©2023 FORTUNE Media IP Limited All rights reserved. Used under
license. FORTUNE and FORTUNE Media IP Limited are not affiliated
with, and do not endorse products or services of, ServiceNow.
Third Quarter 2023 GAAP and Non-GAAP Results:
The following table summarizes our financial results for the
third quarter 2023:
Third Quarter 2023 GAAP
Results
Third Quarter 2023 Non-GAAP
Results(1)
Amount ($
millions)
Year/Year Growth
(%)
Amount ($
millions)(3)
Year/Year Growth
(%)
Subscription revenues
$2,216
27%
$2,173
24.5%
Professional services and other
revenues
$72
(19%)
$70
(21.5%)
Total revenues
$2,288
25%
$2,243
22.5%
Amount ($
billions)
Year/Year Growth
(%)
Amount ($ billions)(3)
Year/Year Growth
(%)
cRPO
$7.43
27%
$7.27
24%
RPO
$14.4
26%
$14.1
23.5%
Amount ($
millions)
Margin (%)
Amount ($
millions)(2)
Margin (%)(2)
Subscription gross profit
$1,796
81%
$1,868
84%
Professional services and other
gross profit (loss)
($4)
(6%)
$7
10%
Total gross profit
$1,792
78%
$1,875
82%
Income from operations
$231
10%
$676
30%
Net cash provided by operating
activities
$311
14%
Free cash flow
$196
9%
Amount ($
millions)
Earnings per Basic/Diluted
Share ($)
Amount ($
millions)(2)
Earnings per
Basic/Diluted Share ($)(2)
Net income
$242
$1.18 / 1.17
$603
$2.95 / 2.92
(1)
We report non-GAAP financial measures in
addition to, and not as a substitute for, or superior to, financial
measures calculated in accordance with GAAP. See the section
entitled “Statement Regarding Use of Non-GAAP Financial Measures”
for an explanation of non-GAAP measures.
(2)
Refer to the table entitled “GAAP to
Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP
measures.
(3)
Non-GAAP subscription revenues,
professional services and other revenues, total revenues, cRPO and
RPO are adjusted only for constant currency. See the section
entitled “Statement Regarding Use of Non-GAAP Financial Measures”
for an explanation of non-GAAP measures.
Note: Numbers rounded for presentation purposes and may not
foot.
Financial Outlook
Our guidance includes GAAP and non-GAAP financial measures. The
non-GAAP growth rates for subscription revenues and cRPO are
adjusted only for constant currency to provide better visibility
into the underlying business trends. Since December 31, 2022,
ServiceNow has seen an incremental strengthening of the U.S. dollar
resulting in foreign exchange ("FX") headwinds. The total FX impact
is estimated to be an approximately $30 million (~0.5%)
year-over-year headwind for Q4 2023 cRPO. Additionally, the Q3 2023
strength of our US Federal business has resulted in a higher mix of
contracts containing 12-month renewal terms. This will create a
1-point headwind to Q4 2023 cRPO growth and remain a headwind into
2024 as that balance is amortized into revenue. We expect that
these contracts will renew in Q3 2024 as ServiceNow’s US Federal
renewal rates have been 99%.
The following table summarizes our guidance for the fourth
quarter 2023:
Fourth Quarter 2023
GAAP Guidance
Fourth Quarter 2023
Non-GAAP Guidance(1)
Amount ($ millions)(3)
Year/Year Growth
(%)(3)
Constant Currency Year/Year
Growth (%)
Subscription revenues
$2,320 - $2,325
24.5% - 25%
23% - 23.5%
cRPO
20.5%
21.0%
Note: Includes headwind from strength of
US Federal business noted above
Margin (%)(2)
Income from operations
27.5%
Amount
(millions)
Weighted-average shares used to compute
diluted net income per share
206
(1)
We report non-GAAP financial measures in
addition to, and not as a substitute for, or superior to, financial
measures calculated in accordance with GAAP. See the section
entitled “Statement Regarding Use of Non-GAAP Financial Measures”
for an explanation of non-GAAP measures.
(2)
Refer to the table entitled
“Reconciliation of Non-GAAP Financial Guidance” for a
reconciliation of GAAP to non-GAAP measures.
(3)
Guidance for GAAP subscription revenues
and GAAP subscription revenues and cRPO growth rates are based on
the 30-day average of foreign exchange rates for September 2023 for
entities reporting in currencies other than U.S. Dollars.
The following table summarizes our guidance for the full-year
2023:
Full-Year 2023 GAAP
Guidance
Full-Year 2023 Non-GAAP
Guidance(1)
Amount ($ millions)(3)
Year/Year Growth
(%)(3)
Constant Currency
Year/Year Growth (%)
Subscription revenues
$8,635 - $8,640
25.5%
25%
Margin (%)(2)
Subscription gross profit
84%
Income from operations
27%
Free cash flow
30%
Amount
(millions)
Weighted-average shares used to compute
diluted net income per share
206
(1)
We report non-GAAP financial measures in
addition to, and not as a substitute for, or superior to, financial
measures calculated in accordance with GAAP. See the section
entitled “Statement Regarding Use of Non-GAAP Financial Measures”
for an explanation of non-GAAP measures.
(2)
Refer to the table entitled
“Reconciliation of Non-GAAP Financial Guidance” for a
reconciliation of GAAP to non-GAAP measures.
(3)
GAAP subscription revenues and related
growth rate for the future quarter included in our full-year 2023
guidance are based on the 30-day average of foreign exchange rates
for September 2023 for entities reporting in currencies other than
U.S. Dollars.
Note: Numbers are rounded for presentation purposes and may
not foot.
Conference Call Details
The conference call will begin at 2 p.m. Pacific Time (21:00
GMT) on October 25, 2023. Interested parties may listen to the call
by dialing (888) 330‑2455 (Passcode: 8135305), or if outside North
America, by dialing (240) 789‑2717 (Passcode: 8135305). Individuals
may access the live teleconference from this webcast
https://events.q4inc.com/attendee/932913620
An audio replay of the conference call and webcast will be
available two hours after its completion and will be accessible for
30 days. To hear the replay, interested parties may go to the
investor relations section of the ServiceNow website or dial (800)
770‑2030 (Passcode: 8135305), or if outside North America, by
dialing (647) 362‑9199 (Passcode: 8135305).
Investor Presentation Details
An investor presentation providing additional information,
including forward-looking guidance, and analysis can be found at
https://investors.servicenow.com.
Upcoming Investor Conferences
ServiceNow today announced that it will attend and have
executives present at three upcoming investor conferences.
These include:
- ServiceNow President and Chief Operating Officer CJ Desai will
participate in a fireside chat at the UBS Global Technology
Conference on Tuesday, November 28, 2023, at 1:15pm PT.
- ServiceNow Chief Financial Officer Gina Mastantuono will
participate in a keynote presentation at the Wells Fargo TMT Summit
on Wednesday, November 29, 2023, at 12:00pm PT.
- ServiceNow Chairman and Chief Executive Officer Bill McDermott
will participate in a keynote presentation at the Barclays Global
Technology Conference on Wednesday, December 6, 2023, at 12:10pm
PT.
The live webcasts will be accessible on the investor relations
section of the ServiceNow website at
https://investors.servicenow.com and archived on the ServiceNow
site for a period of 30 days.
Statement Regarding Use of Non-GAAP Financial
Measures
We use the following non-GAAP financial measures in addition to,
and not as a substitute for, or superior to, financial measures
calculated in accordance with GAAP.
- Revenues. We adjust revenues and related growth rates for
constant currency to provide a framework for assessing how our
business performed excluding the effect of foreign currency rate
fluctuations. To present this information, current period results
for entities reporting in currencies other than U.S. Dollars
(“USD”) are converted into USD at the average exchange rates in
effect during the comparison period (for Q3 2022, the average
exchange rates in effect for our major currencies were 1 USD to
0.99 Euros and 1 USD to 0.85 British Pound Sterling (“GBP”)),
rather than the actual average exchange rates in effect during the
current period (for Q3 2023, the average exchange rates in effect
for our major currencies were 1 USD to 0.92 Euros and 1 USD to 0.79
GBP). Guidance for related growth rates are derived by applying the
average exchange rates in effect during the comparison period
rather than the exchange rates for the guidance period. We believe
the presentation of revenues and related growth rates adjusted for
constant currency facilitates the comparison of revenues
year-over-year.
- Remaining performance obligations and current remaining
performance obligations. We adjust cRPO and remaining performance
obligations (“RPO”) and related growth rates for constant currency
to provide a framework for assessing how our business performed. To
present this information, current period results for entities
reporting in currencies other than USD are converted into USD at
the exchange rates in effect at the end of the comparison period
(for Q3 2022, the end of the period exchange rates in effect for
our major currencies were 1 USD to 1.02 Euros and 1 USD to 0.90
GBP), rather than the actual end of the period exchange rates in
effect during the current period (for Q3 2023, the end of the
period exchange rates in effect for our major currencies were 1 USD
to 0.95 Euros and 1 USD to 0.82 GBP). Guidance for the related
growth rate is derived by applying the end of period exchange rates
in effect during the comparison period rather than the exchange
rates in effect during the guidance period. We believe the
presentation of cRPO and RPO and related growth rates adjusted for
constant currency facilitates the comparison of cRPO and RPO
year-over-year, respectively.
- Gross profit, Income from operations, Net income and Net income
per share - diluted. Our non-GAAP presentation of gross profit,
income from operations, and net income measures exclude certain
non-cash or non-recurring items, including stock-based compensation
expense, amortization of debt discount and issuance costs related
to our convertible senior notes, loss on early note conversions,
amortization of purchased intangibles, legal settlements, business
combination and other related costs, income tax effects and
adjustments, and the income tax benefit from the release of a
valuation allowance on deferred tax assets. The non-GAAP
weighted-average shares used to compute our non-GAAP net income per
share - diluted excludes the dilutive effect of the in-the-money
portion of convertible senior notes as they are covered by our note
hedges, and includes the dilutive effect of time-based stock
awards, the dilutive effect of warrants and the potentially
dilutive effect of our stock awards with performance conditions not
yet satisfied at forecasted attainment levels to the extent we
believe it is probable that the performance condition will be met.
We believe these adjustments provide useful supplemental
information to investors and facilitates the analysis of our
operating results and comparison of operating results across
reporting periods.
- Free cash flow. Free cash flow is defined as net cash provided
by operating activities plus cash paid for legal settlements,
repayments of convertible senior notes attributable to debt
discount and business combination and other related costs including
compensation expense, reduced by purchases of property and
equipment. Free cash flow margin is calculated as free cash flow as
a percentage of total revenues. We believe information regarding
free cash flow and free cash flow margin provides useful
information to investors because it is an indicator of the strength
and performance of our business operations.
Our presentation of non-GAAP financial measures may not be
comparable to similar measures used by other companies. We
encourage investors to carefully consider our results under GAAP,
as well as our supplemental non-GAAP information and the
reconciliation between these presentations, to more fully
understand our business. Please see the tables included at the end
of this release for the reconciliation of GAAP and non-GAAP results
for gross profit, income from operations, net income, net income
per share and free cash flow.
Use of Forward-Looking Statements
This release contains “forward-looking statements” regarding our
performance, including but not limited to statements in the section
entitled “Financial Outlook.” Forward-looking statements are
subject to known and unknown risks and uncertainties and are based
on potentially inaccurate assumptions that could cause actual
results to differ materially from those expected or implied by the
forward-looking statements. If any such risks or uncertainties
materialize or if any of the assumptions prove incorrect, our
results could differ materially from the results expressed or
implied by the forward-looking statements we make.
Factors that may cause actual results to differ materially from
those in any forward-looking statements include, among others,
experiencing an actual or perceived cyber-security event or
weakness; our ability to comply with evolving privacy laws, data
transfer restrictions, and other foreign and domestic standards
related to data and the Internet; errors, interruptions, delays or
security breaches in or of our service or data centers; our ability
to maintain and attract key employees and manage workplace culture;
alleged violations of laws and regulations, including those
relating to anti-bribery and anti-corruption and those relating to
public sector contracting requirements; our ability to compete
successfully against existing and new competitors; our ability to
predict, prepare for and respond promptly to rapidly evolving
technological, market and customer developments; our ability to
grow our business, including converting remaining performance
obligations into revenue, adding and retaining customers, selling
additional subscriptions to existing customers, selling to larger
enterprises, government and regulated organizations with complex
sales cycles and certification processes, and entering new
geographies and markets; our ability to develop and gain customer
demand for and acceptance of existing, new and improved products
and services; our ability to expand and maintain our partnerships
and partner programs, including expected market opportunity from
such relationships; global economic conditions; fluctuations in the
value of foreign currencies relative to the U.S. Dollar;
fluctuations in interest rates; our ability to consummate and
realize the benefits of any strategic transactions or acquisitions;
the impact of the conflicts in Ukraine and the Middle East and bank
failures on macroeconomic conditions; inflation; and fluctuations
and volatility in our stock price.
Further information on these and other factors that could affect
our financial results are included in our Form 10-K for the year
ended December 31, 2022, our Forms 10-Q and other filings we make
with the Securities and Exchange Commission from time to time.
We undertake no obligation, and do not intend, to update these
forward-looking statements, to review or confirm analysts’
expectations, or to provide interim reports or updates on the
progress of the current financial quarter.
About ServiceNow
ServiceNow (NYSE: NOW) makes the world work better for everyone.
Our cloud-based platform and solutions help digitize and unify
organizations so that they can find smarter, faster, better ways to
make work flow. So employees and customers can be more connected,
more innovative, and more agile. And we can all create the future
we imagine. The world works with ServiceNow™. For more information,
visit: www.servicenow.com.
© 2023 ServiceNow, Inc. All rights reserved. ServiceNow, the
ServiceNow logo, Now, and other ServiceNow marks are trademarks
and/or registered trademarks of ServiceNow, Inc. in the United
States and/or other countries. Other company names, product names,
and logos may be trademarks of the respective companies with which
they are associated.
ServiceNow, Inc.
Condensed Consolidated
Statements of Operations
(in millions, except per share
data)
(unaudited)
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Revenues:
Subscription
$
2,216
$
1,742
$
6,315
$
5,031
Professional services and other
72
89
219
274
Total revenues
2,288
1,831
6,534
5,305
Cost of revenues (1):
Subscription
420
301
1,163
863
Professional services and other
76
99
242
295
Total cost of revenues
496
400
1,405
1,158
Gross profit
1,792
1,431
5,129
4,147
Operating expenses (1):
Sales and marketing
799
697
2,454
2,092
Research and development
549
456
1,562
1,314
General and administrative
213
187
621
541
Total operating expenses
1,561
1,340
4,637
3,947
Income from operations
231
91
492
200
Interest income
82
26
216
43
Other expense, net
(14
)
(15
)
(47
)
(27
)
Income before income taxes
299
102
661
216
Provision for (benefit from) income
taxes
57
22
(775
)
41
Net income
$
242
$
80
$
1,436
$
175
Net income per share - basic
$
1.18
$
0.39
$
7.04
$
0.87
Net income per share - diluted
$
1.17
$
0.39
$
7.00
$
0.86
Weighted-average shares used to compute
net income per share - basic
204
202
204
201
Weighted-average shares used to compute
net income per share - diluted
206
203
205
203
(1) Includes stock-based compensation as
follows:
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Cost of revenues:
Subscription
$
52
$
41
$
148
$
116
Professional services and other
11
17
40
51
Operating expenses:
Sales and marketing
132
119
378
337
Research and development
150
127
430
368
General and administrative
68
57
195
166
ServiceNow, Inc.
Condensed Consolidated Balance
Sheets
(in millions)
September 30, 2023
December 31, 2022
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
1,112
$
1,470
Short-term investments
2,955
2,810
Accounts receivable, net
1,168
1,725
Current portion of deferred
commissions
417
369
Prepaid expenses and other current
assets
394
280
Total current assets
6,046
6,654
Deferred commissions, less current
portion
807
742
Long-term investments
2,939
2,117
Property and equipment, net
1,199
1,053
Operating lease right-of-use assets
699
682
Intangible assets, net
242
232
Goodwill
1,204
824
Deferred tax assets
1,505
636
Other assets
450
359
Total assets
$
15,091
$
13,299
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
69
$
274
Accrued expenses and other current
liabilities
1,001
975
Current portion of deferred revenue
4,440
4,660
Current portion of operating lease
liabilities
91
96
Total current liabilities
5,601
6,005
Deferred revenue, less current portion
46
70
Operating lease liabilities, less current
portion
682
650
Long-term debt, net
1,487
1,486
Other long-term liabilities
93
56
Stockholders’ equity
7,182
5,032
Total liabilities and stockholders’
equity
$
15,091
$
13,299
ServiceNow, Inc.
Condensed Consolidated
Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Cash flows from operating
activities:
Net income
$
242
$
80
$
1,436
$
175
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
146
109
408
315
Amortization of deferred commissions
115
92
333
261
Stock-based compensation
413
361
1,191
1,038
Deferred income taxes
30
—
(874
)
(3
)
Other
(11
)
(10
)
(13
)
9
Changes in operating assets and
liabilities, net of effect of business combinations:
Accounts receivable
(83
)
(66
)
552
445
Deferred commissions
(173
)
(132
)
(453
)
(369
)
Prepaid expenses and other assets
(47
)
(1
)
(183
)
(73
)
Accounts payable
(98
)
(24
)
(188
)
116
Deferred revenue
(128
)
(112
)
(217
)
(156
)
Accrued expenses and other liabilities
(95
)
(32
)
(199
)
(197
)
Net cash provided by operating
activities
311
265
1,793
1,561
Cash flows from investing
activities:
Purchases of property and equipment
(136
)
(162
)
(433
)
(406
)
Business combinations, net of cash
acquired
(282
)
—
(282
)
(57
)
Purchases of investments
(984
)
(1,037
)
(3,805
)
(2,811
)
Purchases of non-marketable
investments
(10
)
(2
)
(56
)
(138
)
Sales and maturities of investments
915
569
2,868
1,700
Other
(28
)
3
(15
)
3
Net cash used in investing activities
(525
)
(629
)
(1,723
)
(1,709
)
Cash flows from financing
activities:
Repayments of convertible senior notes
attributable to principal
—
—
—
(94
)
Proceeds from employee stock plans
76
71
193
177
Repurchases of common stock
(282
)
—
(282
)
—
Taxes paid related to net share settlement
of equity awards
(127
)
(111
)
(333
)
(352
)
Net cash used in financing activities
(333
)
(40
)
(422
)
(269
)
Foreign currency effect on cash, cash
equivalents and restricted cash
(4
)
(12
)
(4
)
(61
)
Net change in cash, cash equivalents and
restricted cash
(551
)
(416
)
(356
)
(478
)
Cash, cash equivalents and restricted cash
at beginning of period
1,670
1,670
1,475
1,732
Cash, cash equivalents and restricted cash
at end of period
$
1,119
$
1,254
$
1,119
$
1,254
ServiceNow, Inc.
GAAP to Non-GAAP
Reconciliation
(in millions, except per share
data)
(unaudited)
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Gross profit:
GAAP subscription gross profit
$
1,796
$
1,441
$
5,152
$
4,168
Stock-based compensation
52
41
148
116
Amortization of purchased intangibles
20
18
57
54
Business combination and other related
costs
—
2
—
2
Non-GAAP subscription gross profit
$
1,868
$
1,502
$
5,357
$
4,340
GAAP professional services and other gross
loss
$
(4
)
$
(10
)
$
(23
)
$
(21
)
Stock-based compensation
11
17
40
51
Non-GAAP professional services and other
gross profit
$
7
$
7
$
17
$
30
GAAP gross profit
$
1,792
$
1,431
$
5,129
$
4,147
Stock-based compensation
63
58
188
166
Amortization of purchased intangibles
20
18
57
54
Business combination and other related
costs
—
2
—
2
Non-GAAP gross profit
$
1,875
$
1,509
$
5,374
$
4,369
Gross margin:
GAAP subscription gross margin
81
%
83
%
82
%
83
%
Stock-based compensation as % of
subscription revenues
2
%
2
%
2
%
2
%
Amortization of purchased intangibles as %
of subscription revenues
1
%
1
%
1
%
1
%
Business combination and other related
costs as % of subscription revenues
—
%
—
%
—
%
—
%
Non-GAAP subscription gross margin
84
%
86
%
85
%
86
%
GAAP professional services and other gross
margin
(6
%)
(11
%)
(11
%)
(8
%)
Stock-based compensation as % of
professional services and other revenues
15
%
19
%
18
%
19
%
Non-GAAP professional services and other
gross margin
10
%
8
%
8
%
11
%
GAAP gross margin
78
%
78
%
79
%
78
%
Stock-based compensation as % of total
revenues
3
%
3
%
3
%
3
%
Amortization of purchased intangibles as %
of total revenues
1
%
1
%
1
%
1
%
Business combination and other related
costs as % of total revenues
—
%
—
%
—
%
—
%
Non-GAAP gross margin
82
%
82
%
82
%
82
%
Income from operations:
GAAP income from operations
$
231
$
91
$
492
$
200
Stock-based compensation
413
361
1,191
1,038
Amortization of purchased intangibles
21
20
63
60
Business combination and other related
costs
11
8
26
18
Non-GAAP income from operations
$
676
$
480
$
1,772
$
1,316
Operating margin:
GAAP operating margin
10
%
5
%
8
%
4
%
Stock-based compensation as % of total
revenues
18
%
20
%
18
%
20
%
Amortization of purchased intangibles as %
of total revenues
1
%
1
%
1
%
1
%
Business combination and other related
costs as % of total revenues
—
%
—
%
—
%
—
%
Non-GAAP operating margin
30
%
26
%
27
%
25
%
Net income:
GAAP net income
$
242
$
80
$
1,436
$
175
Stock-based compensation
413
361
1,191
1,038
Amortization of purchased intangibles
21
20
63
60
Business combination and other related
costs
11
8
26
18
Income tax effects and adjustments(1)
(64
)
(71
)
(159
)
(212
)
Release of a valuation allowance on
deferred tax assets
(20
)
—
(985
)
—
Non-GAAP net income
$
603
$
398
$
1,572
$
1,079
Net income per share - basic and
diluted:
GAAP net income per share - basic
$
1.18
$
0.39
$
7.04
$
0.87
GAAP net income per share - diluted
$
1.17
$
0.39
$
7.00
$
0.86
Non-GAAP net income per share - basic
$
2.95
$
1.97
$
7.71
$
5.37
Non-GAAP net income per share -
diluted
$
2.92
$
1.96
$
7.66
$
5.31
GAAP weighted-average shares used to
compute net income per share - basic
204
202
204
201
GAAP and Non-GAAP weighted-average shares
used to compute net income per share - diluted
206
203
205
203
Free cash flow:
GAAP net cash provided by operating
activities
$
311
$
265
$
1,793
$
1,561
Purchases of property and equipment
(136
)
(162
)
(433
)
(406
)
Business combination and other related
costs
21
—
24
5
Non-GAAP free cash flow
$
196
$
103
$
1,384
$
1,160
Free cash flow margin:
GAAP net cash provided by operating
activities as % of total revenues
14
%
15
%
27
%
29
%
Purchases of property and equipment as %
of total revenues
(6
%)
(9
%)
(7
%)
(8
%)
Business combination and other related
costs as % of total revenues
1
%
—
%
—
%
—
%
Non-GAAP free cash flow margin
9
%
6
%
21
%
22
%
(1)
We use a non-GAAP effective tax rate for
evaluating our operating results to provide consistency across
reporting periods. Based on our current long-term projections, we
are using a non-GAAP tax rate of 19%. This non-GAAP tax rate could
change for various reasons including significant changes in our
geographic earnings mix or fundamental tax law changes in major
jurisdictions in which we operate.
Note: Numbers are rounded for presentation purposes and may
not foot.
ServiceNow, Inc.
Reconciliation of Non-GAAP
Financial Guidance
Three Months Ending
December 31, 2023
GAAP operating margin
9
%
Stock-based compensation expense as % of
total revenues
17
%
Amortization of purchased intangibles as %
of total revenues
1
%
Business combination and other related
costs as % of total revenues
—
%
Non-GAAP operating margin
27.5
%
Twelve Months Ending
December 31, 2023
GAAP subscription gross margin
81
%
Stock-based compensation expense as % of
subscription revenues
2
%
Amortization of purchased intangibles as %
of subscription revenues
1
%
Non-GAAP subscription margin
84
%
GAAP operating margin
8
%
Stock-based compensation expense as % of
total revenues
18
%
Amortization of purchased intangibles as %
of total revenues
1
%
Business combination and other related
costs as % of total revenues
—
%
Non-GAAP operating margin
27
%
GAAP net cash provided by operating
activities as % of total revenues
37
%
Purchases of property and equipment as %
of total revenues
(7
)%
Business combination and other related
costs as % of total revenues
—
%
Non-GAAP free cash flow margin
30
%
Note: Numbers are rounded for presentation
purposes and may not foot.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231025584896/en/
Media Contact: Johnna Hoff 408.250.8644
press@servicenow.com
Investor Contact: Darren Yip 925.388.7205
ir@servicenow.com
ServiceNow (NYSE:NOW)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
ServiceNow (NYSE:NOW)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024