Sign In  |  Register  |  About Walnut Creek Guide  |  Contact Us

Walnut Creek, CA
September 01, 2020 1:43pm
7-Day Forecast | Traffic
  • Search Hotels in Walnut Creek Guide

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

ServiceNow Reports Fourth Quarter and Full-Year 2023 Financial Results

  • ServiceNow exceeds guidance across all Q4 2023 topline growth and profitability metrics; raises 2024 subscription revenues and operating margin outlook
  • Subscription revenues of $2,365 million in Q4 2023, representing 27% year-over-year growth, 25.5% in constant currency
  • Total revenues of $2,437 million in Q4 2023, representing 26% year-over-year growth, 24% in constant currency
  • Current remaining performance obligations of $8.60 billion as of Q4 2023, representing 24% year-over-year growth, 23% in constant currency
  • 168 transactions over $1 million in net new ACV in Q4 2023, up 33% year-over-year

ServiceNow (NYSE: NOW), the leading digital workflow company making the world work better for everyone, today announced financial results for its fourth quarter ended December 31, 2023, with subscription revenues of $2,365 million in Q4 2023, representing 27% year-over-year growth and 25.5% in constant currency.

“ServiceNow closed out the year with another outstanding quarter,” said ServiceNow Chairman and CEO Bill McDermott. “Generative AI is injecting new fuel into our already high-performing engine. ServiceNow’s intelligent platform for end-to-end digital transformation is driving massive leaps in productivity and explosive growth. This is a breakthrough moment.”

As of December 31, 2023, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $8.60 billion, representing 24% year-over-year growth and 23% in constant currency. The company now has 1,897 total customers with more than $1 million in annual contract value (“ACV”), representing 15% year-over-year growth in customers.

“Once again we exceeded our topline growth and operating margin guidance metrics, showcasing ServiceNow’s consistent and relentless focus on execution,” said ServiceNow CFO Gina Mastantuono. “We ended Q4 with a 99% renewal rate, accelerating large new logo growth, and the strongest NNACV contribution for any new product family with the introduction of our Plus SKUs. The accelerating pace of investment in workflow automation and generative AI positions us well for another strong year and we are raising our outlook for 2024.”

Recent Business Highlights

  • In its first full quarter since the launch of Now Assist, ServiceNow saw the largest net-new ACV contribution for a first quarter of any new product family release. The company also continued to execute on its ambitious generative AI roadmap, launching a major expansion to its Now Assist generative AI portfolio with Now Assist in Virtual Agent, flow generation, and Now Assist for Field Service Management.
  • The company continued to grow its AI-related partnerships—including a strategic partnership with DXC—to integrate ServiceNow advanced analytics and enhanced AI capabilities into DXC Platform XTM. ServiceNow also announced a five-year Strategic Collaboration Agreement with Amazon Web Services (AWS) to offer the ServiceNow Platform and full suite of solutions in the AWS Marketplace. The two companies will also co-develop and launch industry-specific, AI powered applications.
  • Today, ServiceNow announced a broader strategic alliance with EY to empower responsible AI use for enterprise customers, deliver unified solutions for AI compliance and governance, and bring AI-enhanced experiences to EY employees and clients with ServiceNow Now Assist.
  • Additionally, ServiceNow and Visa today announced a five-year strategic alliance to transform payment services experiences. The initial phase includes the launch of ServiceNow Disputes Management, Built with Visa–– a single, connected solution for disputes resolution.
  • In Q4, ServiceNow joined the AI Alliance launched by IBM and Meta, to advance open, safe, and responsible AI. The AI Alliance consists of a broad range of organizations that are working across aspects of AI education, research, development and deployment, and governance to support open innovation and open science in AI.
  • The company announced its acquisition of task mining company UltimateSuite to bolster automation and AI capabilities, helping customers identify process bottlenecks and drive stronger operational efficiencies.
  • Aston Martin Aramco Cognizant Formula One® Team announced ServiceNow as the intelligent platform partner to streamline the team’s AMR Technology Campus.
  • During the quarter, ServiceNow repurchased 400,000 shares of its common stock for $256 million as part of its share repurchase program, with the primary objective of managing the impact of dilution from future employee equity grants and employee stock purchase programs. $962 million of the original authorized amount remains available for future share repurchases under the existing program.
  • The company received significant recognition during the quarter, ranking #1 in the software category and #5 overall in the American Opportunity Index, as well as #3 on Glassdoor’s Best Places to Work 2023. ServiceNow was further recognized by placing on Fortune World’s 25 Best Workplaces™ and Fortune 100 Best Large Workplaces for Women™ lists(1). The company was also named a Leader in both the Forrester Wave™: Governance, Risk, and Compliance and The Forrester Wave™: Digital Process Automation Software.
(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.

Fourth Quarter 2023 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the fourth quarter 2023:

 

Fourth Quarter 2023 GAAP Results

 

Fourth Quarter 2023 Non-GAAP Results(1)

 

Amount

($ millions)

Year/Year

Growth (%)

 

Amount

($ millions)(3)

Year/Year

Growth (%)

Subscription revenues

$2,365

27%

 

$2,332

25.5%

Professional services and other revenues

$72

(10%)

 

$71

(11%)

Total revenues

$2,437

26%

 

$2,403

24%

 

 

 

 

 

 

 

Amount

($ billions)

Year/Year

Growth (%)

 

Amount

($ billions)(3)

Year/Year

Growth (%)

cRPO

$8.60

24%

 

$8.52

23%

RPO

$18.0

29%

 

$17.9

27.5%

 

 

 

 

 

 

 

Amount

($ millions)

Margin (%)

 

Amount

($ millions)(2)

Margin (%)(2)

Subscription gross profit

$1,922

81%

 

$1,996

84%

Professional services and other gross profit (loss)

($1)

(1%)

 

$11

15%

Total gross profit

$1,921

79%

 

$2,007

82%

Income from operations

$270

11%

 

$717

29%

Net cash provided by operating activities

$1,605

66%

 

 

 

Free cash flow

 

 

 

$1,344

55%

 

 

 

 

 

 

 

Amount

($ millions)

Earnings per

Basic/Diluted

Share ($)

 

Amount

($ millions)(2)

Earnings per

Basic/Diluted

Share ($)(2)

Net income

$295

$1.44 / 1.43

 

$643

$3.14 / 3.11

(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.

Full-Year 2023 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the full-year 2023:

 

 

 

 

 

 

 

Full-Year 2023 GAAP Results

 

Full-Year 2023 Non-GAAP Results(1)

 

Amount

($ millions)

Year/Year

Growth (%)

 

Amount

($ millions)(3)

Year/Year

Growth (%)

Subscription revenues

$8,680

26 %

 

$8,647

25.5%

Professional services and other revenues

$291

(18%)

 

$290

(18%)

Total revenues

$8,971

24 %

 

$8,937

23.5%

 

 

 

 

 

 

 

Amount

($ billions)

Year/Year

Growth (%)

 

Amount

($ billions)(3)

Year/Year

Growth (%)

cRPO

$8.60

24%

 

$8.52

23%

RPO

$18.0

29%

 

$17.9

27.5%

 

 

 

 

 

 

 

Amount

($ millions)

Margin (%)

 

Amount

($ millions)(2)

Margin (%)(2)

Subscription gross profit

$7,074

82%

 

$7,353

85%

Professional services and other gross profit (loss)

($24)

(8%)

 

$28

10%

Total gross profit

$7,050

79%

 

$7,381

82%

Income from operations

$762

8%

 

$2,489

28%

Net cash provided by operating activities

$3,398

38%

 

 

 

Free cash flow

 

 

 

$2,728

30%

 

 

 

 

 

 

 

Amount

($ millions)

Earnings per

Basic/Diluted

Share ($)

 

Amount

($ millions)(2)

Earnings per

Basic/Diluted

Share ($)(2)

Net income

$1,731

$8.48 / $8.42

 

$2,215

$10.85 / $10.78

(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. Our Q1 2024 cRPO guidance reflects the continued strength of our public sector business, which drives a higher mix of 12-month contracts and self-hosted deals, both of which contribute to subscription revenue growth but whose economic benefits are not fully represented in cRPO growth. As we have previously mentioned, the Q3 2023 strength of our U.S. Federal business has resulted in a higher mix of contracts containing 12-month renewal terms. This will create a negative 1.5-point impact and negative 2-point impact to Q1 and Q2 2024 cRPO growth, respectively, as that balance is amortized into revenue. We expect that these contracts will renew in Q3 2024 as ServiceNow’s U.S. Federal renewal rates have been 99%.

The following table summarizes our guidance for the first quarter 2024:

 

First Quarter 2024

GAAP Guidance

 

First Quarter 2024

Non-GAAP Guidance(1)

 

Amount

($ millions)(3)

Year/Year

Growth (%)(3)

 

Constant Currency

Year/Year Growth (%)

 

Subscription revenues

$2,510 - $2,515

24% - 24.5%

 

23.5% - 24%

 

 

 

 

 

 

 

cRPO

 

20%

 

20%

 

Note: Includes impact from strength of public sector business noted above

 

 

 

 

 

 

 

 

 

Margin (%)(2)

 

Income from operations

 

 

 

29%

 

 

 

 

 

 

 

 

 

Amount

(millions)

 

 

 

Weighted-average shares used to compute diluted net income per share

 

208

 

 

 

(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 31-day average of foreign exchange rates for December 2023 for entities reporting in currencies other than U.S. Dollars.

The following table summarizes our guidance for the full-year 2024:

 

Full-Year 2024

GAAP Guidance

 

Full-Year 2024

Non-GAAP Guidance(1)

 

Amount

($ millions)(3)

Year/Year

Growth (%)(3)

 

Constant Currency

Year/Year Growth (%)

Subscription revenues

$10,555 - $10,575

21.5% - 22%

 

21.5%

 

 

 

 

 

 

 

 

 

Margin (%)(2)

Subscription gross profit

 

 

 

84.5%

Income from operations

 

 

 

29%

Free cash flow

 

 

 

31%

 

 

 

 

 

 

 

Amount

(millions)

 

 

Weighted-average shares used to compute diluted net income per share

 

208

 

 

(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 2024 guidance are based on the 31-day average of foreign exchange rates for December 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 (22:00 GMT) on January 24, 2024. 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/685457644

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 Chief Financial Officer Gina Mastantuono will participate in a fireside chat at the Morgan Stanley Technology, Media & Telecom Conference on Monday, March 4, 2024, at 2:10 p.m. PT.

The live webcast 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 Q4 2022, the average exchange rates in effect for our major currencies were 1 USD to 0.98 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 Q4 2023, the average exchange rates in effect for our major currencies were 1 USD to 0.93 Euros and 1 USD to 0.81 GBP). Guidance for related growth rates is 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 Q4 2022, the end of the period exchange rates in effect for our major currencies were 1 USD to 0.93 Euros and 1 USD to 0.83 GBP), rather than the actual end of the period exchange rates in effect during the current period (for Q4 2023, the end of the period exchange rates in effect for our major currencies were 1 USD to 0.91 Euros and 1 USD to 0.79 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 outflows 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 armed conflicts 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, 2023, and in 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 ServiceNowTM. 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

 

Year Ended

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Revenues:

 

 

 

 

 

 

 

Subscription

$

2,365

 

 

$

1,860

 

 

$

8,680

 

 

$

6,891

 

Professional services and other

 

72

 

 

 

80

 

 

 

291

 

 

 

354

 

Total revenues

 

2,437

 

 

 

1,940

 

 

 

8,971

 

 

 

7,245

 

Cost of revenues (1):

 

 

 

 

 

 

 

Subscription

 

443

 

 

 

324

 

 

 

1,606

 

 

 

1,187

 

Professional services and other

 

73

 

 

 

91

 

 

 

315

 

 

 

386

 

Total cost of revenues

 

516

 

 

 

415

 

 

 

1,921

 

 

 

1,573

 

Gross profit

 

1,921

 

 

 

1,525

 

 

 

7,050

 

 

 

5,672

 

Operating expenses (1):

 

 

 

 

 

 

 

Sales and marketing

 

847

 

 

 

722

 

 

 

3,301

 

 

 

2,814

 

Research and development

 

562

 

 

 

454

 

 

 

2,124

 

 

 

1,768

 

General and administrative

 

242

 

 

 

194

 

 

 

863

 

 

 

735

 

Total operating expenses

 

1,651

 

 

 

1,370

 

 

 

6,288

 

 

 

5,317

 

Income from operations

 

270

 

 

 

155

 

 

 

762

 

 

 

355

 

Interest income

 

86

 

 

 

39

 

 

 

302

 

 

 

82

 

Other expense, net

 

(9

)

 

 

(11

)

 

 

(56

)

 

 

(38

)

Income before income taxes

 

347

 

 

 

183

 

 

 

1,008

 

 

 

399

 

Provision for (benefit from) income taxes

 

52

 

 

 

33

 

 

 

(723

)

 

 

74

 

Net income

$

295

 

 

$

150

 

 

$

1,731

 

 

$

325

 

Net income per share - basic

$

1.44

 

 

$

0.74

 

 

$

8.48

 

 

$

1.61

 

Net income per share - diluted

$

1.43

 

 

$

0.74

 

 

$

8.42

 

 

$

1.60

 

Weighted-average shares used to compute net income per share - basic

 

205

 

 

 

203

 

 

 

204

 

 

 

201

 

Weighted-average shares used to compute net income per share - diluted

 

207

 

 

 

203

 

 

 

206

 

 

 

204

 

 

(1) Includes stock-based compensation as follows:

 

 

Three Months Ended

 

Year Ended

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Cost of revenues:

 

 

 

 

 

 

 

Subscription

$

54

 

$

41

 

$

202

 

$

157

Professional services and other

 

12

 

 

16

 

 

52

 

67

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

127

 

 

122

 

 

505

 

459

Research and development

 

149

 

 

127

 

 

579

 

495

General and administrative

 

71

 

 

57

 

 

266

 

223

 

ServiceNow, Inc.

Condensed Consolidated Balance Sheets

(in millions)

 

 

December 31, 2023

 

December 31, 2022

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,897

 

$

1,470

Short-term investments

 

2,980

 

 

2,810

Accounts receivable, net

 

2,036

 

 

1,725

Current portion of deferred commissions

 

461

 

 

369

Prepaid expenses and other current assets

 

403

 

 

280

Total current assets

 

7,777

 

 

6,654

Deferred commissions, less current portion

 

919

 

 

742

Long-term investments

 

3,203

 

 

2,117

Property and equipment, net

 

1,358

 

 

1,053

Operating lease right-of-use assets

 

715

 

 

682

Intangible assets, net

 

224

 

 

232

Goodwill

 

1,231

 

 

824

Deferred tax assets

 

1,508

 

 

636

Other assets

 

452

 

 

359

Total assets

$

17,387

 

$

13,299

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

126

 

$

274

Accrued expenses and other current liabilities

 

1,365

 

 

975

Current portion of deferred revenue

 

5,785

 

 

4,660

Current portion of operating lease liabilities

 

89

 

 

96

Total current liabilities

 

7,365

 

 

6,005

Deferred revenue, less current portion

 

81

 

 

70

Operating lease liabilities, less current portion

 

707

 

 

650

Long-term debt, net

 

1,488

 

 

1,486

Other long-term liabilities

 

118

 

 

56

Stockholders’ equity

 

7,628

 

 

5,032

Total liabilities and stockholders’ equity

$

17,387

 

$

13,299

 

ServiceNow, Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)

 

 

Three Months Ended

 

Year Ended

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

295

 

 

$

150

 

 

$

1,731

 

 

$

325

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

154

 

 

 

118

 

 

 

562

 

 

433

 

Amortization of deferred commissions

 

126

 

 

 

97

 

 

 

459

 

 

358

 

Stock-based compensation

 

413

 

 

 

363

 

 

 

1,604

 

 

1,401

 

Deferred income taxes

 

17

 

 

 

18

 

 

 

(857

)

 

15

 

Other

 

13

 

 

 

8

 

 

 

 

 

17

 

Changes in operating assets and liabilities, net of effect of business combinations:

 

 

 

 

 

 

 

Accounts receivable

 

(852

)

 

 

(785

)

 

 

(300

)

 

(340

)

Deferred commissions

 

(264

)

 

 

(197

)

 

 

(717

)

 

(566

)

Prepaid expenses and other assets

 

(20

)

 

 

34

 

 

 

(203

)

 

(39

)

Accounts payable

 

46

 

 

 

56

 

 

 

(142

)

 

172

 

Deferred revenue

 

1,302

 

 

 

1,060

 

 

 

1,085

 

 

904

 

Accrued expenses and other liabilities

 

375

 

 

 

240

 

 

 

176

 

 

43

 

Net cash provided by operating activities

 

1,605

 

 

 

1,162

 

 

 

3,398

 

 

2,723

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(261

)

 

 

(144

)

 

 

(694

)

 

(550

)

Business combinations, net of cash acquired

 

 

 

 

(34

)

 

 

(282

)

 

(91

)

Purchases of investments

 

(829

)

 

 

(1,227

)

 

 

(4,634

)

 

(4,038

)

Purchases of non-marketable investments

 

(19

)

 

 

(29

)

 

 

(75

)

 

(167

)

Sales and maturities of investments

 

654

 

 

 

545

 

 

 

3,522

 

 

2,245

 

Other

 

11

 

 

 

15

 

 

 

(4

)

 

18

 

Net cash used in investing activities

 

(444

)

 

 

(874

)

 

 

(2,167

)

 

 

(2,583

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Repayments of convertible senior notes attributable to principal

 

 

 

 

 

 

 

 

 

 

(94

)

Proceeds from employee stock plans

 

1

 

 

 

 

 

 

194

 

 

 

177

 

Repurchases of common stock

 

(256

)

 

 

 

 

 

(538

)

 

 

 

Taxes paid related to net share settlement of equity awards

 

(126

)

 

 

(75

)

 

 

(459

)

 

 

(427

)

Net cash used in financing activities

 

(381

)

 

 

(75

)

 

 

(803

)

 

 

(344

)

Foreign currency effect on cash, cash equivalents and restricted cash

 

5

 

 

 

8

 

 

 

1

 

 

 

(53

)

Net change in cash, cash equivalents and restricted cash

 

785

 

 

 

221

 

 

 

429

 

 

 

(257

)

Cash, cash equivalents and restricted cash at beginning of period

 

1,119

 

 

 

1,254

 

 

 

1,475

 

 

 

1,732

 

Cash, cash equivalents and restricted cash at end of period

$

1,904

 

 

$

1,475

 

 

$

1,904

 

 

$

1,475

 

 

ServiceNow, Inc.

GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

(unaudited)

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

2023

 

December 31,

2022

 

December 31,

2023

 

December 31,

2022

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

GAAP subscription gross profit

$

1,922

 

 

$

1,536

 

 

$

7,074

 

 

$

5,704

 

 

Stock-based compensation

 

54

 

 

 

41

 

 

 

202

 

 

 

157

 

 

Amortization of purchased intangibles

 

20

 

 

 

18

 

 

 

77

 

 

 

72

 

 

Business combination and other related costs

 

 

 

 

 

 

 

 

 

 

2

 

 

Non-GAAP subscription gross profit

$

1,996

 

 

$

1,595

 

 

$

7,353

 

 

$

5,935

 

 

 

 

 

 

 

 

 

 

 

GAAP professional services and other gross loss

$

(1

)

 

$

(11

)

 

$

(24

)

 

$

(32

)

 

Stock-based compensation

 

12

 

 

 

16

 

 

 

52

 

 

 

67

 

 

Non-GAAP professional services and other gross profit

$

11

 

 

$

5

 

 

$

28

 

 

$

35

 

 

 

 

 

 

 

 

 

 

 

GAAP gross profit

$

1,921

 

 

$

1,525

 

 

$

7,050

 

 

$

5,672

 

 

Stock-based compensation

 

66

 

 

 

57

 

 

 

254

 

 

 

224

 

 

Amortization of purchased intangibles

 

20

 

 

 

18

 

 

 

77

 

 

 

72

 

 

Business combination and other related costs

 

 

 

 

 

 

 

 

 

 

2

 

 

Non-GAAP gross profit

$

2,007

 

 

$

1,600

 

 

$

7,381

 

 

$

5,970

 

 

 

 

 

 

 

 

 

 

 

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

 

(1

%)

 

 

(14

%)

 

 

(8

%)

 

 

(9

%)

 

Stock-based compensation as % of professional services and other revenues

 

17

%

 

 

20

%

 

 

18

%

 

 

19

%

 

Non-GAAP professional services and other gross margin

 

15

%

 

 

6

%

 

 

10

%

 

 

10

%

 

 

 

 

 

 

 

 

GAAP gross margin

 

79

%

 

 

79

%

 

 

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

%

 

 

83

%

 

 

82

%

 

 

82

%

 

 

 

 

 

 

 

 

 

 

Income from operations:

 

 

 

 

 

 

 

 

GAAP income from operations

$

270

 

 

$

155

 

 

$

762

 

 

$

355

 

 

Stock-based compensation

 

413

 

 

 

363

 

 

 

1,604

 

 

 

1,401

 

 

Amortization of purchased intangibles

 

22

 

 

 

20

 

 

 

85

 

 

 

80

 

 

Business combination and other related costs

 

12

 

 

 

6

 

 

 

38

 

 

 

24

 

 

Non-GAAP income from operations

$

717

 

 

$

544

 

 

$

2,489

 

 

$

1,860

 

 

 

 

 

 

 

 

 

 

 

Operating margin:

 

 

 

 

 

 

 

 

GAAP operating margin

 

11

%

 

 

8

%

 

 

8

%

 

 

5

%

 

Stock-based compensation as % of total revenues

 

17

%

 

 

19

%

 

 

18

%

 

 

19

%

 

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

 

29

%

 

 

28

%

 

 

28

%

 

 

26

%

 

 

 

 

 

 

 

 

 

 

Net income:

 

 

 

 

 

 

 

 

GAAP net income

$

295

 

 

$

150

 

 

$

1,731

 

 

$

325

 

 

Stock-based compensation

 

413

 

 

 

363

 

 

 

1,604

 

 

 

1,401

 

 

Amortization of purchased intangibles

 

22

 

 

 

20

 

 

 

85

 

 

 

80

 

 

Business combination and other related costs

 

12

 

 

 

6

 

 

 

38

 

 

 

24

 

 

Income tax effects and adjustments(1)

 

(34

)

 

 

(75

)

 

 

(193

)

 

 

(287

)

 

Release of a valuation allowance on deferred tax assets

 

(65

)

 

 

 

 

 

(1,050

)

 

 

 

 

Non-GAAP net income

$

643

 

 

$

464

 

 

$

2,215

 

 

$

1,543

 

 

 

 

 

 

 

 

 

 

 

Net income per share - basic and diluted:

 

 

 

 

 

 

 

 

GAAP net income per share - basic

$

1.44

 

 

$

0.74

 

 

$

8.48

 

 

$

1.61

 

 

GAAP net income per share - diluted

$

1.43

 

 

$

0.74

 

 

$

8.42

 

 

$

1.60

 

 

Non-GAAP net income per share - basic

$

3.14

 

 

$

2.29

 

 

$

10.85

 

 

$

7.66

 

 

Non-GAAP net income per share - diluted

$

3.11

 

 

$

2.28

 

 

$

10.78

 

 

$

7.59

 

 

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares used to compute net income per share - basic

 

205

 

 

 

203

 

 

 

204

 

 

 

201

 

 

 

 

 

 

 

 

 

 

 

GAAP weighted-average shares used to compute net income per share - diluted

 

207

 

 

 

203

 

 

 

206

 

 

 

204

 

 

Effects of in-the-money portion of convertible senior notes(2)

 

 

 

 

 

 

 

 

 

 

(1

)

 

GAAP and Non-GAAP weighted-average shares used to compute net income per share - diluted

 

207

 

 

 

203

 

 

 

206

 

 

 

203

 

 

 

 

 

 

 

 

 

 

 

Free cash flow:

 

 

 

 

 

 

 

 

GAAP net cash provided by operating activities

$

1,605

 

 

$

1,162

 

 

$

3,398

 

 

$

2,723

 

 

Purchases of property and equipment

 

(261

)

 

 

(144

)

 

 

(694

)

 

 

(550

)

 

Business combination and other related costs

 

 

 

 

2

 

 

 

24

 

 

 

7

 

 

Non-GAAP free cash flow

$

1,344

 

 

$

1,020

 

 

$

2,728

 

 

$

2,180

 

 

 

 

 

 

 

 

 

 

 

Free cash flow margin:

 

 

 

 

 

 

 

 

GAAP net cash provided by operating activities as % of total revenues

 

66

%

 

 

60

%

 

 

38

%

 

 

38

%

 

Purchases of property and equipment as % of total revenues

 

(11

%)

 

 

(7

%)

 

 

(8

%)

 

 

(8

%)

 

Business combination and other related costs as % of total revenues

 

%

 

 

%

 

 

%

 

 

%

 

Non-GAAP free cash flow margin

 

55

%

 

 

53

%

 

 

30

%

 

 

30

%

 

(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.

(2)

Effects of dilutive time-based stock awards, in-the-money portion of convertible senior notes and warrants are included in the GAAP weighted-average diluted shares in periods where we have GAAP net income. We exclude the in-the-money portion of convertible senior notes for non-GAAP weighted-average diluted shares as they are covered by our note hedges. We include stock awards with performance conditions not yet satisfied for non-GAAP weighted average diluted shares at forecasted attainment levels to the extent we believe it is probable that the performance condition will be met.

 

Note: Numbers are rounded for presentation purposes and may not foot.

ServiceNow, Inc.

Reconciliation of Non-GAAP Financial Guidance

 

 

Three Months Ending

 

March 31, 2024

 

 

 

 

GAAP operating margin

11

%

 

 

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

29

%

 

 

Twelve Months Ending

 

December 31, 2024

 

 

 

 

GAAP subscription gross margin

81.5

%

 

 

Stock-based compensation expense as % of subscription revenues

2

%

 

 

Amortization of purchased intangibles as % of subscription revenues

1

%

 

 

Non-GAAP subscription margin

84.5

%

 

 

GAAP operating margin

12

%

 

 

Stock-based compensation expense as % of total revenues

16

%

 

 

Amortization of purchased intangibles as % of total revenues

1

%

 

 

Business combination and other related costs as % of total revenues

%

 

 

Non-GAAP operating margin

29

%

 

 

GAAP net cash provided by operating activities as % of total revenues

39

%

 

 

Purchases of property and equipment as % of total revenues

(8

%)

 

 

Business combination and other related costs as % of total revenues

%

 

 

Non-GAAP free cash flow margin

31

%

 

 

Note: Numbers are rounded for presentation purposes and may not foot.

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 WalnutCreekGuide.com & California Media Partners, LLC. All rights reserved.