Document

EX-99.1 3 erq3fy24.htm EX-99.1 Document

サービスナウは2024年第三四半期の財務結果を報告しました

•サービスナウは、2024年の第3四半期にすべてのトップライン成長と収益性のメトリクスでガイダンスを上回し、2024年のサブスクリプション収益のガイダンスを引き上げます

•2024年第3四半期の定期収入は271500万ドルで、前年比23％の成長を示し、一定の通貨で22.5％です。

•2024年第3四半期の総収入は279700万ドルで、前年比22%増の通貨ベースでは22%増加しています

•2024年第3四半期時点での93.6億ドルの現在の残存業務義務は、前年比26%の成長、為替レートを考慮して23.5%増加しています。

•2024年第3四半期時点で、195億ドルの未履行契約があり、前年比36%の増加、為替レートを考慮した場合は33%増加しています。

•2024年第3四半期には、500万ドル以上の純新規ACV取引が15件あり、前年比50％増加しました。

カリフォルニア州サンタクララ、2024年10月23日 - サービスナウ（NYSE: NOW）は、ビジネス変革のための人工知能プラットフォームとして知られる企業です。本日、2024年9月30日に終了したサービスナウの第3四半期の財務結果を発表し、2024年第3四半期のサブスクリプション収入は271500万ドルで、前年比23%の成長を達成しました。為替レートを考慮した状況では、22.5%成長しました。

「サービスナウの会長兼CEOビル・マクダーモットは、第3四半期の結果の強さを受けて、当社の通期トップラインのガイダンスを引き上げました。さらに、これは期待を上回るもので、既存および新規顧客が、ビジネス変革のための人工知能プラットフォームとしてサービスナウへの投資を倍増していることに起因しています。人々のために人工知能を活用するという要請は、世代を超えたテクノロジーシフトを表しています。我々は、サービスナウのチーム、プラットフォーム、エンタープライズソフトウェアの最高の成長企業としての地位について、これまで以上に自信を持っています。」

2024年9月30日現在、次の12か月で収益化される契約収益残高（「cRPO」）は93.6億ドルで、前年比26%の成長率と通貨ベースで23.5%を表しています。現在、企業は合計2020人以上の顧客を抱え、年間契約価値（「ACV」）が100万ドルを超える顧客の年間成長率は14%です。

「Q3は、Now Platformへの強力な需要と優れたチームの実行に支えられた素晴らしい四半期でした」とサービスナウのCFOであるジーナ・マスタントーノは述べています。「Now Assistが既に素晴らしい結果を提供している中、最新のXanaduリリースは、これまでにないAI革新の包括的なセットを実現し、我々の持続的なトップラインの成長とマージンの拡大をさらに後押しします。」

サービスナウは、エンタープライズソフトウェア業界のベテランであるAmit Zaveryを2024年10月28日から製品やエンジニアリングをリードするために、社長、最高製品責任者（CPO）、最高執行責任者（COO）に任命しました。 A以上のエンタープライズテクノロジーで30年以上の経験を持ち、Google CloudやOracleでの以前のリーダーシップにあたるZaveryは、エンタープライズの革新、変革、スケールにおいて包括的な経験を持つビジョナリーリーダーです。 Zaveryの責任範囲には、サービスナウのプラットフォーム、製品、エンジニアリング、クラウドインフラ、ユーザーエクスペリエンス、および企業全体の運営が含まれており、すべてのソリューションがサービスナウの顧客の実際のビジネスニーズを満たすように確認されます。

最近のビジネスのハイライト

イノベーション

•サービスナウはAIを顧客に活用しています。第3四半期のNow Platform Xanaduリリースでは、サービスナウの過去最大規模のAIリリースが行われ、Now Assistスキルキットやテレコム、メディア、テクノロジー、金融サービス、公共セクターなどの業種向けの数百の追加および新しいAI機能が導入されました。

•ザナドゥと並行して、アジェンティック人工知能をサービスナウプラットフォームに統合し、大規模な24時間体制の生産性を解き放つ計画を発表しました。最先端の推論に基づき、Nowプラットフォームを通じたクロスエンタープライズデータに基づいて、サービスナウ人工知能エージェントは、より一般的なプロンプトベースのアクティビティから深い文脈理解に進化し、堅牢な監督とガバナンスのために人々をループに維持します。最初のユースケースは、11月に顧客サービス管理（CSM）およびITサービス管理（ITSM）向けに利用可能になります。

•今日、企業はサービスナウワークフローデータファブリックを発表しました。これは、エンタープライズ全体でビジネスとテクノロジーデータを統合する統合データレイヤーであり、あらゆるワークフローや人工知能エージェントをリアルタイムかつ安全にデータソースからのアクセスで駆動します。自動化エンジンとRaptorDb Proハイパフォーマンスデータベースによって動作し、ワークフローデータファブリックは、超高速かつスケールでのオーケストレーションと自動化により価値を引き出します。

•先月の国際連合総会で、サービスナウは、テクノロジー、知識、機会へのより大きなアクセスを通じて、より良い世界を築くというコミットメントを実証しました。ServiceNow.orgなどの取り組みを通じて、サービスナウは、非営利団体や顧客とのパートナーシップを加速し、10億人に到達するという大胆な野望を掲げています。これには、同社が慈善活動を通じて2000万人に肯定的な影響を及ぼすという目標も含まれています。

パートナーシップ

•今日、企業は複数のパートナーシップ発表を行い、サービスナウのエコシステム拡大とビジネス変革の加速を図ることを発表しました。ServiceNowとNVIDIAは、ServiceNowプラットフォーム内でNVIDIA NIm Agent Blueprintsを使用してネイティブAIエージェントを共同開発し、お客様が簡単にオンにできるビジネス知識に基づくユースケースを作成します。また、ServiceNowとSiemensは、産業用サイバーセキュリティを強化し、GenAIをショップフロアのオペレーションに統合するためのコラボレーションを発表しました。さらに、ServiceNowとリミニストリートは、レガシーERPシステムの価値を引き出すためのパートナーシップを発表しました。そして、ServiceNowとピアソンは、人工知能の時代における労働力開発と従業員エクスペリエンスの強化を計画することを発表しました。

•10月初旬、サービスナウとズームは、企業のGenAI技術を統合する拡大戦略提携を発表しました。これにより、サービスナウのNow AssistとズームのAIコンパニオンを活用して、タスクやアクティビティのための先進的なワークフロー自動化が提供されます。

グローバルな拡大

•四半期にわたり、人工知能やテクノロジースキルの拡大を図る取り組みを継続してきたサービスナウは、新たにシンガポールのリパブリックポリテクニックとのナショナルアカデミック・パートナーシップを発表しました。これにより、数百人の新人や生涯にわたる学習者が、政府のスマートネーション政策をサポートするために新興の人工知能やクラウドコンピューティングの役割へアクセスできるようになります。

•今月末に、企業はidc関連の需要の増加に対応して、ミラノとローマに新しいデータセンターペアを立ち上げる予定です。データセンターペアは、顧客の俊敏性を向上させ、生産性を向上させ、イノベーションを促進するのに役立ちます。

•10月、サービスナウは、次の5年でイギリスのビジネスに累計で15億ドル投資する計画を発表しました。これには、従業員数の増加、オフィススペースの拡大、および人工知能スキルプログラムの計画が含まれています。

投資

•サービスナウは、普通株式の約272,000株を$22500万で買い戻しました。これは、株式買い戻しプログラムの一環で、普通株式の希薄化の影響を管理することを主な目的としています。元の承認額のうち、約$56200万が既存のプログラムの下で将来の株式買い戻しのために利用可能です。

Recognition

•As a testament to ServiceNow’s workplace culture, ServiceNow was awarded 10th place on the Fortune Best Workplaces in Technology list1, in addition to placing on the TIME World's Best Companies, PEOPLE Companies that Care, Fast Company 100 Best Workplaces for Innovators, and more.

Third Quarter 2024 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the third quarter 2024:



	Third Quarter 2024 GAAP Results			Third Quarter 2024 Non-GAAP Results(1)
	Amount ($ millions)	Year/Year Growth (%)		Amount ($ millions)(3)	Year/Year Growth (%)
Subscription revenues	$2,715	23	%	$2,711	22.5	%
Professional services and other revenues	$82	14	%	$81	13.5	%
Total revenues	$2,797	22	%	$2,792	22	%





	Amount ($ billions)	Year/Year Growth (%)		Amount ($ billions)(3)	Year/Year Growth (%)
cRPO	$9.36	26	%	$9.18	23.5	%
RPO	$19.5	36	%	$19.1	33	%

	Amount ($ millions)	Margin (%)		Amount ($ millions)(2)	Margin (%)(2)
Subscription gross profit	$2,219	82	%	$2,305	85	%
Professional services and other gross (loss) profit	($6)	(7	%)	$5	7	%
Total gross profit	$2,213	79	%	$2,310	83	%
Income from operations	$418	15	%	$872	31	%
Net cash provided by operating activities	$671	24	%
Free cash flow				$471	17	%

	Amount ($ millions)	Earnings per Basic/Diluted Share ($)		Amount ($ millions)(2)	Earnings per Basic/Diluted Share ($)(2)
Net income	$432	$2.09 / $2.07		$775	$3.76 / $3.72

(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 and total revenues are adjusted for constant currency by excluding effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts. Professional services and other 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 are adjusted for constant currency by excluding effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts, and cRPO are adjusted only for constant currency to provide better visibility into the underlying business trends.

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


	Fourth Quarter 2024 GAAP Guidance			Fourth Quarter 2024 Non-GAAP Guidance(1)
	Amount ($ millions)(3)	Year/Year Growth (%)(3)		Constant Currency Year/Year Growth (%)
Subscription revenues	$2,875 - $2,880	21.5% - 22%		20.5	%

cRPO		21.5	%	21.5	%


				Margin (%)(2)
Income from operations				29	%

		Amount (millions)
Weighted-average shares used to compute diluted net income per share		209

(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 2024 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	$10,655 - $10,660	23	%	22.5	%

				Margin (%)(2)
Subscription gross profit				84.5	%
Income from operations				29.5	%
Free cash flow				31	%

		Amount (millions)
Weighted-average shares used to compute diluted net income per share		208

(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 30-day average of foreign exchange rates for September 2024 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 (“PT”) (21:00 GMT) on October 23, 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/941960692

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 (609) 800‑9909 (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 four upcoming investor conferences.

These include:

•ServiceNow Global Executive Committee Member Nick Tzitzon will participate in a fireside chat at the RBC Capital Markets 2024 Global TIMT Conference on Wednesday, November 20, 2024 at 10:20am PT.

•ServiceNow Chief Financial Officer Gina Mastantuono will participate in a keynote presentation at the UBS Global Technology Conference on Tuesday, December 3, 2024 at 9:15am PT.

•ServiceNow Chief Financial Officer Gina Mastantuono will participate in a keynote presentation at the Wells Fargo TMT Summit on Wednesday, December 4, 2024 at 12:00pm PT.

•ServiceNow Chief Financial Officer Gina Mastantuono will participate in a keynote presentation at the Barclays Global Technology Conference on Wednesday, December 11, 2024 at 12:10pm 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 and any gains or losses from foreign currency hedge contracts that are reported in the current and comparative period. To exclude the effect of foreign currency rate fluctuations, 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 2023, the average exchange rates in effect for our major currencies were 1 USD to 0.92 Euros and 1 USD to 0.79 British Pound Sterling (“GBP”)), rather than the actual average exchange rates in effect during the current period (for Q3 2024, the average exchange rates in effect for our major currencies were 1 USD to 0.91 Euros and 1 USD to 0.77 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, adjusted for any foreign currency hedging effects. 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 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), rather than the actual end of the period exchange rates in effect during the current period (for Q3 2024, the end of the period exchange rates in effect for our major currencies were 1 USD to 0.90 Euros and 1 USD to 0.75 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” and statements regarding the expected benefits of our announced partnerships. 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, and realize the anticipated benefits thereof; 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) is putting AI to work for people. We move with the pace of innovation to help customers transform organizations across every industry while upholding a trustworthy, human centered approach to deploying our products and services at scale. Our AI platform for business transformation connects people, processes, data, and devices to increase productivity and maximize business outcomes. For more information, visit: www.servicenow.com.

© 2024 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.

Media Contact:

Johnna Hoff

(408) 250-8644

press@servicenow.com

Investor Contact:

Darren Yip

(925) 388-7205

ir@servicenow.com

ServiceNow, Inc.

Condensed Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Revenues:
Subscription	$	2,715	$	2,216	$	7,780	$	6,315
Professional services and other	82		72		247		219
Total revenues	2,797		2,288		8,027		6,534
Cost of revenues (1):
Subscription	496		420		1,406		1,163
Professional services and other	88		76		250		242
Total cost of revenues	584		496		1,656		1,405
Gross profit	2,213		1,792		6,371		5,129
Operating expenses (1):
Sales and marketing	944		799		2,827		2,454
Research and development	626		549		1,875		1,562
General and administrative	225		213		679		621
Total operating expenses	1,795		1,561		5,381		4,637
Income from operations	418		231		990		492
Interest income	108		82		313		216
Other expense, net	(10)		(14)		(28)		(47)
Income before income taxes	516		299		1,275		661
Provision for (benefit from) income taxes	84		57		234		(775)
Net income	$	432	$	242	$	1,041	$	1,436
Net income per share - basic	$	2.09	$	1.18	$	5.06	$	7.04
Net income per share - diluted	$	2.07	$	1.17	$	5.00	$	7.00
Weighted-average shares used to compute net income per share - basic	206		204		206		204
Weighted-average shares used to compute net income per share - diluted	209		206		208		205

(1)Includes stock-based compensation as follows:


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Cost of revenues:
Subscription	$	64	$	52	$	184	$	148
Professional services and other	11		11		35		40
Operating expenses:
Sales and marketing	144		132		419		378
Research and development	150		150		479		430
General and administrative	57		68		175		195

ServiceNow, Inc.

Condensed Consolidated Balance Sheets

(in millions)


	September 30, 2024		December 31, 2023
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,885	$	1,897
Short-term investments	3,410		2,980
Accounts receivable, net	1,308		2,036
Current portion of deferred commissions	502		461
Prepaid expenses and other current assets	591		403
Total current assets	7,696		7,777
Deferred commissions, less current portion	946		919
Long-term investments	3,829		3,203
Property and equipment, net	1,718		1,358
Operating lease right-of-use assets	661		715
Intangible assets, net	214		224
Goodwill	1,291		1,231
Deferred tax assets	1,444		1,508
Other assets	635		452
Total assets	$	18,434	$	17,387
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	165	$	126
Accrued expenses and other current liabilities	1,058		1,365
Current portion of deferred revenue	5,457		5,785
Current portion of operating lease liabilities	106		89


Total current liabilities	6,786		7,365
Deferred revenue, less current portion	77		81
Operating lease liabilities, less current portion	650		707
Long-term debt, net	1,489		1,488
Other long-term liabilities	142		118
Stockholders’ equity	9,290		7,628
Total liabilities and stockholders’ equity	$	18,434	$	17,387

ServiceNow, Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Cash flows from operating activities:
Net income	$	432	$	242	$	1,041	$	1,436
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	144		146		410		408

Amortization of deferred commissions	140		115		403		333

Stock-based compensation	426		413		1,292		1,191
Deferred income taxes	(5)		30		47		(874)




Other	(6)		(11)		(31)		(13)
Changes in operating assets and liabilities, net of effect of business combinations:
Accounts receivable	228		(83)		727		552
Deferred commissions	(155)		(173)		(461)		(453)
Prepaid expenses and other assets	(15)		(47)		(267)		(183)
Accounts payable	(130)		(98)		42		(188)
Deferred revenue	(263)		(128)		(355)		(217)
Accrued expenses and other liabilities	(125)		(95)		(216)		(199)
Net cash provided by operating activities	671		311		2,632		1,793
Cash flows from investing activities:
Purchases of property and equipment	(202)		(136)		(599)		(433)
Business combinations, net of cash acquired(1)	(41)		(279)		(82)		(279)
Purchases of other intangibles	—		(3)		(30)		(3)
Purchases of investments	(1,292)		(984)		(3,952)		(3,805)
Purchases of non-marketable investments	(61)		(10)		(149)		(56)
Sales and maturities of investments	911		915		3,024		2,868

Other	27		(28)		25		(15)
Net cash used in investing activities	(658)		(525)		(1,763)		(1,723)
Cash flows from financing activities:








Proceeds from employee stock plans	106		76		237		193
Repurchases of common stock	(225)		(282)		(400)		(282)
Taxes paid related to net share settlement of equity awards	(173)		(127)		(525)		(333)
Business combination (1)	—		—		(184)		—
Net cash used in financing activities	(292)		(333)		(872)		(422)
Foreign currency effect on cash, cash equivalents and restricted cash	5		(4)		(8)		(4)
Net change in cash, cash equivalents and restricted cash	(274)		(551)		(11)		(356)
Cash, cash equivalents and restricted cash at beginning of period	2,167		1,670		1,904		1,475
Cash, cash equivalents and restricted cash at end of period	$	1,893	$	1,119	$	1,893	$	1,119

(1) The nine-months period ended September 30, 2024 reflects a reclassification of $184 million from investing activities to financing activities related to the second installment payment made in the acquisition of G2K Group GmbH during the three months ended March 31, 2024.

ServiceNow, Inc.

GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

(unaudited)


	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023




























































Gross profit:
GAAP subscription gross profit	$	2,219		$	1,796		$	6,374		$	5,152
Stock-based compensation	64			52			184			148
Amortization of purchased intangibles	22			20			64			57

Non-GAAP subscription gross profit	$	2,305		$	1,868		$	6,622		$	5,357

GAAP professional services and other gross loss	$	(6)		$	(4)		$	(3)		$	(23)
Stock-based compensation	11			11			35			40


Non-GAAP professional services and other gross profit	$	5		$	7		$	32		$	17

GAAP gross profit	$	2,213		$	1,792		$	6,371		$	5,129
Stock-based compensation	75			63			219			188
Amortization of purchased intangibles	22			20			64			57

Non-GAAP gross profit	$	2,310		$	1,875		$	6,654		$	5,374

Gross margin:
GAAP subscription gross margin	82		%	81		%	82		%	82		%
Stock-based compensation as % of subscription revenues	2		%	2		%	2		%	2		%
Amortization of purchased intangibles as % of subscription revenues	1		%	1		%	1		%	1		%

Non-GAAP subscription gross margin	85		%	84		%	85		%	85		%

GAAP professional services and other gross margin	(7		%)	(6		%)	(1		%)	(11		%)
Stock-based compensation as % of professional services and other revenues	13		%	15		%	14		%	18		%


Non-GAAP professional services and other gross margin	7		%	10		%	13		%	8		%

GAAP gross margin	79		%	78		%	79		%	79		%
Stock-based compensation as % of total revenues	3		%	3		%	3		%	3		%
Amortization of purchased intangibles as % of total revenues	1		%	1		%	1		%	1		%

Non-GAAP gross margin	83		%	82		%	83		%	82		%


	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Income from operations:
GAAP income from operations	$	418		$	231		$	990		$	492
Stock-based compensation	426			413			1,292			1,191
Amortization of purchased intangibles	23			21			71			63
Business combination and other related costs	4			11			29			26

Non-GAAP income from operations	$	872		$	676		$	2,383		$	1,772

Operating margin:
GAAP operating margin	15		%	10		%	12		%	8		%
Stock-based compensation as % of total revenues	15		%	18		%	16		%	18		%
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	31		%	30		%	30		%	27		%


























Net income:
GAAP net income	$	432		$	242		$	1,041		$	1,436
Stock-based compensation	426			413			1,292			1,191
Amortization of purchased intangibles	23			21			71			63
Business combination and other related costs	4			11			29			26



Income tax effects and adjustments(1)	(110)			(64)			(300)			(159)
Release of a valuation allowance on deferred tax assets	—			(20)			—			(985)
Non-GAAP net income	$	775		$	603		$	2,133		$	1,572

Net income per share - basic and diluted:
GAAP net income per share - basic	$	2.09		$	1.18		$	5.06		$	7.04
GAAP net income per share - diluted	$	2.07		$	1.17		$	5.00		$	7.00
Non-GAAP net income per share - basic	$	3.76		$	2.95		$	10.37		$	7.71
Non-GAAP net income per share - diluted	$	3.72		$	2.92		$	10.26		$	7.66

Weighted-average shares used to compute net income per share - basic	206			204			206			204







Weighted-average shares used to compute net income per share - diluted	209			206			208			205

Free cash flow:
GAAP net cash provided by operating activities	$	671		$	311		$	2,632		$	1,793
Purchases of property and equipment	(202)			(136)			(599)			(433)


Business combination and other related costs	2			21			22			24
Non-GAAP free cash flow	$	471		$	196		$	2,055		$	1,384


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Free cash flow margin:
GAAP net cash provided by operating activities as % of total revenues	24	%	14	%	33	%	27	%
Purchases of property and equipment as % of total revenues	(7	%)	(6	%)	(7	%)	(7	%)


Business combination and other related costs as % of total revenues	—	%	1	%	—	%	—	%
Non-GAAP free cash flow margin	17	%	9	%	26	%	21	%

(1)We use a non-GAAP effective tax rate for evaluating our operating results to provide consistency across reporting periods. Based on our long-term projections, we are using a non-GAAP tax rate of 20% and 19% for the three and nine months ended September 30, 2024 and 2023, respectively. 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, 2024

























GAAP operating margin	13	%

Stock-based compensation expense as % of total revenues	15	%

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	12.5	%

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	29.5	%

GAAP net cash provided by operating activities as % of total revenues	38	%

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	31	%

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