Servicenow, Inc. · NYSE:NOW
Servicenow — Investor Day (May 2022)
107 slides from Servicenow's investor day presentation, May 24, 2022
Slide 1: Financial Analyst Day 2022
Financial Analyst Day 2022 May 24, 2022 Las Vegas, NV
Slide 2: Welcome
2. Welcome Darren Yip, VP of Investor Relations 6. Vision & Strategy Bill McDermott, President and Chief Executive Officer Nick Tzitzon, Chief Strategy and Corporate Affairs Officer 14. Innovating our Platform for the Future CJ Desai, Chief Operating Officer Welcome 36. A New Era for Technology Work
Slide 3: Safe Harbor and Other Information
Safe Harbor and Other Information This presentation contains “forward-looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward-looking statements include information concerning our possible or assumed strategy, futur
Slide 4: Statement Regarding Use of Non-GAAP Financial Measures
Statement Regarding Use of Non-GAAP Financial Measures 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. We adjust revenues and related growth rates, and current remaining performance obligations
Slide 5: The World Works with ServiceNow
Slide 6: Vision & Strategy
Vision & Strategy Bill McDermott Nick Tzitzon President and Chief Executive Officer Chief Strategy and Corporate Affairs Officer 6
Slide 7: ServiceNow is an enduring platform for a fast-changing world
ServiceNow is an enduring platform for a fast-changing world Secular tailwinds in our favor; Macro crosswinds can be accelerators of enterprise digitization Secular Tailwinds Macro Crosswinds CXOs believe they need digital Business model Inflation and FY22 growth in spend on 64% business models by 2
Slide 8: A Class of One achieving Rule of 60 at scale
A Class of One achieving “Rule of 60” at scale(1) Best in Class Financials Customer and World Class Talent and Shareholder Return Ecosystem Momentum and Culture 30% + 32% = 62% 98% ~80% 18,000+ (+3,800 in 2021) Revenue FCF Rule of 60 Renewal Fortune 500 Total Global growth + Margin (1) In 2021(1) Ra
Slide 9: Our revised ambition reflects our opportunity
Our revised ambition reflects our opportunity FY26 $16B+ $15B+ FY24 $11B+ $10B+ Years since $1B 0 1 2 3 4 5 6 7 8 9 10 Note: Year 0 based on the FY that each company crosses $1B in revenue. ServiceNow FY22 to FY26 uses straight line growth. This does not represent guidance. © 2022 ServiceNow, Inc. A
Slide 10: Our organic trajectory to $16B+ is unparalleled
Our organic trajectory to $16B+ is unparalleled FY26 $16B+ $15B+ FY24 $11B+ $10B+ Years since $1B 0 1 2 3 4 5 6 7 8 9 10 Note: Year 0 based on the FY that each company crosses $1B in revenue. ServiceNow FY22 to FY26 uses straight line growth. This does not represent guidance. SAP and Oracle based on
Slide 11: We are not opportunity constrained
We are not opportunity constrained Expand Accelerate Broaden Scale Platform Opportunity Customer Adoption Market Presence Partner Ecosystem Industry ERP Lightstep Solutions Workflows Observability © 2022 ServiceNow, Inc. All Rights Reserved. 11
Slide 12: The platform for digital business
The platform for digital business Unlock value from existing investments while creating new and compelling digital experiences Digital workflows Customer Employee Technology Creator Workflows across departments, Workflows Workflows Workflows Workflows vendors, partners and customers Platform Foundat
Slide 13: The World Works with ServiceNow
Slide 14: Innovating our Platform for the Future
Innovating our Platform for the Future CJ Desai Chief Operating Officer © 2022 ServiceNow, Inc. All Rights Reserved. 14
Slide 15: We are a platform company
OG WE ARE A PLATFORM COMPANY
Slide 16: Our platform is critical for C-Suite Priorities
Our platform is critical for C-Suite Priorities Our workflow solutions run their business “Lead us to the top of our industry.” CEO “Keep our technology secure, “Foster innovation so we can resilient, and performant.” digitize work more effectively.” Chief Technology Officer CIO/Chief Digital Office
Slide 17: Customers will continue to choose the Now Platform over point solutions
Customers will continue to choose the Now Platform over point solutions What this means • One Architecture for our Customers • ML/AI Built-in Platform • Process Mining Native in Platform • Speed to Value • RPA Native in Platform • Higher Organization Productivity • Enterprise-wide Integrations • Min
Slide 18: Key Customer Outcomes
ServiceNow is the platform for Key Customer Outcomes Customer Employee Experience Experience Technology Operating Excellence Excellence The Low Code Platform for Automation © 2022 ServiceNow, Inc. All Rights Reserved. 18
Slide 19: From JP Morgan Chase's Investor day 5/23/22
From JP Morgan Chase’s Investor day 5/23/22 19
Slide 20: Rapidly Expanding Product Portfolio & Platform Innovation
Rapidly Expanding Product Portfolio & Platform Innovation © 2022 ServiceNow, Inc. All Rights Reserved,
Slide 21: Rapid new product Innovations
Rapid new product Observability & Incident Response Environmental, Social & Governance Innovations Insurance Industry Products Public Sector Digital Services Order Management Vaccine Administration Mgmt Technology Providers Products IT Service Mgmt Enterprise Impact COMING SOON: H2 2022 Customer Ser
Slide 22: Massive potential to grow our customer base with expanded portfolio
We have massive potential to grow our customer base $200B with the newly expanded FY24 TAM (1) portfolio New growth vectors $175B FY24 TAM Pre-built Solutions for Target Industries Enterprise Asset Management Observability & Incident Response ERP Workflow Products Field Service Management Workplace
Slide 23: Our Workflows
Our Workflows continue to evolve for enterprise-wide impact Technology Employee Workflows Workflows Customer Creator Workflows Workflows The Low Code Platform for Automation © 2022 ServiceNow, Inc. All Rights Reserved. 23
Slide 24: Our Workflows
Our Workflows have evolved for enterprise-wide personas Technology Employee Workflows Workflows PERSONAS PERSONAS Information Technology Human Resources Developers & Site Reliability Eng. Workplace / Facilities Security & Risk Practitioners Legal Teams Customer Creator Workflows Workflows PERSONAS P
Slide 25: Customer Workflows
Customer Workflows What this means for our customers TAM $51B Empower employees to deliver FY24 TAM frictionless customer experience Customer experience central to digital business models Solve customer issues Trends • New business models: Direct to consumer, Product as service • Self-service & omni
Slide 26: Employee Workflows
Employee Workflows What this means for our customers TAM $14B Boost employee productivity FY24 TAM (1) and engagement Employee Experience is a critical C-Level priority • Hybrid work is here to stay Transform employee Trends • Criticality of employee engagement and communication journeys • War for t
Slide 27: Creator Workflows
Creator Workflows What this means for our customers TAM $54B Build apps quickly by FY24 TAM ALL developers • Hyper-automation driving innovation and efficiency Any app, built by anyone Trends • Democratization of application innovation to fill developer talent gap governed from a single place • Enab
Slide 28: One Code Base, One Architecture, One Platform
ONE CODE BASE ONE ARCHITECTURE ONE PLATFORM ONE MORE THING... © 2022 ServiceNow, Inc. All Rights Reserved. 28
Slide 29: Introducing ERP workflows
Introducing NEW ERP workflows Procurement Supply Chain Accounts Payable © 2022 ServiceNow, Inc. All Rights Reserved. 29
Slide 30: Impact
NEW Impact Industry-defining value acceleration solution focused on Customer Outcomes Personalizes Amplifies ServiceNow Accelerates Value Experiences Expertise Time-to-Value Built on the © 2022 ServiceNow, Inc. All Rights Reserved. 30
Slide 31: GTM focus is on our unique opportunity
GTM focus is on our unique opportunity Workflows Expansion Target Industries Large growth Opportunity in existing Accounts Financial Services Telco / Media / Tech 4 Workflows Manufacturing Public Sector ~20 Products Healthcare & Life Sciences 3 Packages: Good Better Best Target Growth Geographies Ne
Slide 32: Our world-wide cloud footprint
Our world-wide cloud footprint Continued global expansion while meeting regional standards U.K. Germany Netherlands Canada Switzerland Singapore U.S. Federal Australia 26 Global Datacenters South Korea India Americas: 10 Europe: 8 Japan APJ: 8 Brazil U.S. © 2022 ServiceNow, Inc. All Rights Reserved.
Slide 33: Our ecosystem powers expansion
Our ecosystem powers Integrations expansion Partnerships Public Sector / Geo ServiceNow Standard and Controls Store US Federal DOD: IL4 / IL5 ~1,000 ~90% Partner of customers use Australia IRAP Developed the ServiceNow The Low Code Platform Apps Store ServiceNow Protected for Automation Platform for
Slide 34: Keys to our success
Keys to our success Unrivaled power of the platform A new era Experience design for technology workflows for business impact Pablo Stern Amy Lokey SVP, Technology Workflows SVP, Product Experience © 2022 ServiceNow, Inc. All Rights Reserved. 34
Slide 35: The World Works with ServiceNow
Slide 36: A New Era for Technology Workflows
A New Era for Technology Workflows Pablo Stern SVP & GM, Technology Workflow Products © 2022 ServiceNow, Inc. All Rights Reserved. 36
Slide 37: We are expanding from our core in IT
We are expanding Technology-driven from our core in IT Operations All Technology COOs emerging as a key Teams digital transformation leaders ~$50B Growth in annual COO spend on software by FY25 Core IT innovation Shift to cloud accelerating, DevOps becoming mainstream ~$190B Annual cloud spend incre
Slide 38: We are expanding from our core in IT
We are expanding Technology-driven from our core in IT Operations $70B TAM Technology-driven Operations All Technology Fosters operational excellence for the entire business Teams • Supports the COO transformation agenda $59B All technology teams Core IT Unifies centralized IT and decentralized inno
Slide 39: Core IT innovation
Core IT innovation Significant runway ahead for us in IT as we continue to out-innovate competition Service Operations • ITOM + ITSM better together 6x • Modernize, automate & optimize on a single platform Average customer growth over 3 years • ITSM Standard (2005) Pro (2018) Ent (2021) • ITOM Stand
Slide 40: © 2022 ServiceNow, Inc. All Rights Reserved. Confidential.
© 2022 ServiceNow, Inc. All Rights Reserved. Confidential. 40
Slide 41: All technology teams
All technology teams Plan, build, operate and service applications that drive the digital business Cloud acceleration 1,200+ • Accelerate cloud adoption and migrations Cloud Visibility customers All technology • Cloud Visibility (2019) • Cloud Health (2020) teams • Cloud Insights (2019) • Cloud Gove
Slide 42: © 2022 ServiceNow, Inc. All Rights Reserved. Confidential.
© 2022 ServiceNow, Inc. All Rights Reserved. Confidential. 42
Slide 43: Technology-driven operations
Technology-driven operations Technology-driven Extend and leverage Tech workflows to enable cross-enterprise Operations operational excellence and increase C-Suite relevance IT Risk Enterprise Risk & ESG Integrated Risk and ESG compliance across enterprise with improved visibility and governance • E
Slide 44: Cross-functional excellence in the San Diego Release
Cross-functional excellence in the San Diego Release ai intelligently respond to evolving risks Colaye| future regulatory requirements ine with a 1 modem experience © 2022 ServiceNow, Inc. All Rights Reserved.
Slide 45: Customers are realizing value from our innovation and demanding more
Customers are realizing Technology-driven value from our innovation Operations and demanding more All Technology Teams ~25% Improved enterprise planning productivity Real time enterprise-wide planning ~10% Asset spend reduction Core IT Innovation >17% Higher DevOps Productivity and release throughpu
Slide 46: *" Gina
; i *" Gina Seat mee 7 Pre WORLD WORKE= 5 WITH SERVICENOW a= | i ae eo = © serviceNow, Inc. All Rights Reserved. 46 a ~ — Ap 4
Slide 47: Experience Design for Business Impact
Experience Design for Business Impact Amy Lokey SVP, Product Experience © 2022 ServiceNow, Inc. All Rights Reserved. 47
Slide 48: Great product experience drives business value
Great product experience drives business value Improved workflow productivity and efficiency drive revenue, retention, renewal Cohesive, consumer-grade ML, AI, customization and low design drives affinity, code tools drive innovation, interest, new customers automation, expansion NEXT EXPERIENCE © 2
Slide 49: Next Experience
Slide 50: Next Experience product screen
servicenow ail Welcome, Fred Now it’s easier to do your best work yet. | Check it out Review your work Assignments i Last refreshed 2m ago Number Created + 1NC0001037 Wed, Jan 12 2022 - 10:52 AM 1NC0001038 Fri, Mar 18, 2022 - 11:34 AM 1NC0001039 Thu, Mar 10, 2022 - 03:34 PM INC0001040 Mon, Jan 31, 2
Slide 51: What our customers are saying
What our customers are saying “Well, we might be quiet “More user friendly compared because we are all IN AWE” to other ticketing tools” Public Sector Technology customer customer Next “Shut up and take “It's modern, sleek, my money” tidy yet simple” Experience Telecommunications Healthcare customer
Slide 52: Lifting every product
Slide 53: Automated operations
Automated operations Employee ~ "4 Workflows Customer Workflows Now Support ®?: Hello! “© I'm Now Virtual Agent. How can | help you? Please enter your request or create (0) a link with your ServiceNow account. Please type your request
Slide 54: Employee experience
servicenow. Purchase and expense ~ Legal - Org chart Technology e@ Workflows 9:41 a Employee experience © Customer Workflows Creator 2023 annual goals! anager and £6 priorities for the upcoming year. ‘Apple Phone 13 Google smart WiFi Pro 1286B hotspot sme Myrequests Mor My COVID-19 employee What to
Slide 55: Technology Workflows
> ff Technology Workflows Employee Workflows servicenow All Favorites History Workspaces ¢s00001006 Details Fraud dispute- Tampered cards Work orders si sks Interactions Emails Show KCS results kB001 30901006 Compose secomments & Work notes e your comments he Activity Edna Krabappel made change: rou
Slide 56: Process optimization
Technology Workflows of e Employee 4 Workflows Process optimization . Creator Workflows servicenow. (ts) = Process Models IT Operation: Incident 225k nmary and Insigh Tilers Breakciown fil Alert emai Portal Phone Walken Sock Mobile Apo All Favorites History Workspaces Operations. is Process O} Recor
Slide 57: Creator Workflows
Technology Workflows Employee Workflows Customer Workflows Creator Workflows Hi, Fred How do you want to get started? Quick start ‘kd an automated flow rows My recent apps See all my ap a eT | Plant Maintenance Expense Reporting Emergency Response ‘Work from Home App. Start with a template See all t
Slide 58: Customer performance dashboard
See how you're doing when it comes to customer satisfaction, quality of work, and speed. All Home + Performance Fe Favorites © 2 (2%) since Apr 19 Target 99% | Gap (10% April 19 Response time wie 15H 15H pew Bis 12H 11s 10H History Workspaces? AN 15 Apri 2021 | 0626 PM 1 Siowest tine 1 Average tine
Slide 59: Beautiful enterprise software equals impact
Slide 60: The World Works with ServiceNow
Slide 61: The Customer Experience
The Customer Experience Paul Smith Chief Commercial Officer © 2022 ServiceNow, Inc. All Rights Reserved. 61
Slide 62: Customer Panel
Customer Panel Host: Paul Smith Chief Commercial Officer Aaron Purcell Stephen Whelan Managing Director, Head Executive Director, People Services of Enterprise Architecture © 2022 ServiceNow, Inc. All Rights Reserved. 62
Slide 63: Automation transforms KPMG's core legal intake process
Automation transforms KPMG’s core legal intake process into a smooth, streamlined, Delivering world class audit, and transparent digital system tax, and advisory services ~30 billion In global revenues 200,000+ people In global team Aaron Purcell Managing Director, Head of Enterprise Architecture Le
Slide 64: HR Delivery Services connect departments on a single experience center
HR Delivery Services used to connect 400 departments and 38 divisions on a single One of the most innovative employee experience center universities in the United States 24,000 employees Orange County's second- largest employer 37,000 Stephen Whelan Students Executive Director, People Services Top R
Slide 65: Customer Panel
Customer Panel Host: Paul Smith Chief Commercial Officer Aaron Purcell Stephen Whelan Managing Director, Head Executive Director, People Services of Enterprise Architecture © 2022 ServiceNow, Inc. All Rights Reserved. 65
Slide 66: Financial Overview and ESG Strategy
Financial Overview and ESG Strategy Gina Mastantuono Chief Financial Officer © 2022 ServiceNow, Inc. All Rights Reserved. 66
Slide 67: Sustaining strong organic growth at unprecedented scale
Sustaining strong Subscription Revenues and Y/Y Growth organic growth at unprecedented scale 41% 39% 50% 6,500 34% 32% 30% $ 5,573 5,500 0% 34% USD in Millions 4,500 $ 4,286 -50% 3,500 $ 3,255 -100% $ 2,421 2017 – 2021 CAGR 2,500 Subscription Revenue $ 1,740 -150% 1,500 500 -200% 2017 2018 2019 2020
Slide 68: Robust RPO growth supports continued topline strength
Robust RPO growth supports continued $11.5 topline strength $8.9 2019 – 2021 CAGR $5.8 32% $6.6 USD in Billions $4.5 $3.3 Total RPO 31% $5.7 $4.4 $3.3 Current RPO 2019 2020 2021 Current RPO Noncurrent RPO Note: Numbers rounded for presentation purposes © 2022 ServiceNow, Inc. All Rights Reserved. 68
Slide 69: Plenty of opportunity to win new logos
We have plenty of opportunity to win new logos, and even more products to land them with ~50K Companies with 20%+ New logos 1,000+ employees are landed with and $100M+ revenue non-Technology worldwide(1) Workflows in 2021 (1) ~50K companies with 1,000+ employees and $100M+ revenue worldwide statisti
Slide 70: Landing more products within new logos
We are landing more products within those new logos Average number of products purchased in first year ~30% growth achieved again in just 1 year ~30% growth over 4 years 2016 2020 2021 © 2022 ServiceNow, Inc. All Rights Reserved. 70
Slide 71: Once landed, customers continually expand with us
Once landed, customers continually expand with us 125%+ net expansion rate in 2021 75% 81% 85% 86% 88% 2/3+ of our existing customer base spent 25% 2017 19% 2018 15% 2019 14% 2020 12% 2021 incremental dollars with NOW in 2021 New Customer Net New ACV Expansion Net New ACV Note: Revised mapping of cu
Slide 72: Healthy growth across all cohorts
We continue to see healthy growth across all cohorts Annual Growth of Initial ACV 57% 2022 60% 2021 77% 2020 76% 2019 73% 2018 2017 98% 2016 105% 2015 2014 83% 2013 2012 102% 2011 2010 109% 154% 176%(1) (1) As an illustrative example, 2010 customer cohort started with a contract of initial ACV (annu
Slide 73: A look into a customer's journey
A look into a Year 8 - 9 Today Total product count: 10 customer’s • $1M+ deal each year • $10M+ ACV with • Added CSM, ITAM & HR opportunity for (Safe Workplace Services) further expansion Year 7 journey • ~$3M 2013 Cohort NNACV from $10M+ upgrade to ITSM Pro and SPM & Risk addition A Large Telecommu
Slide 74: A look into a customer's journey
A look into a Today customer’s Total product count: 9 • ~$10M ACV customer in Year 3 3 years with opportunity • ~$3M NNACV deal with ITSM, for further expansion journey SPM, App Engine, CSM, HR Pro & Platform Foundation 2019 Cohort Year 2 ~$10M A Government Agency • ~$3M NNACV from CSM upsale and In
Slide 75: Comprehensive platform solution driving bigger deals and $1M+ customers
Selling a comprehensive platform solution is driving bigger deals and growing our $1M+ customer base $1M+ Deals(1) $1M+ Customers(2) ~40% ~3X Y/Y Growth in 2021 Increase in number of customers between 2017-2021 (1) $1M+ deals refer to transactions with over $1M net new annual contract value that wer
Slide 76: Our largest customers are expanding even faster
And our largest customers 23 are expanding even faster 66 1,345 Customers with $1M+ ACV 176 ~95% 2017 – 2021 CAGR for $10M+ 1,080 ACV Customer Count # of Customers in 2021 $20M+ ACV $10M-$20M ACV $5M-$10M ACV $1M-$5M ACV Note: Previously disclosed number of customers with ACV greater than $1 million
Slide 77: Continued strength in core Technology Workflows
Continued strength in core Technology Workflows with further runway 50%+ 2017 – 2021 CAGR ACV of each emerging technology product(1) <20% Average customer penetration for emerging technology products(1) (1) Emerging technology products includes ITAM, Risk, Security & SPM (Strategic Portfolio Managem
Slide 78: Massive opportunity to cross-sell our newer workflows
With a massive opportunity to cross-sell our newer workflows ~10% of our customers are using all 4 Workflows(1) Technology Employee Customer Creator Workflows Workflows Workflows Workflows © 2022 ServiceNow, Inc. All Rights Reserved. 78
Slide 79: Deepen customer relationship with AI powered experiences in premium SKUs
Deepen the customer relationship with AI powered experiences in our premium SKUs ~25% Realized ITSM price uplift Pro SKU vs. Standard SKU ~30% ~60% ITSM Pro SKU penetration 2021 ITSM new customer ACV is from Pro SKU © 2022 ServiceNow, Inc. All Rights Reserved. 79
Slide 80: Industry solutions exhibiting strong potential
Industry solutions are also already exhibiting strong potential Telecommunication SKUs Top 20 G2K Telco companies 45% Penetrated ServiceNow Telco customers 13%Penetrated ~2.5x Average deal size for Telco industry solutions vs. traditional CSM deals © 2022 ServiceNow, Inc. All Rights Reserved. 80
Slide 81: Time between sales shortens as a customer expands
Time between sales shortens as a customer expands with us… Average deal size also increased with subsequent sales for customers from 2016-2021 Time Between Sales © 2022 ServiceNow, Inc. All Rights Reserved. 81
Slide 82: Improvement in Sales Rep Productivity
…Driving continued improvement in Sales Rep Productivity… Total Sales Rep Productivity(1) ~43% ~16% Y/Y Increase in 2021 2017 2021 (1) Total sales rep productivity defined as commissionable NNACV divided by total sales representatives included in ending period headcount. Note: Numbers rounded for pr
Slide 83: Increasing Sales Efficiency
Which has led to increasing Sales Efficiency(1) First FY at $1B $2B $4B $5B 5.1X 3.5X 3.6X 2.9X Sales Efficiency(1) at Different Total Revenue Milestones 2015(2) 2018 2020 2021 (1) Sales Efficiency is calculated on a non-GAAP basis and represents the change in total revenue in the respective year, d
Slide 84: Now Buying Program makes it easy for largest customers to grow
Our Now Buying Program makes it easy for our largest customers to grow with us • 100+ Now Buying Program (NBP) deals in 2021 Early • Delivered twice the ACV growth vs. overall $1M+ deals Success • Closed with comparable price performance Customer • NPS scores for NBP customers are Feedback 14pts hig
Slide 85: Non-GAAP Operating Profit and Margin
The efficiency of our Non-GAAP Operating Profit and Margin %(1) platform and land-and- $2,000 25% 25% expand growth engine $1,800 21% 20% drive strong profitability $1,600 18% $1,482 20% $1,400 43% $1,200 $1,121 USD in Millions 10% $1,000 $800 $740 $600 $528 0% $400 $352 2017 – 2021 CAGR Non-GAAP Op
Slide 86: Non-GAAP Free Cash Flow and Margin
And robust free cash Non-GAAP Free Cash Flow and Margin %(1) flow leverage 32% 32% 28% 28% 30% 26% $2,000 $1,867 20% 40% 10% $1,500 $1,449 USD in Millions 0% $971 -10% $1,000 $732 -20% 2017 – 2021 CAGR $492 -30% Non-GAAP Free Cash Flow $500 -40% $- -50% 2017 2018 2019 2020 2021 (1) Non-GAAP Free cas
Slide 87: Unmatched combination of growth and profitability
ServiceNow generates an unmatched combination 70% of growth and profitability 64% 63% 62% at our current scale 61% without any large M&A(1) 53% 57% 54% 50% 44% Free Cash Flow Margin Plus Total Revenue Growth Rate(2) at Full Year Revenue Milestones First FY at $1B+ First FY at $2B+ First FY at $3B+ F
Slide 88: Momentum continues in 2022: Strong Topline Growth
And that momentum continues in 2022: Strong Topline Growth… Subscription Revenue Current RPO 26% 28.5% $7.0 25% 28% $5.9 Growth CC Growth(1) Growth CC Growth(1) $5.6 $4.7 USD in Billions 2021 2022E Q2 2021 Q2 2022E (1) Non-GAAP growth rates for subscription revenues and cRPO are adjusted for constan
Slide 89: Paired with Strong Free Cash Flow
…paired with Strong Free Cash Flow $2.2B 2022E Free Cash Flow 31% 2022E Free Cash Flow Margin Note: Free cash flow growth based off the 2022 guidance of 31% free cash flow margin provided on 4/27/22, with the assumption that professional services grows inline with the mid-point of our subscription r
Slide 90: Annual share dilution below average vs our peers
Annual share dilution below average vs our peers(1) 3.5% 3.5% 2021 Employee Share Dilution(2): 2.6% 1.6% 1.7% 0.6% ADBE NOW TEAM CRM WDAY ZEN SBC as a % of revenue expected to decline over time (1) Software peers include ADBE, CRM, TEAM, WDAY, ZEN. Fiscal year period corresponds to most recent 10-K
Slide 91: Strategic Investments to Drive Growth and Scale
Strategic Investments to Drive Growth and Scale No other software company has achieved NOW’s size, growth, and profitability profile organically 1 2 3 Product Go-to-Market Talent • Innovate NOW Platform • Scale industries GTM • Competitive compensation and benefits • Secure our relevance with • Scal
Slide 92: ESG Strategy
ESG Strategy © 2022 ServiceNow, Inc. All Rights Reserved. 92
Slide 93: ESG strategy: Key initiatives
ESG strategy We make the world work better for everyone Sustaining our planet Creating equitable opportunity Acting with integrity Championing the transition to a Making work more equitable, accessible, Building trust through ethical, transparent, net-zero world and rewarding for all people and secu
Slide 94: Our ESG journey
Our ESG journey Creating an impact beyond our four walls to enable everyone to contribute to a more sustainable, equitable, and ethical world 2021 Highlights • Launched and adopted ESG Command Center solution suite including the ESG Management Solution • Achieved carbon neutrality(1) and 100% renewa
Slide 95: Long-Term Targets
Long-Term Targets © 2022 ServiceNow, Inc. All Rights Reserved. 95
Slide 96: 2024 Target operating model
2024 Target operating model Subscription Non-GAAP Non-GAAP Free Revenues Operating Margin Cash Flow Margin 33% 33% $11+ 27% $10+ 26.5% 31% USD in Billions $7+ 25% 2022E Prior 2024E 2024E 2022E Prior 2024E 2024E 2022E Prior 2024E 2024E <2% Annual Dilution 19-20% Non-GAAP Tax Rate Note: 2022 estimates
Slide 97: Our largest customers will continue expanding even faster
CAGR ~50 ~30% ~150 ~31% 23 ~19% ~300 66 Our largest 176 ~16% customers ~1,700 will continue 1,080 expanding 1,345 customers with $1M+ ACV in 2021 ~2,200 customers with $1M+ ACV in 2024E even faster # of Customers $20M+ ACV $10M-$20M ACV $5M-$10M ACV $1M-$5M ACV Note: Previously disclosed number of c
Slide 98: Workflow NNACV Mix
Non-Technology workflows are expected 9% 15% 20% to generate the majority 14% of NNACV at $11B in 28% subscription revenue Workflow NNACV Mix 35% 77% 57% 45% 2017 2021 2024E Technology Workflows Customer & Employee Workflows Creator & Workflows & Others Other workflows (1) Historical presentations d
Slide 99: Geo NNACV Mix
And 40% of NNACV is expected to come from 9% 10% 13% EMEA and APJ at $11B in 26% subscription revenue 27% 28% Geo NNACV Mix 65% 63% 59% 2017 2021 2024E AMS EMEA APJ © 2022 ServiceNow, Inc. All Rights Reserved. 99
Slide 100: Subscription Revenue
j of Subscription Revenue of A servicenow. >. .
Slide 101: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation © 2022 ServiceNow, Inc. All Rights Reserved. 101
Slide 102: GAAP to Non-GAAP Reconciliation – Subscription Revenues
GAAP to Non-GAAP Reconciliation – Subscription Revenues Q2-22E 2022E In millions (except %’s) Q1-20 Q2-20 Q3-20 Q4-20 2020 Q1-21 Q2-21 Q3-21 Q4-21 2021 Q1-22 Midpoint Midpoint GAAP Subscription Revenues $995 $1,015 $1,091 $1,184 $4,286 $1,293 $1,330 $1,427 $1,523 $5,573 $1,631 $1,673 $7,033 (+) Effe
Slide 103: GAAP to Non-GAAP Reconciliation – cRPO and RPO
GAAP to Non-GAAP Reconciliation – cRPO and RPO In billions (except %’s) 2019 2020 2021 Q1-22 Q2-22E GAAP Current Remaining Performance Obligations at Period End $3.3 $4.4 $5.7 $5.7 N/A Y/Y Current Remaining Performance Obligations Growth Rates(2) N/A N/A N/A N/A 25% (+) Effects of Foreign Currency R
Slide 104: GAAP to Non-GAAP Reconciliation – Sales and Marketing Expense
GAAP to Non-GAAP Reconciliation – Sales and Marketing Expense In millions (except %’s and per share data) 2013* 2014* 2015* 2016 2017 2018 2019 2020 2021 GAAP Sales and Marketing $195 $341 $498 $660 $895 $1,203 $1,534 $1,855 $2,292 (-) Sales and Marketing SBC $22 $54 $102 $132 $171 $228 $268 $320 $3
Slide 105: GAAP to Non-GAAP Reconciliation – Operating Income and Operating Margin
GAAP to Non-GAAP Reconciliation – Operating Income and Operating Margin In millions (except %’s 2017 Margin 2018 Margin 2019 Margin 2020 Margin 2021 Margin and per share data) GAAP Income (Loss) from Operations $(64) (3%) $(42) (2%) $42 1% $199 5% $257 5% (-) SBC $394 21% $544 21% $662 19% $870 19%
Slide 106: GAAP to Non-GAAP Reconciliation – Free Cash Flow and Free Cash Flow Margin
GAAP to Non-GAAP Reconciliation – Free Cash Flow and Free Cash Flow Margin In millions (except %’s 2015* Margin* 2016 Margin 2017 Margin 2018 Margin 2019 Margin 2020 Margin 2021 Margin Q1-22 Margin 2022E Margin and per share data) GAAP Net Cash $318 32% $159 12% $643 33% $811 31% $1,236 36% $1,787 3
Slide 107: Thank you
Thank you Financial Analyst Day 2022