Servicenow, Inc. · NYSE:NOW

Servicenow — Q1 2022 Earnings Presentation

26 slides from Servicenow's earnings presentation, Apr 27, 2022

  1. Slide 1: Investor Presentation First Quarter 2022

    Investor Presentation First Quarter 2022

  2. Slide 2: 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

  3. Slide 3: 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

  4. Slide 4: We make the world work better for everyone

    We make the world work better for everyone™ Our 7,400+ global enterprise ServiceNow helps digitize and customers(1) include approximately Our aspiration is to be the unify organizations so that they 80% of the Fortune 500. They all rely defining enterprise software can find smarter, faster, better o

  5. Slide 5: Now Platform: Optimize processes, connect silos, and create new value

    Now Platform®: Optimize processes, connect silos, and create new value on a single, unifying platform to digitize your entire business. Technology Employee Customer Creator Workflows Workflows Workflows Workflows Accelerate digital Deliver a unified Deliver frictionless Build connected transformatio

  6. Slide 6: Q1-22 Financial Highlights

    Q1-22 Financial Highlights Increase Non-GAAP Constant Q1 2022 Results Quarterly Results Currency Impact Y/Y(1) (Decrease) Y/Y Currency Y/Y(2) Subscription Revenues $1,631M 26% ~250bps headwind 29% Current RPO (cRPO) $5.69B 29% ~150bps headwind 30.5% Remaining Performance Obligations (RPO) $11.5B 30%

  7. Slide 7: Guidance Summary

    Guidance Summary Currency Impact Quarterly Increase Non-GAAP Constant Q2 2022 Y/Y Included in Guidance (Decrease) Y/Y Currency Y/Y(2) Guidance(1) Subscription Revenues $1,670M - $1,675M 26% ~300bps headwind 29% Non-GAAP Operating Margin(3) 22% ~(300)bps NA NA Current RPO (cRPO) Growth(4) 25% NA ~300

  8. Slide 8: Comparison to Previously Issued Guidance

    Comparison to Previously Issued Guidance ($M) Subscription Revenues Y/Y Growth 25% 26% 26% 26% Q1-22A FY22E Prev. Guidance Midpoint(1) Currency Impact(2) Q1 Performance Actual Results Guidance Change Current Guidance Midpoint (1) Refers to previously issued financial guidance dated 1/26/22 (2) GAAP

  9. Slide 9: Year-Over-Year Subscription Revenues Growth

    Year-Over-Year Subscription Revenues Growth 34% 31% 31% 30% 32% 32% 30% 30% 31% 29% 30% 30% 29% 30% 27% 28% 26% 26% Subscription Revenues Q1-21A Q2-21A Q3-21A Q4-21A Q1-22A FY21A Previous Year Growth Actual Growth Non-GAAP Constant Currency Sub Revenue Growth (1) (1) Non-GAAP constant currency subsc

  10. Slide 10: Comparison of Constant Currency Subscription Revenues Growth Guidance to Prior Year Results

    Comparison of Constant Currency Subscription Revenues Growth Guidance to Prior Year Results 29% 28.5% 28% 26.5% Non-GAAP Subscription Revenues Constant Currency Growth(1) Constant Currency Growth Guidance Midpoint(1) Q2-21A Q2-22E FY21A FY22E (1) Constant currency subscription revenues growth rates

  11. Slide 11: Currency Impact to Year-Over-Year Sub. Revenues

    Currency Impact to Year-Over-Year Sub. Revenues $1,538 $1,631 $1,666 $5,573 $5,496 $1,330 $1,285 $1,427 $1,416 $1,523 ($11) $15 $35 ($77) ($44) ($M) Subscription Revenues Q2-21A Q3-21A Q4-21A Q1-22A FY21A Y/Y Growth 31% 27% 31% 30% 29% 30% 26% 29% 30% 28% Actuals Currency Impact Non-GAAP Constant Cu

  12. Slide 12: Remaining Performance Obligations

    Remaining Performance Obligations ($B) Current RPO Noncurrent RPO Q1-22 $11.5 $11.5 Y/Y Growth $9.5 $9.7 $8.8 +30% / +31.5% cc(1) $5.8 $5.8 Total RPO $4.8 $4.7 $4.4 $4.75 $4.96 $5.68 $5.69 $4.42 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 cRPO Y/Y Growth 33% 34% 32% 29% 29% cRPO cc(1) Y/Y Growth 29% 31% 32% 32% 3

  13. Slide 13: Customer Cohort Growth

    Customer Cohort Growth Annual Growth of Initial ACV 57% 60% 77% 76% 73% 98% 105% 83% 102% 109% 154% 176% (1) (1) As an illustrative example, 2010 customer cohort started with a contract of initial ACV (annual contract value) of $100 and grew to ACV of $2,212 as of Q1-22, and represents growth of ini

  14. Slide 14: Expansion of Customer Relationships

    Expansion of Customer Relationships $3.9 $3.8 $3.7 $3.6 $3.5 $3.5 $3.4 1,401 ($M) $3.3 1,345 $3.2 1,252 1,192 1,131 1,077 1,004 925 959 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Number of Customers with $1M+ ACV Avg ACV of Customers with $1M+ ACV Note: Previously disclosed number of cust

  15. Slide 15: Net New ACV Contribution Across Workflows and Products

    Net New ACV Contribution Across Workflows and Products (1) Technology Workflows Customer & Employee Workflows Creator Workflows & Others 14% 17% 15% 14% 20% 25% 28% 27% 25% 26% 61% 57% 57% 59% 55% Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 (1) Historical presentations disclosed net new ACV contribution across pr

  16. Slide 16: Renewal Rate

    Renewal Rate 99% 98% 98% 97% 97% Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Note: We adjust our Renewal Rate for acquisitions, consolidations and other customer events that cause the merging of two or more accounts occurring at the time of renewal. Previously disclosed renewal rates may be restated to reflect su

  17. Slide 17: GAAP Revenues by Geography

    GAAP Revenues by Geography North America EMEA APAC & Other 10% 10% 10% 10% 10% 25% 27% 27% 27% 25% 65% 63% 63% 63% 65% Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 © 2022 ServiceNow, Inc. All Rights Reserved © 2022 ServiceNow, Inc. All Rights Reserved. Confidential. 17 ®

  18. Slide 18: Headcount by Department

    Headcount by Department PS & Other Cost of Sales Sub. Cost of Sales S&M R&D G&A 16,881 17,884 15,947 15,048 2,459 2,353 13,988 2,256 2,055 1,876 5,422 5,138 4,840 4,560 4,251 5,969 6,362 5,501 5,668 5,090 2,144 2,286 2,407 1,908 2,000 863 932 1,039 1,135 1,234 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 © 2022 Se

  19. Slide 19: Non-GAAP Gross Margins

    Non-GAAP Gross Margins Non-GAAP Subscription Gross Margin 86% 86% 86% 85% 85% 85% 85% Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 FY20 FY21 Non-GAAP PS & Other Gross Margin 14% 17% 17% 15% 15% 16% 12% Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 FY20 FY21 Non-GAAP Total Gross Margin 82% 81% 81% 81% 83% 82% 81% Q1-21 Q2-21 Q3-21

  20. Slide 20: Non-GAAP Operating and Free Cash Flow Margins

    Non-GAAP Operating and Free Cash Flow Margins Non-GAAP Operating Margin 27% 26% 25% 25% 25% 25% 23% Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 FY20 FY21 Non-GAAP Free Cash Flow Margin 46% 46% 45% 32% 32% 19% 15% Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 FY20 FY21 Note: All figures are calculated on a non-GAAP basis. See app

  21. Slide 21: Non-GAAP Net Income and Diluted EPS

    Non-GAAP Net Income and Diluted EPS Non-GAAP Net Income ($M) $1,201 $926 $306 $287 $314 $296 $352 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 FY20 FY21 $5.92 $4.63 Non-GAAP Diluted EPS $1.52 $1.42 $1.55 $1.46 $1.73 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 FY20 FY21 Note: All figures are calculated on a non-GAAP basis. See a

  22. Slide 22: GAAP to Non-GAAP Reconciliation

    GAAP to Non-GAAP Reconciliation © 2022 ServiceNow, Inc. All Rights Reserved. Confidential. 22 ®

  23. Slide 23: GAAP to Non-GAAP Reconciliation – Revenues

    GAAP to Non-GAAP Reconciliation – Revenues in millions (except %'s) Q1-20 Q2-20 Q3-20 Q4-20 2020 Q1-21 Q2-21 Q3-21 Q4-21 2021 Q1-22 Q2-22E Midpoint 2022E 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

  24. Slide 24: GAAP to Non-GAAP Reconciliation – Remaining Performance Obligations

    GAAP to Non-GAAP Reconciliation – Remaining Performance Obligations in billions (except %'s) Q1-21 Q2-21 Q3-21 Q4-21 2021 Q1-22 Q2-22E 2022E Midpoint GAAP Current Remaining Performance Obligations at Period End $ 4.42 $ 4.75 $ 4.96 $ 5.68 $ 5.68 $ 5.69 N/A N/A (2) YoY Current Remaining Performance O

  25. Slide 25: GAAP to Non-GAAP Reconciliation – Other

    GAAP to Non-GAAP Reconciliation – Other in millions (except %'s and per share data) Q1-21 Margin Q2-21 Margin Q3-21 Margin Q4-21 Margin 2021 Margin Q1-22 Margin Q2-22E Margin 2022E Margin GAAP Subscription Gross Profit $ 1,065 82% $ 1,082 81% $ 1,163 81% $ 1,241 82% $ 4,551 82% $ 1,356 83% N/A N/A N

  26. Slide 26: GAAP to Non-GAAP Reconciliation – Other (cont.)

    GAAP to Non-GAAP Reconciliation – Other (cont.) in millions (except %'s and per share data) Q1-21 Margin Q2-21 Margin Q3-21 Margin Q4-21 Margin 2021 Margin Q1-22 Margin Q2-22E Margin 2022E Margin GAAP Weighted-Average Shares Used to Compute Net Income (Loss) per 202 N/A 202 N/A 203 N/A 204 N/A 203 N

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