Servicenow, Inc. · NYSE:NOW

Servicenow — Investor Day (May 2024)

161 slides from Servicenow's investor day presentation, May 2024

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
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 (“revenues”), and current remaining performance
Slide 4: Agenda and speakers
Customer and Industry Workflows John Ball Terence Chesire Platform Gen AI and User Experience Amy Lokey Opening Joe Davis Darren Yip Break Vision and Opportunity Bill McDermott Nick Tzitzon Go-to-Market Strategy Paul Smith Platform Innovation CJ Desai Financial Overview Gina Mastantuono Technology W
Slide 5: Vision and opportunity
Vision and opportunity Bill McDermott Nick Tzitzon Chairman & CEO Chief Strategy and Corporate Affairs Officer © 2024 ServiceNow, © Inc. All Rights 2024 Reserved. ServiceNow, Inc. Confidential. All Rights Reserved. 5
Slide 6: Best in class performance at scale
Best in class performance at scale DESCO21C: INNOVATION VELOCITY + EXCEPTIONAL GROWTH + OPERATIONAL EXCELLENCE Financials and Innovation Customer World class shareholder return velocity momentum culture and brand 26% 2X ~23K 1 BEST IN CLASS LOYALTY Growth at scale (2023) Horizontal products relative
Slide 7: ServiceNow class of 'one'
ServiceNow class of ‘one’ RULE OF 50 Delivering consistent growth at scale + margin expansion 2019 2023 54% 61% 46% 60% 38% 50% 42% 46% Note: Rule of 50 calculation includes last twelve months (LTM) Revenue Growth and LTM Free Cash Flow (FCF). Calculation compares fiscal years ending closest to 12/3
Slide 8: Business transformation powered by AI
A generational transformation of the enterprise PERSONAS REDEFINED INDUSTRIES REIMAGINED Business TECH STACK RESHUFFLED transformation TALENT RESKILLED powered by AI TRUST REGAINED © 2024 ServiceNow, Inc. All Rights Reserved. 8
Slide 10: Executing on this opportunity
Executing on this opportunity ECOSYSTEM G O TO MA R KET GLOBAL FOOTPRINT INDUSTRY FOCUS CUSTOMER EXPANSION INNOVATION Technology Employee Customer and Creator and Workflows Workflows Industry Workflows FSC Workflows DEVELOPER EMPLOYEE GenAI CUSTOMER AGENT © 2024 ServiceNow, Inc. All Rights Reserved.
Slide 11: The AI platform for business transformation
The AI platform for business transformation Innovation Operational Exceptional velocity excellence growth at scale © 2024 ServiceNow, Inc. All Rights Reserved. 11
Slide 14: Platform architecture across each layer
DRIVING INNOVATION PLATFORM ACROSS EACH LAYER ARCHITECTURE INDUSTRY SOLUTIONS WORKFLOW APPLICATIONS PLATFORM CORE SERVICENOW CLOUD © 2024 ServiceNow, Inc. All Rights Reserved. 14
Slide 15: ServiceNow Cloud
OUTCOME PLATFORM OPTIMAL ARCHITECTURE GROSS MARGIN SERVICENOW CLOUD Compute (CPU / GPU) Networking Storage Automated Cloud Services Operations © 2024 ServiceNow, Inc. All Rights Reserved. 15
Slide 16: ServiceNow Cloud: cloud choice
OUTCOME PLATFORM OPTIMAL ARCHITECTURE GROSS MARGIN SERVICENOW CLOUD CLOUD CHOICE Compute (CPU / GPU) Networking Storage Automated Cloud Services Operations © 2024 ServiceNow, Inc. All Rights Reserved. 16
Slide 17: Platform Core: rapid innovation
OUTCOME PLATFORM RAPID ARCHITECTURE INNOVATION PLATFORM CORE Core Data Model Industry Data Models CMDB RaptorDB Security © 2024 ServiceNow, Inc. All Rights Reserved. 17
Slide 18: Platform Core: capabilities
OUTCOME PLATFORM RAPID ARCHITECTURE INNOVATION PLATFORM CORE Workflows ON Service Portal ON ML + Gen AI LLMs ON User Experience ON Integrations ON Virtual Agent ON Process Mining ON RPA ON Low Code Tools ON AI Search ON Encryption ON Analytics ON © 2024 ServiceNow, Inc. All Rights Reserved. 18
Slide 19: Workflow Applications
OUTCOME PLATFORM ENTERPRISE-WIDE ARCHITECTURE EXPANSION WO RK FL O W A PPL ICA T IO N S Technology Employee Customer Creator Workflows Workflows and Industry and FSC Workflows Workflows © 2024 ServiceNow, Inc. All Rights Reserved. 19
Slide 20: Industry Solutions
OUTCOME LINE OF BUSINESS IN D U S T RY S O L U T IO N S PLATFORM ARCHITECTURE UNLOCKED Telecom, Media & Technology Healthcare & Life Sciences Financial Services Manufacturing Public Sector Retail © 2024 ServiceNow, Inc. All Rights Reserved. 20
Slide 23: Workflows expansion 2018
2018 INTRODUCED PRO Technology Employee Customer Creator Workflows Workflows Workflows Workflows IT Service Management HR Service Delivery Customer Service Management App Engine IT Operations Management Field Service Management Integration Hub Strategic Portfolio Management Integrated Risk Managemen
Slide 24: Workflows expansion 2023
2023 INTRODUCED PRO PLUS Technology Employee Customer and Creator and Workflows Workflows Industry Workflows FSC Workflows IT Service Management HR Service Delivery Customer Service Management App Engine IT Operations Management Legal Service Delivery Field Service Management Automation Engine Strat
Slide 25: Workflows expansion 2024
2024 Technology Employee Customer and Creator and Workflows Workflows Industry Workflows FSC Workflows IT Service Management HR Service Delivery Customer Service Management App Engine IT Operations Management Legal Service Delivery Field Service Management Automation Engine Strategic Portfolio Manag
Slide 27: Lines of business unlocked across the C-suite
Lines of business unlocked across the C-suite TELECOM PUBLIC SECTOR FINANCIAL SERVICES CORE CORE CORE Chief Information Officer Chief Information Officer Chief Information Officer Chief Network Officer Chief Distribution Center Officer Chief Information & Security Officer Head of Business Group Chie
Slide 28: Our TAM has expanded systematically
Our TAM has expanded $275B systematically ( F O R E C A S T E D ) $220B ( F O R E C A S T E D ) $200B $165B $110B $39B 2015 2018 2023 2024 2025 2026 Calculations performed by ServiceNow based on Gartner research, ServiceNow 28 analysis, and additional research reports. Sources available upon request
Slide 29: TAM by workflow category
Our TAM has expanded systematically $275B ( F O R E C A S T E D ) Technology Employee Customer and Creator and Workflows Workflows Industry Workflows FSC Workflows $108B $15B $68B $84B Calculations performed by ServiceNow based on Gartner research, ServiceNow 29 analysis, and additional research rep
Slide 30: ServiceNow portfolio
SERVICENOW PORTFOLIO Industry Products Telecom, Media & Technology Manufacturing Healthcare & Life Sciences Financial Services Public Sector Retail Technology Employee Customer and Creator Workflows Workflows Industry Workflows Workflows IT Service Management HR Service Delivery Customer Service Man
Slide 33: IT and OT are converging
IT and OT are converging INFORMATION OPERATIONAL TECHNOLOGY TECHNOLOGY Established system of record Production Digitally behind IT by 10+ years Process Comprehensive product set Security & resiliency are critical © 2024 ServiceNow, Inc. All Rights Reserved. 33
Slide 34: We are accelerating OT digital transformation
We are accelerating OT digital transformation P E R S O N A S W H Y N O W U S E C A S E S Available now Risk of ransomware increased, OT Operations Management impacting production lines CIO CISO and asset lifecycles OT Service Management OT Security Operations NEW Factory Owner IT and OT stakeholder
Slide 36: John Ball, Customer and Industry Workflows
John Ball GM & SVP Customer and Industry Workflows © 2024 ServiceNow, © Inc. All Rights 2024 Reserved. ServiceNow, Inc. Confidential. All Rights Reserved. 36
Slide 38: Disparate systems, human middleware
W H A T A C T U A L L Y H A P P E N S : Disparate systems, Digitization efforts human middleware started here Omnichannel solutions Operations Legal Inventory CHAT Excellent EMAIL Frontline ? customer Customer MOBILE agent Fulfillment Sales Collections service VOICE WEB Invoicing Marketing Contracts
Slide 39: End to end customer service
S O L V I N G W I T H End to end customer service Operations Legal Inventory WORKFLOW Excellent customer Fulfillment Customer Automation Sales Integration Collections Experiences service Invoicing Marketing Contracts © 2024 ServiceNow, Inc. All Rights Reserved. 39
Slide 40: Systematic expansion of use cases
Systematic expansion of use cases ? Middle Front Industry Office Office Service Solutions Service CUSTOMER AND INDUSTRY WORKFLOWS FOUNDATION © 2024 ServiceNow, Inc. All Rights Reserved. 40
Slide 41: Sales and Order Management
Opportunity Management Sales Catalog INTRODUCING & Guided Selling Sales and Order Configure Price Quote (CPQ) Management Pricing Engine Order Capture © 2024 ServiceNow, Inc. All Rights Reserved. 41
Slide 42: Unified experience from Genesys and ServiceNow
INTRODUCING Unified experience from Genesys and ServiceNow Turnkey, AI-powered solution Seamless Customer Choice Unified agent Workforce engagement V I R T U A L workspace management A G E N T S Workflow-driven D I G I T A L Personalized CX C H A N N E L S system of action orchestration and routing
Slide 43: Why service to sales matters
Why service to sales matters FIELD TECHNICIAN INTERNET PROVIDER SERVICE SALES Visits onsite to check Sells home security equipment and repair connection and sets up delivery date CUSTOMER SUPPORT AGENT INSURANCE COMPANY SERVICE SALES Helps newlyweds with Sells additional valuables adding driver to t
Slide 47: ServiceNow's AI strategy
ServiceNow’s AI strategy Powered by an industry leading AI team Language RESEARCH | SCIENCE | ENGINEERING | PRODUCT | EXPERIENCE Models 1 2 3 ServiceNow Intelligent Pro Plus GenAI models workflows products We build use case specific NOW LLMs combined with our Additional value delivered ServiceNow Ge
Slide 48: GenAI models
GenAI models BEST OF GENERAL PURPOSE + DOMAIN SPECIFIC SERVICENOW DEVELOPED MODELS W H Y I T M A T T E R S ? High performance Fast innovation Accurate models Data privacy Low cost © 2024 ServiceNow, Inc. All Rights Reserved. 48
Slide 49: This means flexibility for our customers
SERVICENOW AI ARCHITECTURE IS OPEN This means flexibility for our customers ServiceNow GenAI models Bring your own GenAI models OR © 2024 ServiceNow, Inc. All Rights Reserved. 49
Slide 51: Pro Plus roadmap
Pro Plus roadmap IT Service Management IT Operations Management Security Operations Customer Service Management Strategic Portfolio Management Contract Lifecycle Management Industry Products Procurement Field Service Management Supplier Operations HR Service Delivery H 2 2 0 2 4 Creator H 1 2 0 2 4
Slide 52: The Pro Plus advantage
The Pro Plus advantage for: Service Agents ServiceNow Developers Improved Employee Increased Agent Productivity Workflow Automation Higher Velocity Service Request Deflection © 2024 ServiceNow, © Inc. All Rights 2024 Reserved. ServiceNow, Inc. Confidential. All Rights Reserved. 52
Slide 53: Customer proof points
Customer proof points 7 months since Pro Plus was introduced MULTINATIONAL LARGE MANUFACTURING GLOBAL PROFESSIONAL BUSINESS SERVICES ORGANIZATION SERVICES COMPANY COMPANY IT Service Management Pro Plus ITSM and HR Pro Plus Creator Pro Plus 30% >80% 25% Mean time to resolution improvement Self-servic
Slide 54: Pro Plus adoption dynamics
Pro Plus adoption dynamics CURRENT PACKAGING TIME TO VALUE Pro Enterprise Pro Standard Plus Pro Plus PRICE REALIZATION BASED ON VALUE DELIVERED Pro SEAT COUNT FOR PRO LAST 4 QUARTERS Pro Plus © 2024 ServiceNow, Inc. All Rights Reserved. 54
Slide 55: Innovation roadmap
Generation Spoke Generation Innovation roadmap NOV 2024 Analytics Generation AUG 2024 Playbook Generation App Generation Catalog Generation MAY 2024 Flow Generation NOV 2023 Code Generation SEP 2023 ©©2024 2024ServiceNow, ServiceNow,Inc. Inc.All AllRights RightsReserved. Reserved. 55 55
Slide 56: Amy Lokey and Joe Davis
Amy Lokey Chief Experience Officer SERVICENOW Joe Davis SVP, Platform and AI Engineering SERVICENOW © 2024 ServiceNow, © Inc. All Rights 2024 Reserved. ServiceNow, Inc. Confidential. All Rights Reserved. 56
Slide 75: My Assist demo
; a a & sal gw a 2) Sonistend Work | Managerhub Connect Company Get help Las veges Mie 72 e AAPI Heritage month RICH PAST RADIANT FUTURE Jen, Diana, and Lizzy on your team are in this belonging group. ®56 18 © 200 ely ServiceNow turns 20 Mo celebrates 8 STRIVIAS Celebrate our company’s rich history
Slide 76: My Assist demo: onboarding
(2) My Assist Welcome to the office. Let's start by getting you familiar with your new laptop and systems. I've granted you access to these cloud-based apps. You'll find them in your ServiceNow Managed Bookmarks in Chrome. i [H Microsoft End-point Management 2 re] LDAP Master Console x bed RSA Secur
Slide 77: My Assist demo
@ My Assist Your team uses ScreenMeet, would you like me to install that now? (2) My Assist We can get a few items on your onboarding checklist done before your orientation starts in one hour. Get to know Setup Draft My team Team meetings Intro messages Ask me anything... G Y
Slide 78: My Assist demo: time off
1 are in 0} s rich »etition. cast ears of jays val to for -_ @ Ask me anything... @ My Assist ServiceNow offers unlimited flexible time off (FTO) days without the need to log time off in Workday for U.S. employees. Our programs support taking time off for personal needs such as medical appointments,
Slide 79: My Assist demo: meetings
1 are in @ My Assist IT managers like you typically have half-hour meetings every other week with their directs. 20 s rich 3) Meera Patel # etition. Sast Can you set these up starting next week? @ My Assist ears of Yes. Calendar invites have been sent with the meeting topic “Bi-weekly 1:1", starting
Slide 80: My Assist demo: data visualization
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Slide 81: My Assist demo: collaboration
1 are in @ My Assist Here's a rundown of where they typically share work and collaborate: 20 r IT Central > Ln | IT_Central@ServiceNow.com > s rich »etition. cast sp IT Insights Hub & xe Active support agents & ears of mom Oo xX @ My Assist I'll ask your team to grant you access to their relevant do
Slide 82: My Assist demo: welcome message
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Slide 83: My Assist demo
aglyh and goals. Your input on improving our processes and customer solutions is extremely valuable to me. Thanks for the warm welcome and let's connect soon! 20 s rich »etition. sast ears of jays 3 = [ =Lengthy Toney >¢Rephrase ¥ CRegenerate @ Add photo Ask me anything... G WW)
Slide 84: My Assist demo: orientation directions
month on your team are in > 200 ow turns 20 ur company's rich a trivia competition. the broadcast rates 8 fe her eight years of n Monday. er a note Duein2days \ested approval to on 8/21/2026 for @ My Assist It's almost time to head to orientation. Directions below. Neighborhoods v L = ) B118 fBuildi
Slide 85: My Assist demo: manager info
1 are in 20 s rich »etition. sast ears of @ Meera Patel What should | know about my manager? @ My Assist Chris Bedi joined ServiceNow in September 2015 and is based in Santa Clara. As Chief Digital Information Officer (CDIO), he has a global team of 1,889 reports. To learn how he likes to collaborat
Slide 86: My Assist demo
al eae oN o Pinned items nth our team are in @ My Assist op IT Centre 0 Here are some shots of Chris from recent live events and socials. ce | Welcome turns 20 ompany’s rich fia competition. s 5» IT Insight broadcast Your calenda es 8 r eight years of (ELL nday. May 14, 2 1note A Your work Duein2day
Slide 87: Intelligent Workflows
F a a & a gw 5 2) SeMaschten Work Managerhub Connect Company _ Get help Las Vegas ie 72 c Insights and news App updates a Bloragt a Chris Bedi Inside ServiceNow 2 letentak iene FUTURE BRO x j ; 4 Pinned items A AAPI Heritage month Jen, Diana, and Lizzy on your team are in this belonging group. @ My
Slide 91: We are outexecuting at scale
STRONG CUSTOMER MOMENTUM 2.2x 2.0x $20M+ Customers $10M+ Customers (2023 vs. 2021) (2023 vs. 2021) We are UNPARALLELED CUSTOMER SUCCESS 98.5% ~70% outexecuting Renewal rate (2023) of Customers grew ACV (2023) at scale IMPROVED SALES EFFICIENCY ~10% ~150bps Sales Productivity1 S&M Op Margin Lift Impr
Slide 92: We have a large, growing TAM
We have a large, $275B growing TAM ( F O R E C A S T E D ) Accelerated by GenAI $220B ( F O R E C A S T E D ) TAM PENETRATION $200B <5% Across all Geographies1 <7% Across Top 6 Industries 2024 2025 2026 (1) Americas (AMS), EMEA, APAC, Japan Note: Calculations performed by ServiceNow based on Gartner
Slide 93: Massive opportunity for customer expansion
Massive opportunity for customer expansion 8K+ 50K+ Customers Total Customer Opportunity Total customers 8K+ Multi Workflow 2K+ customers 3+ workflows “All in with NOW” 55 customers $20M+ ACV Source: Total Customer Opportunity based on CapIQ screen as of April 2024 includes companies with $100M+ rev
Slide 94: Our GTM acceleration levers
Our GTM Acceleration levers 1 International 2New 3 Scale and 4 Partner 5 Focus Expansion Logos Efficiency Ecosystem Industries © 2024 ServiceNow, Inc. All Rights Reserved. 94
Slide 95: International business has a strong foundation
ACV GROWTH International 2024 ~$5B business has a strong foundation $200M+ ACV MARKETS 10+ 15+ $20M+ ACV 2021 CUSTOMERS $2.7B 1. ACV for non-US markets © 2024 ServiceNow, Inc. All Rights Reserved. 95
Slide 96: Accelerating international business
Accelerating International business SCALE BUILD FUTURE $1B+ MARKETS HIGH-GROWTH MARKETS UK Germany Japan India Mexico KSA Canada Australia France Brazil ASEAN © 2024 ServiceNow, Inc. All Rights Reserved. 96
Slide 97: We will build on our new logo success
THREE MOTIONS TO TARGET NEW LOGOS We will build New Logo Territories on our new 100 dedicated territories created logo success Scale Inside Sales 50K+ ~25% of New logos driven by Inside Sales Total customer opportunity Partner Resell ~16% Penetration Coverage in underserved segments, markets Source:
Slide 98: We are scaling our GTM, efficiently
We are scaling our GTM, efficiently Scale Segmentation Efficiency Coverage & Reach Fit for purpose resourcing Low cost models 12% 3X Marquee, Enterprise & Commercial 3-year Rep CAGR coverage model Inside sales rep growth Note: Rep CAGR as of 2023; inside sales based on 3 years (2021 to 2024 plan) ©
Slide 99: Partner ecosystem
Building a GTM force multiplier through our Partner ecosystem Strategic Hyperscalers Reseller SI partners & tech partners partners © 2024 ServiceNow, Inc. All Rights Reserved. 99
Slide 100: Unlock industry and LoB opportunity in top 6 industries
Unlock industry and LoB opportunity in Top 6 industries NEW ADD RETAIL & FINANCIAL HEALTHCARE & HOSPITALITY SERVICES LIFE SCIENCES <7% TAM PENETRATION TELCO/MEDIA PUBLIC MANUFACTURING /TECH SECTOR © 2024 ServiceNow, Inc. All Rights Reserved. 100
Slide 101: Public Sector opportunity
Public Sector opportunity Steve Walters SVP, Public Sector © 2024 ServiceNow, © Inc. All Rights 2024 Reserved. ServiceNow, Inc. Confidential. All Rights Reserved. 101
Slide 102: The U.S. Federal Government works with ServiceNow
SERVICENOW WORKS WITH All 15 400+ All branches Cabinet Offices Bureaus & of the military Agencies subagencies The U.S. Federal SERVICENOW WORKS TO SUPPORT • Real-world Mission Priorities • Asset Management Government • Human Resources • Security • Citizen Engagement • Federally Regulated Clouds work
Slide 103: ServiceNow investments in the Federal market
ServiceNow investments in the Federal market 2012 2013 2016 2019 2020 Today Interim FISMA FedRAMP FedRAMP MedCol DOD IL5 Moderate Moderate High 2020 March 2023 June 2012 February 2016 September 2019 FISMA DOD IL4 Public Sector GenAI GA Moderate December 2019 Digital Services 2024 April 2013 May 2022
Slide 104: Verticalization is the strength of our GTM
Verticalization is the strength of our GTM FEDERAL FORUM 2024 3,000+ REGISTERED 37 PARTNERS Finance DoD Health Intel Civilian Civilian $400M+ IN PIPELINE © 2024 ServiceNow, Inc. All Rights Reserved. 104
Slide 106: Leveraging ESAs drive adoption as the engagement layer
Leveraging ESAs drive adoption as the engagement layer MISSION FUTURE OF DIGITAL RESILIENCY WORK ACCELERATION Interoperability of People | Net-New Automation | Modernize Legacy Systems © 2024 ServiceNow, Inc. All Rights Reserved. 106
Slide 109: ServiceNow is powering digital transformation in the Public Sector
ServiceNow is powering digital $1.5B+ ACV from Public Sector transformation in the Public Sector 30%+ Growth Y/Y in 2023 © 2024 ServiceNow, © Inc. All Rights 2024 Reserved. ServiceNow, Inc. Confidential. All Rights Reserved. 109
Slide 112: GenAI innovation, capital allocation, power of the platform
GenAI and New Disciplined Product Innovation: Capital Allocation: Seeding future growth Driving shareholder value Power of the Platform: Key competitive advantage © 2024 ServiceNow, Inc. All Rights Reserved. 112
Slide 113: Continuous innovation drives durable organic growth
Continuous SUBSCRIPT ION REV ENUES AND Y/Y G ROW T H (CC)1 US D IN M IL L IO NS innovation 37% 31% drives durable 28% 29% 25% organic $8,680 growth $6,891 28% $5,573 $4,286 $3,255 $2,421 2019 – 2023 Subscription $1,740 Revenue CAGR (CC)1 2017 2018 2019 2020 2021 2022 2023 (1) Y/Y Growth (CC) represe
Slide 114: Continuous innovation drives durable organic growth
Continuous SUBSCRIPT ION REV ENUES AND Y/Y G ROW T H (CC)1 US D IN M IL L IO NS innovation 37% 31% drives durable 28% 29% 25% organic $1.8B $8,680 growth $6,891 $5,573 $4,286 $3,255 $2,421 $1,740 2017 2018 2019 2020 2021 2022 2023 (1) Y/Y Growth (CC) represents year on year constant currency subscri
Slide 115: RPO acceleration increases visibility to future revenue
RPO acceleration REMAINING PERFORMANCE OBLIGATIONS USD IN BILLIONS increases visibility LEGEND $18.0 to future revenue Current RPO Noncurrent RPO • 29% Y/Y acceleration • Contract duration improves $9.4 growth $14.0 $7.1 $11.5 2019 – 2023 CA G R (CC)1 $5.8 29% 27% $8.9 $4.5 $8.6 $6.6 $3.3 $6.9 Total
Slide 116: Our best-in-class renewal rates have steadily improved
98.5% MISSION CRITICAL: Our best-in-class renewal rates have steadily Renewal Rate improved 2023 2022 2021 2020 © 2024 ServiceNow, Inc. All Rights Reserved. 116
Slide 117: Strong customer adds fuel our growth engine
Strong customer adds fuel our growth engine ~400 NET CUSTOMER ADDS IN 2023 8K+ CUSTOMERS AT THE END OF 2023 © 2024 ServiceNow, Inc. All Rights Reserved. 117
Slide 118: Larger customer lands with more products and higher ACV
Larger With more customer lands products and higher ACV +25% +25% Enterprise New Logos with 5K+ Employees Average New Logo ACV in 1st year Y/Y GROWTH IN 2023 Y/Y GROWTH IN 2023 © 2024 ServiceNow, Inc. All Rights Reserved. 118
Slide 119: Our laser focus on landing the right customer
Our laser focus on landing the right customer continues to bear fruit ~2X Mix of new logos cohort with $500K+ ACV 2019-2023 © 2024 ServiceNow, Inc. All Rights Reserved. 119
Slide 120: Emerging products further diversify new deal ACV mix
Strength of emerging products further diversifies new 45%+ Contribution from non-Technology deal ACV mix Workflows in 2023 Customer & Industry Workflows Employee Non-Technology Workflows 2023 NEW LOGO ACV Technology workflows workflows Creator Workflows © 2024 ServiceNow, Inc. All Rights Reserved. 1
Slide 121: CSM matches ITSM as our top product in new logos
CSM matches ITSM as our CSM top product in new logos ITSM 2023 NEW LOGO ACV PRODUCT MIX 2016 ITSM Top product 2016 2017 2018 2019 2020 2021 2022 2023 IN NEW LOGOS IT Service Management CSM & ITSM © 2024 ServiceNow, Inc. All Rights Reserved. 121
Slide 122: Our customers continue to grow with us
~70% Mix of existing Our customers spending incremental dollars customers with ServiceNow continue to growth with us 85%+ Mix of NNACV from existing customers © 2024 ServiceNow, Inc. All Rights Reserved. 122
Slide 123: Newer cohorts are landing larger and expanding higher
Newer cohorts are landing larger and continue to expand at higher ~30% 2018-2020 average ACV 2010-2017 Higher Average ACV AVERAGE ACV/CUSTOMER BY COHORT $ACV Year 3 Year 2 Year 1 Year 0 © 2024 ServiceNow, Inc. All Rights Reserved. 123
Slide 124: Time to hit $1M in ACV has improved
YEARS 2010 8 Years 2011 2012 Time to hit $1M 2013 in ACV has 2014 improved 2015 significantly with 2016 newer cohorts 2017 2018 2019 2020 2 Years © 2024 ServiceNow, Inc. All Rights Reserved. 124
Slide 125: Rapid innovation continues to fuel growth across cohorts
2024 2023 47% Our rapid innovation 2022 54% 2021 60% 2020 65% 2019 83% continues to fuel 2018 2017 77% 72% growth across 2016 2015 99% 110% cohorts 2014 105% 2013 146% 2012 142% 2011 196% 2010 224%1 Annual Growth of Initial ACV (1) As an illustrative example, 2010 customer cohort started with a cont
Slide 126: Power of the Platform: Better together
Power of the Platform: NNACV MIX BY PRODUCT COUNTS Better together 98% 54% 65% 72% 77% 82% NNACV from multi-product deals in 2023 82% 39% 30% LEGEND 25% 20% 5+ product deals 16% NNACV from 5+ product 2-4 product deals 7% deals in 2023 Single product deals 5% 3% 3% 2% 2019 2020 2021 2022 2023 Note: N
Slide 127: A look into a customer's journey
A look into $5.0M a customer’s journey Total A Financial Service Software Company 3 600% Quarters to Growth of ACV $4.0M become a ~$1M as of Q4 2023 vs. ACV customer Initial Land $0.3M $0.7M Q4 2022 Q2 2023 Q4 2023 2023 License Expansion deal 11 Products across New Land across License Expansion Deal
Slide 128: Expansion driving robust growth in large customer spend
Expansion is NUMBER OF CUSTOMERS IN 2023 driving robust growth in large 55 customer spend $20M+ ACV 126 $10M-$20M ACV ~45% 2019 – 2023 Average ACV Growth for $5M+ Customers 224 $5M-$10M ACV Note: Previously disclosed number of customers with ACV greater than $1 million is restated to 1,492 allow for
Slide 129: Marquee customers are increasing their business with us
Marquee customers are $75M increasing their business with us $50M MARQUEE CUSTOMER ACV $25M $5M $10M +18 +25 +9 +4 +3 NUMBER OF MARQUEE CUSTOMERS CROSSING EACH THRESHOLD IN 2023 Note: Marquee customers are ServiceNow customers with high total addressable market and where ServiceNow can help drive ex
Slide 130: Plenty of opportunities remain within our largest customers
Plenty of opportunities ~2X Opportunity for remain within our license expansion and SKU upgrade largest customers $100M ACV ACTUAL $75M+ MARQUEE CUSTOMER EXAMPLE Products 1-10 Note: ACV values as of the end of 2023 © 2024 ServiceNow, Inc. All Rights Reserved. 130
Slide 131: Emerging tech products driving growth
IT Asset Management Emerging tech products driving growth Security Operations Integrated Risk ~50% 2019 – 2023 CAGR Management © 2024 ServiceNow, Inc. All Rights Reserved. 131
Slide 132: Operational Technology $5B+ TAM
Operational Technology $5B+ Total Addressable Market © 2024 ServiceNow, © Inc. All Rights 2024 Reserved. ServiceNow, Inc. Confidential. All Rights Reserved. 132
Slide 133: AI-powered experiences provide massive opportunities to upsell
AI-powered experiences provide massive opportunities to upsell ~45% ~25% ~65% ITSM Pro SKU penetration1 Realized price uplift to ITSM ITSM new customer ACV Pro vs. ITSM Standard SKU from Premium SKUs in 2023 (1) © 2024 ServiceNow, Inc. All Rights Reserved. 133
Slide 134: Strong start for Pro Plus
Strong start for Pro Plus >30% NNACV THROUGH FIRST 2 FULL QUARTERS OF LAUNCH Pro Realized price uplift to Pro Plus vs. Pro SKUs Pro Plus Note: Pro Plus and Pro NNACV through first 2 full quarters of launch includes ITSM and CSM. Realized price uplift to Pro Plus vs. Pro SKUs includes service desk cu
Slide 135: $1B+ Gen AI opportunity from existing Pro customers
~45% ITSM, CSM, & HRSD Pro SKU penetration1 $1B+ Gen AI opportunity from existing Pro customers (1) © 2024 ServiceNow, Inc. All Rights Reserved. 135
Slide 136: $2.5B Gen AI opportunity from existing service desk customers
100% ITSM, CSM, & HRSD Upgrade to Pro Plus $2.5B Gen AI opportunity from existing service desk customers © 2024 ServiceNow, Inc. All Rights Reserved. 136
Slide 137: Pro Plus availability
Pro Plus AVAILABILITY IT Service Management IT Operations Management Security Operations Customer Service Management Strategic Portfolio Management Contract Lifecycle Management Industry Products Source-to-pay Field Service Management H 2 2 0 2 4 HR Service Delivery Creator H 1 2 0 2 4 H 2 2 0 2 3 ©
Slide 138: Plenty of extensibility beyond IT
We have plenty 20% 2022 of extensibility beyond IT AVERAGE Employee Customer & Creator PENETRATION Workflows Industry Workflows Workflows 25% 2023 NON-IT PRODUCT OPPORTUNITY © 2024 ServiceNow, Inc. All Rights Reserved. 138
Slide 139: Emerging workflows delivering rapid growth at scale
Emerging workflows delivering rapid growth at scale Customer Creator Employee & Industry Workflows Workflows Workflows $1,100M+ $1,050M+ $850M+ ACV ACV ACV Note: ACV values as of the end of 2023 © 2024 ServiceNow, Inc. All Rights Reserved. 139
Slide 140: Finance, Supply Chain, and Clean Core ERP momentum
Finance, Supply Chain, and Clean Core ERP Products gaining significant momentum San Diego Tokyo Vancouver Feb 2022 Aug 2022 Aug 2023 Sourcing and Supplier Lifecycle Accounts Payable Procurement Operations Operations Operations Clean Core ERP with App Engine1 Source-to-Pay Operations2 150% Y/Y Growth
Slide 142: Productivity and cost savings from deploying GenAI internally
Enhancing productivity and cost savings from deploying GenAI internally 20+ $10M >7X Internal use cases Productivity gains and ROI from ServiceNow GenAI efficiency savings1 internal use cases1 (1) Productivity gains and efficiency savings are annualized based on projections © 2024 ServiceNow, Inc. A
Slide 143: Performance-to-cost improvements lead to better GenAI unit economics
Performance-to-cost improvements leading to better GenAI unit economics 20%+ Improvement from last two mainstream GPU SKU upgrades TECHNOLOGY PERFORMANCE TECHNOLOGY COST 2020 2022 © 2024 ServiceNow, Inc. All Rights Reserved. 143
Slide 144: Sales efficiency above at-scale cloud peers
We continue to see sales efficiency above at-scale 3.8X cloud peers 3.4X 3.0X 2.9X Peer Avg 2.3X 2023 SALES EFFICIENCY NOW ADBE WDAY CRM Note: Sales Efficiency is calculated on a non-GAAP basis and represents the change in total revenues in the respective year, divided by prior year change in Non-GA
Slide 145: Operational discipline yields consistent margin expansion
Operational NON-GAAP OPERATING PROFIT AND MARGIN %1 US D IN M IL L IO NS discipline yields 28% consistent margin 26% 25% 25% $2,489 expansion 21% $1,860 35% $1,482 $1,121 2019 – 2023 CAGR $740 Non-GAAP Operating Profit (1) Non-GAAP presentation of operating profit and operating margin exclude certai
Slide 146: Robust free cash flow
As well as robust NON-GAAP FREE CASH FLOW AND MARGIN %1 US D IN M IL L IO NS free cash flow 32% 32% 30% 30% 28% $2,728 $2,180 29% $1,867 $1,449 $971 2019 – 2023 CAGR Non-GAAP Free Cash Flow (1) Non-GAAP Free cash flow is defined as net cash provided by (used in) operating activities plus cash paid f
Slide 147: 2024 Guidance
2024 Guidance SUBSCRIPTION REVENUES FREE CASH FLOW1 U S D I N B I L L I O N S U S D I N B I L L I O N S $10.6 22% $3.3 31% $8.7 Growth Margin $2.7 2023 2024E 2023 2024E (1) Free cash flow and free cash flow margin are based off the 2024 guidance of 31% free cash flow margin provided on 1/24/24, with
Slide 148: Durable Rule of 50+ at massive scale
Durable Rule of 50+ at massive scale 54% 56% 53% Rule of 50+ SUB REV ENUE G ROW T H RAT E PLUS FR E E C A S H FL OW M A R G IN 1 2022 2023 2024E (1) Non-GAAP Free cash flow is defined as net cash provided by operating activities plus cash paid for legal settlements, repayments of convertible senior
Slide 149: Subscription revenue targets
SUBSCRIPT ION REV ENUES U S D I N B I L L I O N S $15+ Subscription revenue targets $10.6 20%+ $8.7 Constant Currency CAGR Through 2026 2023 2024E 2026E Note: Targets exclude material M&A Numbers rounded for presentation purposes. © 2024 ServiceNow, Inc. All Rights Reserved. 149
Slide 150: Profitability trajectory to 2026
Profitability trajectory to 2026 NON-GAAP OPERATING NON-GAAP MARGIN FREE CASH FLOW MARGIN 31% Average 100bps+ Average 50bps+ 30% expansion/yr expansion/yr driven by operating despite incremental efficiencies tax headwinds of 29% ~100bps in 2024 & 2025, and ~200bps in 2026 28% 2023 2024E 2023 2024E N
Slide 151: SBC % of revenue on track to <15% by 2026
2022 19% 2023 18% 2026 <15% SBC % of Revenue 10% on track to <15% by 2026 Note: Numbers rounded for presentation purposes © 2024 ServiceNow, Inc. All Rights Reserved. 151
Slide 152: Focusing on shareholder value
2019 1.5% 2023 1.1% Annual Dilution Focusing on shareholder value <1.0% Note: Annual dilution target for fully diluted shares outstanding. Numbers rounded for presentation purposes. © 2024 ServiceNow, Inc. All Rights Reserved. 152
Slide 155: GAAP to Non-GAAP Reconciliation: Subscription Revenues
GAAP to Non-GAAP Reconciliation Subscription Revenues In millions (except %’s) 2017 2018 2019 2020 2021 2022 2023 GAAP Subscription Revenues $1,740 $2,421 $3,255 $4,286 $5,573 $6,891 $8,680 (+) Effects of Foreign Currency Rate Fluctuations $(6) $(27) $58 $(14) $(77) $274 $(33) Non-GAAP Subscription
Slide 156: GAAP to Non-GAAP Reconciliation: cRPO and RPO
GAAP to Non-GAAP Reconciliation cRPO and RPO In billions (except %’s) 2019 2020 2021 2022 2023 GAAP Current Remaining Performance Obligations at Period End $3.3 $4.4 $5.7 $6.9 $8.6 Y/Y Current Remaining Performance Obligations Growth Rates(1) N/A N/A N/A N/A N/A (+) Effects of Foreign Currency Rate
Slide 157: GAAP to Non-GAAP Reconciliation: Operating Income and Margin
GAAP to Non-GAAP Reconciliation Operating Income and Operating Margin 2024E In millions (except %’s ) 2019 Margin 2020 Margin 2021 Margin 2022 Margin 2023 Margin Margin GAAP Income (Loss) from Operations $42 1% $199 5% $257 4% $355 5% $762 8% 12% (-) SBC $662 19% $870 19% $1,131 19% $1,401 19% $1,60
Slide 158: GAAP to Non-GAAP Reconciliation: Free Cash Flow
GAAP to Non-GAAP Reconciliation Free Cash Flow and Free Cash Flow Margin In millions (except %’s 2019 Margin 2020 Margin 2021 Margin 2022 Margin 2023 Margin 2024E Margin and per share data) GAAP Net Cash $1,236 36% $1,787 39% $2,191 37% $2,723 38% $3,398 38% N/A 39% Provided by Operating Activities
Slide 159: GAAP to Non-GAAP Reconciliation: Sales & Marketing Expense
GAAP to Non-GAAP Reconciliation Sales & Marketing Expense In millions 2021 2022 2023 Sales and marketing expense $2,292 $2,814 $3,301 (-) Stock based compensation, sales and marketing $389 $459 $505 (-) Sales and marketing amortization of purchased intangibles $1 - - Non-GAAP Sales and marketing exp
Slide 161: servicenow.
servicenow.

ServiceNow — Investor Day (May 2024) on 6ix

Servicenow — Investor Day (May 2024)

Slide 1: © 2024 ServiceNow, © Inc. All Rights

Slide 2: Safe Harbor and other information

Slide 3: Statement regarding use of Non-GAAP financial measures

Slide 4: Agenda and speakers

Slide 5: Vision and opportunity

Slide 6: Best in class performance at scale

Slide 7: ServiceNow class of 'one'

Slide 8: Business transformation powered by AI

Slide 9: $275B 2026 TAM: our massive strategic opportunity

Slide 10: Executing on this opportunity

Slide 11: The AI platform for business transformation

Slide 12: Platform Innovation

Slide 13: IS A

Slide 14: Platform architecture across each layer

Slide 15: ServiceNow Cloud

Slide 16: ServiceNow Cloud: cloud choice

Slide 17: Platform Core: rapid innovation

Slide 18: Platform Core: capabilities

Slide 19: Workflow Applications

Slide 20: Industry Solutions

Slide 21: Growth vectors

Slide 22: Technology Workflows (2005)

Slide 23: Workflows expansion 2018

Slide 24: Workflows expansion 2023

Slide 25: Workflows expansion 2024

Slide 26: Our enterprise reach

Slide 27: Lines of business unlocked across the C-suite

Slide 28: Our TAM has expanded systematically

Slide 29: TAM by workflow category

Slide 30: ServiceNow portfolio

Slide 31: Pablo Stern, Technology Workflows

Slide 32: Operational Technology

Slide 33: IT and OT are converging

Slide 34: We are accelerating OT digital transformation

Slide 35: OT is a strategic growth opportunity

Slide 36: John Ball, Customer and Industry Workflows

Slide 37: Customer and Industry Workflows

Slide 38: Disparate systems, human middleware

Slide 39: End to end customer service

Slide 40: Systematic expansion of use cases

Slide 41: Sales and Order Management

Slide 42: Unified experience from Genesys and ServiceNow

Slide 43: Why service to sales matters

Slide 44: Sales and Order Management live demo

Slide 45: Generative AI

Slide 46: ServiceNow's AI strategy: intelligent workflows

Slide 47: ServiceNow's AI strategy

Slide 48: GenAI models

Slide 49: This means flexibility for our customers

Slide 50: Intelligent workflows

Slide 51: Pro Plus roadmap

Slide 52: The Pro Plus advantage

Slide 53: Customer proof points

Slide 54: Pro Plus adoption dynamics

Slide 55: Innovation roadmap

Slide 56: Amy Lokey and Joe Davis

Slide 57: Playbook Generation live demo

Slide 58: Now Assist for Teams live demo

Slide 59: Analytics Generation live demo

Slide 60: Intelligent workflows

Slide 61: Knowledge Graph

Slide 62: Services, People, Integrations

Slide 63: Services

Slide 64: Services

Slide 65: Integrations

Slide 66: People

Slide 67: Intelligent Workflows

Slide 68: Intelligent workflows

Slide 69: Intelligent workflows: My Assist

Slide 70: © 2024 ServiceNow, Inc. All Rights Reserved.

Slide 71: © 2024 ServiceNow, Inc. All Rights Reserved.

Slide 72: © 2024 ServiceNow, Inc. All Rights Reserved.

Slide 73: © 2024 ServiceNow, Inc. All Rights Reserved.

Slide 74: © 2024 ServiceNow, Inc. All Rights Reserved.

Slide 75: My Assist demo

Slide 76: My Assist demo: onboarding

Slide 77: My Assist demo

Slide 78: My Assist demo: time off

Slide 79: My Assist demo: meetings