Slide 1: Investor Presentation First Quarter 2024
Investor Presentation First Quarter 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: Now Platform: Optimize processes, connect data and silos, and accelerate innovation
Now Platform®: Optimize processes, connect data and silos, and accelerate innovation at scale using the power of generative AI to create new value on a single, unifying platform built for digital transformation. Technology Employee Customer and Creator Workflows Workflows Industry Workflows Workflow
Slide 5: We make the world work better for everyone
We make the world work better for everyone Our 8,100+ global customers(1) ServiceNow helps digitize and include approximately 85% of the Our aspiration is to be the unify organizations so that they Fortune 500. They all rely on defining enterprise software can find smarter, faster, better ServiceNow
Slide 6: Q1-24 Financial Highlights
Q1-24 Financial Highlights Increase Non-GAAP Constant Q1 2024 Results Quarterly Results Currency Impact(1) (Decrease) Y/Y Currency Y/Y(2) Subscription Revenues $2,523M 25% ~50bps tailwind 24.5% Current RPO (cRPO) $8.45B 21% ~50bps headwind 21% Remaining Performance Obligations (RPO) $17.7B 26% ~50bp
Slide 7: Guidance Summary
Guidance Summary Currency Impact Increase Non-GAAP Constant Q2 2024 Guidance Quarterly Guidance Included in (Decrease) Y/Y Currency Y/Y(2) Guidance(1) Subscription Revenues $2,525M - $2,530M 21.5% - 22% ~Flat 22% Non-GAAP Operating Margin(3) 25% ~(50bps) NA NA 20.5% Current RPO (cRPO) Growth 20.5% N
Slide 8: Comparison to Previously Issued Guidance
Comparison to Previously Issued Guidance ($M) Subscription Revenues Y/Y Growth 24% 24.5% 21.5% 21.5% Q1-24A FY24E Prev. Guidance Midpoint(1) Currency Impact(2) Q1 Performance Actual Results Guidance Change Current Guidance Midpoint (1) Refers to previously issued financial guidance dated 1/24/24. (2
Slide 9: Year-Over-Year Subscription Revenues Growth
Year-Over-Year Subscription Revenues Growth 26% 27% 27% 27% 26% 25% 24% 25% 25% 25% 25% 25% 24% 25% 24% 24% 22% 22% Subscription Revenues Q1-23A Q2-23A Q3-23A Q4-23A Q1-24A FY23A Previous Year Growth Actual Growth Non-GAAP Constant Currency Sub Revenue Growth (1) (1) Non-GAAP subscription revenues g
Slide 10: Currency Impact to Year-Over-Year Sub. Revenues
Currency Impact to Year-Over-Year Sub. Revenues $2,523 $2,517 $2,216 $2,173 $2,365 $2,332 $2,075 $2,074 $(6) $8,680 $8,647 $(43) $(34) $(1) $(33) ($M) Subscription Revenues Q2-23A Q3-23A Q4-23A Q1-24A FY23A Y/Y Growth 25% 25% 27% 25% 27% 25% 25% 24% 26% 25% Actuals Currency Impact Non-GAAP Constant
Slide 11: Remaining Performance Obligations
Remaining Performance Obligations ($B) Current RPO Noncurrent RPO Q1-24 $18.0 $17.7 Y/Y Growth $14.0 $14.2 $14.4 +26% / +27% cc(1) $9.4 $9.2 Total RPO $7.0 $7.0 $7.0 $7.01 $7.20 $7.43 $8.60 $8.45 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 cRPO Y/Y Growth 23% 25% 27% 24% 21% cRPO cc(1) Y/Y Growth 25% 24% 24% 23%
Slide 12: Customer Cohort Growth
Customer Cohort Growth Annual Growth of Initial ACV 2024 47% 2023 54% 60% 2022 65% 2021 83% 77% 2020 72% 2019 99% 2018 2017 110% 2016 105% 2015 2014 146% 2013 142% 2012 2011 196% 2010 224% (1) (1) As an illustrative example, 2010 customer cohort started with a contract of initial ACV (annual contrac
Slide 13: Expansion of Customer Relationships
Expansion of Customer Relationships $4.6 $4.5 ($M) $4.3 $4.4 $4.1 $4.2 $4.0 1,897 1,933 $3.9 $3.9 1,789 1,687 1,725 1,645 1,534 1,467 1,405 Q1-22 Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Number of Customers with $1M+ ACV Avg ACV of Customers with $1M+ ACV Note: Previously disclosed number of
Slide 14: Renewal Rate
Renewal Rate 99% 99% 98% 98% 98% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 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. © 2022 ServiceNow, Inc. All Rights Reserved © 2022 ServiceNow, I
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 18% 16% 15% 16% 18% 25% 26% 25% 29% 30% 57% 58% 60% 55% 52% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 (1) Historical presentations disclosed net new ACV contribution across pr
Slide 16: GAAP Revenues by Geography
GAAP Revenues by Geography North America EMEA APAC & Other 11% 11% 11% 11% 11% 25% 25% 26% 26% 26% 64% 64% 63% 63% 63% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 © 2022 ServiceNow, Inc. All Rights Reserved © 2022 ServiceNow, Inc. All Rights Reserved. Confidential. 16 ®
Slide 17: Headcount by Department
Headcount by Department PS & Other Cost of Sales Sub. Cost of Sales S&M R&D G&A 23,362 22,166 22,668 21,031 21,377 2,854 2,886 2,802 2,703 2,731 7,211 7,520 6,524 6,920 6,415 7,814 7,934 7,966 8,209 7,719 2,956 3,168 3,421 3,622 3,853 1,238 1,140 1,089 1,015 894 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 © 2022
Slide 18: Non-GAAP Gross Margins
Non-GAAP Gross Margins Non-GAAP Subscription Gross Margin 86% 86% 86% 85% 85% 84% 84% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 FY22 FY23 Non-GAAP PS & Other Gross Margin 15% 16% 11% 10% 10% 10% 4% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 FY22 FY23 Non-GAAP Total Gross Margin 83% 82% 82% 82% 83% 82% 82% Q1-23 Q2-23 Q3-23
Slide 19: Non-GAAP Operating and Free Cash Flow Margins
Non-GAAP Operating and Free Cash Flow Margins Non-GAAP Operating Margin 30% 29% 30% 28% 26% 25% 26% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 FY22 FY23 Non-GAAP Free Cash Flow Margin 55% 47% 35% 30% 30% 21% 9% Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 FY22 FY23 Note: All figures are calculated on a non-GAAP basis. See appe
Slide 20: Non-GAAP Net Income and Diluted EPS
Non-GAAP Net Income and Diluted EPS Non-GAAP Net Income ($M) $2,215 $1,543 $603 $643 $707 $483 $486 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 FY22 FY23 $10.78 Non-GAAP Diluted EPS $7.59 $2.92 $3.11 $3.41 $2.37 $2.37 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 FY22 FY23 Note: All figures are calculated on a non-GAAP basis. Se
Slide 21: GAAP to Non-GAAP Reconciliation and Supplemental Information
GAAP to Non-GAAP Reconciliation and Supplemental Information © 2022 ServiceNow, Inc. All Rights Reserved. Confidential. 21 ®
Slide 22: GAAP to Non-GAAP Reconciliation – Other
GAAP to Non-GAAP Reconciliation – Other in millions (except %'s and per share data) 2022 Margin Q1'23 Margin Q2'23 Margin Q3'23 Margin Q4'23 Margin 2023 Margin Q1'24 Margin Q2'24E Margin 2024E Margin GAAP Subscription Gross Profit $ 5,704 83% $ 1,670 83% $ 1,686 81% $ 1,796 81% $ 1,922 81% $ 7,074 8
Slide 23: GAAP to Non-GAAP Reconciliation – Other (cont.)
GAAP to Non-GAAP Reconciliation – Other (cont.) in millions (except %'s and per share data) 2022 Margin Q1'23 Margin Q2'23 Margin Q3'23 Margin Q4'23 Margin 2023 Margin Q1'24 Margin Q2'24E Margin 2024E Margin GAAP Weighted-Average Shares Used to Compute Net Income (Loss) per 204 N/A 204 N/A 205 N/A 2
Slide 24: Supplemental Information
Supplemental Information in millions Q1'23 Q2'23 Q3'23 Q4'23 2023 Q1'24 Stock-based compensation Cost of revenues Subscription $ 46 $ 50 $ 52 $ 54 $ 202 $ 58 Professional services and other $ 14 $ 15 $ 11 $ 12 $ 52 $ 12 Operating expenses: Sales and marketing $ 126 $ 120 $ 132 $ 127 $ 505 $ 134 Rese