Slide 1: Investor Presentation First Quarter 2021
® Investor Presentation First Quarter 2021
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 present revenues, revenue growth rates, and current remaining performance obligations an
Slide 4: We make the world of work, work better for people
We make the world of work, work better for people™ Our ~6,900 global enterprise ServiceNow delivers digital customers include approximately Our aspiration is to be the workflows that create great 80% of the Fortune 500. They all defining enterprise software experiences and unlock rely on ServiceNow
Slide 5: Now Platform: The platform of platforms for the digital transformation
Now Platform®: The platform of platforms for the digital transformation IT Employee Customer Creator Workflows Workflows Workflows Workflows Transform your Create connected Connect your Build connected business with and engaging customer operations cross-enterprise workflows that experiences for you
Slide 6: Q1-21 Financial Highlights
Q1-21 Financial Highlights Q1 2021 Results Quarterly Results Increase Y/Y Subscription Revenues $1,293M 30% Non-GAAP Subscription Billings(1) $1,365M 29% Non-GAAP Normalized Subscription Billings 37%(2) Current RPO (cRPO) $4.4B 33% Remaining Performance Obligations (RPO) $8.8B 34% Non-GAAP Operating
Slide 7: Guidance Summary
Guidance Summary Q2 2021 Quarterly Guidance Increase (Decrease) Y/Y Subscription Revenues $1,290M - $1,295M 27% - 28% Non-GAAP Subscription Billings(1) $1,250M - $1,255M 23% Non-GAAP Operating Margin(1) 22% (~600bps) Current RPO (cRPO) Growth(2) 30% NA Full-Year 2021 Full-Year Guidance Increase (Dec
Slide 8: Comparison to Previously Issued Guidance
Comparison to Previously Issued Guidance $5,490 $32 $5,463 $1,278 $20 $1,293 ($59) ($5) ($M) Subscription Revenues Y/Y Growth 28% 30% 28% 27% $1,313 $47 $1,365 $11 ($M) ($5) Non-GAAP Subscription Billings(3) Y/Y Growth 24% 29% 25% 24% Q1-21A FY21E Prev. Guidance Midpoint(1) Currency Impact(2) Durati
Slide 9: Year-Over-Year Subscription Revenues and Billings Growth
Year-Over-Year Subscription Revenues and Billings Growth 36% 34% 36% 35% 34% 34% 32% 33% 33% 31% 30% 32% 29% 32% 29% 30% 31% 26% Subscription Revenues Q1-20A Q2-20A Q3-20A Q4-20A Q1-21A FY20A 41% 36% 38% 32% 32% 31% 32% 31% 27% 30% 28% 30% 29% 25% 26% 25% 24% 25% Non-GAAP Subscription Billings(1) Q1
Slide 10: Currency and Duration Impact to Year-Over-Year Sub. Revenues and Sub. Billings
Currency and Duration Impact to Year-Over-Year Sub. Revenues and Sub. Billings $1,184 $1,293 $1,256 $4,286 $4,272 $1,161 ($M) $1,016 $12 $1,027 $1,091 $1,077 ($37) ($14) ($14) ($23) Subscription Revenues Y/Y Growth 30% 32% 31% 29% 32% 29% 30% 26% 32% 31% Q2-20A Q3-20A Q4-20A Q1-21A FY20A $1,828 $1,7
Slide 11: Remaining Performance Obligations
Remaining Performance Obligations Current RPO Noncurrent RPO ($B) $8.9 $8.8 Q1-21 Y/Y Growth $7.0 $7.3 $6.6 $4.5 $4.4 +34% / +30% cc(1) $3.5 Total RPO $3.3 $3.5 $4.4 $4.4 +33% / +29% cc(1) $3.3 $3.5 $3.8 Current RPO Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 (1) Current period end results for entities reporting
Slide 12: Customer Cohort Growth
Customer Cohort Growth Annual Growth of Initial ACV 54% 74% 66% 71% 84% 91% 73% 84% 93% 128% 134% (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 $1,574 as of Q1-21, representing annual growth of initi
Slide 13: Expansion of Customer Relationships
Expansion of Customer Relationships $4.0 1500 $3.4 $3.4 ($M) $3.5 $3.2 $3.3 $3.1 $3.1 1300 $3.0 $2.9 $2.9 $3.0 1,146 1,093 1100 1,011 $2.5 932 965 890 900 809 $2.0 766 720 700 $1.5 500 $1.0 300 $0.5 100 $0.0 -100 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Number of Customers with $1M+ ACV
Slide 14: Net New ACV Contribution Across Workflows and Products
Net New ACV Contribution Across Workflows and Products (1) IT Workflows Customer & Employee Workflows Creator Workflows & Others 11% 13% 12% 15% 20% 23% 24% 26% 23% 25% 66% 63% 62% 62% 55% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Notes: (1) Historical presentations disclosed net new ACV contribution across pro
Slide 15: Renewal Rate
Renewal Rate 99% 98% 97% 97% 97% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 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. Additionally, starting in 2020, we simplified our methodology re
Slide 16: GAAP Revenues by Geography
GAAP Revenues by Geography North America EMEA APAC & Other 9% 9% 9% 10% 10% 24% 25% 25% 26% 25% 67% 66% 66% 64% 65% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 ® 16 © 2021 ServiceNow, Inc. All Rights Reserved.
Slide 17: Headcount by Department
Headcount by Department PS & Other Cost of Sales Sub. Cost of Sales S&M R&D G&A 13,988 13,096 12,643 1,876 11,901 11,148 1,798 1,761 1,656 1,534 4,251 3,769 3,915 3,436 3,120 4,762 5,090 4,444 4,599 4,211 1,516 1,595 1,715 1,790 1,908 767 770 799 831 863 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 ® 17 © 2021 Ser
Slide 18: Non-GAAP Gross Margins
Non-GAAP Gross Margins Non-GAAP Subscription Gross Margin 87% 87% 86% 86% 86% 86% 85% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 FY19 FY20 Non-GAAP PS & Other Gross Margin 19% 16% 14% 12% 0% 13% 1% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 FY19 FY20 Non-GAAP Total Gross Margin 83% 83% 82% 82% 82% 81% 82% Q1-20 Q2-20 Q3-20 Q
Slide 19: Non-GAAP Operating and Free Cash Flow Margins
Non-GAAP Operating and Free Cash Flow Margins Non-GAAP Operating Margin 28% 26% 27% 24% 25% 22% 21% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 FY19 FY20 Non-GAAP Free Cash Flow Margin 46% 45% 39% 32% 28% 24% 19% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 FY19 FY20 Note: All figures are calculated on a non-GAAP basis. See app
Slide 20: Non-GAAP Net Income and Diluted EPS
Non-GAAP Net Income and Diluted EPS Non-GAAP Net Income ($M) $926 $646 $306 $207 $243 $241 $235 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 FY19 FY20 $4.63 Non-GAAP Diluted EPS $3.32 $1.23 $1.52 $1.05 $1.21 $1.17 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 FY19 FY20 Note: All figures are calculated on a non-GAAP basis. See app
Slide 21: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation ® 21 © 2021 ServiceNow, Inc. All Rights Reserved.
Slide 22: GAAP to Non-GAAP Reconciliation – Revenues and Billings
GAAP to Non-GAAP Reconciliation – Revenues and Billings in millions (except %'s) 2019 Q1-20 Q2-20 Q3-20 Q4-20 2020 Q1-21 Q2-21E Midpoint 2021E Midpoint GAAP Subscription Revenues $ 3,255 $ 995 $ 1,016 $ 1,091 $ 1,184 $ 4,286 $ 1,293 $ 1,293 $ 5,463 (+) Effects of Foreign Currency Rate Fluctuations 5
Slide 23: GAAP to Non-GAAP Reconciliation – Remaining Performance Obligations
GAAP to Non-GAAP Reconciliation – Remaining Performance Obligations in billions (except %'s) Q1-20 Q2-20 Q3-20 Q4-20 2020 Q1-21 GAAP Current Remaining Performance Obligations at Period End $ 3.3 $ 3.5 $ 3.8 $ 4.4 $ 4.4 $ 4.4 (+) Effects of Foreign Currency Rate Fluctuations 0.0 0.0 (0.1) (0.1) (0.1)
Slide 24: GAAP to Non-GAAP Reconciliation – Billings and Normalized Billings
GAAP to Non-GAAP Reconciliation – Billings and Normalized Billings in millions (except %'s) Q4-20 2020 Q1-21 2021E Midpoint GAAP Subscription Revenues $ 1,184 $ 4,286 $ 1,293 $ 5,463 (+/-) Change in Subscription Deferred Revenue, Unbilled Receivables, and 643 696 72 735 Customer Deposits Non-GAAP Su
Slide 25: GAAP to Non-GAAP Reconciliation – Other
GAAP to Non-GAAP Reconciliation – Other in millions (except %'s and per share data) 2019 Margin Q1-20 Margin Q2-20 Margin Q3-20 Margin Q4-20 Margin 2020 Margin Q1-21 Margin Q2'21E Margin 2021E Margin GAAP Subscription Gross Profit $ 2,705 83% $ 835 84% $ 844 83% $ 902 83% $ 974 82% $ 3,555 83% $ 1,0
Slide 26: GAAP to Non-GAAP Reconciliation – Other (cont.)
GAAP to Non-GAAP Reconciliation – Other (cont.) in millions (except %'s and per share data) 2019 Margin Q1-20 Margin Q2-20 Margin Q3-20 Margin Q4-20 Margin 2020 Margin Q1-21 Margin Q2'21E Margin 2021E Margin GAAP Weighted-Average Shares Used to Compute Net Income (Loss) per Share - Diluted 197 N/A 2