Servicenow, Inc. · NYSE:NOW

Servicenow — Investor Day (May 2023)

151 slides from Servicenow's investor day presentation, May 16, 2023

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, and current remaining performance obligations
Slide 4: Agenda
U T A H D E S E R T Opening Remarks Darren Yip – VP of Investor Relations Vision and Opportunity Bill McDermott – Chairman and Chief Executive Officer Platform Innovation & Go-to-market CJ Desai – President and Chief Operating Officer Generative AI Jon Sigler – SVP, Platform Agenda Amy Lokey – SVP,
Slide 5: Vision and Opportunity
U T A H D E S E R T Vision and Opportunity Bill McDermott Chairman & CEO
Slide 6: ServiceNow at the center of a Great Reprioritization in the enterprise
ServiceNow at the center of a “Great Reprioritization” in the enterprise DIGITAL TRANSFORMATION Powered by The intelligent platform for end-to-end digital transformation Enterprise-wide Integration: Systems of Record | Data | Devices Cost takeout Business model Tech landscape Generational and produc
Slide 7: Our trajectory remains best-in-class among scale peers
Our trajectory remains best-in-class among scale peers Fastest to $7B of Organic Revenue… …with industry-leading Rule of 50 performance 33 53% 30 30 38% 28 quarters 30% 25% SAP ORCL CRM SAP ORCL CRM Notes: Revenue growth comparison shows number of quarters from first quarter over $1B trailing twelve
Slide 8: Our market leading performance despite a complex environment
Our market leading performance despite a complex environment SUSTAINED VALUE CREATION BEST-IN-CLASS EXECUTION WORLD CLASS CULTURE $6.8B+ 14 2,000+ ~21K No Subscription revenue(1) Product leadership Innovations Total global Layoffs recognitions(3) employees 26% ~85% 1,641 32.3% 14.7% Operating margin
Slide 9: CEOs are wary of IT and business silos
CEOs are wary of IT and business silos… CEO CIO CFO IT PMO CISO CCO COO Business IT Strategy Head of Shared Head of CPO/ Strategy CRO Services App Dev CSCO CHRO CMO Data & Analytics © 2023 ServiceNow, Inc. All Rights Reserved. 9
Slide 10: With AI, the IT strategy is the business strategy
…With AI, the IT strategy is the business strategy CIO CEO Higher Workforce productivity supported by THE Intelligent Better EXPONENTIAL Automation platform experiences ENTERPRISE Generative AI Low Code Business Process Mining | RPA acceleration CFO COO © 2023 ServiceNow, Inc. All Rights Reserved. 1
Slide 11: Growth engines to give us unparalleled momentum
Growth engines to give us unparalleled momentum 3 GEOGRAPHIES 4 CUSTOMER SEGMENTS Global footprint GTM coverage AMS EMEA APJ Marquee Enterprise Commercial Non-profits Business Transformation 5 PRIORITY INDUSTRIES VAST ECOSYSTEM Industry solutions and integrated GTM 2k+ Partners, Million+ Skilled Pro
Slide 12: We will be the Defining Enterprise Software Company of the 21st Century
We will be the… Defining Enterprise Software Company of the 21st Century #DESCO21C Build great Tell a great Deliver amazing Build a Products Story Experiences Movement World works with ServiceNow™ SHAREHOLDER VALUE CUSTOMER TRUST SOCIAL IMPACT © 2023 ServiceNow, Inc. All Rights Reserved. 12
Slide 13: We have liftoff
We have liftoff Profitable growth trajectory to $20B+ Sustained focus on exceptional shareholder value Note: $20B+ denotes Total Revenues © 2023 ServiceNow, Inc. All Rights Reserved. 13
Slide 14: Platform Innovation
Platform Innovation CJ Desai President & COO
Slide 16: Progress in ~7 Years
Progress in ~7 Years NON-GAAP NON-GAAP SUBSCRIPTION Q1 2023 OPERATING FY22 FREE CASH FLOW FY22 $2B 26% 30% REVENUE M A R G I N (1) M A R G I N (2) 10x +16% +7% Q2 2015 FY15 FY15 $200M 10% 23% Note: Subscription revenue, Operating margin, Free Cash flow Margin in 2015 is not adjusted for ASC 606 adop
Slide 18: Platform capabilities
Workflows ON Service Portal ON ML ON Search ON PLATFORM User Experience ON Integrations ON Virtual Agent ON Encryption ON CAPABILITIES Process Mining ON RPA ON Low Code Tools ON Analytics ON Core Data Model Industry Data Models PLATFORM CORE CMDB Security Compute Networking Storage SERVICENOW CLOUD
Slide 19: Customer & Industry Workflows
Customer Creator Technology Employee & Industry Workflows Workflows Workflows Workflows and Others IT Service Management HR Service Delivery Customer Service Management App Engine (Low Code) IT Operations Management Legal Service Delivery Field Service Management Automation Engine IT Asset Managemen
Slide 22: Higher innovation velocity: time to new product
1 MAJOR PRODUCTS 2023 6 Months 20+ GLOBAL PUBLIC SECTOR NEW PRODUCT Higher 15 Months 2020 HARDWARE ASSET innovation MANAGEMENT NEW PRODUCT 12 velocity © 2023 ServiceNow, Inc. All Rights Reserved. 22
Slide 24: Better R&D and operating economics
2 7 R&D Personnel TO DEVELOP A PUBLIC SECTOR PRODUCT 11 R&D Personnel T O D E V E L OP 1 st V E R S I ON OF HAR D WAR E ASSET MANAGEMENT PRODUCT Better R&D and operating 84% Subscription Gross Margin(1) economics STANDARDIZED GLOBAL INFRASTRUCTURE FOR A SINGLE PLATFORM (1) Subscription Gross Margin
Slide 26: Faster time to value for customers
Once ITSM is live, other products 3 are implemented faster within… HRSD SAAS COMPANY 8 weeks ITOM LSD LIFE SCIENCES COMPANY CSM 12 weeks Faster time to value for customers AUTOMOBILE MANUFACTURER 16 weeks ERP / Supplier © 2023 ServiceNow, Inc. All Rights Reserved. 26
Slide 28: Expansion of the Now Platform
A B C Evolution from Expansion of the Established Now Platform relevancy in the horizontal to beyond IT C-suite industry-specific solutions © 2023 ServiceNow, Inc. All Rights Reserved. 28
Slide 29: The platform has progressed within and beyond CIO's technology spend
Present A. The And NOW Expansion to legal, finance, has progressed within procurement, and industry- specific products and beyond CIO's The entire C-suite technology spend 2015 Buying Centers First Expansion beyond IT to HR, Security, and Customer Service 2011 CIO / CISO / CHRO / CCO First use case
Slide 30: The platform has evolved to serve the entire C-suite
UNLOCKED B. The UNLOCKED has evolved to serve UNLOCKED CFO the entire C-suite UNLOCKED Chief Sustainability Officer Chief Legal Officer ESG CTO LSD Observability CCO CIO/CDO Chief ITOM Procurement & CSM Facilities Officer CISO ITSM ERP SecOps CHRO Chief Risk Officer WSD HRSD SVP, IT RISK ITSM ITOM I
Slide 31: Industry Workflows, Data Models, & Integrations
C. Industry Workflows, Public Sector Data Models, Telco / Media / Tech & Integrations Financial Services Healthcare & Life Sciences Manufacturing © 2023 ServiceNow, Inc. All Rights Reserved. 31
Slide 32: Higher Average Selling Price
THIS MEANS Higher Public Sector Telco / Media / Tech PSDS ENTERPRISE TSM ENTERPRISE Average Financial Services Selling Price Healthcare & Life Sciences Manufacturing OTM ENTERPRISE OTV © 2023 ServiceNow, Inc. All Rights Reserved. 32
Slide 35: Our TAM continues to expand
$81B Technology Workflows Our TAM Employee $13B Workflows continues $220B F Y 2 5 T A M ( 1) Customer & Industry to expand $55B Workflows Creator Workflows $71B and Others (1) Calculations performed by ServiceNow based on Gartner research, ServiceNow analysis, and additional research reports. Source
Slide 36: Customer & Industry Workflows
Customer Creator Technology Employee & Industry Workflows Workflows Workflows Workflows and Others IT Service Management HR Service Delivery Customer Service Management App Engine (Low Code) IT Operations Management Legal Service Delivery Field Service Management Automation Engine IT Asset Managemen
Slide 37: When customers leverage our platform across the enterprise
When customers leverage our platform across the enterprise Store and manage Discover assets Manage enterprise assets in across public cloud network ServiceNow’s CMDB & private cloud inventory TELCO Launch and Mitigate Improve CUSTOMER onboard Risk & Security employee SPOTLIGHT new products vulnerabi
Slide 38: ServiceNow Platform AI
Platform Al “ss ~ ion i > ~~ <* — — ose oe eee. - < o— . ~ servicenow. — ~ Ys
Slide 39: Intentional M&A to get world-class AI talent
In the last 6 years ServiceNow has been intentional to get world-class AI talent Enterprise AI Virtual Agent Natural Language Query Multi-language NLU RPA ML Platform NLU English AI-based Search AI Ops Large-scale Data Mgmt Skills Mapping Intentional M&A 2017 2018 2019 2020 2021 2022 AI IN THE NOW P
Slide 41: GenAI is a Catalyst for the ServiceNow Platform
GenAI is a Catalyst for the ServiceNow Platform WITH POSITIVE IMPACT ACROSS A MULTITUDE OF DIGITAL WORKFLOWS © 2023 ServiceNow, Inc. All Rights Reserved. 41
Slide 42: All of our workflows will leverage Gen AI
All of our workflows will leverage Gen AI Technology Employee Customer & Industry Creator Workflows Workflows Workflows Workflows and Others EXAMPLES EXAMPLES EXAMPLES EXAMPLES Shared Services Higher deflection rates for Automation and Higher agent Text-to-code all types of IT Incidents Cost Optimiz
Slide 43: ServiceNow's Generative AI strategy
General purpose Domain specific SERVICENOW DEVELOPED MODELS CURRENT ServiceNow’s Generative AI WHY IT MATTERS? strategy EXPLORING Large Language Model Accuracy Optimized for Customer Data Data Privacy MONETIZATION STRATEGY Directly monetized across majority of workflows and uses cases GEN AI BENEFIT
Slide 44: Utah, Vancouver, Washington DC+
TODAY TOMORROW FUTURE Utah Vancouver Washington DC+ Live Now Sep 2023 2024 Agent Assist Virtual Agent Complete self-service for all Q&A interactions in Leverage conversation and workflow Easy access to Gen AI LLMs in one seamless experience powering the experience Virtual Agent experiences Summarize
Slide 47: What can Generative AI do for the ServiceNow Platform?
What can Intent Understanding Generative AI do for the ServiceNow Platform? Knowledge Synthesis These capabilities are relevant and valuable for all ServiceNow personas across our product portfolio Language Generation © 2023 ServiceNow, Inc. All Rights Reserved. 47
Slide 52: A trustworthy and human-centered approach
A trustworthy and human-centered approach Central Secure Platform UX Guidelines Controlled, governance & data & reviews phased releases © 2023 ServiceNow, Inc. All Rights Reserved. 52
Slide 55: Now Assist helps all of our users
Now Assist helps all of our users Erick Valdes Nick Burdock Bonny Keller Indra Hall Hillary Osman Developer Admin Customer Agent Employee Exponentially faster Easier & faster to deploy Efficient, cohesive Productivity catalysts that Build new apps with time to configure and & optimize apps– and simp
Slide 57: UI Builder demo
servicenow UI Builder e Oper: Editor Data Preview and test Settings DD Coffee Corner (Light) v 920 px 100% Welcome, Erick. = Main content You have several critical incidents to handle v © Body header 2} Header viewport Body main v O Left Top priorities vB Oveniew INC340462 arViP [TSC INC94SES52 VIP
Slide 58: UI Builder workspace
servicenow Ul Builder 1s Workspace Preview and test Settings. Welcome, Erick. You have several critical incidents to handle. UI Builder DD Coffee Corner (Light) v Top priorities NcO34532 VIP) (AIBIGritieal). + MeetX is pixelated and laggy, keeps dropping meetings Customer is having issues with their
Slide 59: UI Builder Now Assist
& Ul Builder Now Assist is Workspace / fi Home (Service desk landing page SNC) ¥ Data Previewandtest _ Settings Welcome, Erick. You have several critical incidents to handle. Top priorities Nco34532 VIP) (AIBIGritieal). + MeetX is pixelated and laggy, keeps dropping meetings Customer is having issue
Slide 60: UI Builder Now Assist
servicenow BE UI Builder e » Now Assist © ulBuilder / & serv a Workspace / l& Home (Service desk landing page SNC) ¥ Editor Data Previewandtest Settings DD Coffee Corner (Light)v © & GQ QO Welcome, Erick. “A Y Y, You have several critical incidents to handle. Top priorities Show more options NCO3453
Slide 61: P1 task alert flow
Re P1 task alert flow _ iinaave vew (83 (5) (e) | Test) GARE |: TRIGGER © incident Created where (Priority is 1 - Critical) ACTIONS 1 © Look Up Change Records where (Created is after 1 week ago) v2 -£> If 1-Look Up Records >...» Caused by Change X contains | 1-LookUp... »...» Change Record 3 then ©)
Slide 62: UI Builder operations workspace
servicenow Ul Builder erations Workspace Editor Data -—Previewandtest _— Settings Welcome, Erick. You have several critical incidents to handle. Top priorities NcO34532 VIP! (AIBIGHitieal) + MeetX is pixelated and laggy, keeps dropping meetings Customer is having issues with their op randomly crashi
Slide 64: Admin Center demo
33 COFFEECORNER All Favorites History Admin 1 app moved to staging since you last checked in, Nick. View details What's happening on your instance Instance upgrade Current Latest Washington Xanadu Upgradability violations 11. 9 +2 since May 11 Review results Visit Upgrade Center Security compliance
Slide 65: Apps
Apps Needs update 11 9 5 Dev Staging Production 8:56AM Need help with something, Nick? Service Operations Workspace Ready to test 8:56 AM Metric Intelligence Ready to test Upon) 2 uy What steps do | need to take to make More. Service Operations Workspace Visit App Manager available to our agents? 8:
Slide 66: What steps do I need to take
7 8:56AM What steps do | need to take to make Service Operations Workspace Apps available to our agents? 8:56 AM Needs update 11 9 5 . Service Operations Workspace Dev Staging Production Deployment best practices: Deploying your Service Operations Workspace is easy with the right Service Operations
Slide 67: Apps
Apps Needs update 11 9 5 Dev Staging Production Service Operations Workspace Testing aD 58% Up to date 123 Visit App Manager Subscriptions Overall subscription issues 2 Unconfirmed user groups 2 0 Unmapped global custom tables Visit Subscription Management Morev Adoption blueprint spotlight Expand t
Slide 68: While tests run, you can sort out access
ce Ae While tests run, you can sort out access. Who should have access to Service Operations Workspace? Apps 8:57 AM Needs update 11 9 5 VIMO RED AESESSME NE Dev Staging Production Cee Right now, all agents. That's the default setting. Service Operations Workspace Testing Up to date 123 Hello, all C
Slide 69: Apps
Apps Needs update 11 9 5 Dev Staging Production Service Operations Workspace Ready to deploy Up to date 123 Metric Intelligence Ready to test Morev Visit App Manager Subscriptions Overall subscription issues 2 Unconfirmed Unmapped global user groups custom tables 2 O Visit Subscription Management Ad
Slide 71: Employee portal demo
> COFFEE CORNER Tasks@ Requests @ Morey J i)~ Work + Grow + Connect » OurCompany » — Org Chart + Ask Now Assist... hat is our globel travel policy? What's the next company holiday? Tackle tasks View all > Choose equipment for your new hire Frank starts June Srd Complete yearly compliance training Se
Slide 72: Now Assist app creation
rs + Now Assist How do | make a form for sales employees to request a headshot 3:45 PM You have access to creating ServiceNow applications. We can easily build your app together in Creator Studio. Go to Creator Studio KNOWLEDGE ARTICLES B Security best practices for photoshoots B How to create avata
Slide 73: Now Assist request
you alizations + Now Assist to add that? 3:46 PM Yes! | also need them to give us permission to use their photo in marketing materials for promotional purposes. 2 3 = Sear empire Published
Slide 74: Headshot Request
Headshot Request Schedule your headshot with a photographer. g answer By submitting this form, you'll allow the marketing team to use your headshot for promotional purposes. Full name Email 2 Preferred date > [ A . Here's the application for sales team members to request a headshot. You'll see that
Slide 75: Could I get an email whenever someone requests a headshot?
Could I get an email whenever someone requests a headshot? Headshot Request Sure, added a workflow that will email you whenever someone submits a headshot request, View workflow } Schedule your headshot with a photographer. g answer By submitting this form, you'll allow the marketing team to use you
Slide 76: Now Assist workflow
ERED Wertpece P cotfeecomeritish » SRC GEMM | + Now Assist j Could I get an email whenever COFFEE CORNER Tasks@ Requests aN More + yo someor headshot? PM Me + Work + ° C. Our Company + Org Chart Sure, added a workflow that will email ‘you whenever someone submits a headshot request. Explore Catalogs
Slide 77: Portal Workspace Now Assist
oo Portal Workspace )B Coffee Comer (light) ¥ @ 2 OQ Back to editor | Submit for review + Now Assist oO 9:48 PM , COFFEE CORNER Taks@ = (Ok, here are a few options: Explore Catalogs Schedule your headshot wit Add image photographer Show more options 3:48 PM By submitting this form, you'll allow the
Slide 78: Headshot Request Workspace
Portal | Workspace DD Coffee Corner (Light) ¥ Back to editor (Submitforreview Now Assist PM COFFEE CORNER Headshot Request Workspace (Ok, here are a few options: Monitor all of your headshots requests in one place. Welcome, Hillary! y ; a Add image Overview ‘Show more options Open requests Requests
Slide 79: Congrats on creating your first app
1D © Portal workspace DP Coffee Corner (Light) ~ aoa Back to editor > COFFEE CORNER Tasks@ Requests @ Morey J i)~ Me + Work» Grow + Connect > OurCompany + — Org Chart 7 RN ey FT mm © © ° ¢ . iy Congrats on creating your first app! It's been submitted to your admin for review. We'll let you know when
Slide 80: Headshot Request form is now live
Company ~ Org Chart Tasks@ Requests Y More ~ 7) ~ Your Headshot Request form is now live. Go to form Tackle tasks View all > Choose equipment for your new hire Frank starts June 3rd Complete yearly compliance training Due: 5/21/23 { Review updated global travel policy Share on Teams
Slide 81: Now Assist: Our New Horizon
Now Assist O U R N E W H O R I Z O N
Slide 82: Finance and Supply Chain Workflows
Finance and Supply Chain Workflows Josh Kahn SVP, Creator Workflows
Slide 83: Finance and Supply Chain processes are very manual
Finance and Supply Chain processes are very manual because of the technology landscape Procure Pay © 2023 ServiceNow, Inc. All Rights Reserved. 83
Slide 84: Transformation is typically stalled waiting for ERP migration
Transformation is typically stalled waiting for ERP migration, but neither is successful today BUSINESS PRIORITY TECHNOLOGY PRIORITY DIGITAL TRANSFORMATION ERP MIGRATION & CONSOLIDATION GOAL: GOAL: Streamline ERP Processes Clean Core ERP INCREASING REALITY: REALITY: TECH DEBT Stalled for ~5-10 years
Slide 85: Creator Workflows
Creator Workflows Delivers transformation in weeks, while reducing ERP migration risk 1. 2. 3. Automation App Finance and Supply Engine Engine Chain Workflows © 2023 ServiceNow, Inc. All Rights Reserved. 85
Slide 86: App Engine
Build custom apps to transform fast, Creator Workflows while supporting App Engine a clean core ERP Customization Mining Data Access Layer Low-code Tools © 2023 ServiceNow, Inc. All Rights Reserved. 86
Slide 87: Finance and Supply Chain Workflows
Transform Source-to-Pay Operations, delivering Finance and hard cost savings and Supply Chain productivity gains Workflows Sourcing and Procurement Operations Supplier Lifecycle Operations Accounts Payable Operations © 2023 ServiceNow, Inc. All Rights Reserved. 87
Slide 88: We have landed 70+ customers
300% Estimated ROI with a global supplier workflow platform AEROSPACE COMPANY $1B We have Estimated savings on procurement spend cost by FY 2025 landed 70+ customers APPAREL COMPANY in 1 year One Engagement Including 8 in the Global 100, Experience without adding a new go to From dozen of legacy sys
Slide 90: Rapid pace of innovation in Finance and Supply Chain Workflows
Rapid pace of innovation in Finance and Supply Chain Workflows Sourcing & Procurement Supplier Lifecycle Accounts Payable Operations Operations Operations 20 MONTHS TO GA 17 MONTHS TO GA 13 MONTHS TO GA Q1 2022 Q3 2022 Q3 2023 © 2023 ServiceNow, Inc. All Rights Reserved. 90
Slide 92: This is a huge opportunity for ServiceNow
This is a huge $11B+ opportunity 2025 TAM (SOURCE-TO-PAY) for ServiceNow RELEVANT TO EVERY SERVICENOW CUSTOMER AND BEYOND © 2023 ServiceNow, Inc. All Rights Reserved. 92
Slide 94: Still untapped opportunity across many regions
Still untapped USA Remains largest opportunity Americas untapped TAM across many Canada LATAM regions 65% OF FY22 REVENUE (e.g., Brazil) UK Australia EMEA APJ Japan Germany France India 25% OF FY22 REVENUE 10% OF FY22 REVENUE © 2023 ServiceNow, Inc. All Rights Reserved. 94
Slide 95: World-wide cloud presence
World-wide cloud presence Continued data center expansion to keep pace with GTM expansion U.K. Ireland Germany Netherlands Canada Switzerland Singapore U.S. Federal Australia 34 Global Datacenters South Korea Americas: 15 India Europe: 8 APJ: 11 Japan Brazil U.S. Locations on map depicted for illust
Slide 96: Unmatched opportunity across industries
Unmatched <5% TAM PENETRATION opportunity IN TOP 5 INDUSTRIES across industries Financial Services Manufacturing Public Sector HealthCare Life Sciences Telco, Media, Tech Note: <5% denotes aggregate penetration of the top 5 industries listed on this slide. © 2023 ServiceNow, Inc. All Rights Reserved
Slide 98: Accelerate growth of large and strategic customers
We are focused on delivering GTM operating leverage 1. Accelerate growth of our large and strategic customers HOW? Orchestrate end-to-end GTM personnel to enable enterprise- wide platform adoption © 2023 ServiceNow, Inc. All Rights Reserved. 98
Slide 99: Simplified coverage model to drive scale and efficiency
We are focused on delivering GTM operating leverage 2. Simplified coverage model to drive scale and efficiency HOW? Solution-led selling, field verticalization, digital sales & marketing, and customer success © 2023 ServiceNow, Inc. All Rights Reserved. 99
Slide 100: Scale ecosystem for sales capacity and implementation
We are focused on delivering GTM operating leverage 3. Scale ecosystem for sales capacity and implementation HOW? Partner deeply to Sell-with and Sell-through and accelerate customer value © 2023 ServiceNow, Inc. All Rights Reserved. 100
Slide 101: Our expansion ecosystem
Our expansion ecosystem PARTNERSHIPS Technology Partners Strategic SI Partners Standards & controls Integrations ServiceNow Store Practitioners US Federal DOD: IL4 / IL5, FedRamp ~1,200 ~95% ~1M+ Australia IRAP Partner of customers Skilled individuals Developed use the on the NOW ServiceNow Protecte
Slide 103: Customer Panel
Customer Panel Paul Smith Chief Commercial Officer
Slide 104: CxOs are facing difficult choices
CxOs are facing difficult choices BUSINESS PRIORITY TECHNOLOGY PRIORITY Lower cost to serve Elevate customer experiences YES! Minimize your labor costs Enhance employee experiences Reduce risk Build for resilience Protect your customer base Digitize your business © 2023 ServiceNow, Inc. All Rights R
Slide 105: Customer Panel
CUSTOMER PANEL WELCOME, SERVICENOW CUSTOMERS: Dr Stefan Henkel Kayoor Gajarawala Host: Chief Information Officer VP Information & Digital Engineering Paul Smith Chief Commercial Officer © 2023 ServiceNow, Inc. All Rights Reserved. 105
Slide 106: Solving a global problem: Energy transition
CUSTOMER SPOTLIGHT Solving a Global business global problem: 80+ countries and 32M daily customers at retail sites Energy transition Highly resilient & responsive Digital backbone for IT operations Streamlined & standardized Project and resource management Connected IRM & IT risk workflows © 2023 Se
Slide 107: Delivering a world-class, 360° customer experience
Delivering a CUSTOMER SPOTLIGHT world-class, Global business Operating in 70 countries 360° customer Driving digital innovation experience Beyond IT Single platform For customer service & field service management Unlimited enterprise-wide use cases on the NOW Platform © 2023 ServiceNow, Inc. All Rig
Slide 108: Customer Panel
CUSTOMER PANEL WELCOME, SERVICENOW CUSTOMERS: Dr Stefan Henkel Kayoor Gajarawala Host: Chief Information Officer VP Information & Digital Engineering Paul Smith Chief Commercial Officer © 2023 ServiceNow, Inc. All Rights Reserved. 108
Slide 109: Financial Overview and ESG Strategy
Financial Overview and ESG Strategy Gina Mastantuono Chief Financial Officer
Slide 110: Durable growth, consistent execution, inherent leverage at scale
Consistent Inherent strong leverage execution Durable at scale growth ©©2023 2023ServiceNow, ServiceNow,Inc. Inc.All AllRights Rights Reserved. Reserved. 110 110
Slide 111: Relentless execution continues to deliver strong growth
Relentless S U B S C R I P T I O N R E V E N U E S A N D Y / Y G R O W T H ( C C ) (1) USD IN MILLIONS execution 38% 37% 31% 28% 29% continues to $6,891 deliver strong $5,573 growth $4,286 31% 2018 – 2022 CAGR (CC)(1) Subscription Revenue $2,421 $3,255 (1) Y/Y Growth (CC) represents year on year con
Slide 112: Healthy backlog provides sturdy base for future revenue growth
Healthy backlog REMAINING PERFORMANCE OBLIGATIONS USD IN BILLIONS provides sturdy base for future LEGEND Current RPO $11.5 $14.0 revenue growth Noncurrent RPO $8.9 $7.1 $5.8 $6.6 $4.5 31% 30% $4.9 $3.3 $2.5 $6.9 2018 – 2022 CAGR (CC)(1) 2018 – 2022 CAGR (CC)(1) $5.7 Total RPO Current RPO $4.4 $3.3 $
Slide 113: Winning quality new logos with bigger deal sizes
Winning quality new logos with bigger deal sizes ~40% 60%+ 2018 – 2022 GROWTH 2018 – 2022 GROWTH New logos landing with $250K+ in ACV New logo average ACV in first year © 2023 ServiceNow, Inc. All Rights Reserved. 113
Slide 114: Even more products landed within new logos
...driven by even more products landed within new logos Average number of products customers purchased in first year ~30% growth achieved again in just 1 year ~30% ~30% growth over 4 growth achieved years in just 1 year 2016 2020 2021 2022 © 2023 ServiceNow, Inc. All Rights Reserved. 114
Slide 115: Once on board, customers expand with us for years
Once on board, customers expand with us for years ~125% Net Expansion Rate(1) in 2022 66% Of our existing customer base spent incremental dollars with NOW in 2022 85%+ Of NNACV came from existing customers in 2022 (1) Net Expansion Rate is calculated by dividing ACV for the current period by the tot
Slide 116: Customer cohorts demonstrate the durability of our growth engine
Customer cohorts demonstrate the durability of our growth engine Annual Growth of Initial ACV 46% 63% 61% 83% 77% 71% 97% 106% 95% 132% 123% 173% 191% (1) © 2023 ServiceNow, Inc. All Rights Reserved. 116
Slide 117: Our Better Together story is resonating
Our Better Together NNACV MIX BY PRODUCT COUNTS story is resonating 97% 44% LEGEND 54% 65% 5+ product deals 72% 2-4 product deals 77% Single product deals NNACV from multi-product deals in 2022 77% 47% 39% 30% 25% 20% 9% 7% 5% NNACV from deals with 5+ 3% 3% products in 2022 2018 2019 2020 2021 2022
Slide 118: Expansion is driving robust growth in large customer spend
Expansion is driving robust growth in large customer spend 1,641 NUMBER OF CUSTOMERS IN 2022 39 Customers with $1M+ ACV $20M+ ACV ~20% 98 $10M-$20M ACV $1M+ ACV Customers as a 190 Percentage of Total Customer Base $5M-$10M ACV 1,314 $1M-$5M ACV © 2023 ServiceNow, Inc. All Rights Reserved. 118
Slide 119: More $5M+ customers with growing spend
The platform’s extensibility is yielding more $5M+ customers with growing spend ~4x Increase in number of $5M+ customers between 2018-2022 40%+ 2018 – 2022 Growth ACV for $5M+ Customers © 2023 ServiceNow, Inc. All Rights Reserved. 119
Slide 120: Marquee customers offer significant growth potential
Marquee customers offer significant growth potential ~7x $17B+ Potential ACV Total ACV Potential (200+ Marquee Customers with Existing Products) $3B+ Current ACV © 2023 ServiceNow, Inc. All Rights Reserved. 120
Slide 121: Dominant platform for IT and well positioned for further growth
Dominant FASTEST GROWING LEGEND Platform for IT TECHNOLOGY PRODUCTS Penetration Opportunity and well positioned for Security <15% further growth 50%+ Risk <15% ITAM <20% 2018 – 2022 CAGR ACV of emerging technology products(1) © 2023 ServiceNow, Inc. All Rights Reserved. 121
Slide 122: Plenty of extensibility beyond IT
We have plenty of extensibility beyond IT Average penetration opportunity within existing customers for non-IT products Non-IT product penetration opportunity ~80% LEGEND Penetration Opportunity © 2023 ServiceNow, Inc. All Rights Reserved. 122
Slide 123: Massive opportunity to cross-sell our newer workflows
With a massive opportunity to cross-sell our newer workflows Customer Employee Creator & Industry Workflows Workflows Workflows $800M+ $650M+ $850M+ ACV ACV ACV Note: ACV values as of the end of 2022 © 2023 ServiceNow, Inc. All Rights Reserved. 123
Slide 124: Premium SKUs demonstrate ability to monetize AI
Success with premium SKUs demonstrate our ability to monetize AI powered experiences ~40% ITSM Pro SKU ~25% ~60% penetration(1) Realized price uplift from ITSM Pro 2022 ITSM new customer ACV vs. ITSM Standard SKU from Premium SKUs © 2023 ServiceNow, Inc. All Rights Reserved. 124
Slide 125: Telco solution is helping accelerate penetration
Telco solution is helping accelerate penetration 65% Penetrated ~30% Penetrated ~30% Realized price uplift from existing customers expanding with Telco Top 20 G2K ServiceNow solution in 2022 Telco Companies(1) Telco Customers © 2023 ServiceNow, Inc. All Rights Reserved. 125
Slide 126: Financial Services solution is seeing great traction
Financial Services solution is seeing great traction 25% Penetrated ~10% Penetrated ~40% Realized price uplift from existing customers expanding with Financial Top 20 G2K ServiceNow Services solutions in 2022 Banking Companies(1) Banking Customers © 2023 ServiceNow, Inc. All Rights Reserved. 126
Slide 127: Strategic partner for digital transformation in the Public Sector
ServiceNow is PUBLIC SECTOR ACV GROWTH becoming the strategic partner to drive digital transformation in 30% the Public Sector Y/Y Growth in 2022 35%+ $1B+ ACV from Public Sector 2018 - 2022 CAGR © 2023 ServiceNow, Inc. All Rights Reserved. 127
Slide 129: Increasing R&D Efficiency enables us to innovate at scale
Increasing R&D Efficiency(1) enables us to innovate at scale rapidly Risk product suite example ACV GROWTH $250M+ 50%+ Increase in R&D Efficiency from 2019–2022 12 R&D Personnel at Launch 2022 product launch (1) R&D Efficiency is calculated as product ACV divided by fully burdened R&D personnel expe
Slide 130: Inherent leverage in S&M as we expand with existing customers
Inherent leverage in S&M as we expand with existing customers Illustrative example of a typical enterprise customer 4.5x+ Revenue/S&M LEGEND Sub Revenue Non-GAAP Sales Expense Non-GAAP Marketing Expense Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 © 2023 ServiceNow,
Slide 131: Non-GAAP operating profit and margin
We continue to N O N - G A A P O P E R A T I N G P R O F I T A N D M A R G I N % (1) benefit from the $2,500 USD IN MILLIONS efficiencies of the 40% 21% 25% 25% 26% 20% NOW platform $2,000 10% $1,860 ourselves $1,500 $1,482 -20% -50% 37% $1,121 -80% $1,000 -110% $740 2018 – 2022 CAGR $528 -140% $500
Slide 132: Non-GAAP free cash flow and margin
And continue N O N - G A A P F R E E C A S H F L O W A N D M A R G I N % (1) generating $3,500 USD IN MILLIONS strong free $3,000 28% 28% 32% 32% 30% 40% cash flow $2,500 10% -20% 31% $2,180 $2,000 $1,867 -50% $1,449 -80% $1,500 -110% 2018 – 2022 CAGR $971 $1,000 Non-GAAP Free Cash Flow $732 -140% $
Slide 133: Balance of growth and profitability at scale
ServiceNow SUB REVENUE GROWTH RATE (CC) P L U S F R E E C A S H F L O W M A R G I N (1) remains focused 70% on delivering 66% 65% 63% 60% 59% a balance of 60% growth and 50% profitability LEGEND 40% 38% 37% at scale 31% 32% Sub Rev Growth Rate (CC) 32% FCF Margin 30% 28% 28% 28% 29% 30% Sub Rev Grow
Slide 134: 2023 Guidance
2023 Guidance SUBSCRIPTION REVENUE CURRENT RPO F R E E C A S H F L O W (1) 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 U S D I N B I L L I O N S $8.5 $7.1 $2.6+ $6.9 $2.2 $5.8 23.5% 23% 30% Growth Growth Margin 2022 2023E Q2 2022 Q2 2023E 2022 2023E © 2023 ServiceNow, Inc. All Rights Reserve
Slide 136: The world has changed since our last Analyst Day
FX headwinds The world has Macro environment changed since and Deal elongation our last Analyst Day Generative AI opportunity © 2023 ServiceNow, Inc. All Rights Reserved. 136
Slide 137: $15B+ subscription revenue by 2026
Subscription Revenue milestones Subscription $15B+ Revenues $15+ USD in Billions $10.4 $8.5 OF SUBSCRIPTION REVENUE by 2026 2023E 2024E 2026E Note: Milestones exclude material M&A. © 2023 ServiceNow, Inc. All Rights Reserved. 137
Slide 138: Long-term profitability trajectory
Long-term profitability trajectory Non-GAAP Non-GAAP Free Operating Margin Cash Flow Margin 28% 31% 30% 26% Flat margins in FY25 despite ~200bps in incremental tax Continued expansion headwinds; driven by operating leverage Expansion thereafter 2023E 2024E 2023E 2024E Incremental Y/Y Tax Headwind ~1
Slide 139: SBC Expense Target
SBC Expense Target SBC % of revenue expected to decline to <15% by 2026 on its way to <10% SBC % OF REVENUE 19% <15% <10% 2022 2026 © 2023 ServiceNow, Inc. All Rights Reserved. 139
Slide 140: Driving Exceptional Shareholder Value
Driving Exceptional Shareholder Value First-ever share repurchase program $1.5B SHARE REPURCHASE <1.5% ANNUAL AUTHORIZATION DILUTION © 2023 ServiceNow, Inc. All Rights Reserved. 140
Slide 142: ESG strategic pillars, material issues & 2022 highlights
ESG strategic pillars, material issues & 2022 highlights We make the world work better for everyone Environmental: Social: Governance: Sustaining our planet Creating equitable opportunity Acting with integrity • Climate and energy • Our people • Security and data privacy • Responsible procurement •
Slide 144: GAAP to Non-GAAP Reconciliation – Subscription Revenues
GAAP to Non-GAAP Reconciliation – Subscription Revenues In millions (except %’s 2017 2018 2019 2020 2021 2022 and per share data) GAAP Subscription Revenues $1,740 $2,421 $3,255 $4,286 $5,573 $6,891 (+) Effects of Foreign Currency Rate Fluctuations $(6) $(27) $58 $(14) $(77) $274 Non-GAAP Subscripti
Slide 145: GAAP to Non-GAAP Reconciliation – cRPO and RPO
GAAP to Non-GAAP Reconciliation – cRPO and RPO In billions (except %’s) 2018 2019 2020 2021 2022 GAAP Current Remaining Performance Obligations at Period End $2.5 $3.3 $4.4 $5.7 $6.9 Y/Y Current Remaining Performance Obligations Growth Rates(1) N/A N/A N/A N/A N/A (+) Effects of Foreign Currency Rat
Slide 146: GAAP to Non-GAAP Reconciliation – Operating Income and Operating Margin
GAAP to Non-GAAP Reconciliation – Operating Income and Operating Margin In millions (except %’s 2015* Margin* 2016 Margin 2017 Margin 2018 Margin 2019 Margin 2020 Margin 2021 Margin 2022 Margin and per share data) GAAP Income (Loss) from $(166) (17%) $(423) (30%) $(64) (3%) $(42) (2%) $42 1% $199 5%
Slide 147: 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 2022 Margin Q1-23 Margin 2023E Margin and per share data) GAAP Net Cash $318 32% $160 12% $643 33% $811 31% $1,236
Slide 148: GAAP to Non-GAAP Reconciliation – Subscription Gross Margin
GAAP to Non-GAAP Reconciliation – Subscription Gross Margin In millions (except %’s 2023E Margin and per share data) GAAP Subscription Gross Profit 81% (+) Subscription SBC 2% (+) Subscription Amort of Purchased Intangibles 1% Non-GAAP Subscription Gross Profit 84% Note: Numbers rounded for presenta
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servicenow.

ServiceNow — Investor Day (May 2023) on 6ix

Servicenow — Investor Day (May 2023)

Slide 1: ServiceNow Financial Analyst Day

Slide 2: Safe Harbor and other information

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

Slide 4: Agenda

Slide 5: Vision and Opportunity

Slide 6: ServiceNow at the center of a Great Reprioritization in the enterprise

Slide 7: Our trajectory remains best-in-class among scale peers

Slide 8: Our market leading performance despite a complex environment

Slide 9: CEOs are wary of IT and business silos

Slide 10: With AI, the IT strategy is the business strategy

Slide 11: Growth engines to give us unparalleled momentum

Slide 12: We will be the Defining Enterprise Software Company of the 21st Century

Slide 13: We have liftoff

Slide 14: Platform Innovation

Slide 15: ServiceNow is a Platform Company

Slide 16: Progress in ~7 Years

Slide 17: Why is ServiceNow a unique platform company?

Slide 18: Platform capabilities

Slide 19: Customer & Industry Workflows

Slide 20: What are the advantages of a platform company?

Slide 21: Higher innovation velocity

Slide 22: Higher innovation velocity: time to new product

Slide 23: Higher innovation velocity

Slide 24: Better R&D and operating economics

Slide 25: Higher innovation velocity

Slide 26: Faster time to value for customers

Slide 27: Workflow automation platform for the enterprise

Slide 28: Expansion of the Now Platform

Slide 29: The platform has progressed within and beyond CIO's technology spend

Slide 30: The platform has evolved to serve the entire C-suite

Slide 31: Industry Workflows, Data Models, & Integrations

Slide 32: Higher Average Selling Price

Slide 33: Innovation Growth Vectors

Slide 34: Our Expanding Product Portfolio

Slide 35: Our TAM continues to expand

Slide 36: Customer & Industry Workflows

Slide 37: When customers leverage our platform across the enterprise

Slide 38: ServiceNow Platform AI

Slide 39: Intentional M&A to get world-class AI talent

Slide 40: AI leadership team

Slide 41: GenAI is a Catalyst for the ServiceNow Platform

Slide 42: All of our workflows will leverage Gen AI

Slide 43: ServiceNow's Generative AI strategy

Slide 44: Utah, Vancouver, Washington DC+

Slide 45: Generative AI

Slide 46: Generative AI + Productivity, Value, Experience

Slide 47: What can Generative AI do for the ServiceNow Platform?

Slide 48: Intent Understanding

Slide 49: Knowledge Synthesis

Slide 50: Language Generation

Slide 51: Live demo

Slide 52: A trustworthy and human-centered approach

Slide 53: The Future of ServiceNow and Generative AI

Slide 54: The future of ServiceNow and Generative AI

Slide 55: Now Assist helps all of our users

Slide 56: Now Assist for Developers

Slide 57: UI Builder demo

Slide 58: UI Builder workspace

Slide 59: UI Builder Now Assist

Slide 60: UI Builder Now Assist

Slide 61: P1 task alert flow

Slide 62: UI Builder operations workspace

Slide 63: Now Assist for Admins

Slide 64: Admin Center demo

Slide 65: Apps

Slide 66: What steps do I need to take

Slide 67: Apps

Slide 68: While tests run, you can sort out access

Slide 69: Apps

Slide 70: Now Assist for Everyone

Slide 71: Employee portal demo

Slide 72: Now Assist app creation

Slide 73: Now Assist request

Slide 74: Headshot Request

Slide 75: Could I get an email whenever someone requests a headshot?

Slide 76: Now Assist workflow

Slide 77: Portal Workspace Now Assist

Slide 78: Headshot Request Workspace

Slide 79: Congrats on creating your first app