Slide 1: Investor Presentation Third Quarter 2024
Investor Presentation Third 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: Technology, Employee, Customer and Creator Workflows
Technology Employee Customer and Creator Workflows Workflows Industry Workflows Workflows Build connected Accelerate digital Drive employee Deliver frictionless cross-enterprise transformation with productivity, retention, customer experiences workflow apps fast resilient, cost-efficient, and growth
Slide 5: We are the AI Platform for Business Transformation
We are the AI Platform for Business Transformation We move with the pace of Our 8,100+ global customers(1) Our aspiration is to be the innovation to help customers include approximately 85% of the defining enterprise software transform organizations across Fortune 500. They all rely on company of th
Slide 6: Q3-24 Financial Highlights
Q3-24 Financial Highlights Increase Non-GAAP Constant Q3 2024 Results Quarterly Results Currency Impact(1) (Decrease) Y/Y Currency Y/Y(2) Subscription Revenues $2,715M 23% ~Flat 22.5% Current RPO (cRPO) $9.36B 26% ~250bps tailwind 23.5% Remaining Performance Obligations (RPO) $19.5B 36% ~300bps tail
Slide 7: Guidance Summary
Guidance Summary Currency Impact Increase Non-GAAP Constant Q4 2024 Guidance Quarterly Guidance Included in (Decrease) Y/Y Currency Y/Y(2) Guidance(1) Subscription Revenues $2,875M - $2,880M 21.5% - 22% ~100bps tailwind 20.5% Non-GAAP Operating Margin(3) 29% ~(50bps) NA NA Current RPO (cRPO) Growth
Slide 8: Comparison to Previously Issued Guidance
Comparison to Previously Issued Guidance $42 $2,715 $48 $10,658 $2,663 $10 $30 $10,580 ($M) Subscription Revenues Y/Y Growth 20.5% 22.5% 22% 22.5% Q3-24A FY24E Prev. Guidance Midpoint(1) Currency Impact(2) Q3 Performance Actual Results Guidance Change Current Guidance Midpoint (1) Refers to previous
Slide 9: Year-Over-Year Subscription Revenues Growth
Year-Over-Year Subscription Revenues Growth Subscription Revenues (%) 27% 27% 27% 26% 25% 25% 25% 24% 25% 24% 25% 23% 23% 23% 22% 24% 22% 22% Q3-23A Q4-23A Q1-24A Q2-24A Q3-24A FY23A Previous Year Growth Actual Growth Non-GAAP Constant Currency Sub Revenue Growth (1) (1) Non-GAAP subscription revenu
Slide 10: Currency Impact to Year-Over-Year Sub. Revenues
Currency Impact to Year-Over-Year Sub. Revenues Subscription Revenues ($M) $2,365 $2,332 $2,523 $2,517 $2,542 $2,552 $2,715 $2,711 $8,680 $8,647 $(34) $(6) $10 $(4) $(33) Q4-23A Q1-24A Q2-24A Q3-24A FY23A Y/Y Growth 27% 25% 25% 24% 23% 23% 23% 22% 26% 25% Actuals Currency Impact Non-GAAP Constant Cu
Slide 11: Remaining Performance Obligations (RPO)
Remaining Performance Obligations (RPO) ($B) Current RPO Noncurrent RPO Q3-24 $19.5 $18.0 $18.6 Y/Y $17.7 Growth $14.4 +36% / +33% cc(1) $9.8 $10.2 $9.4 $9.2 Total RPO $7.0 $8.60 $8.45 $8.78 $9.36 $7.43 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 cRPO Y/Y Growth 27% 24% 21% 22% 26% cRPO cc(1) Y/Y 24% 23% 21% 22.5
Slide 12: Customer Cohort Growth
Customer Cohort Growth Annual Growth of Initial ACV 48% 2024 51% 55% 2023 67% 2022 81% 76% 2021 73% 2020 102% 2019 2018 113% 2017 115% 2016 2015 159% 2014 157% 2013 2012 208% 2011 2010 234% (1) (1) As an illustrative example, 2010 customer cohort started with a contract of initial ACV (annual contra
Slide 13: Expansion of Customer Relationships
Expansion of Customer Relationships ($M) $4.8 $4.6 $4.7 $4.5 $4.3 $4.4 $4.2 $4.2 1,973 2,020 $4.0 1,886 1,923 1,772 1,668 1,708 1,628 1,521 Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 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% 98% 98% 98% 98% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 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. © 2024 ServiceNow, Inc. All Rights Reserved. 14
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 15% 16% 18% 17% 15% 25% 29% 30% 29% 31% 60% 55% 52% 54% 54% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 (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% 12% 11% 26% 26% 26% 25% 25% 63% 63% 63% 63% 64% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 © 2024 ServiceNow, Inc. All Rights Reserved. 16
Slide 17: Headcount by Department
Headcount by Department PS & Other Cost of Sales Sub. Cost of Sales S&M R&D G&A 25,743 24,469 22,668 23,362 3,086 22,166 2,992 2,854 2,886 2,802 8,393 7,912 7,211 7,520 6,920 8,585 9,008 7,934 7,966 8,209 3,421 3,622 3,853 4,063 4,351 1,089 1,015 894 917 905 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 © 2024 Serv
Slide 18: Non-GAAP Gross Margins
Non-GAAP Gross Margins Non-GAAP Subscription Gross Margin 86% 86% 84% 85% 85% 85% 84% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 FY22 FY23 Non-GAAP PS & Other Gross Margin 15% 16% 16% 10% 7% 10% 10% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 FY22 FY23 Non-GAAP Total Gross Margin 82% 82% 83% 83% 83% 82% 82% Q3-23 Q4-23 Q1-24
Slide 19: Non-GAAP Operating and Free Cash Flow Margins
Non-GAAP Operating and Free Cash Flow Margins Non-GAAP Operating Margin 30% 30% 31% 29% 28% 27% 26% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 FY22 FY23 Non-GAAP Free Cash Flow Margin 55% 47% 30% 30% 14% 17% 9% Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 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 $643 $707 $651 $775 $603 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 FY22 FY23 $10.78 Non-GAAP Diluted EPS $7.59 $3.11 $3.41 $3.13 $3.72 $2.92 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 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 © 2024 ServiceNow, Inc. All Rights Reserved. 21
Slide 22: GAAP to Non-GAAP Reconciliation – Other
GAAP to Non-GAAP Reconciliation – Other in millions (except %'s and per share data) Q1'23 Margin Q2'23 Margin Q3'23 Margin Q4'23 Margin 2023 Margin Q1'24 Margin Q2'24 Margin Q3'24 Margin Q4'24E 2024E GAAP Subscription Gross Profit $ 1,670 83% $ 1,686 81% $ 1,796 81% $ 1,922 81% $ 7,074 82% $ 2,082 8
Slide 23: Supplemental Information
Supplemental Information in millions Q1'23 Q2'23 Q3'23 Q4'23 2023 Q1'24 Q2'24 Q3'24 Stock-based compensation Cost of revenues: Subscription $ 46 $ 50 $ 52 $ 54 $ 202 $ 58 $ 62 $ 64 Professional services and other $ 14 $ 15 $ 11 $ 12 $ 52 $ 12 $ 12 $ 11 Operating expenses: Sales and marketing $ 126 $
Slide 24: servicenow.
servicenow.