ServiceNow Reports Fourth Quarter and Full-Year 2020 Financial Results

Rhea-AI Summary

ServiceNow (NYSE: NOW) reported strong financial results for Q4 2020, with subscription revenues reaching $1,184 million, up 32% year-over-year. The quarter saw 89 transactions exceeding $1 million in net new annual contract value. Total customers with contracts over $1 million rose by 23%, totaling 1,093.

For the full year, subscription revenues reached $4,286 million, a 32% increase. The company ended the year with nearly $9 billion in remaining performance obligations, aiming to become a $10 billion revenue company.

Positive

• Q4 subscription revenues increased by 32% to $1,184 million.
• Closed 89 transactions with over $1 million ACV in Q4.
• Total customers grew by 23%, reaching 1,093.
• Full-year subscription revenues totaled $4,286 million, a 32% rise.

Negative

• Income from operations declined to $18 million, a margin of only 1%.
• Professional services gross profit was negative at ($3 million), reflecting a -5% margin.

ServiceNow (NYSE: NOW), the leading digital workflow company making work, work better for people, today announced financial results for its fourth quarter ended December 31, 2020, with subscription revenues of $1,184 million in Q4 2020, representing 32% year-over-year growth.

During the quarter, ServiceNow closed 89 transactions with more than $1 million in net new annual contract value (“ACV”). The company now has 1,093 total customers with more than $1 million in ACV, representing 23% year-over-year growth in customers.

“ServiceNow delivered a market leading 2020 and significantly beat expectations across the board,” said Bill McDermott, ServiceNow president and CEO. “The secular tailwinds of digital transformation, cloud computing, and business model innovation have all intersected at the perfect moment in time. ServiceNow is the platform for digital business, enabling seamless workflows that create the great experiences people deserve. Now, we are focused on managing the world’s greatest workflow challenge: helping convert vaccines into vaccinations. We are changing the world one workflow at a time and are well on our way to becoming the defining enterprise software company of the 21st century.”

ServiceNow CFO Gina Mastantuono said, “We delivered another fantastic quarter to cap a very strong 2020, ending the year with nearly $9 billion in remaining performance obligations. These outstanding results continue to demonstrate ServiceNow’s strong platform and product portfolio, our focus on building deep customer relationships, and commitment to enabling their digital transformations. I’m extremely proud of our team’s performance and their unrelenting execution in a turbulent year. We are well on our way to becoming a $10 billion revenue company. I’m excited about the opportunities ahead of us in 2021.”

During the quarter, ServiceNow saw continued progress and customer adoption across its IT, Employee, and Customer workflows, as well as with its artificial intelligence (“AI”) and machine learning capabilities. The acquisition of Element AI, which closed in January, brings to ServiceNow a deep bench of world-class technical talent, underscoring our commitment to be the leader in AI-enabled workflows. As ServiceNow continues to innovate to help its customers navigate COVID-19, this week it launched its first vaccine management solution to solve last mile vaccine challenges and drive better healthcare outcomes for people. ServiceNow’s comprehensive approach enables workflow solutions that simplify the complex challenges of vaccine distribution, administration, and monitoring.

Fourth Quarter 2020 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the fourth quarter 2020:

	Fourth Quarter 2020 GAAP Results			Fourth Quarter 2020 Non-GAAP Results(1)
	Amount ($ millions)	Year/Year Growth (%)		Amount ($ millions)	Year/Year Growth (%)	Adjusted Amount ($ millions)(2)	Adjusted Year/Year Growth (%)
Subscription revenues	$1,184	32%				$1,161	29%
Professional services and other revenues	$66	26%				$65	23%
Total revenues	$1,250	31%				$1,226	29%
Subscription billings				$1,828	41%	$1,796	38%
Professional services and other billings				$80	31%	$78	29%
Total billings				$1,907	40%	$1,874	38%
	Amount ($ millions)	Margin (%)		Amount ($ millions)	Margin (%)
Subscription gross profit	$974	82%		$1,009	85%
Professional services and other gross profit (loss)	($3)	(5%)		$11	16%
Total gross profit	$971	78%		$1,019	82%
Income from operations	$18	1%		$276	22%
Net cash provided by operating activities	$686	55%
Free cash flow				$565	45%
	Amount ($ millions)	Earnings per Basic/Diluted Share ($)		Amount ($ millions)	Earnings per Basic/Diluted Share ($)
Net income	$17	$0.09/ $0.08		$235	$1.20/ $1.17

(1)		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. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures.
(2)		Non-GAAP adjusted subscription revenues, professional services and other revenues, total revenues and professional services and other billings are adjusted for constant currency. Non-GAAP adjusted subscription billings and total billings are adjusted for constant currency and constant billings duration. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures.
		Note: Numbers rounded for presentation purposes.

Full-Year 2020 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the full-year 2020:

	Full-Year 2020 GAAP Results			Full-Year 2020 Non-GAAP Results(1)
	Amount ($ millions)	Year/Year Growth (%)		Amount ($ millions)	Year/Year Growth (%)	Adjusted Amount ($ millions)(2)	Adjusted Year/Year Growth (%)
Subscription revenues	$4,286	32%				$4,272	31%
Professional services and other revenues	$234	14%				$233	13%
Total revenues	$4,519	31%				$4,505	30%
Subscription billings				$4,982	32%	$4,963	31%
Professional services and other billings				$247	15%	$246	15%
Total billings				$5,229	31%	$5,209	30%
	Amount ($ millions)	Margin (%)		Amount ($ millions)	Margin (%)
Subscription gross profit	$3,555	83%		$3,689	86%
Professional services and other gross profit (loss)	($23)	(10%)		$29	12%
Total gross profit	$3,532	78%		$3,718	82%
Income from operations	$199	5%		$1,121	25%
Net cash provided by operating activities	$1,787	39%
Free cash flow				$1,449	32%
	Amount ($ millions)	Earnings per Basic/Diluted Share ($)		Amount ($ millions)	Earnings per Basic/Diluted Share ($)
Net income	$119	$0.61/ $0.59		$926	$4.79/ $4.63

(1)		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. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures.
(2)		Non-GAAP adjusted subscription revenues, professional services and other revenues, total revenues and professional services and other billings are adjusted for constant currency. Non-GAAP adjusted subscription billings and total billings are adjusted for constant currency and constant billings duration. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures.
		Note: Numbers rounded for presentation purposes.

Financial Outlook

ServiceNow will provide forward-looking guidance in connection with this quarterly announcement on its earnings conference call and webcast, and it will introduce current remaining performance obligations (“cRPO”) as a new guidance metric for Q1 2021.

Conference Call Details

The conference call will begin at 2 p.m. Pacific Time (22:00 GMT) on January 27, 2021. Interested parties may listen to the call by dialing (833) 513‑0567 (Passcode: 7862176), or if outside North America, by dialing (236) 714‑2186 (Passcode: 7862176). Individuals may access the live teleconference from this webcast link:

https://event.on24.com/wcc/r/2924209/3989884C5B58ED139BE2D9AE3152B4D5

An audio replay of the conference call and webcast will be available two hours after its completion and will be accessible for 30 days. To hear the replay, interested parties may go to the investor relations section of the ServiceNow website or dial (800) 585‑8367 (Passcode: 7862176), or if outside North America, by dialing (416) 621‑4642 (Passcode: 7862176).

Investor Presentation Details

An investor presentation providing additional information, including forward-looking guidance, and analysis can be found at http://investors.servicenow.com.

Statement Regarding Use of Non-GAAP Financial Measures

We report the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

• Adjusted revenues. We present revenues adjusted for constant currency to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations. To present this information, current period results for entities reporting in currencies other than U.S. Dollars (“USD”) are converted into USD at the average exchange rates in effect during the comparison period (for Q4 2019, the average exchange rates in effect for our major currencies were 1 USD to 0.90 Euros and 1 USD to 0.78 British Pound Sterling (“GBP”), rather than the actual average exchange rates in effect during the current period (for Q4 2020, the average exchange rates in effect for our major currencies were 1 USD to 0.84 Euros and 1 USD to 0.76 GBP). We believe the presentation of revenues adjusted for constant currency facilitates the comparison of revenues year-over-year.

• Billings and Adjusted billings. We define subscription billings, professional services and other billings, and total billings as the applicable revenue plus the applicable change in deferred revenue, unbilled receivables and customer deposits as presented or derived from the statement of cash flows. We adjust billings for constant currency, as described above, and for constant duration by replacing the portion of multi-year billings in excess of twelve months during the current period with the portion of multi-year billings in excess of twelve months during the comparison period. We believe these adjustments facilitate greater comparability in our billings information year-over-year. We believe billings is one indicator of the performance of our business.

• Gross profit, Income from operations, Net income and Net income per share - diluted. Our non-GAAP presentation of gross profit, income from operations, and net income measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of debt discount and issuance costs related to our convertible senior notes, loss on early note conversions, amortization of purchased intangibles, legal settlements, business combination and other related costs, and the related income tax effect of these adjustments. The non-GAAP weighted-average shares used to compute our non-GAAP net income per share - diluted excludes the dilutive effect of the in-the-money portion of convertible senior notes as they are covered by our note hedges, and includes the dilutive effect of time-based stock awards, the dilutive effect of warrants and the potentially dilutive effect of our stock awards with performance conditions not yet satisfied at forecasted attainment levels to the extent we believe it is probable that the performance condition will be met. We believe these adjustments provide useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods.

• Free cash flow. Free cash flow is defined as net cash provided by (used in) operating activities plus cash paid for legal settlements and repayments of convertible senior notes attributable to debt discount, reduced by purchases of property and equipment. Free cash flow margin is calculated as free cash flow as a percentage of total revenues. We believe information regarding free cash flow and free cash flow margin provides useful information to investors because it is an indicator of the strength and performance of our business operations.

Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP and non-GAAP results.

Use of Forward-Looking Statements

This release contains “forward-looking statements” regarding our performance, including but not limited to statements in the section entitled “Financial Outlook.” Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.

Factors that may cause actual results to differ materially from those in any forward-looking statements include: (i) the impact and duration of the health impact of COVID-19 and the economic impact of safety measures to mitigate its impact, including the effectiveness, extent and duration of efforts to limit the spread and impact of the disease, such as “shelter in place” and similar government directives; (ii) our ability to compete successfully against existing and new competitors, (iii) our ability to comply with evolving privacy laws, data transfer restrictions, and other foreign and domestic standards related to data and the Internet, (iv) our ability to predict, prepare for and respond promptly to rapidly evolving technological, market and customer developments, (v) errors, interruptions, delays, or security breaches in or of our service or data centers, (vi) our ability to grow our business, including converting remaining performance obligations into revenue, adding and retaining customers, selling additional subscriptions to existing customers, selling to larger enterprises, government and regulated organizations with complex sales cycles and certification processes, and entering new geographies and markets, (vii) our ability to develop and gain customer acceptance of new and improved products and services, including those acquired through strategic transactions, and (viii) material changes in the value of foreign currencies relative to the U.S. Dollar. Additionally, these forward-looking statements involve risk, uncertainties and assumptions, including those related to the continued impacts of COVID-19 on our business and global economic conditions. Many of these assumptions relate to matters that are beyond our control and changing rapidly, including, but not limited to, the timeframes for and severity of social distancing and other mitigation requirements, the timing of headwinds from COVID-19, the continued impact of COVID-19 on new or existing customers’ purchasing decisions and the length of our sales cycles, renewal timing or billings terms, particularly for customers in certain industries highly affected by COVID-19. Significant variation from the assumptions underlying our forward-looking statements could cause our actual results to vary, and the impact could be significant.

Further information on these and other factors that could affect our financial results are included in our Form 10-Q for the quarter ended September 30, 2020 and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-K that will be filed for the year ended December 31, 2020.

We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.

About ServiceNow

ServiceNow (NYSE: NOW) is making the world of work, work better for people. Our cloud-based platform and solutions deliver digital workflows that create great experiences and unlock productivity for employees and the enterprise. For more information, visit: www.servicenow.com.

© 2021 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo, Now, and other ServiceNow marks are trademarks and/or registered trademarks of ServiceNow, Inc. in the United States and/or other countries. Other company names, product names, and logos may be trademarks of the respective companies with which they are associated.

ServiceNow, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
	Three Months Ended								Twelve Months Ended
	December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Revenues:
Subscription	$	1,184,181			$	899,194			$	4,285,797			$	3,255,079
Professional services and other	66,149				52,580				233,687				205,358
Total revenues	1,250,330				951,774				4,519,484				3,460,437
Cost of revenues (1):
Subscription	209,900				148,244				730,835				549,642
Professional services and other	69,204				63,209				256,278				247,003
Total cost of revenues	279,104				211,453				987,113				796,645
Gross profit	971,226				740,321				3,532,371				2,663,792
Operating expenses (1):
Sales and marketing	533,853				416,005				1,855,016				1,534,284
Research and development	284,297				202,328				1,024,327				748,369
General and administrative	135,146				93,476				454,165				339,016
Total operating expenses	953,296				711,809				3,333,508				2,621,669
Income from operations	17,930				28,512				198,863				42,123
Interest expense	(7,708		)		(8,475		)		(32,746		)		(33,283		)
Other income (expense), net	3,138				14,149				(16,932		)		58,345
Income before income taxes	13,360				34,186				149,185				67,185
Provision for (benefit from) income taxes	(3,288		)		(564,538		)		30,682				(559,513		)
Net income	$	16,648			$	598,724			$	118,503			$	626,698
Net income per share - basic	$	0.09			$	3.17			$	0.61			$	3.36
Net income per share - diluted	$	0.08			$	3.03			$	0.59			$	3.18
Weighted-average shares used to compute net income per share - basic	195,461				189,042				193,096				186,466
Weighted-average shares used to compute net income per share - diluted	202,455				197,843				202,478				197,223
(1) Includes stock-based compensation as follows:
	Three Months Ended								Twelve Months Ended
	December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Cost of revenues:
Subscription	$	26,172			$	18,709			$	98,258			$	72,728
Professional services and other	13,696				11,374				51,553				43,123
Sales and marketing	92,330				68,337				320,328				268,408
Research and development	78,965				50,562				282,244				194,821
General and administrative	34,236				21,069				118,070				83,115

ServiceNow, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
	December 31, 2020				December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	1,676,794			$	775,778
Short-term investments	1,415,242				915,317
Accounts receivable, net	1,009,415				835,279
Current portion of deferred commissions	228,924				175,039
Prepaid expenses and other current assets	191,467				125,488
Total current assets	4,521,842				2,826,901
Deferred commissions, less current portion	444,068				333,448
Long-term investments	1,468,006				1,013,332
Property and equipment, net	659,641				468,085
Operating lease right-of-use assets	454,218				402,428
Intangible assets, net	153,367				143,850
Goodwill	240,764				156,756
Deferred tax assets	673,111				599,633
Other assets	100,040				77,997
Total assets	$	8,715,057			$	6,022,430
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	34,236			$	52,960
Accrued expenses and other current liabilities	668,093				461,403
Current portion of deferred revenue	2,962,579				2,185,754
Current portion of operating lease liabilities	72,236				52,668
Total current liabilities	3,737,144				2,752,785
Deferred revenue, less current portion	45,346				40,038
Operating lease liabilities, less current portion	422,779				383,221
Long-term debt	1,640,153				694,981
Other long-term liabilities	35,154				23,464
Stockholders’ equity	2,834,481				2,127,941
Total liabilities and stockholders’ equity	$	8,715,057			$	6,022,430

ServiceNow, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
	Three Months Ended								Twelve Months Ended
	December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Cash flows from operating activities:
Net income	$	16,648			$	598,724			$	118,503			$	626,698
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	93,033				72,331				336,381				252,114
Amortization of deferred commissions	60,440				45,788				217,631				168,014
Amortization of debt discount and issuance costs	2,492				8,475				24,478				33,283
Stock-based compensation	245,399				170,051				870,453				662,195
Deferred income taxes	(18,041		)		(572,923		)		(24,481		)		(575,765		)
Repayments of convertible senior notes attributable to debt discount	(13,449		)		—				(81,958		)		—
Loss on extinguishment of 2022 Notes	4,954				—				46,611				—
Other	(3,134		)		(4,300		)		(2,493		)		(8,921		)
Changes in operating assets and liabilities, net of effect of business combinations:
Accounts receivable	(361,706		)		(288,166		)		(151,431		)		(259,835		)
Deferred commissions	(143,863		)		(97,296		)		(365,264		)		(255,605		)
Prepaid expenses and other assets	(12,507		)		(4,338		)		(54,203		)		(29,907		)
Accounts payable	(35,375		)		(8,733		)		(33,583		)		21,355
Deferred revenue	644,453				401,794				710,998				537,249
Accrued expenses and other liabilities	206,181				99,804				174,957				65,097
Net cash provided by operating activities	685,525				421,211				1,786,599				1,235,972
Cash flows from investing activities:
Purchases of property and equipment	(134,000		)		(79,003		)		(419,327		)		(264,892		)
Business combinations, net of cash acquired	411				(7,414		)		(107,236		)		(7,414		)
Purchases of intangibles	(6,690		)		(35,329		)		(13,190		)		(72,689		)
Purchases of investments	(704,791		)		(339,976		)		(2,933,876		)		(1,595,667		)
Sales and maturities of investments	666,460				261,297				1,965,429				1,192,750
Realized gains on derivatives not designated as hedging instruments, net	2,091				1,693				1,328				23,435
Net cash used in investing activities	(176,519		)		(198,732		)		(1,506,872		)		(724,477		)
Cash flows from financing activities:
Net proceeds from borrowings on 2030 Notes	—				—				1,481,633				—
Repayments of convertible senior notes attributable to principal	(58,824		)		(9		)		(1,627,690		)		(9		)
Net proceeds from unwind of 2022 Note Hedge	—				—				1,105,542				—
Proceeds from employee stock plans	3,266				2,641				145,766				107,868
Taxes paid related to net share settlement of equity awards	(147,934		)		(78,913		)		(508,604		)		(409,715		)
Net cash provided by (used in) financing activities	(203,492		)		(76,281		)		596,647				(301,856		)
Foreign currency effect on cash, cash equivalents and restricted cash	22,106				6,253				25,065				(186		)
Net increase in cash, cash equivalents and restricted cash	327,620				152,451				901,439				209,453
Cash, cash equivalents and restricted cash at beginning of period	1,351,810				625,540				777,991				568,538
Cash, cash equivalents and restricted cash at end of period	$	1,679,430			$	777,991			$	1,679,430			$	777,991

ServiceNow, Inc.
GAAP to Non-GAAP Reconciliation
(in thousands, except per share data)
(unaudited)
	Three Months Ended										Twelve Months Ended
	December 31, 2020				December 31, 2019				Growth Rates		December 31, 2020				December 31, 2019				Growth Rates
Subscription revenues:
GAAP subscription revenues	$	1,184,181			$	899,194			32%		$	4,285,797			$	3,255,079			32%
Effects of foreign currency rate fluctuations	(22,878		)								(13,786		)
Non-GAAP adjusted subscription revenues(1)	$	1,161,303							29%		$	4,272,011							31%
Subscription billings:
GAAP subscription revenues	$	1,184,181			$	899,194			32%		$	4,285,797			$	3,255,079			32%
Change in subscription deferred revenue, unbilled receivables and customer deposits	643,344				398,564						696,437				533,227
Non-GAAP subscription billings	1,827,525				1,297,758				41%		4,982,234				3,788,306				32%
Effects of foreign currency rate fluctuations	(31,440		)								(19,966		)
Effects of fluctuations in billings duration	(242		)								295
Non-GAAP adjusted subscription billings(2)	$	1,795,843							38%		$	4,962,563							31%
Professional services and other revenues:
GAAP professional services and other revenues	$	66,149			$	52,580			26%		$	233,687			$	205,358			14%
Effects of foreign currency rate fluctuations	(1,470		)								(639		)
Non-GAAP adjusted professional service and other revenues(1)	$	64,679							23%		$	233,048							13%
Professional services and other billings:
GAAP professional services and other revenues	$	66,149			$	52,580			26%		$	233,687			$	205,358			14%
Change in professional services and other deferred revenue	13,433				8,114						13,085				8,549
Non-GAAP professional services and other billings	79,582				60,694				31%		246,772				213,907				15%
Effects of foreign currency rate fluctuations	(1,470		)								(639		)
Non-GAAP adjusted professional services and other billings(2)	$	78,112							29%		$	246,133							15%
Total revenues:
GAAP total revenues	$	1,250,330			$	951,774			31%		$	4,519,484			$	3,460,437			31%
Effects of foreign currency rate fluctuations	(24,348		)								(14,425		)
Non-GAAP adjusted total revenues(1)	$	1,225,982							29%		$	4,505,059							30%
Total billings:
GAAP total revenues	$	1,250,330			$	951,774			31%		$	4,519,484			$	3,460,437			31%
Change in total deferred revenue, unbilled receivables and customer deposits	656,777				406,678						709,522				541,776
Non-GAAP total billings	1,907,107				1,358,452				40%		5,229,006				4,002,213				31%
Effects of foreign currency rate fluctuations	(32,910		)								(20,605		)
Effects of fluctuations in billings duration	(242		)								295
Non-GAAP adjusted total billings(2)	$	1,873,955							38%		$	5,208,696							30%
Cost of revenues:
GAAP subscription cost of revenues	$	209,900			$	148,244					$	730,835			$	549,642
Stock-based compensation	(26,172		)		(18,709		)				(98,258		)		(72,728		)
Amortization of purchased intangibles	(8,142		)		(7,538		)				(35,823		)		(24,133		)
Non-GAAP subscription cost of revenues	$	175,586			$	121,997					$	596,754			$	452,781
GAAP professional services and other cost of revenues	$	69,204			$	63,209					$	256,278			$	247,003
Stock-based compensation	(13,696		)		(11,374		)				(51,553		)		(43,123		)
Non-GAAP professional services and other cost of revenues	$	55,508			$	51,835					$	204,725			$	203,880
Gross profit:
GAAP subscription gross profit	$	974,281			$	750,950					$	3,554,962			$	2,705,437
Stock-based compensation	26,172				18,709						98,258				72,728
Amortization of purchased intangibles	8,142				7,538						35,823				24,133
Non-GAAP subscription gross profit	$	1,008,595			$	777,197					$	3,689,043			$	2,802,298
GAAP professional services and other gross loss	$	(3,055	)		$	(10,629	)				$	(22,591	)		$	(41,645	)
Stock-based compensation	13,696				11,374						51,553				43,123
Non-GAAP professional services and other gross profit	$	10,641			$	745					$	28,962			$	1,478
GAAP gross profit	$	971,226			$	740,321					$	3,532,371			$	2,663,792
Stock-based compensation	39,868				30,083						149,811				115,851
Amortization of purchased intangibles	8,142				7,538						35,823				24,133
Non-GAAP gross profit	$	1,019,236			$	777,942					$	3,718,005			$	2,803,776
Gross margin:
GAAP subscription gross margin	82		%		84		%				83		%		83		%
Stock-based compensation as % of subscription revenues	2		%		2		%				2		%		2		%
Amortization of purchased intangibles as % of subscription revenues	1		%		0		%				1		%		1		%
Non-GAAP subscription gross margin	85		%		86		%				86		%		86		%
GAAP professional services and other gross margin	(5		%)		(20		%)				(10		%)		(20		%)
Stock-based compensation as % of professional services and other revenues	21		%		21		%				22		%		21		%
Non-GAAP professional services and other gross margin	16		%		1		%				12		%		1		%
GAAP gross margin	78		%		78		%				78		%		77		%
Stock-based compensation as % of total revenues	3		%		3		%				3		%		3		%
Amortization of purchased intangibles as % of total revenues	1		%		1		%				1		%		1		%
Non-GAAP gross margin	82		%		82		%				82		%		81		%
Operating expenses:
GAAP sales and marketing expenses	$	533,853			$	416,005					$	1,855,016			$	1,534,284
Stock-based compensation	(92,330		)		(68,337		)				(320,328		)		(268,408		)
Amortization of purchased intangibles	(314		)		(161		)				(1,250		)		(161		)
Non-GAAP sales and marketing expenses	$	441,209			$	347,507					$	1,533,438			$	1,265,715
GAAP research and development expenses	$	284,297			$	202,328					$	1,024,327			$	748,369
Stock-based compensation	(78,965		)		(50,562		)				(282,244		)		(194,821		)
Amortization of purchased intangibles	(455		)		(455		)				(1,820		)		(1,820		)
Non-GAAP research and development expenses	$	204,877			$	151,311					$	740,263			$	551,728
GAAP general and administrative expenses	$	135,146			$	93,476					$	454,165			$	339,016
Stock-based compensation	(34,236		)		(21,069		)				(118,070		)		(83,115		)
Amortization of purchased intangibles	(2,202		)		(2,341		)				(6,867		)		(8,459		)
Business combination and other related costs	(2,050		)		(505		)				(6,143		)		(625		)
Non-GAAP general and administrative expenses	$	96,658			$	69,561					$	323,085			$	246,817
GAAP total operating expenses	$	953,296			$	711,809					$	3,333,508			$	2,621,669
Stock-based compensation	(205,531		)		(139,968		)				(720,642		)		(546,344		)
Amortization of purchased intangibles	(2,971		)		(2,957		)				(9,937		)		(10,440		)
Business combination and other related costs	(2,050		)		(505		)				(6,143		)		(625		)
Non-GAAP total operating expenses	$	742,744			$	568,379					$	2,596,786			$	2,064,260
Income from operations:
GAAP income from operations	$	17,930			$	28,512					$	198,863			$	42,123
Stock-based compensation	245,399				170,051						870,453				662,195
Amortization of purchased intangibles	11,113				10,495						45,760				34,573
Business combination and other related costs	2,050				505						6,143				625
Non-GAAP income from operations	$	276,492			$	209,563					$	1,121,219			$	739,516
Operating margin:
GAAP operating margin	1		%		3		%				5		%		1		%
Stock-based compensation as % of total revenues	20		%		18		%				19		%		19		%
Amortization of purchased intangibles as % of total revenues	1		%		1		%				1		%		1		%
Business combination and other related costs as % of total revenues	0		%		0		%				0		%		0		%
Non-GAAP operating margin	22		%		22		%				25		%		21		%
Net income:
GAAP net income	$	16,648			$	598,724					$	118,503			$	626,698
Stock-based compensation	245,399				170,051						870,453				662,195
Amortization of purchased intangibles	11,113				10,495						45,760				34,573
Business combination and other related costs	2,050				505						6,143				625
Amortization of debt discount and issuance costs	2,492				8,475						24,478				33,283
Loss on extinguishment of 2022 Notes	4,954				—						46,611				—
Income tax expense effects related to the above adjustments	{ "@context": "https://schema.org", "@type": "FAQPage", "name": "ServiceNow Reports Fourth Quarter and Full-Year 2020 Financial Results FAQs", "mainEntity": [ { "@type": "Question", "name": "What were ServiceNow's revenues for Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "ServiceNow reported subscription revenues of $1,184 million for Q4 2020." } }, { "@type": "Question", "name": "How many customers does ServiceNow have as of Q4 2020?", "acceptedAnswer": { "@type": "Answer", "text": "As of Q4 2020, ServiceNow has 1,093 customers with more than $1 million in annual contract value." } }, { "@type": "Question", "name": "What is ServiceNow's financial outlook for 2021?", "acceptedAnswer": { "@type": "Answer", "text": "ServiceNow aims to continue its growth trajectory and is focused on reaching $10 billion in revenue." } }, { "@type": "Question", "name": "How did ServiceNow perform financially in 2020?", "acceptedAnswer": { "@type": "Answer", "text": "In 2020, ServiceNow achieved total subscription revenues of $4,286 million, marking a 32% increase year-over-year." } } ] } FAQ What were ServiceNow's revenues for Q4 2020? ServiceNow reported subscription revenues of $1,184 million for Q4 2020. How many customers does ServiceNow have as of Q4 2020? As of Q4 2020, ServiceNow has 1,093 customers with more than $1 million in annual contract value. What is ServiceNow's financial outlook for 2021? ServiceNow aims to continue its growth trajectory and is focused on reaching $10 billion in revenue. How did ServiceNow perform financially in 2020? In 2020, ServiceNow achieved total subscription revenues of $4,286 million, marking a 32% increase year-over-year. SERVICENOW, INC. NYSE:NOW NOW Rankings #38 Ranked by Market Cap N/A Ranked by Dividends NOW Latest News Dec 10, 2024 ServiceNow Named a Leader in Task-Centric Automation Software by Independent Research Firm Dec 3, 2024 ServiceNow and AWS Expand Strategic Collaboration With New Capabilities to Accelerate AI Transformation Nov 19, 2024 ServiceNow and Microsoft Expand Strategic Alliance to Modernize the Front-Office With Copilot and AI Agents Nov 13, 2024 ServiceNow Advances Autonomous, Responsible AI on the Now Platform With New GenAI and Governance Innovations Nov 13, 2024 ServiceNow and Five9 Expand Partnership With Turnkey AI-Powered Solution for Unified Employee and Customer Experiences NOW Stock Data Market Cap 228.10B Float 205.60M Insiders Ownership 0.18% Institutions Ownership 91.8% Short Percent 1.57% Industry Software - Application Sector Services-prepackaged Software Website Link Country United States of America City SANTA CLARA Explore About Rhea-AI Sitemap Legal Terms of Use Cookie Notice Privacy Policy Links RSS feed Patreon Discord Server Facebook Reddit Google News © 2020-2024 StockTitan.net