InnovationOpenLab.it

ServiceNow Reports Fourth Quarter and Full-Year 2023 Financial Results

ServiceNow (NYSE: NOW), the leading digital workflow company making the world work better for everyone, today announced financial results for its fourth quarter ended December 31, 2023, with subscript...

Autore: Business Wire

ServiceNow Reports Fourth Quarter and Full-Year 2023 Financial Results

SANTA CLARA, Calif.SANTA CLARA, Calif.: ServiceNow (NYSE: NOW), the leading digital workflow company making the world work better for everyone, today announced financial results for its fourth quarter ended December 31, 2023, with subscription revenues of $2,365 million in Q4 2023, representing 27% year-over-year growth and 25.5% in constant currency.

“ServiceNow closed out the year with another outstanding quarter,” said ServiceNow Chairman and CEO Bill McDermott. “Generative AI is injecting new fuel into our already high-performing engine. ServiceNow’s intelligent platform for end-to-end digital transformation is driving massive leaps in productivity and explosive growth. This is a breakthrough moment.”

As of December 31, 2023, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $8.60 billion, representing 24% year-over-year growth and 23% in constant currency. The company now has 1,897 total customers with more than $1 million in annual contract value (“ACV”), representing 15% year-over-year growth in customers.

“Once again we exceeded our topline growth and operating margin guidance metrics, showcasing ServiceNow’s consistent and relentless focus on execution,” said ServiceNow CFO Gina Mastantuono. “We ended Q4 with a 99% renewal rate, accelerating large new logo growth, and the strongest NNACV contribution for any new product family with the introduction of our Plus SKUs. The accelerating pace of investment in workflow automation and generative AI positions us well for another strong year and we are raising our outlook for 2024.”

Recent Business Highlights

(1)

©2023 FORTUNE Media IP Limited All rights reserved. Used under license. FORTUNE and FORTUNE Media IP Limited are not affiliated with, and do not endorse products or services of, ServiceNow.

Fourth Quarter 2023 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the fourth quarter 2023:

 

Fourth Quarter 2023 GAAP Results

 

Fourth Quarter 2023 Non-GAAP Results(1)

 

Amount
($ millions)

Year/Year
Growth (%)

 

Amount
($ millions)(3)

Year/Year
Growth (%)

Subscription revenues

$2,365

27%

 

$2,332

25.5%

Professional services and other revenues

$72

(10%)

 

$71

(11%)

Total revenues

$2,437

26%

 

$2,403

24%

 

 

 

 

 

 

 

Amount
($ billions)

Year/Year
Growth (%)

 

Amount
($ billions)(3)

Year/Year
Growth (%)

cRPO

$8.60

24%

 

$8.52

23%

RPO

$18.0

29%

 

$17.9

27.5%

 

 

 

 

 

 

 

Amount
($ millions)

Margin (%)

 

Amount
($ millions)(2)

Margin (%)(2)

Subscription gross profit

$1,922

81%

 

$1,996

84%

Professional services and other gross profit (loss)

($1)

(1%)

 

$11

15%

Total gross profit

$1,921

79%

 

$2,007

82%

Income from operations

$270

11%

 

$717

29%

Net cash provided by operating activities

$1,605

66%

 

 

 

Free cash flow

 

 

 

$1,344

55%

 

 

 

 

 

 

 

Amount
($ millions)

Earnings per
Basic/Diluted
Share ($)

 

Amount
($ millions)(2)

Earnings per
Basic/Diluted
Share ($)(2)

Net income

$295

$1.44 / 1.43

 

$643

$3.14 / 3.11

(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.

(2)

Refer to the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures.

(3)

Non-GAAP subscription revenues, professional services and other revenues, total revenues, cRPO and RPO are adjusted only for constant currency. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures.

 
Note: Numbers rounded for presentation purposes and may not foot.

Full-Year 2023 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the full-year 2023:

 

 

 

 

 

 

 

Full-Year 2023 GAAP Results

 

Full-Year 2023 Non-GAAP Results(1)

 

Amount
($ millions)

Year/Year
Growth (%)

 

Amount
($ millions)(3)

Year/Year
Growth (%)

Subscription revenues

$8,680

26 %

 

$8,647

25.5%

Professional services and other revenues

$291

(18%)

 

$290

(18%)

Total revenues

$8,971

24 %

 

$8,937

23.5%

 

 

 

 

 

 

 

Amount
($ billions)

Year/Year
Growth (%)

 

Amount
($ billions)(3)

Year/Year
Growth (%)

cRPO

$8.60

24%

 

$8.52

23%

RPO

$18.0

29%

 

$17.9

27.5%

 

 

 

 

 

 

 

Amount
($ millions)

Margin (%)

 

Amount
($ millions)(2)

Margin (%)(2)

Subscription gross profit

$7,074

82%

 

$7,353

85%

Professional services and other gross profit (loss)

($24)

(8%)

 

$28

10%

Total gross profit

$7,050

79%

 

$7,381

82%

Income from operations

$762

8%

 

$2,489

28%

Net cash provided by operating activities

$3,398

38%

 

 

 

Free cash flow

 

 

 

$2,728

30%

 

 

 

 

 

 

 

Amount
($ millions)

Earnings per
Basic/Diluted
Share ($)

 

Amount

($ millions)(2)

Earnings per
Basic/Diluted
Share ($)(2)

Net income

$1,731

$8.48 / $8.42

 

$2,215

$10.85 / $10.78

(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.

(2)

Refer to the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures.

(3)

Non-GAAP subscription revenues, professional services and other revenues, total revenues, cRPO and RPO are adjusted only for constant currency. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures.

 

Note: Numbers rounded for presentation purposes and may not foot.
 

Financial Outlook

Our guidance includes GAAP and non-GAAP financial measures. The non-GAAP growth rates for subscription revenues and cRPO are adjusted only for constant currency to provide better visibility into the underlying business trends. Our Q1 2024 cRPO guidance reflects the continued strength of our public sector business, which drives a higher mix of 12-month contracts and self-hosted deals, both of which contribute to subscription revenue growth but whose economic benefits are not fully represented in cRPO growth. As we have previously mentioned, the Q3 2023 strength of our U.S. Federal business has resulted in a higher mix of contracts containing 12-month renewal terms. This will create a negative 1.5-point impact and negative 2-point impact to Q1 and Q2 2024 cRPO growth, respectively, as that balance is amortized into revenue. We expect that these contracts will renew in Q3 2024 as ServiceNow’s U.S. Federal renewal rates have been 99%.

The following table summarizes our guidance for the first quarter 2024:

 

First Quarter 2024
GAAP Guidance

 

First Quarter 2024
Non-GAAP Guidance(1)

 

Amount
($ millions)(3)

Year/Year
Growth (%)(3)

 

Constant Currency
Year/Year Growth (%)

 

Subscription revenues

$2,510 - $2,515

24% - 24.5%

 

23.5% - 24%

 

 

 

 

 

 

 

cRPO

 

20%

 

20%

 

Note: Includes impact from strength of public sector business noted above

 

 

 

 

 

 

 

 

 

Margin (%)(2)

 

Income from operations

 

 

 

29%

 

 

 

 

 

 

 

 

 

Amount
(millions)

 

 

 

Weighted-average shares used to compute diluted net income per share

 

208

 

 

 

(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.

(2)

Refer to the table entitled “Reconciliation of Non-GAAP Financial Guidance” for a reconciliation of GAAP to non-GAAP measures.

(3)

Guidance for GAAP subscription revenues and GAAP subscription revenues and cRPO growth rates are based on the 31-day average of foreign exchange rates for December 2023 for entities reporting in currencies other than U.S. Dollars.

The following table summarizes our guidance for the full-year 2024:

 

Full-Year 2024
GAAP Guidance

 

Full-Year 2024
Non-GAAP Guidance(1)

 

Amount
($ millions)(3)

Year/Year
Growth (%)(3)

 

Constant Currency
Year/Year Growth (%)

Subscription revenues

$10,555 - $10,575

21.5% - 22%

 

21.5%

 

 

 

 

 

 

 

 

 

Margin (%)(2)

Subscription gross profit

 

 

 

84.5%

Income from operations

 

 

 

29%

Free cash flow

 

 

 

31%

 

 

 

 

 

 

 

Amount
(millions)

 

 

Weighted-average shares used to compute diluted net income per share

 

208

 

 

(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.

(2)

Refer to the table entitled “Reconciliation of Non-GAAP Financial Guidance” for a reconciliation of GAAP to non-GAAP measures.

(3)

GAAP subscription revenues and related growth rate for the future quarter included in our full-year 2024 guidance are based on the 31-day average of foreign exchange rates for December 2023 for entities reporting in currencies other than U.S. Dollars.

 

Note: Numbers are rounded for presentation purposes and may not foot.

Conference Call Details

The conference call will begin at 2 p.m. Pacific Time (22:00 GMT) on January 24, 2024. Interested parties may listen to the call by dialing (888) 330‑2455 (Passcode: 8135305), or if outside North America, by dialing (240) 789‑2717 (Passcode: 8135305). Individuals may access the live teleconference from this webcast.

https://events.q4inc.com/attendee/685457644

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) 770‑2030 (Passcode: 8135305), or if outside North America, by dialing (647) 362‑9199 (Passcode: 8135305).

Investor Presentation Details

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

Upcoming Investor Conferences

ServiceNow today announced that Chief Financial Officer Gina Mastantuono will participate in a fireside chat at the Morgan Stanley Technology, Media & Telecom Conference on Monday, March 4, 2024, at 2:10 p.m. PT.

The live webcast will be accessible on the investor relations section of the ServiceNow website at https://investors.servicenow.com and archived on the ServiceNow site for a period of 30 days.

Statement Regarding Use of Non-GAAP Financial Measures

We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, fina


Visualizza la versione completa sul sito