ServiceNow (NYSE: NOW), the AI platform for business transformation, today announced financial results for its fourth quarter ended December 31, 2024, with subscription revenues of $2,866 million in Q...
SANTA CLARA, Calif.: ServiceNow (NYSE: NOW), the AI platform for business transformation, today announced financial results for its fourth quarter ended December 31, 2024, with subscription revenues of $2,866 million in Q4 2024, representing 21% year-over-year growth and 21% in constant currency.
“ServiceNow closed out the year exceeding Q4 expectations on top of our ‘beat and raise’ track record,” said ServiceNow Chairman and CEO Bill McDermott. “AI is fueling a top to bottom re-ordering of the enterprise technology landscape. Leaders are embracing the ServiceNow Platform as their AI agent control tower to unlock exponential productivity and seamlessly orchestrate end-to-end business transformation. We are still in the early days of a massive opportunity. ServiceNow’s innovation, growth, and profitability put us in a class of one.”
As of December 31, 2024, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $10.27 billion, representing 19% year-over-year growth and 22% in constant currency. The company now has 2,109 customers with more than $1 million in annual contract value (“ACV”), representing 12% year-over-year growth in customers, and nearly 500 customers with more than $5 million in ACV, representing 21% year-over-year growth.
“Q4 was a great quarter, capping a year of incredible innovation and execution,” said ServiceNow President and CFO Gina Mastantuono. “Our GenAI net new ACV stepped up meaningfully in Q4, as the number of Now Assist service desk deals grew over 150% quarter-over-quarter. We’re just scratching the surface of what’s possible. The moves we’re making in 2025 aren’t just about maintaining our lead—they’re about expanding it. We are setting ourselves up to define the future of agent-powered automation, solidify ServiceNow as the AI Platform for Business Transformation, and deliver strong growth year after year.”
Recent Business Highlights
Innovation
Partnerships and Acquisitions
Investment
Recognition
Executive Leadership
(1) | The program does not have a fixed expiration date, may be suspended, or discontinued at any time, and does not obligate ServiceNow to acquire any amount of its common stock. The timing, manner, price, and amount of any repurchases will be determined by ServiceNow at its discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. | |
(2) | Gartner, “Magic Quadrant for the CRM Customer Engagement Center,” by Pri Rathnayake, Drew Kraus, Wynn White, December 11, 2024. | |
(3) | Gartner, Inc., “Magic Quadrant for Artificial Intelligence Applications in IT Service Management,” by Chris Matchett, Rich Doheny, Chris Laske, Ankita Hundal, October 9, 2024. | |
(4) | Forrester Research, “The Forrester Wave™: Task-Centric Automation Software, Q4 2024,” by Bernhard Schaffrik with Pascal Matzke, Faith Born, Kara Hartig, December 5, 2024. | |
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Fourth Quarter 2024 GAAP and Non-GAAP Results:
The following table summarizes our financial results for the fourth quarter 2024:
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| Fourth Quarter 2024 GAAP Results | Fourth Quarter 2024 Non-GAAP Results(1) | |||
| Amount | Year/Year | Amount | Year/Year | |
Subscription revenues | $2,866 | 21% | $2,859 | 21% | |
Professional services and other revenues | $91 | 26% | $91 | 26.5% | |
Total revenues | $2,957 | 21% | $2,950 | 21% | |
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| Amount | Year/Year | Amount | Year/Year | |
cRPO | $10.27 | 19% | $10.49 | 22% | |
RPO | $22.3 | 23% | $22.7 | 26% | |
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| Amount | Margin (%) | Amount | Margin (%)(2) | |
Subscription gross profit | $2,330 | 81% | $2,416 | 84.5% | |
Professional services and other gross (loss) profit | ($4) | (4%) | $7 | 8.5% | |
Total gross profit | $2,326 | 79% | $2,423 | 82% | |
Income from operations | $374 | 13% | $872 | 29.5% | |
Net cash provided by operating activities | $1,635 | 55% |
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Free cash flow |
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| $1,400 | 47.5% | |
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| Amount | Earnings per | Amount | Earnings per | |
Net income | $384 | $1.86 / $1.83 | $769 | $3.72 / $3.67 | |
(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 and total revenues are adjusted for constant currency by excluding effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts. Professional services and other 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 2024 GAAP and Non-GAAP Results:
The following table summarizes our financial results for the full-year 2024:
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| Full-Year 2024 GAAP Results | Full-Year 2024 Non-GAAP Results(1) | |||
| Amount | Year/Year | Amount | Year/Year | |
Subscription revenues | $10,646 | 23% | $10,639 | 22.5% | |
Professional services and other revenues | $338 | 16% | $337 | 16% | |
Total revenues | $10,984 | 22% | $10,976 | 22.5% | |
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| Amount | Year/Year | Amount | Year/Year | |
cRPO | $10.27 | 19% | $10.49 | 22% | |
RPO | $22.3 | 23% | $22.7 | 26% | |
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| Amount | Margin (%) | Amount | Margin (%)(2) | |
Subscription gross profit | $8,704 | 82% | $9,038 | 85% | |
Professional services and other gross (loss) profit | ($7) | (2%) | $39 | 11.5% | |
Total gross profit | $8,697 | 79% | $9,077 | 82.5% | |
Income from operations | $1,364 | 12% | $3,254 | 29.5% | |
Net cash provided by operating activities | $4,267 | 39% |
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Free cash flow |
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| $3,455 | 31.5% | |
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| Amount | Earnings per | Amount | Earnings per | |
Net income | $1,425 | $6.92 / $6.84 | $2,902 | $14.10 / $13.92 | |
(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) | Refer to the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures. | |
(3) | Non-GAAP subscription revenues and total revenues are adjusted for constant currency by excluding effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts. Professional services and other 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 are adjusted for constant currency by excluding the effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts, and the non-GAAP growth rates for cRPO are adjusted only for constant currency to provide better visibility into the underlying business trends.
Since September 30, 2024, ServiceNow has seen an incremental strengthening of the U.S. dollar, resulting in a foreign exchange (“FX”) headwind of approximately $175 million for 2025 subscription revenues, which includes $40 million in Q1 2025, and $205 million for Q1 2025 cRPO.
Our guidance assumes a more pronounced second-half weighted linearity in our U.S. Federal business due to seasonality from the change in presidential administration.
In 2025, we will begin shifting more of our business model to include elements of consumption-based monetization across our AI and data solutions. For instance, we will include our new AI Agents in our Pro Plus and Enterprise Plus SKUs, forgoing upfront incremental new subscriptions to instead drive accelerated adoption and monetize increasing usage over time. We are also optimizing certain aspects of our go-to-market approach and creating more integrated solutions that we will announce at Knowledge 2025. Our guidance prudently reflects the flexibility to make these moves while delivering further free cash flow generation. Our free cash flow margin guidance reflects incremental expansion, building on the accelerated trajectory driven by our 2024 outperformance.
The following table summarizes our guidance for the first quarter 2025:
| First Quarter 2025 |
| First Quarter 2025 | |
| Amount | Year/Year |
| Constant Currency |
Subscription revenues | $2,995 - $3,000 | 18.5% - 19% |
| 19.5% - 20% |
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cRPO |
| 19.5% |
| 20.5% |
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| Margin (%)(2) |
Income from operations |
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| 30% |
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Weighted-average shares used to compute diluted net income per share |
| 210 |
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(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 Fina Related newsLast NewsRSA at Cybertech Europe 2024Alaa Abdul Nabi, Vice President, Sales International at RSA presents the innovations the vendor brings to Cybertech as part of a passwordless vision for… Italian Security Awards 2024: G11 Media honours the best of Italian cybersecurityG11 Media's SecurityOpenLab magazine rewards excellence in cybersecurity: the best vendors based on user votes How Austria is making its AI ecosystem growAlways keeping an European perspective, Austria has developed a thriving AI ecosystem that now can attract talents and companies from other countries Sparkle and Telsy test Quantum Key Distribution in practiceSuccessfully completing a Proof of Concept implementation in Athens, the two Italian companies prove that QKD can be easily implemented also in pre-existing… Most readCoStar Group Acquires Ag-Analytics, Augmenting Land.com Services and CapabilitiesCoStar Group, Inc. (NASDAQ: CSGP) (“CoStar Group,” “we” or “our”), a leading provider of online real estate marketplaces, information and analytics in… BJ’s Wholesale Club to Open in Brooksville, Florida, on February 21BJ’s Wholesale Club (NYSE: BJ) announced today that its club in Brooksville, Florida, will open on February 21, 2025. The club, located at 13085 Cortez… University of Phoenix College of Doctoral Studies Releases White Paper…University of Phoenix College of Doctoral Studies has released a new white paper, “Economic Influence of AI on Career Optimism,” by Christine Marquis,… Qurate Retail, Inc. Declares Quarterly Cash Dividend on 8.0% Series A…Qurate Retail, Inc. (Nasdaq: QRTEA, QRTEB, QRTEP) today announced that an authorized committee of its Board of Directors declared the regular quarterly… G11 Media Networks |