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ServiceNow Reports Fourth Quarter and Full-Year 2022 Financial Results

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  • ServiceNow exceeds high end of guidance across Q4 2022 GAAP topline growth and profitability metrics

  • Subscription revenues of $1,860 million in Q4 2022, representing 22% year-over-year growth, 27.5% adjusted for constant currency

  • Total revenues of $1,940 million in Q4 2022, representing 20% year-over-year growth, 25.5% adjusted for constant currency

  • Current remaining performance obligations (“cRPO”) of $6.94 billion as of Q4 2022, representing 22% year-over-year growth, 25.5% adjusted for constant currency

  • Net new annual contract value (“NNACV”) contribution to cRPO outperformed company expectations in Q4 2022, driven by strong net expansion and over 30% NNACV growth year-over-year from new logos

SANTA CLARA, Calif., January 25, 2023–(BUSINESS WIRE)–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, 2022, with subscription revenues of $1,860 million in Q4 2022, representing 22% year-over-year growth, 27.5% adjusted for constant currency.

“ServiceNow continues to perform as a beyond expectations company,” said ServiceNow Chairman and CEO Bill McDermott. “Our Q4 surge in new business shows that the secular tailwinds of digitization aren’t going anywhere. We are driving net-new innovation, fast growth, and operating leverage. The world works with ServiceNow as the end-to-end platform for digital transformation.”

As of December 31, 2022, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $6.94 billion, representing 22% year-over-year growth and 25.5% adjusted for constant currency. The company now has 1,637 total customers with more than $1 million in annual contract value, representing 22% year-over-year growth in customers.

“Q4 was another great quarter of execution as we exceeded our subscription revenue and profitability guidance,” said ServiceNow CFO Gina Mastantuono. “We outperformed our NNACV expectations, driven by robust net expansion and over 30% NNACV growth year-over-year from new logos. What’s more, our results were generated with a lower mix of early renewals from 2023, providing us more opportunities to drive further expansion throughout the year. With our strong results it’s clear that ServiceNow remains a strategic priority, generating durable demand that is positioning us well for 2023 and beyond.”

Following McDermott’s elevation to Chairman and CEO late in 2022, ServiceNow has appointed Chirantan CJ Desai President and COO of ServiceNow. Desai joined ServiceNow in December 2016 as the Chief Product Officer and was promoted to the role of Chief Operating Officer in January 2022. Prior to joining ServiceNow, Desai held product leadership roles at EMC, Symantec, and Oracle.

“CJ has established himself as a leader of consequence in this industry,” said McDermott. “His track record – from strengthening our platform to driving our customer experience – has helped establish ServiceNow as the enterprise juggernaut it is today. I’d like to personally congratulate CJ for this latest, well-deserved endorsement of his leadership.”

Recent Business Highlights

  • New innovations rolled out in fourth quarter – including automated service suggestions, Service Request Playbook, and Workplace Scenario Planning – were designed to help address today’s most pressing workplace productivity challenges by accelerating automation to eliminate complexity and improve service operations for a better customer, employee, and constituent experience.

  • During the quarter, ServiceNow also enhanced its observability capabilities by launching Lightstep UQL (Unified Query Language) to help companies extend visibility across highly complex and dynamic Kubernetes applications and ensure they’re fully instrumented and observable by default.

  • In addition, ServiceNow and Zoom Communications expanded their partnership with new integrations to help joint customers elevate employee productivity and improve collaboration across their organizations.

  • The company welcomed Masatoshi Suzuki as president of ServiceNow Japan, designating Japan as a fourth geographic region alongside EMEA, APAC, and Americas. Suzuki-san joins ServiceNow after a decades-long, distinguished career in leading industry organizations including UiPath, Symantec, SAP, and Oracle.

  • Last week, ServiceNow also announced a multi-year transformation of its Partner Program to support the estimated $500 billion market opportunity for the Now Platform and associated partner services. It will create new opportunities for partners to expand and collaborate with ServiceNow, giving partners more flexibility to create value, incentives to enable growth, and an improved experience.

Fourth Quarter 2022 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the fourth quarter 2022:

Fourth Quarter 2022 GAAP Results

Fourth Quarter 2022 Non-GAAP Results(1)

Amount
($ millions)

Year/Year
Growth (%)

Amount
($ millions)(2)

Year/Year
Growth (%)

Subscription revenues

$1,860

22

%

$1,941

27.5

%

Professional services and other revenues

$80

(12

%)

$85

(6.5

%)

Total revenues

$1,940

20

%

$2,026

25.5

%

Amount
($ billions)

Year/Year
Growth (%)

Amount
($ billions)(2)

Year/Year
Growth (%)

cRPO

$6.94

22

%

$7.12

25.5

%

RPO

$14.0

22

%

$14.4

25

%

Amount
($ millions)

Margin (%)

Amount
($ millions)

Margin (%)

Subscription gross profit

$1,536

83

%

$1,595

86

%

Professional services and other gross profit (loss)

($11

)

(14

%)

$5

6

%

Total gross profit

$1,525

79

%

$1,600

83

%

Income from operations

$155

8

%

$544

28

%

Net cash provided by…



Read More: ServiceNow Reports Fourth Quarter and Full-Year 2022 Financial Results

2023-01-25 21:10:00

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