ServiceNow Q1 2013 complete financial tables (download PDF)
SAN DIEGO – April 24, 2013 – ServiceNow (NYSE: NOW), the
enterprise IT cloud company, today announced its financial results for
its first quarter of 2013.
First quarter 2013 results:
Revenues of $85.9 million, an increase of 81% compared to the
first quarter of 2012, and an increase of 14% from the fourth
quarter of 2012.
A GAAP net loss for the quarter of $13.4 million, or a loss of
$0.10 per basic and diluted share, compared to a GAAP net loss of
$5.6 million, or a loss of $0.23 per basic and diluted share, in
the first quarter of 2012.
A non‑GAAP net loss for the quarter of $1.9 million, or a loss of
$0.01 per basic and diluted share, compared to a non‑GAAP net loss
of $2.5 million, or a loss of $0.11 per basic and diluted share,
in the first quarter of 2012 (see the table entitled "Results
of Operations GAAP to Non‑GAAP Reconciliation" for a
reconciliation of these GAAP and non‑GAAP financial
Deferred revenue of $194.8 million, a 14% increase over the
$170.4 million reported at the end of the prior quarter.
Billings were $110.3 million, a 13% increase over the $97.6
million reported in the previous quarter and an 88% increase over
the $58.6 million in the same period last year (see the table
entitled "Non‑GAAP Billings Reconciliation" for a
reconciliation of non‑GAAP billings to GAAP revenues).
"The first quarter was a strong start to 2013. We exceeded our
previously stated outlook on revenue and non‑GAAP earnings per share,
added 128 net new customers and achieved a customer renewal rate of
96%," said Frank Slootman, president and chief executive officer,
ServiceNow. "We also continued to penetrate our existing customer
base, with upsells comprising a third of our annual contract value
signed in the quarter."
"We saw strength across our key financial metrics in the
quarter, highlighted by our first quarter with billings in excess of
$100 million, a significant milestone in our growth story," added
Michael Scarpelli, chief financial officer, ServiceNow. "Deferred
revenue grew sequentially by 14% and we generated $15.0 million in
operating cash flow for the quarter."
The financial guidance discussed below is on a non‑GAAP basis,
except for revenues, and excludes stock‑based compensation expense and
the related income tax impact (see table which reconciles these
non‑GAAP financial measures to the related GAAP measures). Negative
numbers are shown in parentheses.
For the second quarter of 2013, we expect:
Total revenues between $94 and $96 million, representing
year‑over‑year growth between 66% and 69%. Our total second
quarter revenue estimate consists of subscription revenues between
$77 and $78 million and professional services and other revenues
between $17 and $18 million.
Subscription gross margin between 74% and 75%, professional
services and other gross margin between 23% and 25%, and overall
gross margin between 64% and 65%. Our professional services and
other revenues outlook includes approximately $4 million related
to Knowledge, our annual user conference to be held in May, with
related expenses of approximately $8 ‑ $9 million recorded in
sales and marketing.
Operating margin between (6%) and (5%).
A net loss per basic and diluted share between ($0.06) and
($0.04) with weighted‑average shares outstanding of approximately
For the full year 2013, we expect revenues to be in the range of
$394 to $398 million, representing year‑over‑year growth between 62%
and 63%. Our total annual revenues estimate consists of subscription
revenues between $332 and $334 million and professional services and
other revenues between $62 and $64 million.
First quarter highlights
On April 1st, ServiceNow received Federal Information Security
Management Act (FISMA) Moderate Authority to Operate (ATO) from
the U.S. General Services Administration (GSA). The authorization
will allow federal, state and local government agencies to
securely leverage ServiceNow for IT system consolidation and
business process automation.
In February, ServiceNow announced Hitachi Solutions has become
the first business partner in Japan to provide ServiceNow to the
Japanese market. Hitachi Solutions will resell the ServiceNow
Service Automation applications and the ServiceNow Service
Automation Platform. Hitachi Solutions will also provide
implementation, training and first‑level support for Japanese
Conference Call Details
ServiceNow will host a conference call to discuss its financial
results for the first quarter of 2013 to begin today at 2 p.m. PDT
(21:00 GMT). Interested parties may listen to the call by dialing
877.546.5018 (passcode: 78194644), or if outside North America, by
dialing 857.244.7550 (passcode: 78194644). Individuals may access the
live teleconference from the investor relations section of the
ServiceNow web site at http://investors.servicenow.com. The webcast will
be archived for a period of 30 days.
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 888.286.8010 (passcode:
60952020), or if outside North America, by dialing 617.801.6888
Statement regarding use of non‑GAAP financial measures
The company reports non‑GAAP results for gross margins, operating
margins, net income or loss, basic and diluted income or loss per
share, free cash flow and billings in addition to, and not as a
substitute for, or superior to, financial measures calculated in
accordance with GAAP.
The company's financial measures under GAAP include stock‑based
compensation expense. Management believes the presentation of
operating results excluding stock‑based compensation expense provides
useful supplemental information to investors and facilitates the
analysis of the company's core operating results and comparison of
operating results across reporting periods. Management also believes
that this supplemental non‑GAAP information is therefore useful to
investors in analyzing and assessing the company's past and future
Free cash flow, which is a non‑GAAP financial measure, is calculated
as GAAP net cash provided by operating activities reduced by purchases
of property and equipment. Management believes information regarding
free cash flow provides investors with an important perspective on the
cash available to invest in our business and fund ongoing operations.
However, our calculation of free cash flow may not be comparable to
similar measures used by other companies.
Billings is calculated as revenue plus the change in total deferred
revenue. Management believes billings offers investors useful
supplemental information regarding the performance of our business,
and will help investors better understand the sales volumes and
performance of our business.
The company encourages investors to carefully consider its results
under GAAP, as well as its supplemental non‑GAAP information and the
reconciliation between these presentations, to more fully understand
its business. Reconciliations between GAAP and non‑GAAP results are
presented in the tables of this release.
Use of forward looking statements
This release contains "forward‑looking statements"
regarding our performance, including 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.
Among the important factors that could cause actual results to
differ materially from those in any forward‑looking statements are:
(i) errors, interruptions, delays, or security breaches in or of our
service or web hosting, (ii) our ability to grow at our expected rate
of growth, including our ability to convert deferred revenue and
backlog into revenue, add and retain customers, and enter new
geographies and markets, (iii) our ability to continue to release, and
gain customer acceptance of, improved versions of our services, (iv)
our ability to develop and gain customer acceptance of new products
and services, including our platform, and (v) our ability to compete
successfully against existing and new competitors.
Further information on these and other factors that could affect our
financial results are included in our Form 10‑K for the year ended
December 31, 2012 and in other filings we make with the Securities and
Exchange Commission from time to time, including our Form 10‑Q that
will be filed for the first quarter ended March 31, 2013.
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.
ServiceNow is the enterprise IT cloud company. We focus on
transforming enterprise IT by automating and standardizing business
processes and consolidating IT across the global enterprise.
Organizations deploy our service to create a single system of record
for enterprise IT, lower operational costs and enhance efficiency.
Additionally, our customers use our extensible platform to build
custom applications for automating activities unique to their business
requirements. For more information, visit www.servicenow.com.
ServiceNow and the ServiceNow logo are trademarks of ServiceNow. All
other brand and product names are trademarks or registered trademarks
of their respective holders.