SANTA CLARA, Calif. – April 16, 2015 – ServiceNow® (NYSE: NOW),
the enterprise cloud company, today announced the financial results
for its first quarter 2015.
First Quarter 2015 Results:
- Revenues of $212 million, an increase of 52% year‑over‑year
and 62% in constant currency.
- GAAP net loss of $58
million, or a loss of $0.38 per basic and diluted share, compared to
a GAAP net loss of $43 million, or a loss of $0.30 per basic and
diluted share, in the first quarter of 2014.
- Non‑GAAP net
income of $2 million, or income of $0.02 per basic share and $0.01
per diluted share, compared to a non‑GAAP net loss of $11 million,
or a loss of $0.08 per basic and diluted share, in the first quarter
- Billings were $268 million, increasing 48%
year‑over‑year and 59% in constant currency.
- Added 23 net
new Global 2000 customers, bringing the total to 545.
- For a
reconciliation of these GAAP and non‑GAAP financial measures, please
see the table entitled "Results of Operations GAAP to Non‑GAAP
Reconciliation” included at the end of this release.
“We are off to a solid start in 2015 as we head into Knowledge, our
annual conference,” said Frank Slootman, president and chief executive
officer, ServiceNow. “We closed eight new deals this quarter with an
annualized contract value in excess of $1 million.”
“We added 23 net new Global 2000 customers during the quarter,”
said Michael Scarpelli, chief financial officer, ServiceNow. “We also
continued to penetrate our existing customer base with annualized
contract value per Global 2000 customer of $746,000, an increase of
34% from the same period last year.”
The financial guidance discussed below is on a non‑GAAP basis,
except for revenues, and excludes stock‑based compensation expense,
amortization of purchased intangibles, and acquisition related
expenses. Please see the tables included at the end of this release
for a reconciliation of these non‑GAAP financial measures to the
related GAAP financial measures. Negative numbers are shown in
parentheses. For the second quarter of 2015, we expect:
- Total revenues between $237 and $242 million, representing
year‑over‑year growth between 42% and 45%. Our total second quarter
revenue estimate consists of subscription revenues between $192 and
$196 million and professional services and other revenues between
$45 and $46 million.
- Billings between $260 and $265
million, representing year‑over‑year growth between 38% and
- Subscription gross margin of approximately 80%,
professional services and other gross margin, excluding Knowledge15
revenue, of approximately 15%, and overall gross margin of
- Operating loss of approximately $5
million, including net expense of $12 million related to
- Free cash flow of approximately $40
For the full year 2015, we expect total revenues to be in the range
of $970 million to $1 billion, representing year‑over‑year growth
between 42% and 47%. Our total annual revenue estimate consists of
subscription revenues between $820 and $840 million and professional
services and other revenues between $150 and $160 million.
Updates Since Our Last Earnings Release:
- ServiceNow acquired Intréis, a team of experts focused on
integrating enterprise governance, risk and compliance solutions and
service management across enterprise environments.
the quarter, ServiceNow released its latest cloud‑based software
extending service management across the enterprise to legal,
marketing and finance.
Conference Call Details
The conference call will begin at 2 p.m. Pacific Time (21:00 GMT)
on Thursday, April 16, 2015. Interested parties may listen to the call
by dialing 866.271.5140 (passcode: 89904836), or if outside North
America, by dialing 617.213.8893 (passcode: 89904836). Individuals may
access the live teleconference from the investor relations section of
the ServiceNow website at http://investors.servicenow.com.
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: 11038912), or if outside North America, by dialing
617.801.6888 (passcode: 11038912).
Statement regarding use of non‑GAAP financial measures
The company reports non‑GAAP financial measures 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 foreign
currency impact, stock‑based compensation expense, the amortization of
debt discount and issuance costs related to the convertible senior
notes, amortization of purchased intangibles and acquisition‑related
expenses, and the related income tax effect of these adjustments.
Management believes the presentation of operating results that
excludes these items 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 operating performance.
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 as presented on the statement of cash flows. 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.
We present constant currency information to provide a framework for
assessing how our underlying business performed excluding the effect
of foreign currency rate fluctuations. To present this information,
current and comparative prior period results for entities reporting in
currencies other than United States dollars are converted into United
States dollars at the exchange rate for the quarter being compared to
for growth rate calculations presented, rather than the actual
exchange rates in effect during that period.
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. 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 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, 2014 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, 2015.
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 changing the way people work. With a
service‑orientation toward the activities, tasks and processes that
make up day‑to‑day work life, we help the modern enterprise operate
faster and be more scalable than ever before. Customers use our
service model to define, structure and automate the flow of work,
removing dependencies on email and spreadsheets to transform the
delivery and management of services for the enterprise. ServiceNow
provides service management for every department in the enterprise
including IT, human resources, facilities, field service and more. We
deliver a ‘lights‑out, light‑speed’ experience through our enterprise
cloud – built to manage everything as a service. To find out how,
ServiceNow, Knowledge and the ServiceNow logo are registered
trademarks of ServiceNow. All other brand and product names are
trademarks or registered trademarks of their respective holders.
ServiceNow Q1 2015 complete financial tables