ServiceNow Q2 2012 complete financial tables (download PDF)
SAN DIEGO ‑‑ Aug. 1, 2012 ‑‑ ServiceNow, Inc.
(NYSE: NOW), a leading provider of cloud‑based services to automate
enterprise IT operations, today announced its financial results for
its second quarter of 2012.
Second quarter 2012 results:
• Revenues of $56.8 million, an increase of 93% compared to the
second quarter of 2011, and an increase of 20% from the first quarter
• A GAAP net loss for the quarter of $8.7 million, or a loss of
$0.32 per basic and diluted share, compared to GAAP net income of $2.0
million, or net income of $0.02 per diluted share, in the second
quarter of 2011.
• A non‑GAAP net loss for the quarter of $3.1 million, or a net loss
of $0.12 per basic and diluted share, compared to non‑GAAP net income
of $2.9 million, or net income of $0.05 per diluted share, in the
second quarter of 2011 (see the table entitled "Results of
Operations GAAP to Non‑GAAP Reconciliation " for a reconciliation
of these GAAP and non‑GAAP financial measures).
• Deferred Revenue of $131.1 million, a 13% increase over the $115.8
million reported at the end of the prior quarter.
• Billings were $72.1 million, a 23% increase over the $58.5 million
reported in the previous quarter and a 98% increase over the $36.5
million in the same period last year.
"ServiceNow's second quarter results were highlighted by record
revenues," said Frank Slootman, chief executive officer of
ServiceNow. "We added over 120 customers during the quarter,
bringing our cumulative customer count to 1,201 worldwide, including
many of the largest and most recognized companies in the world. We
also achieved a customer renewal rate of 95%, a testament to the value
the ServiceNow platform provides to our customers. Continued strong
operational performance, coupled with the milestone of our initial
public offering, have us well‑positioned to execute on our growth
strategy and our vision to transform IT."
"We continued to show strong revenue execution during the
second quarter, continuing to build out key elements of our
infrastructure to position us for future growth," added Michael
Scarpelli, chief financial officer of ServiceNow. "We added 154
net new employees, bringing total headcount to 882, and we generated
approximately $6.9 million in operating cash flow for the quarter."
The non‑GAAP financial guidance discussed below 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).
For the third quarter of 2012, we expect:
• Total revenues between $61 and $63 million, representing
year‑over‑year growth between 78% and 84%. Our total third quarter
revenues estimate consists of subscription revenues between $53 and
$54 million and professional services and other revenues between $8
million and $9 million.
• Subscription gross margin between 66% and 67%, professional
services and other gross margin between (14%) and (19%), and overall
gross margin between 55% and 56%.
• Operating margin between (17%) and (19%).
• A loss per basic and diluted share between $0.10 and $0.11 with
weighted‑average shares outstanding of approximately 121 million.
For the full year 2012 we expect revenues to fall within the range
of $233 to $237 million, representing year‑over‑year growth between
82% and 85%. Our total annual revenues estimate consists of
subscription revenues between $198 and $200 million and professional
services and other revenues between $35 and $37 million.
Second quarter highlights
• In June, ServiceNow became a public company and began trading on
the New York Stock Exchange. On July 5, 2012, ServiceNow closed its
initial public offering, issuing 10,350,000 shares of common stock at
a price to the public of $18.00 per share, which included 1,350,000
shares of common stock issued upon the exercise in full of the
underwriters' over‑allotment option. The offering generated net
proceeds to the company of approximately $170 million.
• In May, ServiceNow hosted Knowledge12, its annual user conference,
in New Orleans with nearly 2,000 attendees to share best practices and
to discover how ServiceNow can drive additional value in their
business. This record number of attendees is up from nearly 1,000 last year.
• In May, ServiceNow launched the ability for customers to take
advantage of advanced high availability in its standard data centers.
When advanced high availability is employed, customer production data
will be replicated, in near real time, to a geographically separate
data center. In the event of service disruption, the customer instance
can be configured to fail over to an alternate data center.
• In May, ServiceNow launched new services that enhance ServiceNow's
proven professional services methodology, StartNow. The methodology is
built on best practices captured from hundreds of successful customer
implementations and is now integrated into the ServiceNow platform
itself. New offerings include ServiceNow Best Practice Workshops that
align customer processes and technology with the ServiceNow platform
and QuickStart packaged implementations that consolidate legacy
systems as additional applications are deployed on the ServiceNow platform.
• In May, ServiceNow announced a relationship with KPMG LLP to
deliver service offerings to leverage the companies' experience in
cloud services and enterprise IT. KPMG will provide implementation
support services, process design, process integration, and IT
organizational change consulting for ServiceNow enterprise customers.
Conference Call Details
ServiceNow will host a conference call to discuss its financial
results for the second quarter of 2012 to begin today at 2 p.m. PDT (5
p.m. EDT). Interested parties may listen to the call by dialing
800.798.2796 (passcode: 30521460), or if outside North America, by
dialing 617.614.6204 (passcode: 30521460). 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 will also be available two
hours after the call and will run for seven days. To hear the replay
interested parties may dial 888.286.8010 (passcode: 50733523), or if
outside North America, by dialing 617.801.6888 (passcode: 50733523).
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 and adjustments for capitalized software.
Management believes the presentation of operating results excluding
stock‑based compensation expense and adjustments for capitalized
software provide 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 that 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 that 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)
possible fluctuations in our financial and operating results, (ii) our
ability to grow at our expected rate of growth and anticipated revenue
run rate, including our ability to convert deferred revenue and
unbilled deferred revenue into revenue, successfully deploy new
customers, and continue to release, and gain customer acceptance of,
new and improved versions of our service, and (iii) errors,
interruptions, delays, or security breaches of our service or web hosting.
Further information on these and other factors that could affect our
financial results are included in our Form S‑1 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 second quarter
ended June 30, 2012.
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 a leading provider of cloud‑based services that
automate enterprise IT operations. 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 http://www.servicenow.com.
Any unreleased services, features or functions referenced in this
document, our website or other press releases or public statements
that are not currently available are subject to change at ServiceNow's
discretion and may not be delivered as planned or at all. Customers
who purchase ServiceNow services should make their purchase decisions
based upon services, features and functions that are currently available.
Copyright © 2012. ServiceNow. All rights reserved. ServiceNow,
StartNow, QuickStart and the ServiceNow logo are trademarks of
ServiceNow. All other brand and product names are trademarks or
registered trademarks of their respective holders.