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ServiceNow Reports Financial Results for Fourth Quarter and Fiscal Year 2012

  ServiceNow Reports Financial Results for Fourth Quarter and Fiscal Year 2012

 Fourth Quarter Revenue Grew 92% Year-over-Year and 17% Quarter-over-Quarter

Business Wire

SAN DIEGO -- January 30, 2013

ServiceNow (NYSE: NOW), the enterprise IT cloud company, today announced its
financial results for its fourth quarter and fiscal year 2012.

Fourth quarter 2012 results:

  *Revenues of $75.2 million, an increase of 92% compared to the fourth
    quarter of 2011, and an increase of 17% from the third quarter of 2012.
  *A GAAP net loss for the quarter of $9.9 million, or a loss of $0.08 per
    basic and diluted share, compared to a GAAP net loss of $6.8 million, or a
    loss of $0.32 per basic and diluted share, in the fourth quarter of 2011.
  *A non-GAAP net loss for the quarter of $0.6 million, or a loss of $0 per
    basic and diluted share, compared to a non-GAAP net loss of $3.6 million,
    or a loss of $0.17 per basic and diluted share, in the fourth 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 $170.4 million, a 15% increase over the $147.9 million
    reported at the end of the prior quarter.
  *Billings were $97.6 million, a 20% increase over the $81.2 million
    reported in the previous quarter and a 58% increase over the $61.9 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).
  *Backlog of $379.0 million, an 81% increase over the $209.9 million
    reported at the end of 2011. Backlog excludes deferred revenue as it
    represents future amounts to be invoiced under our agreements.

Fiscal 2012 results:

  *Revenues of $243.7 million, an increase of 90% compared to 2011.
  *A GAAP net loss for the year of $37.3 million, or a loss of $0.51 per
    basic and diluted share, compared to a GAAP net loss of $1.7 million, or a
    loss of $0.11 per basic and diluted share, in 2011.
  *A non-GAAP net loss for the year of $9.7 million, or a loss of $0.14 per
    basic and diluted share, compared to non-GAAP net income of $5.8 million,
    or income of $0.05 per basic and $0.04 per diluted share, in 2011 (see the
    table entitled “Results of Operations GAAP to Non-GAAP Reconciliation” for
    a reconciliation of these GAAP and non-GAAP financial measures).
  *Billings were $309.4 million, a 72% increase over the $179.4 million
    reported in 2011 (see the table entitled “Non-GAAP Billings
    Reconciliation” for a reconciliation of non-GAAP billings to GAAP
    revenues).

“ServiceNow’s 92% revenue growth in the fourth quarter was a strong finish to
our fiscal year, a year in which we delivered 90% revenue growth and added 538
customers, bringing our cumulative customer count to 1,512 worldwide,” said
Frank Slootman, president and chief executive officer, ServiceNow. “During the
quarter we also achieved a customer renewal rate of 98% and upsells
compromised more than 32% of our total annual contract value signed during the
quarter, a testament to the value our existing customers are finding in the
ServiceNow platform.”

“We continued to show growth across our key financial metrics and we exceeded
our previously stated outlook on revenue and non-GAAP EPS,” added Michael
Scarpelli, chief financial officer, ServiceNow. “Deferred revenue grew
sequentially by 15%, marking the sixth consecutive quarter of double digit
sequential growth, and we generated $16.7 million in operating cash flow for
the quarter.”

Financial Outlook

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 first quarter of 2013, we expect:

  *Total revenues between $81.5 and $82.5 million, representing sequential
    growth between 8% and 10%. Our total first quarter revenues estimate
    consists of subscription revenues between $69 and $69.5 million and
    professional services and other revenues between $12.5 million and $13
    million.
  *Subscription gross margin between 73% and 74%, professional services and
    other gross margin between 0% and 4%, and overall gross margin between 62%
    and 63%.
  *Operating margin between (4%) and (2%).
  *A loss per basic and diluted share between $0.05 and $0.04 with
    weighted-average shares outstanding of approximately 129 million.

For the full year 2013 we expect revenues to be in the range of $387 to $392
million, representing year-over-year growth between 59% and 61%. Our total
annual revenues estimate consists of subscription revenues between $327 and
$329 million and professional services and other revenues between $60 and $63
million.

Fourth quarter highlights

  *In November, ServiceNow closed its follow-on public offering, in which
    ServiceNow and selling shareholders sold 16,100,000 shares of common stock
    at a price of $28.00 per share, including the exercise in full by the
    underwriters of their option to purchase 2,100,000 shares of common stock.
    Of the 16,100,000 shares of ServiceNow’s common stock sold in the
    follow-on public offering, 1,897,500 shares were sold by ServiceNow and
    14,202,500 shares were sold by selling stockholders. The offering
    generated net proceeds to the company of $50.6 million.
  *In November, ServiceNow ranked 33^rd on the Deloitte Technology Fast 500,
    a list of the 500 fastest growing technology companies.
  *In December, Inc. Magazine recognized ServiceNow with a HirePower award,
    which honors America's top 100 job creators. According to Inc., ServiceNow
    was the #1 job creator in the software industry and #14 overall.

Conference Call Details

ServiceNow will host a conference call to discuss its financial results for
the fourth quarter of 2012 to begin today at 2 p.m. PDT (22:00 GMT).
Interested parties may listen to the call by dialing 866.272.9941 (passcode:
20843149), or if outside North America, by dialing 617.213.8895 (passcode:
20843149). 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 30 days. To hear the replay interested parties may
dial 888.286.8010 (passcode: 15709467), or if outside North America, by
dialing 617.801.6888 (passcode: 15709467).

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 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.
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) 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 10-Q for the quarter ended September 30, 2012
and in other filings we make with the Securities and Exchange Commission from
time to time, including our Form 10-K that will be filed for the fiscal year
ended December 31, 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.

About ServiceNow

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 registered trademarks of ServiceNow.
All other brand and product names are trademarks or registered trademarks of
their respective holders.

ServiceNow, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(Unaudited)
                                                                     
                      Three Months Ended                 Year Ended
                      December 31,      December 31,     December 31,     December 31,
                      2012              2011             2012             2011
                                                                          
Revenues:
Subscription          $ 62,886          $ 34,555         $ 204,526        $ 110,886
Professional           12,276          4,623          39,186         17,186     
services and other
Total revenues         75,162          39,178         243,712        128,072    
Cost of revenues
^(1):
Subscription            20,076            8,750            63,258           24,288
Professional           12,232          7,241          40,751         22,336     
services and other
Total cost of          32,308          15,991         104,009        46,624     
revenues
Gross profit           42,854          23,187         139,703        81,448     
Operating expenses
^(1):
Sales and marketing     29,481            18,521           103,837          52,896
Research and            13,235            4,273            39,333           11,276
development
General and            9,676           5,575          34,117         16,046     
administrative
Total operating        52,392          28,369         177,287        80,218     
expenses
Income (loss) from      (9,538      )     (5,182     )     (37,584    )     1,230
operations
Interest and other
income (expense),      456             (717       )    1,604          (1,129     )
net
Income (loss)
before provision        (9,082      )     (5,899     )     (35,980    )     101
for income taxes
Provision for          849             906            1,368          1,758      
income taxes
Net income (loss)     $ (9,931      )   $ (6,805     )   $ (37,348    )   $ (1,657     )
Net income
(loss)attributable
to common             $ (9,931      )   $ (6,960     )   $ (37,656    )   $ (2,282     )
stockholders -
Basic and Diluted
                                                                          
Net income (loss)
per share
attributable to
common
stockholders:
Basic                 $ (0.08       )   $ (0.32      )   $ (0.51      )   $ (0.11      )
Diluted               $ (0.08       )   $ (0.32      )   $ (0.51      )   $ (0.11      )
Weighted-average
shares used to
compute net income
(loss) per share
attributable to
common
stockholders:
Basic                  124,000,655     21,515,078     73,908,631     20,154,088 
Diluted                124,000,655     21,515,078     73,908,631     20,154,088 
                                                                  
^(1) Includes total stock-based compensation expense for stock-based awards as follows:
                      Three Months Ended                 Year Ended
                      December 31,      December 31,     December 31,     December 31,
                      2012              2011             2012             2011
Cost of revenues:
Subscription          $ 1,415           $ 473            $ 3,929          $ 997
Professional            610               122              1,574            273
services and other
Sales and marketing     3,337             1,210            10,189           2,583
Research and            2,375             441              6,496            965
development
General and             1,612             1,000            5,749            2,652
administrative
                                                                       
                                                                                       

ServiceNow, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                                                               
                                                   December 31,   December 31,
                                                   2012           2011
ASSETS                                             (Unaudited)
Current assets:
Cash and cash equivalents                          $   118,989    $  68,088
Short-term investments                                 195,702       -
Accounts receivable, net                               78,163        44,860
Current portion of deferred commissions                14,979        6,087
Prepaid expenses and other current assets              13,596        9,928
Current portion of deferred tax assets                660          1,544   
Total current assets                                   422,089       130,507
Deferred commissions, less current portion             11,296        4,597
Property and equipment, net                            42,342        20,695
Other assets                                          2,387        524     
Total assets                                       $   478,114    $  156,323 
                                                                  
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable                                   $   9,604      $  9,411
Accrued expenses and other current liabilities         48,042        25,608
Current portion of deferred revenue                    153,964       91,087
Current portion of deferred rent                      17           455     
Total current liabilities                              211,627       126,561
Deferred revenue, less current portion                 16,397        13,549
Deferred rent, less current portion                    1,148         2,935
Other long-term liabilities                            5,537         2,532
Convertible preferred stock                            -             68,172
Stockholders’ equity (deficit)                        243,405      (57,426 )
Total liabilities, convertible preferred stock     $   478,114    $  156,323 
and stockholders’ equity (deficit)
                                                                             

ServiceNow, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
                                                             
                     Three Months Ended            Year Ended
                     December 31,   December 31,   December 31,   December 31,
                     2012           2011           2012           2011
                                                                  
Cash flows from
operating
activities:
Net loss             $  (9,931  )   $  (6,805  )   $ (37,348  )   $  (1,657  )
Adjustments to
reconcile net loss
to net cash
provided by
operating
activities:
Depreciation and        4,664          1,221         13,506          3,015
amortization
Amortization of
premiums on             743            -             1,337           -
short-term
investments, net
Amortization of
deferred                4,446          1,931         13,710          5,873
commissions
Stock-based             9,349          3,246         27,937          7,470
compensation
Tax benefit from
exercise of stock       (1,161  )      (41     )     (1,694   )      (62     )
options
Deferred tax            (746    )      -             (746     )      -
assets
Bad debt expense        236            -             384             -
(Gain) loss on
disposal of             -              72            (1       )      132
property and
equipment
Lease abandonment       (455    )      -             2,467           -
costs
Changes in
operating assets
and liabilities:
Accounts                (22,276 )      (19,728 )     (33,341  )      (27,496 )
receivable
Deferred                (8,650  )      (5,282  )     (29,175  )      (11,701 )
commissions
Prepaid expenses
and other current       (6,779  )      (1,575  )     (2,537   )      (3,667  )
assets
Other assets            (332    )      (42     )     (367     )      (310    )
Accounts payable        4,993          723           4,887           2,589
Accrued expenses
and other current       18,304         6,551         22,948          10,790
liabilities
Deferred rent           730            (68     )     (2,227   )      3,085
Deferred revenue        21,764         22,759        64,845          51,348
Other long-term        1,772        574         4,181         568     
liabilities
Net cash provided
by operating           16,671       3,536       48,766        39,977  
activities
Cash flows from
investing
activities:
Purchases of
property and            (9,910  )      (5,442  )     (42,066  )      (14,635 )
equipment
Purchases of
short-term              (93,704 )      -             (240,626 )      -
investments
Sale of short-term      -              -             1,025           -
investments
Maturities of
short-term              36,673         -             42,473          -
investments
Restricted cash        37           -           45            150     
Net cash used in
investing              (66,904 )     (5,442  )    (239,149 )     (14,485 )
activities
Cash flows from
financing
activities:
Net proceeds from
initial public          (15     )      -             169,784         -
offering
Net proceeds from       50,561                       50,561
follow-on offering
Proceeds from
exercise of stock       614            316           2,963           1,625
options
Proceeds (buyback)
from early              (75     )      30            949             1,487
exercise of stock
options
Tax benefit from
exercise of stock       1,161          41            1,694           62
options
Net proceeds from
issuance of common      -              -             17,848          -
stock
Purchases of
common stock and       -            (15     )    (1,960   )     (15     )
restricted stock
from stockholders
Net cash provided
by financing           52,246       372         241,839       3,159   
activities
Foreign currency
effect on cash and     -            586         (555     )     980     
cash equivalents
Net increase
(decrease) in cash      2,013          (948    )     50,901          29,631
and cash
equivalents
Cash and cash
equivalents at         116,976      69,036      68,088        38,457  
beginning of
period
Cash and cash
equivalents at end   $  118,989    $  68,088     $ 118,989     $  68,088  
of period
                                                                  
Calculation of
free cash flow (a
non-GAAP measure):
Net cash provided
by operating         $  16,671      $  3,536       $ 48,766       $  39,977
activities
Purchases of
property and           (9,910  )     (5,442  )    (42,066  )     (14,635 )
equipment
Free cash flow       $  6,761      $  (1,906  )   $ 6,700       $  25,342  
                                                                  

ServiceNow, Inc.
Results of Operations GAAP to Non-GAAP Reconciliation
(in thousands except share and per share data)
(Unaudited)
                                                                                             
                   Three Months Ended
                   December 31, 2012                                 December 31, 2011
                   GAAP              Adjustments   Non-GAAP          GAAP             Adjustments   Non-GAAP
                                     ^(1)                                             ^(1)
Reconciliation
of gross profit:
Revenues:
Subscription       $ 62,886          $  -          $ 62,886          $ 34,555         $  -          $ 34,555
Professional
services and        12,276           -          12,276          4,623           -          4,623      
other
Total revenues      75,162           -          75,162          39,178          -          39,178     
Cost of
revenues:
Subscription         20,076             (1,415 )     18,661            8,750             (473   )     8,277
Professional
services and        12,232           (610   )    11,622          7,241           (122   )    7,119      
other
Total cost of       32,308           (2,025 )    30,283          15,991          (595   )    15,396     
revenues
Gross profit:
Subscription         42,810             1,415        44,225            25,805            473          26,278
Professional
services and        44               610        654             (2,618     )     122        (2,496     )
other
Total gross        $ 42,854         $  2,025     $ 44,879         $ 23,187        $  595       $ 23,782     
profit
                                                                                                    
Reconciliation
of operating
expenses:
Operating
expenses:
Sales and          $ 29,481          $  (3,337 )   $ 26,144          $ 18,521         $  (1,210 )   $ 17,311
marketing
Research and         13,235             (2,375 )     10,860            4,273             (441   )     3,832
development
General and         9,676            (1,612 )    8,064           5,575           (1,000 )    4,575      
administrative
Total operating    $ 52,392         $  (7,324 )   $ 45,068         $ 28,369        $  (2,651 )   $ 25,718     
expenses
                                                                                                    
Reconciliation of income (loss) from operations, provision for income taxes, net income (loss), net income (loss)
per share, and pro forma net income (loss) per share:
Income (loss)      $ (9,538      )   $  9,349     $ (189        )   $ (5,182     )   $  3,246     $ (1,936     )
from operations
Income (loss)
before provision   $ (9,082      )   $  9,349      $ 267             $ (5,899     )   $  3,246      $ (2,653     )
for income taxes
Provision for       849              32         881             906             2          908        
income taxes
Net income         $ (9,931      )   $  9,317     $ (614        )   $ (6,805     )   $  3,244     $ (3,561     )
(loss)
Net income
(loss)
attributable to
common             $ (9,931      )   $  9,317     $ (614        )   $ (6,960     )   $  3,244     $ (3,716     )
stockholders -
Basic and
Diluted
Net income
(loss) per share
attributable to
common
stockholders:
Basic              $ (0.08       )   $  0.08      $ (0.00       )   $ (0.32      )   $  0.15      $ (0.17      )
Diluted            $ (0.08       )   $  0.08      $ (0.00       )   $ (0.32      )   $  0.15      $ (0.17      )
Weighted-average
shares used to
compute net
income (loss)
per share
attributable to
common
stockholders:
Basic               124,000,655      -          124,000,655     21,515,078      -          21,515,078 
Diluted             124,000,655      -          124,000,655     21,515,078      -          21,515,078 
                                                                                                    
                                                                                        
^(1) Adjustments include stock-based compensation and the related tax effect.


ServiceNow, Inc.
Results of Operations GAAP to Non-GAAP Reconciliation
(in thousands except share and per share data)
(Unaudited)
                                                                                                  
                   Year Ended
                   December 31, 2012                               December 31, 2011
                   GAAP             Adjustments   Non-GAAP         GAAP             Adjustments ^(1)     Non-GAAP
                                    ^(1)
Reconciliation
of gross profit:
Revenues:
Subscription       $ 204,526        $ -           $ 204,526        $ 110,886        $ -                  $ 110,886
Professional
services and        39,186         -           39,186         17,186         -                  17,186     
other
Total revenues      243,712        -           243,712        128,072        -                  128,072    
Cost of
revenues:
Subscription         63,258           (3,929  )     59,329           24,288           (997       )         23,291
Professional
services and        40,751         (1,574  )    39,177         22,336         (273       )        22,063     
other
Total cost of       104,009        (5,503  )    98,506         46,624         (1,270     )        45,354     
revenues
Gross profit:
Subscription         141,268          3,929         145,197          86,598           997                  87,595
Professional
services and        (1,565     )    1,574       9              (5,150     )    273                (4,877     )
other
Total gross        $ 139,703       $ 5,503      $ 145,206       $ 81,448        $ 1,270             $ 82,718     
profit
                                                                                                         
Reconciliation
of operating
expenses:
Operating
expenses:
Sales and          $ 103,837        $ (10,189 )   $ 93,648         $ 52,896         $ (2,583     )       $ 50,313
marketing
Research and         39,333           (6,496  )     32,837           11,276           (965       )         10,311
development
General and         34,117         (5,749  )    28,368         16,046         (2,652     )        13,394     
administrative
Total operating    $ 177,287       $ (22,434 )   $ 154,853       $ 80,218        $ (6,200     )       $ 74,018     
expenses
                                                                                                         
Reconciliation of income (loss) from operations, provision for income taxes, net income (loss), net income (loss) per
share, and pro forma net income (loss) per share:
Income (loss)      $ (37,584    )   $ 27,937     $ (9,647     )   $ 1,230         $ 7,470             $ 8,700      
from operations
Income (loss)
before provision   $ (35,980    )   $ 27,937      $ (8,043     )   $ 101            $ 7,470              $ 7,571
for income taxes
Provision for       1,368          333         1,701          1,758          20                 1,778      
income taxes
Net income         $ (37,348    )   $ 27,604     $ (9,744     )   $ (1,657     )   $ 7,450             $ 5,793      
(loss)
Net income
(loss)
attributable to    $ (37,656    )   $ 27,604     $ (10,052    )   $ (2,282     )   $ 3,281      ^(2)   $ 999        
common
stockholders -
Basic
Net income
(loss)
attributable to    $ (37,656    )   $ 27,604     $ (10,052    )   $ (2,282     )   $ 3,673      ^(2)   $ 1,391      
common
stockholders -
Diluted
Net income
(loss) per share
attributable to                                                                     
common
stockholders:
Basic              $ (0.51      )   $ 0.37       $ (0.14      )   $ (0.11      )   $ 0.16              $ 0.05       
Diluted            $ (0.51      )   $ 0.37       $ (0.14      )   $ (0.11      )   $ 0.15              $ 0.04       
Weighted-average
shares used to
compute net
income (loss)
per share
attributable to
common
stockholders:
Basic               73,908,631     -           73,908,631     20,154,088     -                  20,154,088 
Diluted             73,908,631     -           73,908,631     20,154,088     11,425,466 ^(3)    31,579,554 
                                                                                             
^(1) Adjustments include stock-based compensation and the related tax effect.

^(2) Adjustment includes stock-based compensation and the related tax effect, and an allocation of net income to
participating preferred stockholders.

^(3) The effects of these dilutive securities were not included in the GAAP calculation of diluted income (loss) per
share for the year ended December 31, 2011 because the effect would have been anti-dilutive.


ServiceNow, Inc.
Non-GAAP Billings Reconciliation
(in thousands)
(Unaudited)
                                                               
             Three Months Ended                        Year Ended
             December      September     December      December      December
             31,           30,           31,           31,           31,
             2012          2012          2011          2012          2011
Total        $  75,162     $  64,345     $  39,178        243,712      128,072
revenues
Deferred
revenue,        170,361       147,946       104,636       170,361      104,636
end of
period
Less:
deferred
revenue,       147,946      131,069      81,877       104,636     53,288
beginning
of period
Billings     $  97,577     $  81,222     $  61,937     $  309,437    $ 179,420
                                                                       

ServiceNow, Inc.
Reconciliation of Non-GAAP Financial Guidance
                                          
The financial guidance provided below is an estimate based on information
available as of January 30, 2013. The company’s future performance and
financial results are subject to risks and uncertainties, and actual results
could differ materially from the guidance set forth below. Some of the factors
that could affect the company’s financial results are stated above in this
press release. More information on potential factors that could affect the
company’s financial results is included from time to time in the company’s
public reports filed with the SEC, including the company’s prospectuses filed
on June 29, 2012 and November 15, 2012, the company's Form 10-Q for the
quarter ended June 30, 2012 filed on August 10, 2012, and the company's Form
10-Q for the quarter ended September 30, 2012 filed on October 31, 2012. The
company assumes no obligation to update any forward-looking statements or
information, which speak as of their respective dates.
                                                    
                                                    Three Months Ended
                                                    March 31, 2013
                                                    
Non-GAAP subscription gross margin                  73% - 74%
                                                    
Stock-based compensation expense                    (2%)
                                                    
GAAP subscription gross margin                      71% - 72%
                                                    
Non-GAAP professional services and other            0% - 4%
gross margin
                                                    
Stock-based compensation expense                    (7%)
                                                    
GAAP professional services and other                (7%) - (3%)
gross margin
                                                    
Non-GAAP total gross margin                         62% - 63%
                                                    
Stock-based compensation expense                    (3%)
                                                    
GAAP total gross margin                             59% - 60%
                                                    
Non-GAAP operating margin                           (4%) - (2%)
                                                    
Stock-based compensation expense                    (12%)
                                                    
GAAP operating margin                               (16%) - (14%)
                                                    
Non-GAAP basic and diluted net loss per             ($0.05) - ($0.04)
share
                                                    
Stock-based compensation expense                    ($0.08)
                                                    
Incremental non-GAAP tax expense  ^(1)              $0.03
                                                    
GAAP basic and diluted net loss per share           ($0.10) - ($0.09)
                                                  
^(1) Incremental non-GAAP tax expense reflects the increase to GAAP tax
expense related to the non-GAAP stock-based compensation expense adjustments.

Contact:

Media Contacts:
ServiceNow
Liza S. Goldberg, 408-851-8553
liza.goldberg@servicenow.com
Steve Schick, 408-961-2349
steve.schick@servicenow.com
or
Schwartz MSL
Kim McCrossen, 781-684-6253
servicenow@schwartzmsl.com
or
Investor Contact:
858-345-1756
ir@servicenow.com
 
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