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ServiceNow Reports Financial Results for Second Quarter 2013



  ServiceNow Reports Financial Results for Second Quarter 2013

   Second Quarter Revenues Exceed $100 Million and Grew 80% Year-over-Year

Business Wire

SAN DIEGO -- July 31, 2013

ServiceNow® (NYSE: NOW), the enterprise IT cloud company, today announced its
financial results for its second quarter of 2013.

Second quarter 2013 results:

  * Revenues of $102.2 million, an increase of 80% compared to the second
    quarter of 2012, and an increase of 19% from the first quarter of 2013.
  * A GAAP net loss for the quarter of $21.4 million, or a loss of $0.16 per
    basic and diluted share, compared to a GAAP net loss of $8.7 million, or a
    loss of $0.32 per basic and diluted share, in the second quarter of 2012.
  * A non-GAAP net loss for the quarter of $7.8 million, or a loss of $0.06
    per basic and diluted share, compared to a non-GAAP net loss of $1.6
    million, or a loss of $0.06 per basic and diluted share, in the second
    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 measures).
  * Deferred revenue of $210.0 million, an 8% increase over the $194.8 million
    reported at the end of the prior quarter.
  * Billings were $117.5 million, a 6% increase over the $110.3 million
    reported in the previous quarter and a 63% increase over the $72.1 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).

“In the second quarter we added 138 new customers, bringing our cumulative
customer count to 1,778 worldwide, achieved a customer renewal rate of 94.2%,
and continued to penetrate our installed base with upsells comprising 25% of
our total annual contract value signed during the quarter,” said Frank
Slootman, president and chief executive officer, ServiceNow. “We also hosted
nearly 4,000 attendees at our annual user conference, Knowledge, and announced
several key product innovations.”

“ServiceNow crossed the $100 million revenue mark for the first time with
$102.2 million in total revenue in the quarter, and billed $117.5 million, our
second consecutive quarter in excess of $100 million,” added Michael
Scarpelli, chief financial officer, ServiceNow. “In addition, we generated
$9.7 million in operating cash flow in the quarter.”

Financial Outlook

The non-GAAP financial guidance discussed below excludes stock-based
compensation expense and the related income tax effect (see table which
reconciles these non-GAAP financial measures to the related GAAP measures). We
completed the acquisition of Mirror42 on July 1, 2013 and incorporated the
expected revenues and operating expenses associated with the acquisition in
our guidance. The accounting treatment for the acquisition is pending
completion and therefore we have excluded the related amortization of acquired
intangible assets, acquisition-related expenses, and income tax expense from
our guidance for the third quarter. In the future, we will include these
acquisition related expenses in our non-GAAP results. Negative numbers are
shown in parentheses.

For the third quarter of 2013, we expect:

  * Total revenues between $104 and $106 million, representing year-over-year
    growth between 62% and 65%. Our total third quarter revenue estimate
    consists of subscription revenues between $88 and $89 million and
    professional services and other revenues between $16 and $17 million.
  * Subscription gross margin of approximately 75%, professional services and
    other gross margin between 7% and 9%, and overall gross margin of
    approximately 65%.
  * Operating margin between (3%) and (2%).
  * A net loss per basic and diluted share between ($0.03) and ($0.02) with
    weighted-average shares outstanding of approximately 137.5 million.

For the full year 2013, we expect revenues to be in the range of $406 to $410
million, representing year-over-year growth between 67% and 68%. Our total
annual revenues estimate consists of subscription revenues between $337 and
$339 million and professional services and other revenues between $69 and $71
million.

Updates since our last earnings release:

  * In May, ServiceNow hosted Knowledge13™, our annual global user conference,
    in Las Vegas. With nearly 4,000 attendees, doubling last year’s
    attendance, Knowledge is the largest gathering of IT professionals using
    cloud services to transform service delivery across the enterprise.
  * In May, ServiceNow announced:

       * ServiceNow App Creator enabling ‘citizen developers’ to easily create
         intuitive enterprise applications on the ServiceNow Service
         Automation Platform.
       * ServiceNow for iPad which provides IT with the ability to view and
         interact with their work anytime, anywhere.
       * ServiceNow Cloud Provisioning, a new orchestration application that
         enables IT to automate the entire cloud management lifecycle.
       * ServiceNow CMDB data certification, a new capability in the
         ServiceNow CMDB (Configuration Management Database) that ensures data
         remains accurate, current and relevant.

  * In July, ServiceNow announced the acquisition of Mirror42. The new
    ServiceNow Performance Analytics product provides users with Key
    Performance Indicator (KPI)-driven dashboards and scorecards that work
    transparently with all ServiceNow applications.

Conference Call Details

The conference call will begin at 2:00 p.m. Pacific Time (21:00 GMT) on
Wednesday, July 31, 2013. Interested parties may listen to the call by dialing
866.270.6057 (passcode: 37292950), or if outside North America, by dialing
617.213.8891 (passcode: 37292950). Individuals may access the live
teleconference from the investor relations section of the ServiceNow website
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: 11018243), or if outside North
America, by dialing 617.801.6888 (passcode: 11018243).

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 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.
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 second quarter
ended June 30, 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.

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.
Knowledge is a trademark 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                 Six Months Ended
                        June 30,          June 30,         June 30,          June 30,

                        2013              2012             2013              2012
                                                                                           
     Revenues:
     Subscription       $ 80,376          $ 46,820         $ 151,934         $ 86,361
     Professional
     services and         21,846            9,954            36,227            17,844      
     other
     Total revenues       102,222           56,774           188,161           104,205     
     Cost of revenues
     ^(1):
     Subscription         20,219            14,239           38,531            25,251
     Professional
     services and         15,779            8,652            29,775            18,876      
     other
     Total cost of        35,998            22,891           68,306            44,127      
     revenues
     Gross profit         66,224            33,883           119,855           60,078      
     Operating
     expenses ^(1):
     Sales and            52,291            26,909           90,517            46,216
     marketing
     Research and         17,951            9,272            33,990            15,315
     development ^(2)
     General and          15,325            6,819            27,604            13,246      
     administrative
     Total operating      85,567            43,000           152,111           74,777      
     expenses
     Loss from            (19,343     )     (9,117     )     (32,256     )     (14,699    )
     operations
     Interest and
     other income         (1,323      )     41               (1,204      )     533         
     (expense), net
                                                                                           
     Loss before
     provision for        (20,666     )     (9,076     )     (33,460     )     (14,166    )
     (benefit from)
     income taxes
     Provision for
     (benefit from)       739               (352       )     1,303             198         
     income taxes
     Net loss           $ (21,405     )   $ (8,724     )   $ (34,763     )   $ (14,364    )
     Net loss
     attributable to
     common             $ (21,405     )   $ (8,878     )   $ (34,763     )   $ (14,672    )
     stockholders -
     Basic and
     Diluted
                                                                                           
     Net loss per
     share
     attributable to
     common
     stockholders:
     Basic              $ (0.16       )   $ (0.32      )   $ (0.26       )   $ (0.55      )
     Diluted            $ (0.16       )   $ (0.32      )   $ (0.26       )   $ (0.55      )
     Weighted-average
     shares used to
     compute net loss
     per share
     attributable to
     common
     stockholders:
     Basic                134,454,085       27,788,547       132,298,095       26,452,100  
     Diluted              134,454,085       27,788,547       132,298,095       26,452,100  
 
      
^(1) Includes total stock-based compensation expense for stock-based awards as follows:
                        Three Months Ended                 Six Months Ended
                        June 30,          June 30,         June 30,          June 30,

                        2013              2012             2013              2012
     Cost of
     revenues:
     Subscription       $ 1,996           $ 706            $ 3,790           $ 1,238
     Professional
     services and         1,065             277              1,886             469
     other
     Sales and            4,822             2,482            8,807             3,953
     marketing
     Research and         3,715             1,541            6,829             2,202
     development
     General and          3,230             1,451            5,562             2,513
     administrative
                                                                                           
     The Company recorded an out of period adjustment during the quarter ended June 30,
     2012 to reflect the correction of an immaterial error related to software development
^(2) costs of $0.7 million that was improperly capitalized during the quarter ended March
     31, 2012. The correction of this error had no effect on the results of operations for
     the six months ended June 30, 2012.
 

                                                            
ServiceNow, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
               
                                             June 30, 2013   December 31, 2012
ASSETS                                       (Unaudited)
Current assets:
Cash and cash equivalents                    $   120,233     $     118,989
Short-term investments                           133,547           195,702
Accounts receivable, net                         92,765            78,163
Current portion of deferred commissions          21,171            14,979
Prepaid expenses and other current assets        9,093             14,256
Total current assets                             376,809           422,089
Deferred commissions, less current portion       13,786            11,296
Long-term investments                            92,342            -
Property and equipment, net                      57,253            42,342
Other assets                                     2,143             2,387
Total assets                                 $   542,333     $     478,114
                                                                    
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                             $   10,016      $     9,604
Accrued expenses and other current               46,791            48,059
liabilities
Current portion of deferred revenue              192,365           153,964
Total current liabilities                        249,172           211,627
Deferred revenue, less current portion           17,675            16,397
Other long-term liabilities                      7,591             6,685
Stockholders’ equity                             267,895           243,405
Total liabilities and stockholders’ equity   $   542,333     $     478,114
                                                                    

                    
ServiceNow, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
                                                                  
                     Three Months Ended             Six Months Ended
                     June 30,       June 30,        June 30,       June 30,

                     2013           2012            2013           2012
                                                                              
     Cash flows
     from
     operating
     activities:
     Net loss        $ (21,405  )   $ (8,724  )     $ (34,763  )   $ (14,364 )
     Adjustments
     to reconcile
     net loss to
     net cash
     provided by
     operating
     activities:
     Depreciation
     and               5,339          2,826           9,703          4,872
     amortization
     Amortization
     of premiums       1,138          98              2,233          98
     on
     investments
     Amortization
     of deferred       6,631          3,001           11,997         5,344
     commissions
     Stock-based       14,828         6,457           26,874         10,375
     compensation
     Tax benefit
     from exercise     (720     )     703             (2,571   )     (257    )
     of stock
     options
     Deferred tax      -              (174    )       -              (174    )
     assets
     Bad debt          304            -               587            -
     expense
     Lease
     abandonment       28             -               326            -
     costs
     Changes in
     operating
     assets and
     liabilities:
     Accounts          (12,953  )     (4,781  )       (15,891  )     (2,723  )
     receivable
     Deferred          (11,511  )     (7,823  )       (20,780  )     (13,076 )
     commissions
     Prepaid
     expenses and      1,924          1,031           5,842          5,203
     other current
     assets
     Other assets      (17      )     (1,882  )       (247     )     (1,956  )
     Accounts          1,346          (470    )       (125     )     963
     payable
     Accrued
     expenses and      9,294          915             282            1,960
     other current
     liabilities
     Deferred          14,845         15,764          40,574         26,786
     revenue
     Other
     long-term         665            (2      )       718            (33     )
     liabilities
     Net cash
     provided by       9,736          6,939           24,759         23,018   
     operating
     activities
     Cash flows
     from
     investing
     activities:
     Purchases of
     property and      (11,820  )     (11,668 )       (22,235  )     (20,226 )
     equipment
     Purchases of      (128,817 )     (8,575  )       (184,763 )     (23,919 )
     investments
     Sale of           43,298         1,025           43,298         1,025
     investments
     Maturities of
     investments       52,101         -               107,451        -
     ^(1)
     Restricted        (163     )     -               (163     )     8        
     cash
     Net cash used
     in investing      (45,401  )     (19,218 )       (56,412  )     (43,112 )
     activities
     Cash flows
     from
     financing
     activities:
     Payment of
     follow-on         -              -               (698     )     -
     offering
     costs
     Proceeds from
     employee          10,362         832             31,830         2,133
     stock plans
     Proceeds from
     early
     exercise of       -              137             -              1,024
     stock
     options, net
     Tax benefit
     from exercise     720            (703    )       2,571          257
     of stock
     options
     Net proceeds
     from issuance     -              -               -              17,848
     of common
     stock
     Purchases of
     common stock
     and               -              (891    )       -              (1,960  )
     restricted
     stock from
     stockholders
     Offering
     costs in
     connection        -              (1,164  )       -              (1,164  )
     with initial
     public
     offering
     Net cash
     provided by
     (used in)         11,082         (1,789  )       33,703         18,138   
     financing
     activities
     Foreign
     currency
     effect on         34             (590    )       (806     )     (650    )
     cash and cash
     equivalents
     Net increase
     (decrease) in     (24,549  )     (14,658 )       1,244          (2,606  )
     cash and cash
     equivalents
     Cash and cash
     equivalents       144,782        80,140          118,989        68,088   
     at beginning
     of period
     Cash and cash
     equivalents     $ 120,233      $ 65,482        $ 120,233      $ 65,482   
     at end of
     period
                                                                              
     Calculation
     of free cash
     flow (a
     non-GAAP
     measure):
     Net cash
     provided by     $ 9,736        $ 6,939         $ 24,759       $ 23,018
     operating
     activities
     Purchases of
     property and      (11,820  )     (11,668 )       (22,235  )     (20,226 )
     equipment
     Free cash       $ (2,084   )   $ (4,729  )     $ 2,524        $ 2,792    
     flow
                                                                              
                                                                              
     In the six months ended June 30, 2013, maturities of investments includes
^(1) the effect of the correction of an immaterial error of $3.0 million
     related to securities that were improperly classified as short-term
     investments instead of cash and cash equivalents as of December 31, 2012.
                                                                              

                                                                                                        
ServiceNow, Inc.
Results of Operations GAAP to Non-GAAP Reconciliation
(in thousands except share and per share data)
(Unaudited)
                                                                                                                       
                        Three Months Ended
                        June 30, 2013                                     June 30, 2012
                        GAAP              Adjustments   Non-GAAP          GAAP             Adjustments   Non-GAAP
     Reconciliation
     of gross profit:
     Revenues:
     Subscription       $ 80,376          $ -           $ 80,376          $ 46,820         $  -          $ 46,820
     Professional
     services and         21,846            -             21,846            9,954             -            9,954       
     other
     Total revenues       102,222           -             102,222           56,774            -            56,774      
     Cost of revenues
     ^(1):
     Subscription         20,219            (1,996  )     18,223            14,239            (706   )     13,533
     Professional
     services and         15,779            (1,065  )     14,714            8,652             (277   )     8,375       
     other
     Total cost of        35,998            (3,061  )     32,937            22,891            (983   )     21,908      
     revenues
     Gross profit:
     Subscription         60,157            1,996         62,153            32,581            706          33,287
     Professional
     services and         6,067             1,065         7,132             1,302             277          1,579       
     other
     Total gross        $ 66,224          $ 3,061       $ 69,285          $ 33,883         $  983        $ 34,866      
     profit
                                                                                                                       
     Reconciliation
     of operating
     expenses:
     Operating
     expenses ^(1):
     Sales and          $ 52,291          $ (4,822  )   $ 47,469          $ 26,909         $  (2,482 )   $ 24,427
     marketing
     Research and         17,951            (3,715  )     14,236            9,272             (2,273 )     6,999
     development ^(2)
     General and          15,325            (3,230  )     12,095            6,819             (1,451 )     5,368       
     administrative
     Total operating    $ 85,567          $ (11,767 )   $ 73,800          $ 43,000         $  (6,206 )   $ 36,794      
     expenses
                                                                                                                       
     Reconciliation of loss from operations, provision for (benefit from) income taxes, net loss, net loss per share,
     and pro forma net loss per share:
     Loss from          $ (19,343     )   $ 14,828      $ (4,515      )   $ (9,117     )   $  7,189      $ (1,928     )
     operations
     Loss before
     provision for
     (benefit from)     $ (20,666     )   $ 14,828      $ (5,838      )   $ (9,076     )   $  7,189      $ (1,887     )
     income

     taxes
     Provision for
     (benefit from)       739               1,253         1,992             (352       )      110          (242       )
     income taxes
     ^(1), (2)
     Net loss           $ (21,405     )   $ 13,575      $ (7,830      )   $ (8,724     )   $  7,079      $ (1,645     )
     Net loss
     attributable to
     common             $ (21,405     )   $ 13,575      $ (7,830      )   $ (8,878     )   $  7,079      $ (1,799     )
     stockholders -
     Basic and
     Diluted
     Net loss per
     share
     attributable to
     common
     stockholders:
     Basic              $ (0.16       )   $ 0.10        $ (0.06       )   $ (0.32      )   $  0.26       $ (0.06      )
     Diluted            $ (0.16       )   $ 0.10        $ (0.06       )   $ (0.32      )   $  0.26       $ (0.06      )
     Weighted-average
     shares used to
     compute net loss
     per share
     attributable to
     common
     stockholders:
     Basic                134,454,085       -             134,454,085       27,788,547        -            27,788,547  
     Diluted              134,454,085       -             134,454,085       27,788,547        -            27,788,547  
      
^(1) Adjustments include stock-based compensation and the related tax effect.
     Adjustment includes $0.7 million of additional research and development expenses, and the related tax effect, that
^(2) were recorded during the quarter ended June 30, 2012 for the correction of an immaterial error related to software
     development costs that were improperly capitalized during the quarter ended March 31, 2012.
                                                                                                                       

                                                                                                        
ServiceNow, Inc.
Results of Operations GAAP to Non-GAAP Reconciliation
(in thousands except share and per share data)
(Unaudited)
                                                                                                                       
                        Six Months Ended
                        June 30, 2013                                     June 30, 2012
                        GAAP              Adjustments   Non-GAAP          GAAP             Adjustments   Non-GAAP
     Reconciliation
     of gross profit:
     Revenues:
     Subscription       $ 151,934         $ -           $ 151,934         $ 86,361         $  -          $ 86,361
     Professional
     services and         36,227            -             36,227            17,844            -            17,844      
     other
     Total revenues       188,161           -             188,161           104,205           -            104,205     
     Cost of revenues
     ^(1):
     Subscription         38,531            (3,790  )     34,741            25,251            (1,238 )     24,013
     Professional
     services and         29,775            (1,886  )     27,889            18,876            (469   )     18,407      
     other
     Total cost of        68,306            (5,676  )     62,630            44,127            (1,707 )     42,420      
     revenues
     Gross profit:
     Subscription         113,403           3,790         117,193           61,110            1,238        62,348
     Professional
     services and         6,452             1,886         8,338             (1,032     )      469          (563       )
     other
     Total gross        $ 119,855         $ 5,676       $ 125,531         $ 60,078         $  1,707      $ 61,785      
     profit
                                                                                                                       
     Reconciliation
     of operating
     expenses:
     Operating
     expenses ^(1):
     Sales and          $ 90,517          $ (8,807  )   $ 81,710          $ 46,216         $  (3,953 )   $ 42,263
     marketing
     Research and         33,990            (6,829  )     27,161            15,315            (2,202 )     13,113
     development
     General and          27,604            (5,562  )     22,042            13,246            (2,513 )     10,733      
     administrative
     Total operating    $ 152,111         $ (21,198 )   $ 130,913         $ 74,777         $  (8,668 )   $ 66,109      
     expenses
                                                                                                                       
     Reconciliation of loss from operations, provision for income taxes, net loss, net loss per share, and pro forma
     net loss per share:
     Loss from          $ (32,256     )   $ 26,874      $ (5,382      )   $ (14,699    )   $  10,375     $ (4,324     )
     operations
     Loss before
     provision for      $ (33,460     )   $ 26,874      $ (6,586      )   $ (14,166    )   $  10,375     $ (3,791     )
     income taxes
     Provision for
     income taxes         1,303             1,792         3,095             198               141          339         
     ^(1)
     Net loss           $ (34,763     )   $ 25,082      $ (9,681      )   $ (14,364    )   $  10,234     $ (4,130     )
     Net loss
     attributable to
     common             $ (34,763     )   $ 25,082      $ (9,681      )   $ (14,672    )   $  10,234     $ (4,438     )
     stockholders -
     Basic and
     Diluted
     Net loss per
     share
     attributable to
     common
     stockholders:
     Basic              $ (0.26       )   $ 0.19        $ (0.07       )   $ (0.55      )   $  0.38       $ (0.17      )
     Diluted            $ (0.26       )   $ 0.19        $ (0.07       )   $ (0.55      )   $  0.38       $ (0.17      )
     Weighted-average
     shares used to
     compute net loss
     per share
     attributable to
     common
     stockholders:
     Basic                132,298,095       -             132,298,095       26,452,100        -            26,452,100  
     Diluted              132,298,095       -             132,298,095       26,452,100        -            26,452,100  
      
^(1) Adjustments include stock-based compensation and the related tax effect.
                                                                                                                       

                                                                    
ServiceNow, Inc.
Non-GAAP Billings Reconciliation
(in thousands)
(Unaudited)
                                                                      
                                     Three Months Ended
                                     June 30,        March 31,       June 30,
                                     2013            2013            2012
Total revenues                       $ 102,222       $ 85,939        $ 56,774
Deferred revenue, end of               210,040         194,765         131,069
period
Less: deferred revenue,                194,765         170,361         115,757
beginning of period
Billings                             $ 117,497       $ 110,343       $ 72,086
                                                                      

      
     ServiceNow, Inc.
     Reconciliation of Non-GAAP Financial Guidance
                                            
     The financial guidance provided below is an estimate based on information
     available as of July 31, 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 Annual Report on Form 10-K filed on March 8, 2013, the
     company's Form 10-Q for the quarter ended March 31, 2013 filed on May 8,
     2013 and the company's Form 10-Q for the quarter ended June 30, 2013 to
     be filed with the SEC. The company assumes no obligation to update any
     forward-looking statements or information, which speak as of their
     respective dates.
      
                                                     Three Months Ended
                                                     September 30, 2013
                                                      
     Non-GAAP subscription gross margin              75%
                                                      
     Stock-based compensation expense                (2%)
                                                      
     GAAP subscription gross margin                  73%
                                                      
     Non-GAAP professional services and              7%-9%
     other gross margin
                                                      
     Stock-based compensation expense                (9%)
                                                      
     GAAP professional services and other            (2%) - 0%
     gross margin
                                                      
     Non-GAAP total gross margin                     65%
                                                      
     Stock-based compensation expense                (4%)
                                                      
     GAAP total gross margin                         61%
                                                      
     Non-GAAP operating margin                       (3%)-(2%)
                                                      
     Stock-based compensation expense                (17%)
                                                      
     GAAP operating margin                           (20%) - (19%)
                                                      
     Non-GAAP basic and diluted net loss             ($0.03) - ($0.02)
     per share
                                                      
     Stock-based compensation expense                ($0.14)
                                                      
     Incremental non-GAAP tax expense                $0.01
     ^(1)
                                                      
     GAAP basic and diluted net loss per             ($0.16) - ($0.15)
     share
                                                      
     Incremental non-GAAP tax expense reflects the increase to GAAP tax
^(1) expense related to the non-GAAP stock-based compensation expense
     adjustments.
                                                      

Contact:

Media Contacts:
ServiceNow
Liza S. Goldberg, 408-501-8553
liza.goldberg@servicenow.com
or
Schwartz MSL
Kim McCrossen, 781-684-6253
servicenow@schwartzmsl.com
or
Investor Contact:
ir@servicenow.com
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