ServiceNow Reports Financial Results for Third Quarter 2013

  ServiceNow Reports Financial Results for Third Quarter 2013

    Third Quarter Revenues Exceed $110 Million and Grew 73% Year-over-Year

Business Wire

SANTA CLARA, Calif. -- October 23, 2013

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

Third quarter 2013 results:

  *Revenues of $111.3 million, an increase of 73% compared to the third
    quarter of 2012, and an increase of 9% from the second quarter of 2013.
  *GAAP net loss of $14.7 million, or a loss of $0.11 per basic and diluted
    share, compared to a GAAP net loss of $13.1 million, or a loss of $0.11
    per basic and diluted share, in the third quarter of 2012.
  *Non-GAAP net income of $1.6 million, or earnings of $0.01 per basic and
    diluted share, compared to a non-GAAP net loss of $5.0 million, or a loss
    of $0.04 per basic and diluted share, in the third 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 $225.8 million, an 8% increase over the $210.0 million
    reported at the end of the prior quarter.
  *Billings were $127.0 million, an 8% increase over the $117.5 million
    reported in the previous quarter and a 56% increase over the $81.2 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).

“ServiceNow delivered 73% year-over-year revenue growth and billed a record
$127 million in the third quarter,” said Frank Slootman, president and chief
executive officer, ServiceNow. “We grew our total customer count to 1,900,
including the addition of 22 net new enterprises from the Forbes Global 2000
list. We also achieved a renewal rate of 97% and upsells comprised more than
29% of our total annual contract value signed during the quarter.”

“We continued to show growth across our key financial metrics and exceeded our
previously stated outlook on revenue and non-GAAP EPS,” added Michael
Scarpelli, chief financial officer, ServiceNow. “We were profitable on a
non-GAAP basis for the first time in two years, and we generated $20.7 million
in operating cash flow.”

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).
Negative numbers are shown in parentheses.

For the fourth quarter of 2013, we expect:

  *Total revenues between $119.0 and $121.0 million, representing
    year-over-year growth between 58% and 61%. Our total fourth quarter
    revenue estimate consists of subscription revenues between $100.0 and
    $101.0 million and professional services and other revenues between $19.0
    and $20.0 million.
  *Subscription gross margin of approximately 76%, professional services and
    other gross margin of approximately 8%, and overall gross margin of
    approximately 65%.
  *Approximately break-even operating margin.
  *A net loss per basic and diluted share of approximately ($0.02) with
    weighted-average shares outstanding of approximately 140.0 million.

For the full year 2013, we expect total revenues to be in the range of $418.4
to $420.4 million, representing year-over-year growth between 72% and 73%. Our
total annual revenues estimate consists of subscription revenues between
$344.9 and $345.9 million and professional services and other revenues between
$73.5 and $74.5 million.

Conference Call Details

The conference call will begin at 2:00 p.m. Pacific Time (21:00 GMT) on
Wednesday, October 23, 2013. Interested parties may listen to the call by
dialing 866.383.8009 (passcode: 18726358), or if outside North America, by
dialing 617.597.5342 (passcode: 18726358). 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: 85963111), or if outside North
America, by dialing 617.801.6888 (passcode: 85963111).

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 that
excludes 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) 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 third quarter
ended September 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 transform IT by automating
and managing IT service relationships across the global enterprise.
Organizations deploy our service to create a single system of record for
ITandautomate manual tasks, standardizeprocesses and consolidatelegacy
systems. Using our extensible platform, our customers create custom
applicationsandevolve the IT service model to service domains inside and
outside the enterprise. ServiceNow transforms IT from the department of no to
the department of now. 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                  Nine Months Ended
                     September 30,     September 30,     September 30,     September 30,

                     2013              2012              2013              2012
                                                                           
Revenues:
  Subscription       $ 92,992          $ 55,279          $ 244,926         $ 141,640
  Professional
  services and        18,267          9,066           54,494          26,910     
  other
    Total revenues    111,259         64,345          299,420         168,550    
Cost of revenues
^(1):
  Subscription         23,429            17,931            61,960            43,182
  Professional
  services and        18,146          9,643           47,921          28,519     
  other
    Total cost of     41,575          27,574          109,881         71,701     
    revenues
      Gross profit    69,684          36,771          189,539         96,849     
Operating expenses
^(1):
  Sales and            47,336            28,140            137,853           74,356
  marketing
  Research and         20,819            10,783            54,809            26,098
  development
  General and         16,179          11,195          43,783          24,441     
  administrative
    Total
    operating         84,334          50,118          236,445         124,895    
    expenses
      Loss from        (14,650     )     (13,347     )     (46,906     )     (28,046    )
      operations
  Interest and
  other income        600             615             (604        )    1,148      
  (expense), net
      Loss before
      provision        (14,050     )     (12,732     )     (47,510     )     (26,898    )
      for income
      taxes
Provision for         663             321             1,966           519        
income taxes
      Net loss       $ (14,713     )   $ (13,053     )   $ (49,476     )   $ (27,417    )
      Net loss
      attributable
      to common
                     $ (14,713     )   $ (13,053     )   $ (49,476     )   $ (27,725    )
      stockholders
      - Basic and
      Diluted
Net loss per share
attributable to
common
stockholders:
  Basic              $ (0.11       )   $ (0.11       )   $ (0.37       )   $ (0.49      )
  Diluted            $ (0.11       )   $ (0.11       )   $ (0.37       )   $ (0.49      )
Weighted-average
shares used to
compute net loss
per

share attributable
to common
stockholders:
  Basic               137,456,531     117,698,005     134,036,466     57,089,411 
  Diluted             137,456,531     117,698,005     134,036,466     57,089,411 
                                                                
^(1) Includes total stock-based compensation expense for stock-based awards as follows:
                     Three Months Ended                  Nine Months Ended
                     September 30,     September 30,     September 30,     September 30,

                     2013              2012              2013              2012
Cost of revenues:
  Subscription       $ 2,190           $ 1,276           $ 5,980           $ 2,514
  Professional
  services and         1,209             495               3,095             964
  other
Sales and              5,945             2,899             14,752            6,852
marketing
Research and           4,176             1,919             11,005            4,121
development
General and          4,331          1,624          9,893          4,137      
administrative
                                                                                        

ServiceNow, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                                                        
                                        September 30, 2013   December 31, 2012
ASSETS                                  (Unaudited)
Current assets:
  Cash and cash equivalents             $      121,094       $     118,989
  Short-term investments                       99,044              195,702
  Accounts receivable, net                     84,527              78,163
  Current portion of deferred                  24,835              14,979
  commissions
  Prepaid expenses and other current          12,919             14,256
  assets
       Total current assets                    342,419             422,089
Deferred commissions, less current             16,716              11,296
portion
Long-term investments                          132,619             —
Property and equipment, net                    68,642              42,342
Intangible assets, net                         6,189               596
Goodwill                                       8,526               —
Other assets                                  3,625              1,791
       Total assets                     $      578,736       $     478,114
                                                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                      $      7,930         $     9,604
  Accrued expenses and other current           49,664              48,059
  liabilities
  Current portion of deferred revenue         210,545            153,964
       Total current liabilities               268,139             211,627
Deferred revenue, less current                 15,256              16,397
portion
Other long-term liabilities                    7,745               6,685
Stockholders’ equity                          287,596            243,405
       Total liabilities and            $      578,736       $     478,114
       stockholders’ equity
                                                                   

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

                       2013          2012             2013           2012
                                                                     
Cash flows from
operating
activities:
Net loss               $ (14,713 )   $ (13,053  )       (49,476  )   $ (27,417  )
     Adjustments to
     reconcile net
     loss to net
     cash provided
     by operating
     activities:
     Depreciation
     and                 6,613         3,969            16,316         8,841
     amortization
     Amortization of
     premiums on         1,208         496              3,441          594
     investments
     Amortization of
     deferred            7,828         3,920            19,825         9,264
     commissions
     Stock-based         17,851        8,213            44,725         18,588
     compensation
     Tax benefit
     from exercise       754           (276     )       (1,817   )     (533     )
     of stock
     options
     Bad debt            295           148              882            148
     expense
     Lease
     abandonment         28            2,922            354            2,922
     costs
     Changes in
     operating
     assets and
     liabilities:
       Accounts          8,903         (8,342   )       (6,988   )     (11,065  )
       receivable
       Deferred          (14,114 )     (7,449   )       (34,894  )     (20,525  )
       commissions
       Prepaid
       expenses and      (3,015  )     (961     )       2,827          4,242
       other current
       assets
       Other assets      (1,503  )     2,095            (1,750   )     (35      )
       Accounts          (283    )     (1,069   )       (408     )     (106     )
       payable
       Accrued
       expenses and      (2,928  )     2,229            (2,646   )     4,189
       other current
       liabilities
       Deferred          13,758        16,295           54,332         43,081
       revenue
       Other
       long-term        38          (60      )      756          (93      )
       liabilities
         Net cash
         provided by    20,720      9,077          45,479       32,095   
         operating
         activities
Cash flows from
investing
activities:
     Purchases of
     property and        (16,824 )     (11,930  )       (39,059  )     (32,156  )
     equipment
     Acquisition,
     net of cash         (13,330 )     —                (13,330  )     —
     acquired
     Purchases of        (48,681 )     (123,003 )       (233,444 )     (146,922 )
     investments
     Sale of             7,105         —                50,403         1,025
     investments
     Maturities of
     investments         35,005        5,800            142,456        5,800
     ^(1)
     Restricted cash    (11     )    —              (174     )    8        
         Net cash
         used in        (36,736 )    (129,133 )      (93,148  )    (172,245 )
         investing
         activities
Cash flows from
financing
activities:
     Net proceeds
     from initial        —             170,963          —              169,799
     public offering
     Payment of
     follow-on           —             —                (698     )     —
     offering costs
     Proceeds from
     employee stock      16,003        216              47,833         2,349
     plans
     Proceeds from
     early exercise      —             —                —              1,024
     of stock
     options, net
     Tax benefit
     from exercise       (754    )     276              1,817          533
     of stock
     options
     Net proceeds
     from issuance       —             —                —              17,848
     of common stock
     Purchase of
     common stock
     and restricted     —           —              —            (1,960   )
     stock from
     stockholders
         Net cash
         provided by    15,249      171,455        48,952       189,593  
         financing
         activities
Foreign currency
effect on cash and      1,628       95             822          (555     )
cash equivalents
         Net
         increase in
         cash and        861           51,494           2,105          48,888
         cash
         equivalents
Cash and cash
equivalents at          120,233     65,482         118,989      68,088   
beginning of period
Cash and cash
equivalents at end     $ 121,094    $ 116,976       $ 121,094     $ 116,976  
of period
                                                                     
Calculation of free
cash flows (a
non-GAAP measure):
Net cash provided by   $ 20,720      $ 9,077          $ 45,479       $ 32,095
operating activities
Purchases of
property and            (16,824 )    (11,930  )      (39,059  )    (32,156  )
equipment
Free cash flows        $ 3,896      $ (2,853   )     $ 6,420       $ (61      )
                                                                     
                                                        
     In the nine months ended September 30, 2013, maturities of investments
^(1) includes 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
                     September 30, 2013                                    September 30, 2012
                     GAAP              Adjustments        Non-GAAP       GAAP              Adjustments  Non-GAAP
Reconciliation of
gross profit:
Revenues:
  Subscription       $ 92,992          $ —                 $ 92,992        $ 55,279          $  —          $ 55,279
  Professional
  services and        18,267          —                 18,267         9,066            —          9,066       
  other
       Total          111,259         —                 111,259        64,345           —          64,345      
       revenues
Cost of revenues
^(1):
  Subscription         23,429            (2,190     )        21,239          17,931             (1,276 )     16,655
  Professional
  services and        18,146          (1,209     )       16,937         9,643            (495   )    9,148       
  other
       Total cost     41,575          (3,399     )       38,176         27,574           (1,771 )    25,803      
       of revenues
Gross profit:
  Subscription         69,563            2,190               71,753          37,348             1,276        38,624
  Professional
  services and        121             1,209             1,330          (577        )     495        (82         )
  other
       Total gross   $ 69,684         $ 3,399            $ 73,083        $ 36,771         $  1,771     $ 38,542      
       profit
                                                                                                           
Reconciliation of
operating
expenses:
Operating expenses
^(1):
  Sales and          $ 47,336          $ (5,945     )      $ 41,391        $ 28,140          $  (2,899 )   $ 25,241
  marketing
  Research and         20,819            (4,176     )        16,643          10,783             (1,919 )     8,864
  development
  General and         16,179          (4,331     )       11,848         11,195           (1,624 )    9,571       
  administrative
       Total
       operating     $ 84,334         $ (14,452    )      $ 69,882        $ 50,118         $  (6,442 )   $ 43,676      
       expenses
                                                                                                           
Reconciliation of loss from operations, provision for income taxes, net loss, net loss per share, and pro forma net loss
per share:
  Income (Loss)      $ (14,650     )   $ 17,851           $ 3,201         $ (13,347     )   $  8,213     $ (5,134      )
  from operations
  Income (Loss)
  before provision   $ (14,050     )   $ 17,851            $ 3,801         $ (12,732     )   $  8,213      $ (4,519      )
  for income taxes
  Provision for
  income taxes ^      663             1,521             2,184          321              160        481         
  (1)
  Net income         $ (14,713     )   $ 16,330           $ 1,617         $ (13,053     )   $  8,053     $ (5,000      )
  (loss)
  Net income
  (loss)
  attributable to
  common             $ (14,713     )   $ 16,330           $ 1,617         $ (13,053     )   $  8,053      (5,000      )
  stockholders -
  Basic and
  Diluted
  Net income
  (loss) per share
  attributable to
  common
  stockholders:
       Basic         $ (0.11       )   $ 0.12             $ 0.01          $ (0.11       )   $  0.07      $ (0.04       )
       Diluted       $ (0.11       )   $ 0.12             $ 0.01          $ (0.11       )   $  0.07      $ (0.04       )
  Weighted-average
  shares used to
  compute net
  income (loss)
  per share
  attributable to
  common
  stockholders:
       Basic          137,456,531     —                 137,456,531    117,698,005      —          117,698,005 
       Diluted        137,456,531     20,892,410  ^(2)  158,348,941    117,698,005      —          117,698,005 
                                                                                             
^(1) Adjustments include stock-based compensation and the related tax effect.
                                                                                                         
^(2) The effects of these dilutive securities were not included in the GAAP calculation of diluted income (loss) per share
for the three months ended September 30, 2013 because the effect would have been anti-dilutive.
                                                                                                         

ServiceNow, Inc.
Results of Operations GAAP to Non-GAAP Reconciliation
(in thousands except share and per share data)
(Unaudited)
                                                                                             
                     Nine Months Ended
                     September 30, 2013                                September 30, 2012
                     GAAP              Adjustments  Non-GAAP         GAAP             Adjustments  Non-GAAP
Reconciliation of
gross profit:
Revenues:
  Subscription       $ 244,926         $ —           $ 244,926         $ 141,640        $ —           $ 141,640
  Professional
  services and        54,494          —           54,494          26,910         —           26,910     
  other
       Total          299,420         —           299,420         168,550        —           168,550    
       revenues
Cost of revenues
^(1):
  Subscription         61,960            (5,980  )     55,980            43,182           (2,514  )     40,668
  Professional
  services and        47,921          (3,095  )    44,826          28,519         (964    )    27,555     
  other
       Total cost     109,881         (9,075  )    100,806         71,701         (3,478  )    68,223     
       of revenues
Gross profit:
  Subscription         182,966           5,980         188,946           98,458           2,514         100,972
  Professional
  services and        6,573           3,095       9,668           (1,609     )    964         (645       )
  other
       Total gross   $ 189,539        $ 9,075      $ 198,614        $ 96,849        $ 3,478      $ 100,327    
       profit
                                                                                                      
Reconciliation of
operating
expenses:
Operating expenses
^(1):
  Sales and          $ 137,853         $ (14,752 )   $ 123,101         $ 74,356         $ (6,852  )   $ 67,504
  marketing
  Research and         54,809            (11,005 )     43,804            26,098           (4,121  )     21,977
  development
  General and         43,783          (9,893  )    33,890          24,441         (4,137  )    20,304     
  administrative
       Total
       operating     $ 236,445        $ (35,650 )   $ 200,795        $ 124,895       $ (15,110 )   $ 109,785    
       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          $ (46,906     )   $ 44,725     $ (2,181      )   $ (28,046    )   $ 18,588     $ (9,458     )
  operations
  Loss before
  provision for      $ (47,510     )   $ 44,725      $ (2,785      )   $ (26,898    )   $ 18,588      $ (8,310     )
  income taxes
  Provision for
  income taxes        1,966           3,313       5,279           519            301         820        
  ^(1)
  Net loss           $ (49,476     )   $ 41,412     $ (8,064      )   $ (27,417    )   $ 18,287     $ (9,130     )
  Net loss
  attributable to
  common             $ (49,476     )   $ 41,412     $ (8,064      )   $ (27,725    )   $ 18,287      (9,438     )
  stockholders -
  Basic and
  Diluted
  Net loss per
  share
  attributable to
  common
  stockholders:
       Basic         $ (0.37       )   $ 0.31       $ (0.06       )   $ (0.49      )   $ 0.32       $ (0.17      )
       Diluted       $ (0.37       )   $ 0.31       $ (0.06       )   $ (0.49      )   $ 0.32       $ (0.17      )
  Weighted-average
  shares used to
  compute net loss
  per share
  attributable to
  common
  stockholders:
       Basic          134,036,466     —           134,036,466     57,089,411     —           57,089,411 
       Diluted        134,036,466     —           134,036,466     57,089,411     —           57,089,411 
                                                                                        
^(1) Adjustments include stock-based compensation and the related tax effect.
                                                                                                      

ServiceNow, Inc.
Non-GAAP Billings Reconciliation
(in thousands)
(Unaudited)
                                                             
                                     Three Months Ended
                                     September 30,   June 30,    September 30,
                                     2013            2013        2012
Total revenues                           111,259     $ 102,222   $   64,345
Deferred revenue, end of period          225,801       210,040       147,946
Less: deferred revenue, beginning       210,040      194,765      131,069
of period
Billings                             $   127,020     $ 117,497   $   81,222
                                                                     

ServiceNow, Inc.
Reconciliation of Non-GAAP Financial Guidance
                                          
The financial guidance provided below is an estimate based on information
available as of October 23, 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 June 30, 2013 filed on August 7, 2013 and the company's Form 10-Q for
the quarter ended September 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
                                                    December 31, 2013
                                                    
Non-GAAP subscription gross margin                  76%
                                                    
Stock-based compensation expense                    (3%)
                                                    
GAAP subscription gross margin                      73%
                                                    
Non-GAAP professional services and other            8%
gross margin
                                                    
Stock-based compensation expense                    (9%)
                                                    
GAAP professional services and other                (1%)
gross margin
                                                    
Non-GAAP total gross margin                         65%
                                                    
Stock-based compensation expense                    (4%)
                                                    
GAAP total gross margin                             61%
                                                    
Non-GAAP operating margin                           0%
                                                    
Stock-based compensation expense                    (18%)
                                                    
GAAP operating margin                               (18%)
                                                    
Non-GAAP basic and diluted net loss per             ($0.02)
share
                                                    
Stock-based compensation expense                    ($0.15)
                                                    
Incremental non-GAAP tax expense  ^(1)              $0.01
                                                    
GAAP basic and diluted net loss per share           ($0.16)
                                                  
^(1) Incremental non-GAAP tax expense reflects the increase to GAAP tax
expense related to the non-GAAP stock-based compensation expense adjustments.

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