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ServiceNow Reports Financial Results for Fourth Quarter and Fiscal Year 2013

  ServiceNow Reports Financial Results for Fourth Quarter and Fiscal Year 2013

       Fourth Quarter Revenues of $125.2 Million, up 67% Year-over-Year

Business Wire

SANTA CLARA, Calif. -- January 29, 2014

ServiceNow® (NYSE: NOW), the enterprise IT cloud company, today announced its
financial results for its fourth quarter and fiscal year 2013.

Fourth quarter 2013 results:

  *Revenues of $125.2 million, an increase of 67% compared to the fourth
    quarter of 2012, and an increase of 13% from the third quarter of 2013.
  *GAAP net loss of $24.2 million, or a loss of $0.17 per basic and diluted
    share, compared to a GAAP net loss of $9.9 million, or a loss of $0.08 per
    basic and diluted share, in the fourth quarter of 2012.
  *Non-GAAP net loss of $3.0 million, or loss of $0.02 per basic and diluted
    share, compared to a non-GAAP net loss of $0.6 million, or $0.00 per basic
    and diluted share, in the fourth 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 $266.7 million, an 18% increase over the $225.8
    million reported at the end of the prior quarter.
  *Billings were $166.2 million, a 70% increase over the $97.6 million in the
    same period last year, and a 31% increase over the $127.0 million reported
    in the previous quarter (see the table entitled “Non-GAAP Billings
    Reconciliation” for a reconciliation of non-GAAP billings to GAAP
    revenues).
  *Backlog of $608.4 million, a 61% increase over the $379.0 million reported
    at the end of 2012. Backlog represents future amounts to be invoiced under
    our agreements and is not included in deferred revenue. Backlog and
    deferred revenue combined totaled $875.1 million.

Fiscal 2013 results:

  *Revenues of $424.7 million, an increase of 74% compared to the prior year.
  *A GAAP net loss of $73.7 million, or a loss of $0.54 per basic and diluted
    share, compared to a GAAP net loss of $37.3 million, or a loss of $0.51
    per basic and diluted share, in the prior year.
  *A non-GAAP net loss of $11.0 million, or a loss of $0.08 per basic and
    diluted share, compared to non-GAAP net loss of $9.7 million, or a loss of
    $0.14 per basic and diluted share, in the prior year (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 $521.0 million, a 68% increase over the $309.4 million
    reported in the prior year (see the table entitled “Non-GAAP Billings
    Reconciliation” for a reconciliation of non-GAAP billings to GAAP
    revenues).

“ServiceNow grew revenues 67% year-over-year in the fourth quarter, a strong
finish to a year in which we grew revenues by 74% and added 549 customers,
bringing our cumulative customer count to over 2,060 worldwide,” said Frank
Slootman, president and chief executive officer, ServiceNow. “During the
quarter we also achieved a 96% customer renewal rate, continued to penetrate
our installed base with upsells comprising 36% of our total annual contract
value signed during the quarter and announced several important product
additions.”

“In the fourth quarter we set a company record for billings of $166 million
and exited the year with a combined deferred revenue and backlog balance of
$875 million, up 59% over the prior year,” added Michael Scarpelli, chief
financial officer, ServiceNow. “We also generated $20 million in free cash
flows and raised net proceeds of $512 million from our convertible debt
offering at a 0% coupon, ending 2013 with $890 million in cash and
investments.”

Financial Outlook

The non-GAAP financial guidance discussed below excludes stock-based
compensation expense and the related income tax effect of these adjustments
(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 2014, we expect:

  *Total revenues between $133 and $135 million, representing year-over-year
    growth between 55% and 57%. Our total first quarter revenue estimate
    consists of subscription revenues between $112 and $113 million and
    professional services and other revenues between $21 and $22 million.
  *Subscription gross margin of approximately 76%, professional services and
    other gross margin of approximately 6% and overall gross margin of
    approximately 64%.
  *Operating margin of approximately (9%).

For the full year 2014, we expect total revenues to be in the range of $640 to
$645 million, representing year-over-year growth between 51% and 52%. Our
total annual revenues estimate consists of subscription revenues between $533
and $535 million and professional services and other revenues between $107 and
$110 million.

Updates since our last earnings release

  *ServiceNow issued $575 million aggregate principal amount of 0%
    convertible senior notes due 2018. The offering generated proceeds of $512
    million, net of offering costs, costs of the related bond hedge and
    proceeds from warrants.
  *Charles Giancarlo joined the board of directors as a ninth member in an
    additional seat the company has added.
  *ServiceNow HR Service Automation was introduced as a new application that
    makes it easier for organizations to automate HR case management.
  *ServiceNow Configuration Automation was introduced as a new orchestration
    application that controls automated configuration of data center
    infrastructure based on the ServiceNow Configuration Management Database
    (CMDB).
  *ServiceNow and customer-created applications are made instantly mobile on
    devices such as iPhones, iPads and Android smartphones and tablets with
    the latest ServiceNow release.
  *ServiceNow Vendor Performance Management was introduced as a new
    application to help users derive more value from vendors and suppliers by
    evaluating performance relative to commitments and comparing vendors to
    each other across common criteria.
  *ServiceNow Resource Management was introduced as a new application to help
    forecast all IT work and resources reliably through a real-time, single
    system of record for efficient, accurate resource utilization.
  *ServiceNow Automated Password Reset was introduced as a new application
    providing end users with the ability to reset passwords through
    self-service and automation and reduce what industry analysts consider to
    be at least 20% of IT service requests.
  *ServiceNow was awarded “SaaS Product of the Year” from Techworld.

Conference Call Details

The conference call will begin at 2:00 p.m. Pacific Time (22:00 GMT) on
Wednesday, January 29, 2014. Interested parties may listen to the call by
dialing 866.700.6067 (passcode: 75988250), or if outside North America, by
dialing 617.213.8834 (passcode: 75988250). 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: 48173227), or if outside North
America, by dialing 617.801.6888 (passcode: 48173227).

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, the amortization of debt discount and issuance costs related to the
convertible senior notes, and the related income tax effect of these
adjustments. Management believes the presentation of operating results that
excludes these items provides useful supplemental information to investors and
facilitates the analysis of the company’s core operating results and
comparison of operating results across reporting periods. Management also
believes that this supplemental non-GAAP information is therefore useful to
investors in analyzing and assessing the company’s past and future operating
performance.

Free cash flow, which is a non-GAAP financial measure, is calculated as GAAP
net cash provided by operating activities reduced by purchases of property and
equipment. Management believes information regarding free cash flow provides
investors with an important perspective on the cash available to invest in our
business and fund ongoing operations. However, our calculation of free cash
flow may not be comparable to similar measures used by other companies.

Billings is calculated as revenue plus the change in total deferred revenue.
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-K that will be filed for the fiscal year ended
December 31, 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                  Twelve Months Ended
                   December 31,      December 31,      December 31,      December 31,
                   2013              2012              2013              2012
                                                                         
Revenues:
Subscription       $ 104,878         $ 62,886          $ 349,804         $ 204,526
Professional
services and        20,352          12,276          74,846          39,186     
other
Total revenues      125,230         75,162          424,650         243,712    
Cost of revenues
^(1):
Subscription         25,968            20,076            87,928            63,258
Professional
services and        19,410          12,232          67,331          40,751     
other
Total cost of       45,378          32,308          155,259         104,009    
revenues
Gross profit        79,852          42,854          269,391         139,703    
Operating
expenses ^(1):
Sales and            57,337            29,481            195,190           103,837
marketing
Research and         23,869            13,235            78,678            39,333
development
General and         18,007          9,676           61,790          34,117     
administrative
Total operating     99,213          52,392          335,658         177,287    
expenses
Loss from            (19,361     )     (9,538      )     (66,267     )     (37,584    )
operations
Interest and
other income        (4,326      )    456             (4,930      )    1,604      
(expense), net
Loss before
provision for        (23,687     )     (9,082      )     (71,197     )     (35,980    )
income taxes
Provision for       545             849             2,511           1,368      
income taxes
Net loss           $ (24,232     )   $ (9,931      )   $ (73,708     )   $ (37,348    )
Net loss
attributable to
common             $ (24,232     )   $ (9,931      )   $ (73,708     )   $ (37,656    )
stockholders -
Basic and
Diluted
Net loss per
share
attributable to
common             $ (0.17       )   $ (0.08       )   $ (0.54       )   $ (0.51      )
stockholders -
Basic and
Diluted
Weighted-average
shares used to
compute net loss
per share
attributable to     139,508,838     124,000,655     135,415,809     73,908,631 
common
stockholders -
Basic and
Diluted
                                                                 
^(1) Includes total stock-based compensation expense as follows:
                   Three Months Ended                  Year Ended
                   December 31,      December 31,      December 31,      December 31,
                   2013              2012              2013              2012
Cost of
revenues:
Subscription       $ 2,454           $ 1,415           $ 8,434           $ 3,929
Professional
services and         1,654             610               4,749             1,574
other
Sales and            6,857             3,337             21,609            10,189
marketing
Research and         5,218             2,375             16,223            6,496
development
General and          4,673             1,612             14,566            5,749
administrative
                                                                 
                                                                         

ServiceNow, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                                                          
                                         December 31, 2013   December 31, 2012
ASSETS                                   (Unaudited)
Current assets:
Cash and cash equivalents                $    366,303        $     118,989
Short-term investments                        268,251              195,702
Accounts receivable, net                      108,339              78,163
Current portion of deferred                   31,123               14,979
commissions
Prepaid expenses and other current           23,733              14,256
assets
Total current assets                          797,749              422,089
Deferred commissions, less current            21,318               11,296
portion
Long-term investments                         255,356              —
Property and equipment, net                   75,560               42,342
Intangible assets, net                        5,796                596
Goodwill                                      8,724                —
Other assets                                 3,973               1,791
Total assets                             $    1,168,476      $     478,114
                                                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                         $    7,405          $     9,604
Accrued expenses and other current            68,130               48,059
liabilities
Current portion of deferred revenue          252,553             153,964
Total current liabilities                     328,088              211,627
Deferred revenue, less current portion        14,169               16,397
Convertible senior notes, net                 414,777              —
Other long-term liabilities                   17,183               6,685
Stockholders’ equity                         394,259             243,405
Total liabilities and                    $    1,168,476      $     478,114
stockholders’equity
                                                             

ServiceNow, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
                                                             
                      Three Months Ended           Year Ended
                      December 31,   December      December 31,   December 31,
                                     31,
                      2013           2012          2013           2012
                                                                  
Cash flows from
operating
activities:
Net loss              $ (24,232  )   $ (9,931  )   $ (73,708  )   $ (37,348  )
     Adjustments
     to reconcile
     net loss to
     net cash
     provided by
     operating
     activities:
     Depreciation
     and                7,874          4,664         24,152         13,506
     amortization
     Amortization
     of premiums        1,317          743           4,758          1,337
     on
     investments
     Amortization
     of deferred        9,539          4,446         29,364         13,710
     commissions
     Amortization
     of debt
     discount and       3,498          —             3,498          —
     issuance
     costs
     Stock-based        20,856         9,349         65,581         27,937
     compensation
     Tax benefit
     from employee      159            (1,161  )     (1,658   )     (1,694   )
     stock plans
     Deferred           (231     )     (746    )     (231     )     (746     )
     income tax
     Other              (716     )     (219    )     558            2,850
     Changes in
     operating
     assets and
     liabilities:
     Accounts           (22,518  )     (22,276 )     (29,506  )     (33,341  )
     receivable
     Deferred           (20,049  )     (8,650  )     (54,943  )     (29,175  )
     commissions
     Prepaid
     expenses and       2,394          (7,111  )     3,471          (2,904   )
     other assets
     Accounts           156            4,993         (252     )     4,887
     payable
     Deferred           40,073         21,764        94,405         64,845
     revenue
     Accrued
     expenses and      18,147       20,806      16,257       24,902   
     other
     liabilities
     Net cash
     provided by       36,267       16,671      81,746       48,766   
     operating
     activities
Cash flows from
investing
activities:
     Purchases of
     property and       (16,262  )     (9,910  )     (55,321  )     (42,066  )
     equipment
     Acquisition,
     net of cash        —              —             (13,330  )     —
     acquired
     Purchases of       (337,235 )     (93,704 )     (570,679 )     (240,626 )
     investments
     Sale of            4,755          —             55,158         1,025
     investments
     Maturities of
     investments        39,098         36,673        181,554        42,473
     ^(1)
     Restricted        (3       )    37          (177     )    45       
     cash
     Net cash used
     in investing      (309,647 )    (66,904 )    (402,795 )    (239,149 )
     activities
Cash flows from
financing
activities:
     Net proceeds
     from initial       —              (15     )     —              169,784
     public
     offering
     Net proceeds
     from
     (offering
     costs paid in      —              50,561        (698     )     50,561
     connection
     to) follow-on
     offering
     Net proceeds
     from
     borrowings on      562,941        —             562,941        —
     convertible
     senior notes
     Proceeds from
     issuance of        84,525         —             84,525         —
     warrants
     Purchase of
     convertible        (135,815 )     —             (135,815 )     —
     note hedge
     Proceeds from
     employee           8,126          539           55,959         3,912
     stock plans
     Tax benefit
     from employee      (159     )     1,161         1,658          1,694
     stock plans
     Net proceeds
     from issuance      —              —             —              17,848
     of common
     stock
     Purchases of
     common stock      —            —           —            (1,960   )
     from
     stockholders
     Net cash
     provided by       519,618      52,246      568,570      241,839  
     financing
     activities
Foreign currency
effect on cash and     (1,029   )    —           (207     )    (555     )
cash equivalents
     Net increase
     in cash and        245,209        2,013         247,314        50,901
     cash
     equivalents
Cash and cash
equivalents at         121,094      116,976     118,989      68,088   
beginning of
period
Cash and cash
equivalents at end    $ 366,303     $ 118,989    $ 366,303     $ 118,989  
of period
                                                                  
Calculation of
free cash flows (a
non-GAAP measure):
Net cash provided
by operating          $ 36,267       $ 16,671      $ 81,746       $ 48,766
activities
Purchases of
property and           (16,262  )    (9,910  )    (55,321  )    (42,066  )
equipment
Free cash flows       $ 20,005      $ 6,761      $ 26,425      $ 6,700    
                                                                  
                                                         
     During the year ended December 31, 2013, maturities of investments
     includes the effect of the correction of an immaterial error of $3.0
^(1) 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
                   December 31, 2013                                 December 31, 2012
                   GAAP              Adjustments   Non-GAAP          GAAP              Adjustments   Non-GAAP
Reconciliation
of gross profit:
Revenues:
Subscription       $ 104,878         $ —           $ 104,878         $ 62,886          $  —          $ 62,886
Professional
services and        20,352          —           20,352          12,276           —          12,276      
other
Total revenues      125,230         —           125,230         75,162           —          75,162      
Cost of revenues
^(1):
Subscription         25,968            (2,454  )     23,514            20,076             (1,415 )     18,661
Professional
services and        19,410          (1,654  )    17,756          12,232           (610   )    11,622      
other
Total cost of       45,378          (4,108  )    41,270          32,308           (2,025 )    30,283      
revenues
Gross profit:
Subscription         78,910            2,454         81,364            42,810             1,415        44,225
Professional
services and        942             1,654       2,596           44               610        654         
other
Total gross        $ 79,852         $ 4,108      $ 83,960         $ 42,854         $  2,025     $ 44,879      
profit
                                                                                                     
Reconciliation
of operating
expenses:
Operating
expenses ^(1):
Sales and          $ 57,337          $ (6,857  )   $ 50,480          $ 29,481          $  (3,337 )   $ 26,144
marketing
Research and         23,869            (5,218  )     18,651            13,235             (2,375 )     10,860
development
General and         18,007          (4,673  )    13,334          9,676            (1,612 )    8,064       
administrative
Total operating    $ 99,213         $ (16,748 )   $ 82,465         $ 52,392         $  (7,324 )   $ 45,068      
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          $ (19,361     )   $ 20,856      $ 1,495           $ (9,538      )   $  9,349      $ (189        )
operations
Interest and
other income        (4,326      )    3,498       (828        )    456              —          456         
(expense), net
^(2)
Loss before
provision for      $ (23,687     )   $ 24,354      $ 667             $ (9,082      )   $  9,349      $ 267
income taxes
Provision for
income taxes ^      545             3,087       3,632           849              32         881         
(1) (2)
Net loss           $ (24,232     )   $ 21,267     $ (2,965      )   $ (9,931      )   $  9,317     $ (614        )
Net loss
attributable to
common             $ (24,232     )   $ 21,267     $ (2,965      )   $ (9,931      )   $  9,317     $ (614        )
stockholders -
Basic and
Diluted
Net loss per
share
attributable to
common             $ (0.17       )   $ 0.15       $ (0.02       )   $ (0.08       )   $  0.08      $ (0.00       )
stockholders -
Basic and
Diluted
Weighted-average
shares used to
compute net loss
per share
attributable to     139,508,838     —           139,508,838     124,000,655      —          124,000,655 
common
stockholders -
Basic and
Diluted
                                                                                         
^(1) Adjustments include stock-based compensation and the related tax effect.
^(2) Adjustments include amortization of debt discount and issuance costs for the convertible senior notes 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, 2013                                 December 31, 2012
                   GAAP              Adjustments   Non-GAAP          GAAP             Adjustments   Non-GAAP
Reconciliation
of gross profit:
Revenues:
Subscription       $ 349,804         $ —           $ 349,804         $ 204,526        $ —           $ 204,526
Professional
services and        74,846          —           74,846          39,186         —           39,186     
other
Total revenues      424,650         —           424,650         243,712        —           243,712    
Cost of revenues
^(1):
Subscription         87,928            (8,434  )     79,494            63,258           (3,929  )     59,329
Professional
services and        67,331          (4,749  )    62,582          40,751         (1,574  )    39,177     
other
Total cost of       155,259         (13,183 )    142,076         104,009        (5,503  )    98,506     
revenues
Gross profit:
Subscription         261,876           8,434         270,310           141,268          3,929         145,197
Professional
services and        7,515           4,749       12,264          (1,565     )    1,574       9          
other
Total gross        $ 269,391        $ 13,183     $ 282,574        $ 139,703       $ 5,503      $ 145,206    
profit
                                                                                                    
Reconciliation
of operating
expenses:
Operating
expenses ^(1):
Sales and          $ 195,190         $ (21,609 )   $ 173,581         $ 103,837        $ (10,189 )   $ 93,648
marketing
Research and         78,678            (16,223 )     62,455            39,333           (6,496  )     32,837
development
General and         61,790          (14,566 )    47,224          34,117         (5,749  )    28,368     
administrative
Total operating    $ 335,658        $ (52,398 )   $ 283,260        $ 177,287       $ (22,434 )   $ 154,853    
expenses
                                                                                                    
Reconciliation of loss from operations, interest and other income (expense) net, provision for income taxes, net
loss, and net loss per share:
Loss from          $ (66,267     )   $ 65,581      $ (686        )   $ (37,584    )   $ 27,937      $ (9,647     )
operations
Interest and
other income        (4,930      )    3,498       (1,432      )    1,604          —           1,604      
(expense), net
^(2)
Loss before
provision for      $ (71,197     )   $ 69,079      $ (2,118      )   $ (35,980    )   $ 27,937      $ (8,043     )
income taxes
Provision for
income taxes ^      2,511           6,400       8,911           1,368          332         1,700      
(1) (2)
Net loss           $ (73,708     )   $ 62,679     $ (11,029     )   $ (37,348    )   $ 27,605     $ (9,743     )
Net loss
attributable to
common             $ (73,708     )   $ 62,679     $ (11,029     )   $ (37,656    )   $ 27,605     $ (10,051    )
stockholders -
Basic and
Diluted
Net loss per
share
attributable to
common             $ (0.54       )   $ 0.46       $ (0.08       )   $ (0.51      )   $ 0.37       $ (0.14      )
stockholders -
Basic and
Diluted
Weighted-average
shares used to
compute net loss
per share
attributable to     135,415,809     —           135,415,809     73,908,631     —           73,908,631 
common
stockholders -
Basic and
Diluted
                                                                                        
^(1) Adjustments include stock-based compensation and the related tax effect.
^(2) Adjustments include amortization of debt discount and issuance costs for the convertible senior notes and the
related tax effect.
                                                                                                    

ServiceNow, Inc.
Non-GAAP Billings Reconciliation
(in thousands)
(Unaudited)
                                                               
             Three Months Ended                        Year Ended
             December      September     December      December      December
             31,           30,           31,           31,           31,
             2013          2013          2012          2013          2012
Total        $  125,230    $  111,259    $  75,162     $  424,650    $ 243,712
revenues
Deferred
revenue,        266,722       225,801       170,361       266,722      170,361
end of
period
Less:
deferred
revenue,       225,801      210,040      147,946      170,361     104,636
beginning
of period
Billings     $  166,151    $  127,020    $  97,577     $  521,011    $ 309,437
                                                                       

ServiceNow, Inc.
Reconciliation of Non-GAAP Financial Guidance
                                                   
The financial guidance provided below is an estimate based on information
available as of January 29, 2014. 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 September 30, 2013 filed on November 4, 2013 and the company's Form 10-K
for the year ended December 31, 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
                                                   March 31, 2014
                                                   
Non-GAAP subscription gross margin                 76%
                                                   
Stock-based compensation expense                   (4%)
                                                   
GAAP subscription gross margin                     72%
                                                   
Non-GAAP professional services and other gross     6%
margin
                                                   
Stock-based compensation expense                   (10%)
                                                   
GAAP professional services and other gross margin  (4%)
                                                   
Non-GAAP total gross margin                        64%
                                                   
Stock-based compensation expense                   (4%)
                                                   
GAAP total gross margin                            60%
                                                   
Non-GAAP operating margin                          (9%)
                                                   
Stock-based compensation expense                   (21%)
                                                   
GAAP operating margin                              (30%)

Contact:

Media Contacts:
ServiceNow
Steve Schick, 408-961-2349
press@servicenow.com
or
Schwartz MSL
Kim McCrossen, 781-684-6253
servicenow@schwartzmsl.com
or
Investor Contact:
ir@servicenow.com
 
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