ServiceNow® (NYSE:NOW), the enterprise cloud company, today announced the financial results for its third quarter 2015.
Third Quarter 2015 Results:
- Revenues of $261.2 million, an increase of 46% year-over-year and 55% in constant currency.
- GAAP net loss of $41.0 million, or a loss of $0.26 per basic and diluted share, compared to a GAAP net loss of $41.1 million, or a loss of $0.28 per basic and diluted share, in the third quarter of 2014.
- Non-GAAP net income of $25.0 million, or income of $0.16 per basic share and $0.15 per diluted share, compared to a non-GAAP net income of $5.7 million, or income of $0.04 per basic share and $0.03 diluted share, in the third quarter of 2014.
- Billings were $286.4 million, an increase of 38% year-over-year and 46% in constant currency.
- Free cash flow was $42.3 million, an increase of 512% year-over-year.
For a reconciliation of these GAAP and non-GAAP financial measures, please see the table entitled “Results of Operations GAAP to Non-GAAP Reconciliation” included at the end of this release.
“We now count more than 30% of the Global 2000 as customers, an increase of 39 from the prior quarter,” said Frank Slootman, president and chief executive officer, ServiceNow. “Additionally, we now have 206 customers with annualized contract value in excess of $1 million, an increase of 62% year-over-year.”
“We continue to see customers increase their initial annualized contract value by greater than 50% on average every year,” said Michael Scarpelli, chief financial officer, ServiceNow. “In addition, we’re demonstrating more leverage in our business model as free cash flow exceeded third quarter guidance, and we expect our full year 2015 free cash flow to be north of $200 million.”
Financial Outlook:
The financial guidance discussed below is on a non-GAAP basis, except for revenues, and excludes stock-based compensation expense, amortization of purchased intangibles, and acquisition-related expenses. Please see the tables included at the end of this release for a reconciliation of these non-GAAP financial measures to the related GAAP financial measures. For the fourth quarter of 2015, we expect:
- Total revenues between $277 and $282 million, representing year-over-year growth between 40% and 42%, and between 44% and 47% in constant currency. Our total fourth quarter revenue estimate consists of subscription revenues between $239 and $243 million, and professional services and other revenues between $38 and $39 million.
- Billings between $370 and $375 million, representing year-over-year growth between 35% and 37%, and between 39% and 41% in constant currency.
- Subscription gross margin of approximately 82%, professional services and other gross margin of approximately 15%, and overall gross margin of approximately 73%.
- Operating margin of approximately 9%.
- Free cash flow of approximately $60 million.
For the full year 2015, we expect:
- Total revenues of approximately $1 billion, representing year-over-year growth of approximately 47%, and approximately 55% in constant currency.
- Billings of approximately $1.2 billion, representing year-over-year growth of approximately 41%, and approximately 49% in constant currency.
- Operating margin of approximately 9%.
- Free cash flow of approximately $207 million.
Conference Call Details:
The conference call will begin at 2 p.m. Pacific Time (21:00 GMT) on Wednesday, Oct. 21, 2015. Interested parties may listen to the call by dialing 877.703.6105 (passcode: 79125980), or if outside North America, by dialing +1.857.244.7304 (passcode: 79125980). 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 three 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: 81146319), or if outside North America, by dialing +1.617.801.6888 (passcode: 81146319).
Statement regarding use of non-GAAP financial measures
We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Our financial measures under GAAP include foreign currency impact, stock-based compensation expense, the amortization of debt discount and issuance costs related to the convertible senior notes, amortization of purchased intangibles and acquisition-related expenses, and the related income tax effect of these adjustments. We believe the presentation of operating results that exclude these items provides useful supplemental information to investors and facilitates the analysis of our core operating results and comparison of operating results across reporting periods.
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. We believe 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 as presented on the statement of cash flows. We believe 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.
We present constant currency information to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current period results for entities reporting in currencies other than U.S. Dollars are converted into U.S. Dollars at the exchange rates in effect during the prior period presented, rather than the actual exchange rates in effect during the current period.
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. Please see the tables included at the end of this release for the reconciliation of GAAP and non-GAAP results.
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, sell additional subscriptions to existing 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, 2014 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 quarter ended September 30, 2015.
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 changing the way people work. With a service-orientation toward the activities, tasks and processes that make up day-to-day work life, we help the modern enterprise operate faster and be more scalable than ever before. Customers use our service model to define, structure and automate the flow of work, removing dependencies on email and spreadsheets to transform the delivery and management of services for the enterprise. ServiceNow enables service management for every department in the enterprise including IT, human resources, facilities, field service and more. We deliver a ‘lights-out, light-speed’ experience through our enterprise cloud – built to manage everything as a service. To find out how, 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 Q3 2015 complete financial tables (download PDF)
| ServiceNow, Inc. | ||||||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Subscription | $ | 223,208 | $ | 150,367 | $ | 603,576 | $ | 400,466 | ||||||||||||
| Professional services and other | 37,942 | 28,345 | 116,254 | 84,093 | ||||||||||||||||
| Total revenues | 261,150 | 178,712 | 719,830 | 484,559 | ||||||||||||||||
| Cost of revenues (1): | ||||||||||||||||||||
| Subscription | 46,053 | 37,925 | 133,889 | 102,357 | ||||||||||||||||
| Professional services and other | 35,835 | 28,161 | 104,615 | 75,781 | ||||||||||||||||
| Total cost of revenues | 81,888 | 66,086 | 238,504 | 178,138 | ||||||||||||||||
| Gross profit | 179,262 | 112,626 | 481,326 | 306,421 | ||||||||||||||||
| Operating expenses (1): | ||||||||||||||||||||
| Sales and marketing | 117,899 | 84,002 | 364,530 | 245,355 | ||||||||||||||||
| Research and development | 55,822 | 39,683 | 158,946 | 106,232 | ||||||||||||||||
| General and administrative | 33,581 | 23,440 | 93,357 | 69,985 | ||||||||||||||||
| Total operating expenses | 207,302 | 147,125 | 616,833 | 421,572 | ||||||||||||||||
| Loss from operations | (28,040 | ) | (34,499 | ) | (135,507 | ) | (115,151 | ) | ||||||||||||
| Interest and other expense, net | (11,791 | ) | (5,949 | ) | (21,851 | ) | (17,143 | ) | ||||||||||||
| Loss before provision for income taxes | (39,831 | ) | (40,448 | ) | (157,358 | ) | (132,294 | ) | ||||||||||||
| Provision for income taxes | 1,199 | 602 | 3,690 | 2,430 | ||||||||||||||||
| Net loss | $ | (41,030 | ) | $ | (41,050 | ) | $ | (161,048 | ) | $ | (134,724 | ) | ||||||||
| Net loss per share - Basic and Diluted | $ | (0.26 | ) | $ | (0.28 | ) | $ | (1.04 | ) | $ | (0.93 | ) | ||||||||
| Weighted-average shares used to compute net loss per share - Basic and Diluted | 156,930,506 | 146,335,519 | 154,352,037 | 144,239,844 | ||||||||||||||||
| (1) Includes total stock-based compensation expense for stock-based awards as follows: | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||
| Cost of revenues: | ||||||||||||||||||||
| Subscription | $ | 5,951 | $ | 3,995 | $ | 17,183 | $ | 10,896 | ||||||||||||
| Professional services and other | 5,804 | 3,572 | 16,788 | 9,188 | ||||||||||||||||
| Sales and marketing | 26,011 | 14,956 | 74,690 | 36,382 | ||||||||||||||||
| Research and development | 18,130 | 11,682 | 51,703 | 29,973 | ||||||||||||||||
| General and administrative | 9,215 | 7,285 | 29,167 | 21,884 | ||||||||||||||||
| ServiceNow, Inc. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| September 30, 2015 | December 31, 2014 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 349,073 | $ | 252,455 | ||||
| Short-term investments | 379,878 | 416,336 | ||||||
| Accounts receivable, net | 159,768 | 159,171 | ||||||
| Current portion of deferred commissions | 47,583 | 43,232 | ||||||
| Prepaid expenses and other current assets | 45,305 | 35,792 | ||||||
| Total current assets | 981,607 | 906,986 | ||||||
| Deferred commissions, less current portion | 29,595 | 29,453 | ||||||
| Long-term investments | 400,512 | 266,772 | ||||||
| Property and equipment, net | 132,713 | 104,237 | ||||||
| Intangible assets, net | 44,527 | 54,526 | ||||||
| Goodwill | 55,547 | 55,016 | ||||||
| Other assets | 18,387 | 8,089 | ||||||
| Total assets | $ | 1,662,888 | $ | 1,425,079 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 30,654 | $ | 17,829 | ||||
| Accrued expenses and other current liabilities | 84,681 | 79,497 | ||||||
| Current portion of deferred revenue | 519,486 | 409,671 | ||||||
| Total current liabilities | 634,821 | 506,997 | ||||||
| Deferred revenue, less current portion | 8,917 | 12,567 | ||||||
| Convertible senior notes, net | 466,831 | 443,764 | ||||||
| Other long-term liabilities | 35,385 | 33,076 | ||||||
| Stockholders’ equity | 516,934 | 428,675 | ||||||
Total liabilities and stockholders’ equity | $ | 1,662,888 | $ | 1,425,079 | ||||
| ServiceNow, Inc. | ||||||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net loss | $ | (41,030 | ) | $ | (41,050 | ) | $ | (161,048 | ) | $ | (134,724 | ) | ||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | 15,100 | 12,104 | 43,957 | 28,734 | ||||||||||||||||
| Amortization of premiums on investments | 1,768 | 2,185 | 5,380 | 6,044 | ||||||||||||||||
| Amortization of deferred commissions | 16,774 | 12,763 | 48,055 | 36,398 | ||||||||||||||||
| Amortization of debt discount and issuance costs | 7,839 | 7,325 | 23,124 | 21,608 | ||||||||||||||||
| Stock-based compensation | 65,111 | 41,490 | 189,531 | 108,323 | ||||||||||||||||
| Tax benefit from employee stock plans | (584 | ) | (573 | ) | (1,181 | ) | (1,190 | ) | ||||||||||||
| Other | (1,153 | ) | (383 | ) | (5,393 | ) | (1,973 | ) | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Accounts receivable | (16,642 | ) | (4,837 | ) | (5,303 | ) | (6,935 | ) | ||||||||||||
| Deferred commissions | (21,336 | ) | (19,149 | ) | (54,168 | ) | (47,115 | ) | ||||||||||||
| Prepaid expenses and other assets | (889 | ) | (1,285 | ) | (8,915 | ) | (2,386 | ) | ||||||||||||
| Accounts payable | 6,678 | (7,084 | ) | 8,312 | 3,892 | |||||||||||||||
| Deferred revenue | 25,255 | 29,039 | 115,812 | 92,351 | ||||||||||||||||
| Accrued expenses and other liabilities | 6,174 | (5,545 | ) | 11,856 | (11,751 | ) | ||||||||||||||
| Net cash provided by operating activities | 63,065 | 25,000 | 210,019 | 91,276 | ||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Purchases of property and equipment | (20,768 | ) | (18,094 | ) | (62,588 | ) | (45,499 | ) | ||||||||||||
| Acquisition, net of cash acquired | — | (99,813 | ) | (1,100 | ) | (99,813 | ) | |||||||||||||
| Purchases of investments | (211,671 | ) | (119,471 | ) | (543,167 | ) | (360,783 | ) | ||||||||||||
| Purchase of strategic investment | — | — | (10,000 | ) | — | |||||||||||||||
| Sale of investments | 104,269 | 28,914 | 242,631 | 97,807 | ||||||||||||||||
| Maturities of investments | 56,972 | 67,450 | 203,632 | 134,618 | ||||||||||||||||
| Restricted cash | (474 | ) | — | (408 | ) | (55 | ) | |||||||||||||
| Net cash used in investing activities | (71,672 | ) | (141,014 | ) | (171,000 | ) | (273,725 | ) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Proceeds from employee stock plans | 31,663 | 25,218 | 73,347 | 54,398 | ||||||||||||||||
| Taxes paid related to net share settlement of equity awards | (157 | ) | (125 | ) | (12,603 | ) | (494 | ) | ||||||||||||
| Tax benefit from employee stock plans | 584 | 573 | 1,181 | 1,190 | ||||||||||||||||
| Payments on financing obligation | (112 | ) | — | (112 | ) | — | ||||||||||||||
| Net cash provided by financing activities | 31,978 | 25,666 | 61,813 | 55,094 | ||||||||||||||||
| Foreign currency effect on cash and cash equivalents | 348 | (3,841 | ) | (4,214 | ) | (3,862 | ) | |||||||||||||
| Net increase/(decrease) in cash and cash equivalents | 23,719 | (94,189 | ) | 96,618 | (131,217 | ) | ||||||||||||||
| Cash and cash equivalents at beginning of period | 325,354 | 329,275 | 252,455 | 366,303 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 349,073 | $ | 235,086 | $ | 349,073 | $ | 235,086 | ||||||||||||
| Calculation of free cash flows (a non-GAAP measure): | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 63,065 | $ | 25,000 | $ | 210,019 | $ | 91,276 | ||||||||||||
| Purchases of property and equipment | (20,768 | ) | (18,094 | ) | (62,588 | ) | (45,499 | ) | ||||||||||||
| Free cash flows | $ | 42,297 | $ | 6,906 | $ | 147,431 | $ | 45,777 | ||||||||||||
| ServiceNow, Inc. | ||||||||||||||||||||||||||||
| Results of Operations GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
| Constant currency | ||||||||||||||||||||||||||||
| September 30, 2015 | September 30, 2014 | Growth rates | growth rates (1) | September 30, 2015 | September 30, 2014 | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||
| GAAP subscription revenues | $ | 223,208 | $ | 150,367 | $ | 603,576 | $ | 400,466 | ||||||||||||||||||||
| GAAP professional services and other revenues | 37,942 | 28,345 | 116,254 | 84,093 | ||||||||||||||||||||||||
| GAAP total revenues | 261,150 | 178,712 | 46 | % | 55 | % | 719,830 | 484,559 | ||||||||||||||||||||
| Change in deferred revenue from Consolidated Statements of Cash Flows | 25,255 | 29,039 | 115,812 | 92,351 | ||||||||||||||||||||||||
| Non-GAAP billings | $ | 286,405 | $ | 207,751 | 38 | % | 46 | % | $ | 835,642 | $ | 576,910 | ||||||||||||||||
| Cost of revenues: | ||||||||||||||||||||||||||||
| GAAP subscription cost of revenues | $ | 46,053 | $ | 37,925 | $ | 133,889 | $ | 102,357 | ||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | (5,951 | ) | (3,995 | ) | (17,183 | ) | (10,896 | ) | ||||||||||||||||||||
| Amortization of purchased intangibles | (2,747 | ) | (2,559 | ) | (8,246 | ) | (3,306 | ) | ||||||||||||||||||||
| Acquisition and other related costs | — | (2 | ) | — | (2 | ) | ||||||||||||||||||||||
| Non-GAAP subscription cost of revenues | $ | 37,355 | $ | 31,369 | $ | 108,460 | $ | 88,153 | ||||||||||||||||||||
| GAAP professional services and other cost of revenues | $ | 35,835 | $ | 28,161 | $ | 104,615 | $ | 75,781 | ||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | (5,804 | ) | (3,572 | ) | (16,788 | ) | (9,188 | ) | ||||||||||||||||||||
| Amortization of purchased intangibles | — | — | — | — | ||||||||||||||||||||||||
| Acquisition and other related costs | — | (9 | ) | — | (9 | ) | ||||||||||||||||||||||
| Non-GAAP professional services and other costs of revenues | $ | 30,031 | $ | 24,580 | $ | 87,827 | $ | 66,584 | ||||||||||||||||||||
| Gross profit: | ||||||||||||||||||||||||||||
| Non-GAAP subscription gross profit | $ | 185,853 | $ | 118,998 | $ | 495,116 | $ | 312,313 | ||||||||||||||||||||
| Non-GAAP professional services and other gross profit | 7,911 | 3,765 | 28,427 | 17,509 | ||||||||||||||||||||||||
| Non-GAAP gross profit | $ | 193,764 | $ | 122,763 | $ | 523,543 | $ | 329,822 | ||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||
| GAAP sales and marketing expenses | $ | 117,899 | $ | 84,002 | $ | 364,530 | $ | 245,355 | ||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | (26,011 | ) | (14,956 | ) | (74,690 | ) | (36,382 | ) | ||||||||||||||||||||
| Amortization of purchased intangibles | (145 | ) | (182 | ) | (436 | ) | (286 | ) | ||||||||||||||||||||
| Acquisition and other related costs | — | (12 | ) | — | (13 | ) | ||||||||||||||||||||||
| Non-GAAP sales and marketing expenses | $ | 91,743 | $ | 68,852 | $ | 289,404 | $ | 208,674 | ||||||||||||||||||||
| GAAP research and development expenses | $ | 55,822 | $ | 39,683 | $ | 158,946 | $ | 106,232 | ||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | (18,130 | ) | (11,682 | ) | (51,703 | ) | (29,973 | ) | ||||||||||||||||||||
| Amortization of purchased intangibles | — | — | — | — | ||||||||||||||||||||||||
| Acquisition and other related costs | — | (10 | ) | — | (31 | ) | ||||||||||||||||||||||
| Non-GAAP research and development expenses | $ | 37,692 | $ | 27,991 | $ | 107,243 | $ | 76,228 | ||||||||||||||||||||
| GAAP general and administrative expenses | $ | 33,581 | $ | 23,440 | $ | 93,357 | $ | 69,985 | ||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | (9,215 | ) | (7,285 | ) | (29,167 | ) | (21,884 | ) | ||||||||||||||||||||
| Amortization of purchased intangibles | — | (5 | ) | — | (16 | ) | ||||||||||||||||||||||
| Acquisition and other related costs | — | (416 | ) | — | (1,117 | ) | ||||||||||||||||||||||
| Non-GAAP general and administrative expenses | $ | 24,366 | $ | 15,734 | $ | 64,190 | $ | 46,968 | ||||||||||||||||||||
| GAAP total operating expenses | $ | 207,302 | $ | 147,125 | $ | 616,833 | $ | 421,572 | ||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | (53,356 | ) | (33,923 | ) | (155,560 | ) | (88,239 | ) | ||||||||||||||||||||
| Amortization of purchased intangibles | (145 | ) | (187 | ) | (436 | ) | (302 | ) | ||||||||||||||||||||
| Acquisition and other related costs | — | (438 | ) | — | (1,161 | ) | ||||||||||||||||||||||
| Non-GAAP total operating expenses | $ | 153,801 | $ | 112,577 | $ | 460,837 | $ | 331,870 | ||||||||||||||||||||
| Income (loss) from operations: | ||||||||||||||||||||||||||||
| GAAP loss from operations | $ | (28,040 | ) | $ | (34,499 | ) | $ | (135,507 | ) | $ | (115,151 | ) | ||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | 65,111 | 41,490 | 189,531 | 108,323 | ||||||||||||||||||||||||
| Amortization of purchased intangibles | 2,892 | 2,746 | 8,682 | 3,608 | ||||||||||||||||||||||||
| Acquisition and other related costs | — | 449 | — | 1,172 | ||||||||||||||||||||||||
| Non-GAAP income (loss) from operations | $ | 39,963 | $ | 10,186 | $ | 62,706 | $ | (2,048 | ) | |||||||||||||||||||
| Interest and other expense, net | ||||||||||||||||||||||||||||
| GAAP interest and other expense, net | $ | (11,791 | ) | $ | (5,949 | ) | $ | (21,851 | ) | $ | (17,143 | ) | ||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Amortization of debt discount and issuance costs for the convertible senior notes | 7,839 | 7,325 | 23,124 | 21,609 | ||||||||||||||||||||||||
| Non-GAAP interest and other expense, net | $ | (3,952 | ) | $ | 1,376 | $ | 1,273 | $ | 4,466 | |||||||||||||||||||
| Income/ (loss) before provision for income taxes | ||||||||||||||||||||||||||||
| GAAP loss before provision for income taxes | $ | (39,831 | ) | $ | (40,448 | ) | $ | (157,358 | ) | $ | (132,294 | ) | ||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | 65,111 | 41,490 | 189,531 | 108,323 | ||||||||||||||||||||||||
| Amortization of purchased intangibles | 2,892 | 2,746 | 8,682 | 3,608 | ||||||||||||||||||||||||
| Acquisition and other related costs | — | 449 | — | 1,172 | ||||||||||||||||||||||||
| Amortization of debt discount and issuance costs for the convertible senior notes | 7,839 | 7,325 | 23,124 | 21,609 | ||||||||||||||||||||||||
| Non-GAAP income before provision for income taxes | $ | 36,011 | $ | 11,562 | $ | 63,979 | $ | 2,418 | ||||||||||||||||||||
| Provision for income taxes: | ||||||||||||||||||||||||||||
| GAAP provision for income taxes | $ | 1,199 | $ | 602 | $ | 3,690 | $ | 2,430 | ||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Income tax expense effects related to the above adjustments | 9,855 | 5,305 | 25,598 | 14,990 | ||||||||||||||||||||||||
| Non-GAAP provision for income taxes | $ | 11,054 | $ | 5,907 | $ | 29,288 | $ | 17,420 | ||||||||||||||||||||
| Net income (loss): | ||||||||||||||||||||||||||||
| GAAP net loss | $ | (41,030 | ) | $ | (41,050 | ) | $ | (161,048 | ) | $ | (134,724 | ) | ||||||||||||||||
| Add back: | ||||||||||||||||||||||||||||
| Stock-based compensation | 65,111 | 41,490 | 189,531 | 108,323 | ||||||||||||||||||||||||
| Amortization of purchased intangibles | 2,892 | 2,746 | 8,682 | 3,608 | ||||||||||||||||||||||||
| Acquisition and other related costs | — | 449 | — | 1,172 | ||||||||||||||||||||||||
| Amortization of debt discount and issuance costs for the convertible senior notes | 7,839 | 7,325 | 23,124 | 21,609 | ||||||||||||||||||||||||
| Income tax expense effects related to the above adjustments | (9,855 | ) | (5,305 | ) | (25,598 | ) | (14,990 | ) | ||||||||||||||||||||
| Non-GAAP net income (loss) | $ | 24,957 | $ | 5,655 | $ | 34,691 | $ | (15,002 | ) | |||||||||||||||||||
| Net income (loss) per share - basic and diluted: | ||||||||||||||||||||||||||||
| GAAP net loss per share - basic and diluted | $ | (0.26 | ) | $ | (0.28 | ) | $ | (1.04 | ) | $ | (0.93 | ) | ||||||||||||||||
| Non-GAAP net income (loss) per share - basic | $ | 0.16 | $ | 0.04 | $ | 0.22 | $ | (0.10 | ) | |||||||||||||||||||
| Non-GAAP net income (loss) per share - diluted | $ | 0.15 | $ | 0.03 | $ | 0.21 | $ | (0.10 | ) | |||||||||||||||||||
| Weighted-average shares used to compute net income (loss) per share - basic | 156,930,506 | 146,335,519 | 154,352,037 | 144,239,844 | ||||||||||||||||||||||||
| GAAP weighted-average shares used to compute net loss per share - diluted | 156,930,506 | 146,335,519 | 154,352,037 | 144,239,844 | ||||||||||||||||||||||||
| Effect of dilutive securities (stock options, restricted stock units and common stock subject to repurchase) | 11,620,665 | 16,549,145 | 13,495,586 | — | ||||||||||||||||||||||||
| Non-GAAP weighted-average shares used to compute net income per share - diluted | 168,551,171 | 162,884,664 | 167,847,623 | 144,239,844 | ||||||||||||||||||||||||
| (1) Constant currency growth rates presented are derived from converting the current period results for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the actual exchange rates in effect during the current period. | ||||||||||||||||||||||||||||
| ServiceNow, Inc. | ||||||||||||
| Reconciliation of Non-GAAP Financial Guidance | ||||||||||||
| The financial guidance provided below is an estimate based on information available as of September 30, 2015. 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 February 27, 2015 and the company's Form 10-Q for the quarter ended September 30, 2015 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 | Three Months Ended | Constant currency | ||||||||||
| December 31, 2015 | December 31, 2014 | Growth rates | growth rates (1) | |||||||||
| Non-GAAP billings | $370 - $375 million | $274 million | 35% - 37% | 39% - 41% | ||||||||
| Change in deferred revenue from Consolidated Statements of Cash Flows | 93 million | 76 million | ||||||||||
| GAAP revenue | $277 - $282 million | $198 million | 40% - 42% | 44% - 47% | ||||||||
| Non-GAAP subscription gross margin | 82% | |||||||||||
| Stock-based compensation expense | (2%) | |||||||||||
| Amortization of acquired intangible assets | (1%) | |||||||||||
| GAAP subscription gross margin | 79% | |||||||||||
| Non-GAAP professional services and other gross margin | 15% | |||||||||||
| Stock-based compensation expense | (2%) | |||||||||||
| GAAP professional services and other gross margin | 13% | |||||||||||
| Non-GAAP total gross margin | 73% | |||||||||||
| Stock-based compensation expense | (4%) | |||||||||||
| GAAP total gross margin | 69% | |||||||||||
| Non-GAAP operating margin | 9% | |||||||||||
| Stock-based compensation expense | (24%) | |||||||||||
| Amortization of acquired intangible assets | (1%) | |||||||||||
| GAAP operating margin | (16%) | |||||||||||
| Non-GAAP free cash flows | $60 million | |||||||||||
| Purchases of property and equipment | 30 million | |||||||||||
| GAAP net cash provided by operating activities | $90 million | |||||||||||
| Twelve Months Ended | Twelve Months Ended | Constant currency | ||||||||||
| December 31, 2015 | December 31, 2014 | Growth rates | growth rates (1) | |||||||||
| Non-GAAP billings | $1,200 million | $851 million | 41% | 49% | ||||||||
| Change in deferred revenue from cash flow | ~200 million | 168 million | ||||||||||
| GAAP revenue | ~$1,000 million | $683 million | 47% | 55% | ||||||||
| Non-GAAP operating margin | 9% | |||||||||||
| Stock-based compensation expense | (26%) | |||||||||||
| Amortization of acquired intangible assets | (1%) | |||||||||||
| GAAP operating margin | (18%) | |||||||||||
| Non-GAAP free cash flows | $207 million | |||||||||||
| Purchases of property and equipment | 93 million | |||||||||||
| GAAP net cash provided by operating activities | $300 million | |||||||||||
(1) Constant currency growth rates presented are derived from converting the current period estimates for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the current period estimated exchange rates. | ||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151021006556/en/
Contacts:
Media Contacts:
Colleen Haikes, 669-262-2001
press@servicenow.com
Candice
Garmoe, 408-450-7287
press@servicenow.com
Investor
Contact:
ir@servicenow.com
