10-KPeriod: FY2021

ServiceNow, Inc. Annual Report, Year Ended Dec 31, 2021

Filed February 3, 2022For Securities:NOW

Summary

ServiceNow, Inc.'s 2021 10-K filing highlights a robust year of growth, driven by strong demand for its digital workflow platform across IT, Employee, Customer, and Creator workflows. The company continues to expand its customer base, surpassing 7,400 enterprise customers, with significant growth in customers with Annual Contract Value (ACV) over $1 million, reaching 1,359. Total revenues saw a substantial 30% increase, fueled by subscription revenue growth, and the company demonstrated strong free cash flow generation, up 31% year-over-year. Investments in research and development and strategic acquisitions in AI and observability underscore ServiceNow's commitment to innovation and platform enhancement, positioning it to capitalize on the ongoing digital transformation trend across various industries. The company also maintained a high renewal rate of 98%, indicating strong customer retention and satisfaction with its platform.

Financial Highlights

55 data points
Beta

Revenue

$5.90B

77.1% Gross Margin

Net Income

$230.00M

3.9% Net Margin

EPS (Diluted)

$0.23

Total Assets

$10.80B

Cash & Equivalents

$1.73B

Free Cash Flow

$1.80B

Financial Statements
Beta
Revenue$5.90B
Cost of Revenue$1.35B
Gross Profit$4.54B
R&D Expenses$1.40B
Operating Expenses$4.29B
Operating Income$257.00M
Interest Expense$28.00M
Net Income$230.00M
EPS (Basic)$0.23
EPS (Diluted)$0.23
Shares Outstanding (Basic)990.47M
Shares Outstanding (Diluted)1.02B

Key Highlights

  • 1ServiceNow experienced a 30% year-over-year revenue growth, reaching $5.9 billion, primarily driven by its subscription services.
  • 2The company expanded its customer base to over 7,400 enterprise customers, with a notable increase in large enterprise clients, evidenced by 1,359 customers with ACV greater than $1 million.
  • 3Free cash flow increased by 31% to $1.8 billion, showcasing strong operational performance and cash generation capabilities.
  • 4ServiceNow maintained a high customer renewal rate of 98%, demonstrating strong customer loyalty and the stickiness of its platform.
  • 5Significant investments were made in research and development, alongside strategic acquisitions like LightStep, Inc. and Element AI Inc., to enhance AI capabilities and observability solutions.
  • 6The company reported a substantial Remaining Performance Obligation (RPO) of $11.5 billion, indicating strong future revenue visibility.
  • 7ServiceNow continues its focus on the 'Future of Work' strategy, implementing flexible work policies to attract and retain top talent.

Frequently Asked Questions

ServiceNow categorizes its workflows into four primary areas: Information Technology (IT), Employee, Customer, and Creator. These segments represent the core areas where their Now Platform helps organizations digitize workflows and improve experiences.

The majority of ServiceNow's revenue comes from subscription services, which include access to its cloud-based platform, support, and updates. A smaller portion comes from professional services and other related revenues.

RPO represents contracted revenue that has not yet been recognized. A significant and growing RPO, like ServiceNow's $11.5 billion at the end of 2021, indicates strong future revenue streams and provides investors with visibility into the company's growth trajectory.

ServiceNow demonstrates strong financial health, generating significant positive operating cash flows. As of December 31, 2021, the company had $4.9 billion in cash, cash equivalents, and investments, providing ample resources to fund operations, strategic investments, and manage its debt obligations.