Summary
This 10-Q filing for ServiceNow, Inc. (NOW) as of June 29, 2012, marks a significant period following its initial public offering (IPO) in late June 2012. As an "emerging growth company," ServiceNow is navigating the complexities of public company reporting and compliance, while also highlighting its operational and strategic priorities. The company is actively addressing material weaknesses in its internal control over financial reporting by hiring experienced personnel and engaging consultants. This focus on strengthening internal controls is crucial for ensuring the accuracy and reliability of its financial reporting as it scales. Investors should note that ServiceNow does not currently intend to pay dividends, meaning returns will be primarily driven by stock price appreciation. A substantial portion of the company's stock is held by insiders and principal stockholders, granting them significant influence over corporate matters. The company is also strategically deploying capital raised from its IPO, with potential uses including data center expansion, office build-outs, working capital, and possible acquisitions, though no specific plans are currently detailed. The filing also underscores the inherent volatility in technology stock prices and the risks associated with sales to government and highly regulated entities.
Financial Highlights
45 data points| Revenue | $56.77M |
| Cost of Revenue | $22.89M |
| Gross Profit | $33.88M |
| R&D Expenses | $9.27M |
| Operating Expenses | $43.00M |
| Operating Income | -$9.12M |
| Net Income | -$8.72M |
| EPS (Basic) | $-0.06 |
| EPS (Diluted) | $-0.06 |
| Shares Outstanding (Basic) | 138.94M |
| Shares Outstanding (Diluted) | 138.94M |
Key Highlights
- 1ServiceNow recently completed its Initial Public Offering (IPO) on June 28, 2012, raising significant capital and creating a public market for its stock.
- 2The company is operating as an 'emerging growth company' and is leveraging certain exemptions from reporting requirements, but is subject to increasing compliance costs.
- 3Material weaknesses in internal control over financial reporting were identified, stemming from a lack of experienced accounting personnel. The company is actively remediating these through new hires and engagement of external consultants.
- 4A portion of ServiceNow's revenue is generated from sales to government and highly regulated entities, which present unique challenges, including complex contract terms and compliance requirements.
- 5The company has no current plans to pay dividends, indicating that any investor returns will rely solely on stock price appreciation.
- 6A significant percentage of the company's stock is held by directors, officers, and principal stockholders, granting them substantial control over corporate decisions.
- 7Proceeds from the IPO are intended for general corporate purposes, including potential data center expansion, office build-outs, and potential acquisitions, with remaining funds to be invested in short-term, interest-bearing securities.