Summary
ServiceNow, Inc. (NOW) reported its quarterly results for the period ending September 29, 2013. As an emerging growth company, ServiceNow highlighted its compliance efforts with public company regulations, including addressing past material weaknesses in internal controls and its ongoing remediation process. The company is on track to no longer be an emerging growth company by the end of 2013, which will necessitate more stringent auditor attestation requirements for internal controls. Strategic growth initiatives, including its first acquisition of Mirror42 in July 2013, were also discussed, alongside the potential for future acquisitions and partnerships. Investors should note that ServiceNow does not currently intend to pay dividends, with returns expected solely from potential stock price appreciation. The company also warned about the historical volatility of its stock price, influenced by various factors including operating results, industry trends, and analyst expectations.
Financial Highlights
47 data points| Revenue | $111.26M |
| Cost of Revenue | $41.58M |
| Gross Profit | $69.68M |
| R&D Expenses | $20.82M |
| Operating Expenses | $84.33M |
| Operating Income | -$14.65M |
| Net Income | -$14.71M |
| EPS (Basic) | $-0.02 |
| EPS (Diluted) | $-0.02 |
| Shares Outstanding (Basic) | 687.28M |
Key Highlights
- 1ServiceNow is transitioning from an 'emerging growth company' status by year-end 2013, impacting future reporting requirements, particularly regarding auditor attestation for internal controls (Section 404(b) of Sarbanes-Oxley).
- 2The company has taken significant steps to remediate previously identified material weaknesses in its internal control over financial reporting and believes these have been addressed, though full compliance and testing under Section 404 are ongoing.
- 3ServiceNow completed its first acquisition, Mirror42, in July 2013, signaling a strategy for inorganic growth through potential future acquisitions and investments.
- 4The company explicitly states it does not intend to pay cash dividends on its common stock, meaning investor returns are solely dependent on stock price appreciation.
- 5The filing emphasizes the historical volatility of ServiceNow's stock price, attributing it to factors such as operating performance, analyst expectations, competitive actions, and broader market conditions.
- 6Management resources may be diverted by public company compliance obligations and the integration of potential future acquisitions.
- 7The company is subject to risks associated with its growth strategy, including potential dilution from equity issuances, unfavorable debt terms, and difficulties in integrating acquired businesses and technologies.