Summary
ServiceNow, Inc. (NOW) reported its second-quarter 2019 financial results, demonstrating robust top-line growth and significant improvements in profitability. Total revenues increased by 32% year-over-year to $833.9 million, primarily driven by a 33% surge in subscription revenues, which now constitute 94% of total revenue. This strong revenue performance, coupled with improved operating efficiencies, led to a substantial reduction in net loss to $11.1 million for the quarter, compared to a net loss of $52.7 million in the prior year's second quarter. The company also saw a healthy increase in its customer base with Annual Contract Value (ACV) over $1 million, reaching 766 customers. Key financial highlights include a substantial increase in cash flow from operations, growing by 61% year-over-year to $604.6 million for the first six months of the year. The company ended the quarter with a strong liquidity position, holding $583.6 million in cash and cash equivalents, and $1.07 billion in short-term investments. While the company continues to invest heavily in sales and marketing (47% of revenues) and research and development (22% of revenues) to fuel future growth, the overall trend indicates a strengthening financial profile with impressive revenue expansion and a clear path towards sustained profitability.
Financial Highlights
51 data points| Revenue | $833.90M |
| Cost of Revenue | $198.15M |
| Gross Profit | $635.76M |
| R&D Expenses | $183.42M |
| Operating Expenses | $662.76M |
| Operating Income | -$27.00M |
| Interest Expense | $8.27M |
| Net Income | -$11.08M |
| EPS (Basic) | $-0.01 |
| EPS (Diluted) | $-0.01 |
| Shares Outstanding (Basic) | 933.39M |
| Shares Outstanding (Diluted) | 933.39M |
Key Highlights
- 1Total revenues grew 32% year-over-year to $833.9 million for the second quarter of 2019.
- 2Subscription revenues, the primary revenue driver, increased by 33% year-over-year, comprising 94% of total revenues.
- 3Net loss significantly narrowed to $11.1 million for the quarter, compared to $52.7 million in the prior year's second quarter.
- 4Customers with ACV greater than $1 million increased to 766, up from 577 in the prior year.
- 5Cash flow from operating activities increased by 61% to $604.6 million for the first six months of 2019.
- 6The company ended the quarter with a strong balance sheet, reporting $583.6 million in cash and cash equivalents and $1.07 billion in short-term investments.
- 7Operating expenses, particularly sales and marketing and R&D, saw significant increases in absolute terms reflecting continued investment in growth.