Summary
ServiceNow, Inc. reported strong financial performance for the third quarter and the first nine months of 2021, demonstrating robust revenue growth and increasing profitability. Total revenues for the three months ended September 30, 2021, rose by 31% year-over-year to $1.51 billion, driven by a substantial increase in subscription revenues, which now constitute 94% of total revenue. This growth trajectory was also evident in the nine-month period, with total revenues reaching $4.28 billion, a 31% increase from the prior year. The company's operational efficiency improved, with total gross profit percentage remaining strong at 77% for the quarter. Net income for the quarter was $63 million, or $0.31 per diluted share, a significant increase from the prior year's $13 million, or $0.06 per diluted share. The balance sheet remains healthy, with total assets growing to $9.48 billion, supported by strong operating cash flow of $1.35 billion for the first nine months of the year, indicating solid financial health and capacity for future investments and growth.
Financial Highlights
53 data points| Revenue | $1.51B |
| Cost of Revenue | $350.00M |
| Gross Profit | $1.16B |
| R&D Expenses | $358.00M |
| Operating Expenses | $1.09B |
| Operating Income | $74.00M |
| Interest Expense | $7.00M |
| Net Income | $62.89M |
| EPS (Basic) | $0.06 |
| EPS (Diluted) | $0.06 |
| Shares Outstanding (Basic) | 993.00M |
| Shares Outstanding (Diluted) | 1.02B |
Key Highlights
- 1Total revenues increased by 31% year-over-year to $1.51 billion for the third quarter of 2021 and by 31% to $4.28 billion for the first nine months.
- 2Subscription revenues, the primary driver of growth, increased by 31% to $1.43 billion for the quarter and by 31% to $4.05 billion for the nine-month period.
- 3Net income saw a significant improvement, reaching $63 million ($0.31 per diluted share) for the quarter, compared to $13 million ($0.06 per diluted share) in the prior year.
- 4The company made strategic acquisitions, including Element AI Inc. and LightStep Inc., to enhance its AI and observability solutions, contributing to a substantial increase in goodwill and intangible assets.
- 5Remaining Performance Obligations (RPO) reached $9.7 billion as of September 30, 2021, with current RPO (cRPO) representing $4.9 billion, indicating strong future revenue potential.
- 6Free cash flow grew by 29% year-over-year to $1.05 billion for the nine months ended September 30, 2021, demonstrating strong operational cash generation.
- 7The number of customers with an Annual Contract Value (ACV) greater than $1 million increased to 1,266 from 1,012 in the prior year, reflecting successful expansion with large enterprise clients.