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ServiceNow® (NYSE: NOW), the enterprise cloud company, today announced the financial results for its fourth quarter and fiscal year 2014.
Fourth quarter 2014 results:
- Revenues of $198.0 million, an increase of 58% compared to the fourth quarter of 2013 and an increase of 11% from the third quarter of 2014.
- GAAP net loss of $44.7 million, or a loss of $0.30 per basic and diluted share, compared to a GAAP net loss of $24.2 million, or a loss of $0.17 per basic and diluted share, in the fourth quarter of 2013.
- Non-GAAP net income of $4.9 million, or income of $0.03 per basic and diluted share, compared to a non-GAAP net loss of $2.5 million, or a loss of $0.02 per basic and diluted share, in the fourth quarter of 2013 (see the table entitled "Results of Operations GAAP to Non-GAAP Reconciliation” for a reconciliation of these GAAP and non-GAAP financial measures).
- Billings were $269.4 million, a 62% increase over the $166.2 million in the same period last year, and a 34% increase over the $200.7 million reported in the previous quarter (see the table entitled “Non-GAAP Billings Reconciliation” for a reconciliation of non-GAAP billings to GAAP revenues).
- Deferred revenue of $422.2 million, a 20% increase over the $350.8 million reported at the end of the prior quarter.
- Added 211 net new customers, bringing the total to 2,725.
- The customer renewal rate for the quarter was 97% and upsells represented 38% of the annualized contract value booked in the quarter.
Fiscal Year 2014 Results:
- Revenues of $682.6 million, an increase of 61% compared to the prior year.
- A GAAP net loss of $179.4 million, or a loss of $1.23 per basic and diluted share, compared to a GAAP net loss of $73.7 million, or a loss of $0.54 per basic and diluted share, in the prior year.
- A non-GAAP net loss of $10.1 million, or a loss of $0.07 per basic and diluted share, compared to non-GAAP net loss of $9.6 million, or a loss of $0.07 per basic and diluted share, in the prior year (see the table entitled "Results of Operations GAAP to Non-GAAP Reconciliation” for a reconciliation of these GAAP and non-GAAP financial measures).
- Signed $1.2 billion in total contract value, a 64% increase over the prior year.
- Billings were $838.1 million, a 61% increase over the $521.0 million reported in the prior year (see the table entitled “Non-GAAP Billings Reconciliation” for a reconciliation of non-GAAP billings to GAAP revenues).
- Combined backlog and deferred revenue at the end of the year totaled $1.4 billion, growing 57% year-over-year, compared to 59% year-over-year growth in 2013. Backlog represents future amounts to be invoiced under our agreements and is not included in deferred revenue.
“We finished 2014 with strong metrics across the board, maintaining consistently high year-over-year growth rates,” said Frank Slootman, president and chief executive officer, ServiceNow. “In addition to a growing list of new customers that now includes more than 25% of the Global 2000, we continue to see existing customers expand their relationship with us, resulting in the highest quarterly upsell rate since our IPO.”
The total number of customers paying more than $1 million in annualized contract value has increased 93% year-over-year,” said Michael Scarpelli, chief financial officer, ServiceNow. “Within the Global 2000, annualized contract value per customer has increased 40% year-over-year. These expanding contracts have helped us grow our combined backlog and deferred revenue 57% year-over-year.”
Financial Outlook
The financial guidance discussed below is on a non-GAAP basis, except for revenues, and excludes stock-based compensation expense, amortization of purchased intangibles, and acquisition related expenses (see table which reconciles these non-GAAP financial measures to the related GAAP measures). Negative numbers are shown in parentheses. For the first quarter of 2015, we expect:
- Total revenues between $207 and $212 million, representing year-over-year growth between 49% and 52%. Our total first quarter revenue estimate consists of subscription revenues between $176 and $180 million and professional services and other revenues between $31 and $32 million.
- Billings between $260 and $265 million, representing year-over-year growth between 44% and 47%.
- Subscription gross margin of approximately 79%, professional services and other gross margin of approximately 12% and overall gross margin of approximately 69%.
- Approximately breakeven operating margin.
For the full year 2015, we expect total revenues to be in the range of $960 million to $1 billion, representing year-over-year growth between 41% and 47%. Our total annual revenue estimate consists of subscription revenues between $810 and $840 million and professional services and other revenues between $150 and $160 million.
Updates since our last earnings release
- ServiceNow opened four data centers in Asia and South America, bringing the total to 16 data centers around the globe, organized in eight mirrored pairs.
- ServiceNow launched its Express offering, a highly standardized product for organizations of all sizes to adopt service management rapidly.
- The ServiceNow Community grew 65% in 2014, reaching a total of 30,000 registered members.
- ServiceNow signed a lease for two new buildings in Santa Clara, Calif., that will become the company's new headquarters offices in the second half of 2015.
Conference Call Details
The conference call will begin at 2 p.m. Pacific Time (21:00 GMT) on Wednesday, Jan. 28, 2015. Interested parties may listen to the call by dialing 877.415.3178 (passcode: 75348159), or if outside North America, by dialing 857.244.7321 (passcode: 75348159). Individuals may access the live teleconference from the investor relations section of the ServiceNow website at http://investors.servicenow.com.
An audio replay of the conference call and webcast will be available two hours after its completion and will be accessible for 30 days. To hear the replay, interested parties may go to the investor relations section of the ServiceNow website or dial 888.286.8010 (passcode: 17421718), or if outside North America, by dialing 617.801.6888 (passcode: 17421718).
Statement regarding use of non-GAAP financial measures
The company reports non-GAAP financial measures, including gross margins, operating margins, net income or loss, basic and diluted income or loss per share, free cash flow and billings in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The company's financial measures under GAAP include stock-based compensation expense, the amortization of debt discount and issuance costs related to the convertible senior notes, amortization of purchased intangibles and acquisition-related expenses, and the related income tax effect of these adjustments. Management believes the presentation of operating results that excludes these items provides useful supplemental information to investors and facilitates the analysis of the company's core operating results and comparison of operating results across reporting periods. Management also believes that this supplemental non-GAAP information is therefore useful to investors in analyzing and assessing the company's past and future operating performance.
Free cash flow, which is a non-GAAP financial measure, is calculated as GAAP net cash provided by operating activities reduced by purchases of property and equipment. Management believes information regarding free cash flow provides investors with an important perspective on the cash available to invest in our business and fund ongoing operations. However, our calculation of free cash flow may not be comparable to similar measures used by other companies.
Billings is calculated as revenue plus the change in total deferred revenue as presented on the balance sheet. Management believes billings offers investors useful supplemental information regarding the performance of our business, and will help investors better understand the sales volumes and performance of our business.
The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.
Use of forward-looking statements and third-party data
This release contains “forward-looking statements” regarding our performance, including in the section entitled “Financial Outlook.” Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.
Among the important factors that could cause actual results to differ materially from those in any forward-looking statements are: (i) errors, interruptions, delays, or security breaches in or of our service or web hosting, (ii) our ability to grow at our expected rate of growth, including our ability to convert deferred revenue and backlog into revenue, add and retain customers, and enter new geographies and markets, (iii) our ability to continue to release, and gain customer acceptance of, improved versions of our services, (iv) our ability to develop and gain customer acceptance of new products and services, including our platform, and (v) our ability to compete successfully against existing and new competitors.
Further information on these and other factors that could affect our financial results are included in our Form 10-K for the year ended December 31, 2013 and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-K that will be filed for the fiscal year ended December 31, 2014.
We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts' expectations, or to provide interim reports or updates on the progress of the current financial quarter.
The Global 2000 is an annual ranking of the top 2,000 public companies in the world published by Forbes Magazine. The ranking is based on a mix of four metrics: sales, profit, assets and market value.
About ServiceNow
ServiceNow is changing the way people work. With a service-orientation toward the activities, tasks and processes that make up day-to-day work life, we help the modern enterprise operate faster and be more scalable than ever before. Customers use our service model to define, structure and automate the flow of work, removing dependencies on email and spreadsheets to transform the delivery and management of services for the enterprise. ServiceNow provides service management for every department in the enterprise including IT, human resources, facilities, field service and more. We deliver a ‘lights-out, light-speed' experience through our enterprise cloud – built to manage everything as a service. To find out how, visit www.servicenow.com.
ServiceNow, Inc. | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Revenues: | ||||||||||||||||
Subscription | $ | 166,751 | $ | 104,878 | $ | 567,217 | $ | 349,804 | ||||||||
Professional services and other | 31,253 | 20,352 | 115,346 | 74,846 | ||||||||||||
Total revenues | 198,004 | 125,230 | 682,563 | 424,650 | ||||||||||||
Cost of revenues (1): | ||||||||||||||||
Subscription | 40,330 | 25,968 | 142,687 | 87,928 | ||||||||||||
Professional services and other | 30,308 | 19,410 | 106,089 | 67,331 | ||||||||||||
Total cost of revenues | 70,638 | 45,378 | 248,776 | 155,259 | ||||||||||||
Gross profit | 127,366 | 79,852 | 433,787 | 269,391 | ||||||||||||
Operating expenses (1): | ||||||||||||||||
Sales and marketing | 95,764 | 57,337 | 341,119 | 195,190 | ||||||||||||
Research and development | 42,026 | 23,869 | 148,258 | 78,678 | ||||||||||||
General and administrative | 26,260 | 18,007 | 96,245 | 61,790 | ||||||||||||
Total operating expenses | 164,050 | 99,213 | 585,622 | 335,658 | ||||||||||||
Loss from operations | (36,684 | ) | (19,361 | ) | (151,835 | ) | (66,267 | ) | ||||||||
Interest and other income (expense), net | (6,562 | ) | (4,326 | ) | (23,705 | ) | (4,930 | ) | ||||||||
Loss before provision for income taxes | (43,246 | ) | (23,687 | ) | (175,540 | ) | (71,197 | ) | ||||||||
Provision for income taxes | 1,417 | 545 | 3,847 | 2,511 | ||||||||||||
Net loss | $ | (44,663 | ) | $ | (24,232 | ) | $ | (179,387 | ) | $ | (73,708 | ) | ||||
Net loss per share - Basic and Diluted | $ | (0.30 | ) | $ | (0.17 | ) | $ | (1.23 | ) | $ | (0.54 | ) | ||||
Weighted-average shares used to compute net loss per share - Basic and Diluted | 148,666,257 | 139,508,838 | 145,355,543 | 135,415,809 | ||||||||||||
(1) Includes total stock-based compensation expense for stock-based awards as follows: | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | |||||||||||||
Cost of revenues: | ||||||||||||||||
Subscription | $ | 4,092 | $ | 2,454 | $ | 14,988 | $ | 8,434 | ||||||||
Professional services and other | 3,928 | 1,654 | 13,116 | 4,749 | ||||||||||||
Sales and marketing | 17,624 | 6,857 | 54,006 | 21,609 | ||||||||||||
Research and development | 12,562 | 5,218 | 42,535 | 16,223 | ||||||||||||
General and administrative | 7,790 | 4,673 | 29,674 | 14,566 | ||||||||||||
ServiceNow, Inc. | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands) | ||||||
December 31, 2014 | December 31, 2013 | |||||
(unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 252,455 | $ | 366,303 | ||
Short-term investments | 416,336 | 268,251 | ||||
Accounts receivable, net | 159,171 | 108,339 | ||||
Current portion of deferred commissions | 43,232 | 31,123 | ||||
Prepaid expenses and other current assets | 35,792 | 23,733 | ||||
Total current assets | 906,986 | 797,749 | ||||
Deferred commissions, less current portion | 29,453 | 21,318 | ||||
Long-term investments | 266,772 | 255,356 | ||||
Property and equipment, net | 104,237 | 75,560 | ||||
Intangible assets, net | 54,526 | 5,796 | ||||
Goodwill | 55,016 | 8,724 | ||||
Other assets | 8,089 | 3,973 | ||||
Total assets | $ | 1,425,079 | $ | 1,168,476 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 17,829 | $ | 7,405 | ||
Accrued expenses and other current liabilities | 79,497 | 68,130 | ||||
Current portion of deferred revenue | 409,671 | 252,553 | ||||
Total current liabilities | 506,997 | 328,088 | ||||
Deferred revenue, less current portion | 12,567 | 14,169 | ||||
Convertible senior notes, net | 443,764 | 414,777 | ||||
Other long-term liabilities | 33,076 | 17,183 | ||||
Stockholders' equity | 428,675 | 394,259 | ||||
Total liabilities and stockholders' equity | $ | 1,425,079 | $ | 1,168,476 | ||
ServiceNow, Inc. | ||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | |||||||||||||
(unaudited)
| (unaudited) | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (44,663 | ) | $ | (24,232 | ) | $ | (179,387 | ) | $ | (73,708 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 13,325 | 7,874 | 42,059 | 24,152 | ||||||||||||
Amortization of premiums on investments | 2,040 | 1,317 | 8,084 | 4,758 | ||||||||||||
Amortization of deferred commissions | 14,872 | 9,539 | 51,270 | 29,364 | ||||||||||||
Amortization of debt discount and issuance costs | 7,451 | 3,498 | 29,059 | 3,498 | ||||||||||||
Stock-based compensation | 45,996 | 20,856 | 154,319 | 65,581 | ||||||||||||
Tax benefit from employee stock plans | (847 | ) | 159 | (2,037 | ) | (1,658 | ) | |||||||||
Deferred income tax | (1,198 | ) | (231 | ) | (1,198 | ) | (231 | ) | ||||||||
Other | (2,496 | ) | (716 | ) | (4,469 | ) | 558 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (49,850 | ) | (22,518 | ) | (56,785 | ) | (29,506 | ) | ||||||||
Deferred commissions | (26,671 | ) | (20,049 | ) | (73,786 | ) | (54,943 | ) | ||||||||
Prepaid expenses and other assets | (3,154 | ) | 2,394 | (5,540 | ) | 3,471 | ||||||||||
Accounts payable | 6,331 | 156 | 10,223 | (252 | ) | |||||||||||
Deferred revenue | 76,042 | 40,073 | 168,393 | 94,405 | ||||||||||||
Accrued expenses and other liabilities | 10,446 | 18,147 | (1,305 | ) | 16,257 | |||||||||||
Net cash provided by operating activities | 47,624 | 36,267 | 138,900 | 81,746 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of property and equipment | (8,880 | ) | (16,262 | ) | (54,379 | ) | (55,321 | ) | ||||||||
Acquisition, net of cash acquired | — | — | (99,813 | ) | (13,330 | ) | ||||||||||
Purchases of investments | (160,610 | ) | (337,235 | ) | (521,393 | ) | (570,679 | ) | ||||||||
Sale of investments | 69,190 | 4,755 | 166,997 | 55,158 | ||||||||||||
Maturities of investments | 57,097 | 39,098 | 191,715 | 181,554 | ||||||||||||
Restricted cash | — | (3 | ) | (55 | ) | (177 | ) | |||||||||
Net cash used in investing activities | (43,203 | ) | (309,647 | ) | (316,928 | ) | (402,795 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Offering costs paid in connection with follow-on offering | — | — | — | (698 | ) | |||||||||||
Net proceeds from borrowings on convertible senior notes | — | 562,941 | — | 562,941 | ||||||||||||
Proceeds from issuance of warrants | — | 84,525 | — | 84,525 | ||||||||||||
Purchase of convertible note hedge | — | (135,815 | ) | — | (135,815 | ) | ||||||||||
Proceeds from employee stock plans | 14,831 | 8,126 | 68,735 | 55,959 | ||||||||||||
Tax benefit from employee stock plans | 847 | (159 | ) | 2,037 | 1,658 | |||||||||||
Net cash provided by financing activities | 15,678 | 519,618 | 70,772 | 568,570 | ||||||||||||
Foreign currency effect on cash and cash equivalents | (2,730 | ) | (1,029 | ) | (6,592 | ) | (207 | ) | ||||||||
Net increase/(decrease) in cash and cash equivalents
| 17,369 | 245,209 | (113,848 | ) | 247,314 | |||||||||||
Cash and cash equivalents at beginning of period | 235,086 | 121,094 | 366,303 | 118,989 | ||||||||||||
Cash and cash equivalents at end of period | $ | 252,455 | $ | 366,303 | $ | 252,455 | $ | 366,303 | ||||||||
Calculation of free cash flows (a non-GAAP measure): | ||||||||||||||||
Net cash provided by operating activities | $ | 47,624 | $ | 36,267 | $ | 138,900 | $ | 81,746 | ||||||||
Purchases of property and equipment | (8,880 | ) | (16,262 | ) | (54,379 | ) | (55,321 | ) | ||||||||
Free cash flows | $ | 38,744 | $ | 20,005 | $ | 84,521 | $ | 26,425 | ||||||||
ServiceNow, Inc. | ||||||||||||||||
Results of Operations GAAP to Non-GAAP Reconciliation | ||||||||||||||||
(in thousands except share and per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2014 | December 31, 2013 | December 31, 2014 | December 31, 2013 | |||||||||||||
Revenues: | ||||||||||||||||
GAAP subscription revenue | $ | 166,751 | $ | 104,878 | $ | 567,217 | $ | 349,804 | ||||||||
GAAP professional services and other revenue | 31,253 | 20,352 | 115,346 | 74,846 | ||||||||||||
GAAP revenue | 198,004 | 125,230 | 682,563 | 424,650 | ||||||||||||
Deferred revenue, end of period | 422,238 | 266,722 | 422,238 | 266,722 | ||||||||||||
Less: | ||||||||||||||||
Deferred revenue, beginning of period | 350,795 | 225,801 | 266,722 | 170,361 | ||||||||||||
Non-GAAP billings | $ | 269,447 | $ | 166,151 | $ | 838,079 | $ | 521,011 | ||||||||
Cost of revenues: | ||||||||||||||||
GAAP subscription cost of revenues | $ | 40,330 | $ | 25,968 | $ | 142,687 | $ | 87,928 | ||||||||
Add back: | ||||||||||||||||
Stock-based compensation | (4,092 | ) | (2,454 | ) | (14,988 | ) | (8,434 | ) | ||||||||
Amortization of purchased intangibles (1) | (2,838 | ) | (360 | ) | (6,145 | ) | (719 | ) | ||||||||
Acquisition and other related costs (1) | — | — | (2 | ) | (9 | ) | ||||||||||
Non-GAAP subscription cost of revenues | $ | 33,400 | $ | 23,154 | $ | 121,552 | $ | 78,766 | ||||||||
GAAP professional services and other cost of revenues | $ | 30,308 | $ | 19,410 | $ | 106,089 | $ | 67,331 | ||||||||
Add back: | ||||||||||||||||
Stock-based compensation | (3,928 | ) | (1,654 | ) | (13,116 | ) | (4,749 | ) | ||||||||
Acquisition and other related costs (1) | — | — | (9 | ) | (12 | ) | ||||||||||
Non-GAAP professional services and other cost of revenues | $ | 26,380 | $ | 17,756 | $ | 92,964 | $ | 62,570 | ||||||||
Gross profit: | ||||||||||||||||
Non-GAAP subscription gross profit | $ | 133,351 | $ | 81,724 | $ | 445,665 | $ | 271,038 | ||||||||
Non-GAAP professional services and other gross profit | 4,873 | 2,596 | 22,382 | 12,276 | ||||||||||||
Non-GAAP gross profit | $ | 138,224 | $ | 84,320 | $ | 468,047 | $ | 283,314 | ||||||||
Operating expenses: | ||||||||||||||||
GAAP sales and marketing expenses | $ | 95,764 | $ | 57,337 | $ | 341,119 | $ | 195,190 | ||||||||
Add back: | ||||||||||||||||
Stock-based compensation | (17,624 | ) | (6,857 | ) | (54,006 | ) | (21,609 | ) | ||||||||
Amortization of purchased intangibles (1) | (194 | ) | (52 | ) | (480 | ) | (103 | ) | ||||||||
Acquisition and other related costs (1) | — | — | (13 | ) | (9 | ) | ||||||||||
Non-GAAP sales and marketing expenses | $ | 77,946 | $ | 50,428 | $ | 286,620 | $ | 173,469 | ||||||||
GAAP research and development expenses | $ | 42,026 | $ | 23,869 | $ | 148,258 | $ | 78,678 | ||||||||
Add back: | ||||||||||||||||
Stock-based compensation | (12,562 | ) | (5,218 | ) | (42,535 | ) | (16,223 | ) | ||||||||
Acquisition and other related costs (1) | — | — | (31 | ) | (7 | ) | ||||||||||
Non-GAAP research and development expenses | $ | 29,464 | $ | 18,651 | $ | 105,692 | $ | 62,448 | ||||||||
GAAP general and administrative expenses | $ | 26,260 | $ | 18,007 | $ | 96,245 | $ | 61,790 | ||||||||
Add back: | ||||||||||||||||
Stock-based compensation | (7,790 | ) | (4,673 | ) | (29,674 | ) | (14,566 | ) | ||||||||
Amortization of purchased intangibles (1) | (5 | ) | (5 | ) | (20 | ) | (10 | ) | ||||||||
Acquisition and other related costs (1) | — | — | (1,117 | ) | (531 | ) | ||||||||||
Non-GAAP general and administrative expenses | $ | 18,465 | $ | 13,329 | $ | 65,434 | $ | 46,683 | ||||||||
GAAP total operating expenses | $ | 164,050 | $ | 99,213 | $ | 585,622 | $ | 335,658 | ||||||||
Add back: | ||||||||||||||||
Stock-based compensation | (37,976 | ) | (16,748 | ) | (126,215 | ) | (52,398 | ) | ||||||||
Amortization of purchased intangibles (1) | (199 | ) | (57 | ) | (500 | ) | (113 | ) | ||||||||
Acquisition and other related costs (1) | — | — | (1,161 | ) | (547 | ) | ||||||||||
Non-GAAP total operating expenses | $ | 125,875 | $ | 82,408 | $ | 457,746 | $ | 282,600 | ||||||||
Income (loss) from operations: | ||||||||||||||||
GAAP loss from operations | $ | (36,684 | ) | $ | (19,361 | ) | $ | (151,835 | ) | $ | (66,267 | ) | ||||
Add back: | ||||||||||||||||
Stock-based compensation | 45,996 | 20,856 | 154,319 | 65,581 | ||||||||||||
Amortization of purchased intangibles (1) | 3,037 | 417 | 6,645 | 832 | ||||||||||||
Acquisition and other related costs (1) | — | — | 1,172 | 568 | ||||||||||||
Non-GAAP income from operations | $ | 12,349 | $ | 1,912 | $ | 10,301 | $ | 714 | ||||||||
Interest and other income (expense), net | ||||||||||||||||
GAAP interest and other income (expense), net | $ | (6,562 | ) | $ | (4,326 | ) | $ | (23,705 | ) | $ | (4,930 | ) | ||||
Add back: | ||||||||||||||||
Amortization of debt discount and issuance costs for the convertible senior notes | 7,451 | 3,498 | 29,059 | 3,498 | ||||||||||||
Non-GAAP interest and other income (expense), net | $ | 889 | $ | (828 | ) | $ | 5,354 | $ | (1,432 | ) | ||||||
Income/ (loss) before provision for income taxes | ||||||||||||||||
GAAP loss before provision for income taxes | $ | (43,246 | ) | $ | (23,687 | ) | $ | (175,540 | ) | $ | (71,197 | ) | ||||
Add back: | ||||||||||||||||
Stock-based compensation | 45,996 | 20,856 | 154,319 | 65,581 | ||||||||||||
Amortization of purchased intangibles (1) | 3,037 | 417 | 6,645 | 832 | ||||||||||||
Acquisition and other related costs (1) | — | — | 1,172 | 568 | ||||||||||||
Amortization of debt discount and issuance costs for the convertible senior notes | 7,451 | 3,498 | 29,059 | 3,498 | ||||||||||||
Non-GAAP income (loss) before provision for income taxes | $ | 13,238 | $ | 1,084 | $ | 15,655 | $ | (718 | ) | |||||||
Provision for income taxes: | ||||||||||||||||
GAAP provision for income taxes | $ | 1,417 | $ | 545 | $ | 3,847 | $ | 2,511 | ||||||||
Add back: | ||||||||||||||||
Income tax expense effects related to the above adjustments (1) | 6,934 | 3,060 | 21,924 | 6,383 | ||||||||||||
Non-GAAP provision for income taxes | $ | 8,351 | $ | 3,605 | $ | 25,771 | $ | 8,894 | ||||||||
Net income (loss): | ||||||||||||||||
GAAP net loss | $ | (44,663 | ) | $ | (24,232 | ) | $ | (179,387 | ) | $ | (73,708 | ) | ||||
Add back: | ||||||||||||||||
Stock-based compensation | 45,996 | 20,856 | 154,319 | 65,581 | ||||||||||||
Amortization of purchased intangibles (1) | 3,037 | 417 | 6,645 | 832 | ||||||||||||
Acquisition and other related costs (1) | — | — | 1,172 | 568 | ||||||||||||
Amortization of debt discount and issuance costs for the convertible senior notes | 7,451 | 3,498 | 29,059 | 3,498 | ||||||||||||
Income tax expense effects related to the above adjustments (1) | (6,934 | ) | (3,060 | ) | (21,924 | ) | (6,383 | ) | ||||||||
Non-GAAP net income (loss) | $ | 4,887 | $ | (2,521 | ) | $ | (10,116 | ) | $ | (9,612 | ) | |||||
Net income (loss) per share - basic and diluted: | ||||||||||||||||
GAAP net loss per share - basic and diluted | $ | (0.30 | ) | $ | (0.17 | ) | $ | (1.23 | ) | $ | (0.54 | ) | ||||
Non-GAAP net income (loss) per share - basic | $ | 0.03 | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.07 | ) | |||||
Non-GAAP net income (loss) per share - diluted | $ | 0.03 | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.07 | ) | |||||
Weighted-average shares used to compute net loss per share - basic | 148,666,257 | 139,508,838 | 145,355,543 | 135,415,809 | ||||||||||||
GAAP weighted-average shares used to compute net loss per share - diluted | 148,666,257 | 139,508,838 | 145,355,543 | 135,415,809 | ||||||||||||
Effect of dilutive securities (stock options, restricted stock units and common stock subject to repurchase) | 15,260,331 | — | — | — | ||||||||||||
Non-GAAP weighted-average shares used to compute net income per share - diluted | 163,926,588 | 139,508,838 | 145,355,543 | 135,415,809 | ||||||||||||
(1) The Non-GAAP amounts presented for the three and twelve months ended December 31, 2013 have been revised to exclude the amortization of purchased intangibles, acquisition and other related costs and their related tax effects associated with an acquisition completed in 2013. | ||||||||||||||||
ServiceNow, Inc. | ||
Reconciliation of Non-GAAP Financial Guidance | ||
The financial guidance provided below is an estimate based on information available as of December 31, 2014. The company's future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from the guidance set forth below. Some of the factors that could affect the company's financial results are stated above in this press release. More information on potential factors that could affect the company's financial results is included from time to time in the company's public reports filed with the SEC, including the company's Annual Report on Form 10-K filed on February 28, 2014, the company's Form 10-Q for the quarter ended September 30, 2014 filed on November 5, 2014 and the company's Form 10-K for the year ended December 31, 2014 to be filed with the SEC. The company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. | ||
Three Months Ended | ||
March 31, 2015 | ||
Non-GAAP billings | $260 - $265 million | |
Deferred revenue, beginning of period | 422 million | |
Less: deferred revenue, end of period | 475 million | |
GAAP revenue | $207 - $212 million | |
Non-GAAP subscription gross margin | 79% | |
Stock-based compensation expense | (3%) | |
Amortization of acquired intangible assets | (1%) | |
GAAP subscription gross margin | 75% | |
Non-GAAP professional services and other gross margin | 12% | |
Stock-based compensation expense | (16%) | |
GAAP professional services and other gross margin | -4% | |
Non-GAAP total gross margin | 69% | |
Stock-based compensation expense | (6%) | |
GAAP total gross margin | 63% | |
Non-GAAP operating margin | 0% | |
Stock-based compensation expense | (27%) | |
Amortization of acquired intangible assets | (1%) | |
GAAP operating margin | (28%) | |
Non-GAAP free cash flows | $30 million | |
Purchases of property and equipment | 26 million | |
GAAP net cash provided by operating activities | $56 million | |
Twelve Months Ended | ||
December 31, 2015 | ||
Non-GAAP operating margin | 5% | |
Stock-based compensation expense | (27%) | |
Amortization of acquired intangible assets | (1%) | |
GAAP operating margin | (23%) |
Media Contacts:
ServiceNow
Colleen Haikes, 408-816-2592
press@servicenow.com
or
MSL Group
Kim McCrossen, 781-684-6253
servicenow@mslgroup.com
or
Investor Contact:
ir@servicenow.com
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