ServiceNow (NYSE: NOW), the enterprise IT cloud company, today announced
its financial results for its fourth quarter and fiscal year 2012.
Fourth quarter 2012 results:
Fiscal 2012 results:
"ServiceNow's 92% revenue growth in the fourth quarter was a strong
finish to our fiscal year, a year in which we delivered 90% revenue
growth and added 538 customers, bringing our cumulative customer count
to 1,512 worldwide," said Frank Slootman, president and chief executive
officer, ServiceNow. "During the quarter we also achieved a customer
renewal rate of 98% and upsells compromised more than 32% of our total
annual contract value signed during the quarter, a testament to the
value our existing customers are finding in the ServiceNow platform."
"We continued to show growth across our key financial metrics and we
exceeded our previously stated outlook on revenue and non-GAAP EPS,"
added Michael Scarpelli, chief financial officer, ServiceNow. "Deferred
revenue grew sequentially by 15%, marking the sixth consecutive quarter
of double digit sequential growth, and we generated $16.7 million in
operating cash flow for the quarter."
The financial guidance discussed below is on a non-GAAP basis, except
for revenues, and excludes stock-based compensation expense and the
related income tax impact (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 2013, we expect:
For the full year 2013 we expect revenues to be in the range of $387 to
$392 million, representing year-over-year growth between 59% and 61%.
Our total annual revenues estimate consists of subscription revenues
between $327 and $329 million and professional services and other
revenues between $60 and $63 million.
Fourth quarter highlights
Conference Call Details
ServiceNow will host a conference call to discuss its financial results
for the fourth quarter of 2012 to begin today at 2 p.m. PDT (22:00 GMT).
Interested parties may listen to the call by dialing 866.272.9941
(passcode: 20843149), or if outside North America, by dialing
617.213.8895 (passcode: 20843149). Individuals may access the live
teleconference from the investor relations section of the ServiceNow web
site at http://investors.servicenow.com.
The webcast will be archived for a period of 30 days.
An audio replay of the conference call will also be available two hours
after the call and will run for 30 days. To hear the replay interested
parties may dial 888.286.8010 (passcode: 15709467), or if outside North
America, by dialing 617.801.6888 (passcode: 15709467).
Statement regarding use of non-GAAP financial measures
The company reports non-GAAP results for 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. Management believes the presentation of operating
results excluding stock-based compensation expense 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
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. 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
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) possible
fluctuations in our financial and operating results, (ii) our ability to
grow at our expected rate of growth and anticipated revenue run rate,
including our ability to convert deferred revenue and unbilled deferred
revenue into revenue, successfully deploy new customers, and continue to
release, and gain customer acceptance of, new and improved versions of
our service, and (iii) errors, interruptions, delays, or security
breaches of our service or web hosting.
Further information on these and other factors that could affect our
financial results are included in our Form 10-Q for the quarter ended
September 30, 2012 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, 2012.
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
ServiceNow is the enterprise IT cloud company. We focus on transforming
enterprise IT by automating and standardizing business processes and
consolidating IT across the global enterprise. Organizations deploy our
service to create a single system of record for enterprise IT, lower
operational costs and enhance efficiency. Additionally, our customers
use our extensible platform to build custom applications for automating
activities unique to their business requirements. For more information,
ServiceNow and the ServiceNow logo are registered trademarks of
ServiceNow. All other brand and product names are trademarks or
registered trademarks of their respective holders.
Net income (loss)
Net income (loss) attributable to common stockholders - Basic and
Net income (loss) per share attributable to common stockholders:
Weighted-average shares used to compute net income (loss) per
share attributable to common stockholders:
Total liabilities, convertible preferred stock and stockholders'
Adjustments to reconcile net loss to net cash provided by
Amortization of premiums on short-term investments, net
Net cash provided by operating activities
Purchases of common stock and restricted stock from stockholders
December 31, 2012
December 31, 2011
Net income (loss) attributable to common stockholders - Basic and
(1) Adjustments include stock-based compensation and
the related tax effect.
Net income (loss) attributable to common stockholders - Basic
Net income (loss) attributable to common stockholders - Diluted
(2) Adjustment includes stock-based compensation and
the related tax effect, and an allocation of net income to
participating preferred stockholders.
(3) The effects of these dilutive securities were not
included in the GAAP calculation of diluted income (loss) per
share for the year ended December 31, 2011 because the effect
would have been anti-dilutive.
Less: deferred revenue, beginning of period
The financial guidance provided below is an estimate based on
information available as of January 30, 2013. 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 prospectuses filed on June 29, 2012 and November 15,
2012, the company's Form 10-Q for the quarter ended June 30, 2012
filed on August 10, 2012, and the company's Form 10-Q for the
quarter ended September 30, 2012 filed on October 31, 2012. The
company assumes no obligation to update any forward-looking
statements or information, which speak as of their respective
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