UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
_____________________________
FORM
8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of
report (date of earliest event reported):
January
29, 2014
______________
SERVICENOW,
INC.
(Exact
name of registrant as specified in its charter)
______________
Delaware |
001-35580 |
20-2056195 |
(State or other jurisdiction of |
(Commission File Number)
|
(IRS Employer |
3260 Jay Street |
|
Santa Clara, California |
95054 |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s
telephone number, including area code: (408) 501-8550
Not Applicable |
(Former Name or Former Address, if Changed Since Last Report) |
______________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition.
On January 29, 2014, ServiceNow, Inc. (“ServiceNow”) issued a press release announcing financial results for the three months and year ended December 31, 2013.
This press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by this reference.
The information in this report, including the exhibit hereto, is furnished pursuant to Item 2.02 of Form 8-K and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities of that section. The information contained herein and in the accompanying exhibit is not incorporated by reference in any filing of ServiceNow under the Securities Act of 1933 or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
Use of Non-GAAP Financial Information
ServiceNow 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, the amortization of debt discount and issuance costs related to convertible senior notes, 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 that information regarding free cash flow provides investors with an important perspective on the cash available to invest in the company’s business and fund ongoing operations. However, the company’s 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 that billings offers investors useful supplemental information regarding the performance of the company’s business, and will help investors better understand the sales volumes and performance of the company’s 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.
Reconciliation to the nearest GAAP financial measures of the non-GAAP financial measures is included in the press release attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits. | ||||
99.1 | Press release dated January 29, 2014, announcing ServiceNow, Inc.’s financial results for the three months and year ended December 31, 2013. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SERVICENOW, INC. |
||||
|
By: |
/s/ Michael P. Scarpelli |
||
Michael P. Scarpelli |
||||
Chief Financial Officer |
Date: January 29, 2014
INDEX TO EXHIBITS
Exhibit No.
|
Exhibit Title |
|
99.1 |
Press release dated January 29, 2014, announcing ServiceNow, Inc.’s financial results for the three months and year ended December 31, 2013. |
4
Exhibit 99.1
ServiceNow Reports Financial Results for Fourth Quarter and Fiscal Year 2013
Fourth Quarter Revenues of $125.2 Million, up 67% Year-over-Year
SANTA CLARA, Calif.--(BUSINESS WIRE)--January 29, 2014--ServiceNow® (NYSE: NOW), the enterprise IT cloud company, today announced its financial results for its fourth quarter and fiscal year 2013.
Fourth quarter 2013 results:
Fiscal 2013 results:
“ServiceNow grew revenues 67% year-over-year in the fourth quarter, a strong finish to a year in which we grew revenues by 74% and added 549 customers, bringing our cumulative customer count to over 2,060 worldwide,” said Frank Slootman, president and chief executive officer, ServiceNow. “During the quarter we also achieved a 96% customer renewal rate, continued to penetrate our installed base with upsells comprising 36% of our total annual contract value signed during the quarter and announced several important product additions.”
“In the fourth quarter we set a company record for billings of $166 million and exited the year with a combined deferred revenue and backlog balance of $875 million, up 59% over the prior year,” added Michael Scarpelli, chief financial officer, ServiceNow. “We also generated $20 million in free cash flows and raised net proceeds of $512 million from our convertible debt offering at a 0% coupon, ending 2013 with $890 million in cash and investments.”
Financial Outlook
The non-GAAP financial guidance discussed below excludes stock-based compensation expense and the related income tax effect of these adjustments (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 2014, we expect:
For the full year 2014, we expect total revenues to be in the range of $640 to $645 million, representing year-over-year growth between 51% and 52%. Our total annual revenues estimate consists of subscription revenues between $533 and $535 million and professional services and other revenues between $107 and $110 million.
Updates since our last earnings release
Conference Call Details
The conference call will begin at 2:00 p.m. Pacific Time (22:00 GMT) on Wednesday, January 29, 2014. Interested parties may listen to the call by dialing 866.700.6067 (passcode: 75988250), or if outside North America, by dialing 617.213.8834 (passcode: 75988250). 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: 48173227), or if outside North America, by dialing 617.801.6888 (passcode: 48173227).
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, the amortization of debt discount and issuance costs related to the convertible senior notes, 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. 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) 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, 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, 2013.
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.
About ServiceNow
ServiceNow is the enterprise IT cloud company. We transform IT by automating and managing IT service relationships across the global enterprise. Organizations deploy our service to create a single system of record for IT and automate manual tasks, standardize processes and consolidate legacy systems. Using our extensible platform, our customers create custom applications and evolve the IT service model to service domains inside and outside the enterprise. ServiceNow transforms IT from the department of no to the department of now. For more information, visit www.servicenow.com.
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.
ServiceNow, Inc. | ||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(in thousands, except share and per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues: | ||||||||||||||||
Subscription | $ | 104,878 | $ | 62,886 | $ | 349,804 | $ | 204,526 | ||||||||
Professional services and other | 20,352 | 12,276 | 74,846 | 39,186 | ||||||||||||
Total revenues | 125,230 | 75,162 | 424,650 | 243,712 | ||||||||||||
Cost of revenues (1): | ||||||||||||||||
Subscription | 25,968 | 20,076 | 87,928 | 63,258 | ||||||||||||
Professional services and other | 19,410 | 12,232 | 67,331 | 40,751 | ||||||||||||
Total cost of revenues | 45,378 | 32,308 | 155,259 | 104,009 | ||||||||||||
Gross profit | 79,852 | 42,854 | 269,391 | 139,703 | ||||||||||||
Operating expenses (1): | ||||||||||||||||
Sales and marketing | 57,337 | 29,481 | 195,190 | 103,837 | ||||||||||||
Research and development | 23,869 | 13,235 | 78,678 | 39,333 | ||||||||||||
General and administrative | 18,007 | 9,676 | 61,790 | 34,117 | ||||||||||||
Total operating expenses | 99,213 | 52,392 | 335,658 | 177,287 | ||||||||||||
Loss from operations | (19,361 | ) | (9,538 | ) | (66,267 | ) | (37,584 | ) | ||||||||
Interest and other income (expense), net | (4,326 | ) | 456 | (4,930 | ) | 1,604 | ||||||||||
Loss before provision for income taxes | (23,687 | ) | (9,082 | ) | (71,197 | ) | (35,980 | ) | ||||||||
Provision for income taxes | 545 | 849 | 2,511 | 1,368 | ||||||||||||
Net loss | $ | (24,232 | ) | $ | (9,931 | ) | $ | (73,708 | ) | $ | (37,348 | ) | ||||
Net loss attributable to common stockholders - Basic and Diluted |
$ | (24,232 | ) | $ | (9,931 | ) | $ | (73,708 | ) | $ | (37,656 | ) | ||||
Net loss per share attributable to common stockholders - Basic and Diluted |
$ | (0.17 | ) | $ | (0.08 | ) | $ | (0.54 | ) | $ | (0.51 | ) | ||||
Weighted-average shares used to compute net loss per share attributable to common stockholders - Basic and Diluted |
139,508,838 | 124,000,655 | 135,415,809 | 73,908,631 | ||||||||||||
(1) Includes total stock-based compensation expense as follows: | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Cost of revenues: | ||||||||||||||||
Subscription | $ | 2,454 | $ | 1,415 | $ | 8,434 | $ | 3,929 | ||||||||
Professional services and other | 1,654 | 610 | 4,749 | 1,574 | ||||||||||||
Sales and marketing | 6,857 | 3,337 | 21,609 | 10,189 | ||||||||||||
Research and development | 5,218 | 2,375 | 16,223 | 6,496 | ||||||||||||
General and administrative | 4,673 | 1,612 | 14,566 | 5,749 | ||||||||||||
ServiceNow, Inc. | ||||||
Condensed Consolidated Balance Sheets | ||||||
(in thousands) | ||||||
December 31, 2013 | December 31, 2012 | |||||
ASSETS | (Unaudited) | |||||
Current assets: | ||||||
Cash and cash equivalents | $ | 366,303 | $ | 118,989 | ||
Short-term investments | 268,251 | 195,702 | ||||
Accounts receivable, net | 108,339 | 78,163 | ||||
Current portion of deferred commissions | 31,123 | 14,979 | ||||
Prepaid expenses and other current assets | 23,733 | 14,256 | ||||
Total current assets | 797,749 | 422,089 | ||||
Deferred commissions, less current portion | 21,318 | 11,296 | ||||
Long-term investments | 255,356 | — | ||||
Property and equipment, net | 75,560 | 42,342 | ||||
Intangible assets, net | 5,796 | 596 | ||||
Goodwill | 8,724 | — | ||||
Other assets | 3,973 | 1,791 | ||||
Total assets | $ | 1,168,476 | $ | 478,114 | ||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 7,405 | $ | 9,604 | ||
Accrued expenses and other current liabilities | 68,130 | 48,059 | ||||
Current portion of deferred revenue | 252,553 | 153,964 | ||||
Total current liabilities | 328,088 | 211,627 | ||||
Deferred revenue, less current portion | 14,169 | 16,397 | ||||
Convertible senior notes, net | 414,777 | — | ||||
Other long-term liabilities | 17,183 | 6,685 | ||||
Stockholders’ equity | 394,259 | 243,405 | ||||
Total liabilities and stockholders’equity | $ | 1,168,476 | $ | 478,114 | ||
ServiceNow, Inc. | |||||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||||
(in thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net loss | $ | (24,232 | ) | $ | (9,931 | ) | $ | (73,708 | ) | $ | (37,348 | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||||||||||||
Depreciation and amortization | 7,874 | 4,664 | 24,152 | 13,506 | |||||||||||||
Amortization of premiums on investments | 1,317 | 743 | 4,758 | 1,337 | |||||||||||||
Amortization of deferred commissions | 9,539 | 4,446 | 29,364 | 13,710 | |||||||||||||
Amortization of debt discount and issuance costs | 3,498 | — | 3,498 | — | |||||||||||||
Stock-based compensation | 20,856 | 9,349 | 65,581 | 27,937 | |||||||||||||
Tax benefit from employee stock plans | 159 | (1,161 | ) | (1,658 | ) | (1,694 | ) | ||||||||||
Deferred income tax | (231 | ) | (746 | ) | (231 | ) | (746 | ) | |||||||||
Other | (716 | ) | (219 | ) | 558 | 2,850 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Accounts receivable | (22,518 | ) | (22,276 | ) | (29,506 | ) | (33,341 | ) | |||||||||
Deferred commissions | (20,049 | ) | (8,650 | ) | (54,943 | ) | (29,175 | ) | |||||||||
Prepaid expenses and other assets | 2,394 | (7,111 | ) | 3,471 | (2,904 | ) | |||||||||||
Accounts payable | 156 | 4,993 | (252 | ) | 4,887 | ||||||||||||
Deferred revenue | 40,073 | 21,764 | 94,405 | 64,845 | |||||||||||||
Accrued expenses and other liabilities | 18,147 | 20,806 | 16,257 | 24,902 | |||||||||||||
Net cash provided by operating activities | 36,267 | 16,671 | 81,746 | 48,766 | |||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Purchases of property and equipment | (16,262 | ) | (9,910 | ) | (55,321 | ) | (42,066 | ) | |||||||||
Acquisition, net of cash acquired | — | — | (13,330 | ) | — | ||||||||||||
Purchases of investments | (337,235 | ) | (93,704 | ) | (570,679 | ) | (240,626 | ) | |||||||||
Sale of investments | 4,755 | — | 55,158 | 1,025 | |||||||||||||
Maturities of investments (1) |
39,098 | 36,673 | 181,554 | 42,473 | |||||||||||||
Restricted cash | (3 | ) | 37 | (177 | ) | 45 | |||||||||||
Net cash used in investing activities | (309,647 | ) | (66,904 | ) | (402,795 | ) | (239,149 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||||
Net proceeds from initial public offering | — | (15 | ) | — | 169,784 | ||||||||||||
Net proceeds from (offering costs paid in connection to) follow-on offering |
— | 50,561 | (698 | ) | 50,561 | ||||||||||||
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 | 8,126 | 539 | 55,959 | 3,912 | |||||||||||||
Tax benefit from employee stock plans | (159 | ) | 1,161 | 1,658 | 1,694 | ||||||||||||
Net proceeds from issuance of common stock | — | — | — | 17,848 | |||||||||||||
Purchases of common stock from stockholders | — | — | — | (1,960 | ) | ||||||||||||
Net cash provided by financing activities | 519,618 | 52,246 | 568,570 | 241,839 | |||||||||||||
Foreign currency effect on cash and cash equivalents | (1,029 | ) | — | (207 | ) | (555 | ) | ||||||||||
Net increase in cash and cash equivalents | 245,209 | 2,013 | 247,314 | 50,901 | |||||||||||||
Cash and cash equivalents at beginning of period | 121,094 | 116,976 | 118,989 | 68,088 | |||||||||||||
Cash and cash equivalents at end of period | $ | 366,303 | $ | 118,989 | $ | 366,303 | $ | 118,989 | |||||||||
Calculation of free cash flows (a non-GAAP measure): | |||||||||||||||||
Net cash provided by operating activities | $ | 36,267 | $ | 16,671 | $ | 81,746 | $ | 48,766 | |||||||||
Purchases of property and equipment | (16,262 | ) | (9,910 | ) | (55,321 | ) | (42,066 | ) | |||||||||
Free cash flows | $ | 20,005 | $ | 6,761 | $ | 26,425 | $ | 6,700 | |||||||||
(1) |
During the year ended December 31, 2013, maturities of investments includes the effect of the correction of an immaterial error of $3.0 million related to securities that were improperly classified as short-term investments instead of cash and cash equivalents as of December 31, 2012. | ||||||||||||||||
ServiceNow, Inc. | ||||||||||||||||||||||||
Results of Operations GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||||||
(in thousands except share and per share data) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||
GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||
Reconciliation of gross profit: | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Subscription | $ | 104,878 |
$ |
— |
$ | 104,878 | $ | 62,886 | $ | — | $ | 62,886 | ||||||||||||
Professional services and other | 20,352 | — | 20,352 | 12,276 | — | 12,276 | ||||||||||||||||||
Total revenues | 125,230 | — | 125,230 | 75,162 | — | 75,162 | ||||||||||||||||||
Cost of revenues (1): | ||||||||||||||||||||||||
Subscription | 25,968 | (2,454 | ) | 23,514 | 20,076 | (1,415 | ) | 18,661 | ||||||||||||||||
Professional services and other | 19,410 | (1,654 | ) | 17,756 | 12,232 | (610 | ) | 11,622 | ||||||||||||||||
Total cost of revenues | 45,378 | (4,108 | ) | 41,270 | 32,308 | (2,025 | ) | 30,283 | ||||||||||||||||
Gross profit: | ||||||||||||||||||||||||
Subscription | 78,910 | 2,454 | 81,364 | 42,810 | 1,415 | 44,225 | ||||||||||||||||||
Professional services and other | 942 | 1,654 | 2,596 | 44 | 610 | 654 | ||||||||||||||||||
Total gross profit | $ | 79,852 | $ | 4,108 | $ | 83,960 | $ | 42,854 | $ | 2,025 | $ | 44,879 | ||||||||||||
Reconciliation of operating expenses: | ||||||||||||||||||||||||
Operating expenses (1): | ||||||||||||||||||||||||
Sales and marketing | $ | 57,337 | $ | (6,857 | ) | $ | 50,480 | $ | 29,481 | $ | (3,337 | ) | $ | 26,144 | ||||||||||
Research and development | 23,869 | (5,218 | ) | 18,651 | 13,235 | (2,375 | ) | 10,860 | ||||||||||||||||
General and administrative | 18,007 | (4,673 | ) | 13,334 | 9,676 | (1,612 | ) | 8,064 | ||||||||||||||||
Total operating expenses | $ | 99,213 | $ | (16,748 | ) | $ | 82,465 | $ | 52,392 | $ | (7,324 | ) | $ | 45,068 | ||||||||||
Reconciliation of loss from operations, provision for income taxes, net loss, net loss per share, and pro forma net loss per share: | ||||||||||||||||||||||||
Loss from operations | $ | (19,361 | ) | $ | 20,856 | $ | 1,495 | $ | (9,538 | ) | $ | 9,349 | $ | (189 | ) | |||||||||
Interest and other income (expense), net (2) |
(4,326 | ) | 3,498 | (828 | ) | 456 | — | 456 | ||||||||||||||||
Loss before provision for income taxes | $ | (23,687 | ) | $ | 24,354 | $ | 667 | $ | (9,082 | ) | $ | 9,349 | $ | 267 | ||||||||||
Provision for income taxes (1) (2) | 545 | 3,087 | 3,632 | 849 | 32 | 881 | ||||||||||||||||||
Net loss | $ | (24,232 | ) | $ | 21,267 | $ | (2,965 | ) | $ | (9,931 | ) | $ | 9,317 | $ | (614 | ) | ||||||||
Net loss attributable to common stockholders - Basic and Diluted |
$ | (24,232 | ) | $ | 21,267 | $ | (2,965 | ) | $ | (9,931 | ) | $ | 9,317 | $ | (614 | ) | ||||||||
Net loss per share attributable to common stockholders - Basic and Diluted |
$ | (0.17 | ) | $ | 0.15 | $ | (0.02 | ) | $ | (0.08 | ) | $ | 0.08 | $ | (0.00 | ) | ||||||||
Weighted-average shares used to compute net loss per share attributable to common stockholders - Basic and Diluted |
139,508,838 | — | 139,508,838 | 124,000,655 | — | 124,000,655 | ||||||||||||||||||
(1) Adjustments include stock-based compensation and the related tax effect. |
||||||||||||||||||||||||
(2) Adjustments include amortization of debt discount and issuance costs for the convertible senior notes and the related tax effect. | ||||||||||||||||||||||||
ServiceNow, Inc. | ||||||||||||||||||||||||
Results of Operations GAAP to Non-GAAP Reconciliation | ||||||||||||||||||||||||
(in thousands except share and per share data) | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | |||||||||||||||||||||||
GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||||||||||||||||||
Reconciliation of gross profit: | ||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Subscription | $ | 349,804 | $ | — | $ | 349,804 | $ | 204,526 | $ | — | $ | 204,526 | ||||||||||||
Professional services and other | 74,846 | — | 74,846 | 39,186 | — | 39,186 | ||||||||||||||||||
Total revenues | 424,650 | — | 424,650 | 243,712 | — | 243,712 | ||||||||||||||||||
Cost of revenues (1): | ||||||||||||||||||||||||
Subscription | 87,928 | (8,434 | ) | 79,494 | 63,258 | (3,929 | ) | 59,329 | ||||||||||||||||
Professional services and other | 67,331 | (4,749 | ) | 62,582 | 40,751 | (1,574 | ) | 39,177 | ||||||||||||||||
Total cost of revenues | 155,259 | (13,183 | ) | 142,076 | 104,009 | (5,503 | ) | 98,506 | ||||||||||||||||
Gross profit: | ||||||||||||||||||||||||
Subscription | 261,876 | 8,434 | 270,310 | 141,268 | 3,929 | 145,197 | ||||||||||||||||||
Professional services and other | 7,515 | 4,749 | 12,264 | (1,565 | ) | 1,574 | 9 | |||||||||||||||||
Total gross profit | $ | 269,391 | $ | 13,183 | $ | 282,574 | $ | 139,703 | $ | 5,503 | $ | 145,206 | ||||||||||||
Reconciliation of operating expenses: | ||||||||||||||||||||||||
Operating expenses (1): | ||||||||||||||||||||||||
Sales and marketing | $ | 195,190 | $ | (21,609 | ) | $ | 173,581 | $ | 103,837 | $ | (10,189 | ) | $ | 93,648 | ||||||||||
Research and development | 78,678 | (16,223 | ) | 62,455 | 39,333 | (6,496 | ) | 32,837 | ||||||||||||||||
General and administrative | 61,790 | (14,566 | ) | 47,224 | 34,117 | (5,749 | ) | 28,368 | ||||||||||||||||
Total operating expenses | $ | 335,658 | $ | (52,398 | ) | $ | 283,260 | $ | 177,287 | $ | (22,434 | ) | $ | 154,853 | ||||||||||
Reconciliation of loss from operations, interest and other income (expense) net, provision for income taxes, net loss, and net loss per share: | ||||||||||||||||||||||||
Loss from operations | $ | (66,267 | ) | $ | 65,581 | $ | (686 | ) | $ | (37,584 | ) | $ | 27,937 | $ | (9,647 | ) | ||||||||
Interest and other income (expense), net (2) | (4,930 | ) | 3,498 | (1,432 | ) | 1,604 | — | 1,604 | ||||||||||||||||
Loss before provision for income taxes | $ | (71,197 | ) | $ | 69,079 | $ | (2,118 | ) | $ | (35,980 | ) | $ | 27,937 | $ | (8,043 | ) | ||||||||
Provision for income taxes (1) (2) | 2,511 | 6,400 | 8,911 | 1,368 | 332 | 1,700 | ||||||||||||||||||
Net loss | $ | (73,708 | ) | $ | 62,679 | $ | (11,029 | ) | $ | (37,348 | ) | $ | 27,605 | $ | (9,743 | ) | ||||||||
Net loss attributable to common stockholders - Basic and Diluted |
$ | (73,708 | ) | $ | 62,679 | $ | (11,029 | ) | $ | (37,656 | ) | $ | 27,605 | $ | (10,051 | ) | ||||||||
Net loss per share attributable to common stockholders - Basic and Diluted |
$ | (0.54 | ) | $ | 0.46 | $ | (0.08 | ) | $ | (0.51 | ) | $ | 0.37 | $ | (0.14 | ) | ||||||||
Weighted-average shares used to compute net loss per share attributable to common stockholders - Basic and Diluted |
135,415,809 | — | 135,415,809 | 73,908,631 | — | 73,908,631 | ||||||||||||||||||
(1) Adjustments include stock-based compensation and the related tax effect. | ||||||||||||||||||||||||
(2) Adjustments include amortization of debt discount and issuance costs for the convertible senior notes and the related tax effect. | ||||||||||||||||||||||||
ServiceNow, Inc. | |||||||||||||||
Non-GAAP Billings Reconciliation | |||||||||||||||
(in thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||
2013 | 2013 | 2012 | 2013 | 2012 | |||||||||||
Total revenues | $ | 125,230 | $ | 111,259 | $ | 75,162 | $ | 424,650 | $ | 243,712 | |||||
Deferred revenue, end of period | 266,722 | 225,801 | 170,361 | 266,722 | 170,361 | ||||||||||
Less: deferred revenue, beginning of period | 225,801 | 210,040 | 147,946 | 170,361 | 104,636 | ||||||||||
Billings | $ | 166,151 | $ | 127,020 | $ | 97,577 | $ | 521,011 | $ | 309,437 | |||||
ServiceNow, Inc. | |
Reconciliation of Non-GAAP Financial Guidance | |
The financial guidance provided below is an estimate based on information available as of January 29, 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 March 8, 2013, the company's Form 10-Q for the quarter ended September 30, 2013 filed on November 4, 2013 and the company's Form 10-K for the year ended December 31, 2013 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, 2014 | |
Non-GAAP subscription gross margin | 76% |
Stock-based compensation expense | (4%) |
GAAP subscription gross margin | 72% |
Non-GAAP professional services and other gross margin | 6% |
Stock-based compensation expense | (10%) |
GAAP professional services and other gross margin | (4%) |
Non-GAAP total gross margin | 64% |
Stock-based compensation expense | (4%) |
GAAP total gross margin | 60% |
Non-GAAP operating margin | (9%) |
Stock-based compensation expense | (21%) |
GAAP operating margin | (30%) |
CONTACT:
Media Contacts:
ServiceNow
Steve Schick,
408-961-2349
press@servicenow.com
or
Schwartz MSL
Kim
McCrossen, 781-684-6253
servicenow@schwartzmsl.com
or
Investor
Contact:
ir@servicenow.com