SANTA CLARA, Calif.--(BUSINESS WIRE)--ServiceNow (NYSE: NOW), the leading digital workflow company making work, work better for people, today announced financial results for its second quarter ended June 30, 2021, with subscription revenues of $1,330 million in Q2 2021, representing 31% year-over-year growth, 27% adjusted for constant currency.
As of June 30, 2021, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $4.7 billion, representing 34% year-over-year growth, 31% adjusted for constant currency. The company now has 1,201 total customers with more than $1 million in annual contract value, representing 25% year-over-year growth in customers.
“I’m so proud of our team’s performance, significantly exceeding the high end of our guidance across all metrics, which is reflected in our strong full-year guidance raise,” said Bill McDermott, ServiceNow president and CEO. “Business leaders worldwide are facing ‘do or die’ moments in a forever changed world. They are leveraging the flexibility of the Now Platform to create innovative digital solutions needed to solve the biggest challenges of our time. In partnership with our customers, we workflow a better world.”
ServiceNow CFO Gina Mastantuono said, “Q2 was a tremendous quarter, showcasing the power of our business model and our ability to drive a balance of growth and profitability. The team demonstrated exceptional execution, and we saw strong demand across all regions and workflows. We are the platform for digital business, and we are well on our way to becoming a $15+ billion revenue company.”
During the quarter, ServiceNow hosted Knowledge 2021, where customers, partners, and developers from 141 countries came together to address how they are using digital workflows to grow their business, become more resilient, and reshape their industries. At Knowledge 21, ServiceNow released new solutions to power the manufacturing and healthcare and life sciences industries by helping customers increase their agility, resilience, and productivity. In Q2, the company also acquired next-generation observability leader Lightstep to help customers accelerate digital transformation with insight-driven, action-oriented workflows. To support customers as they prepare for a hybrid workplace, ServiceNow recently announced an integration with Microsoft’s new Windows 365 solution to let users easily access Cloud PCs directly through Microsoft Teams. The company also launched enhancements to its Workplace Service Delivery solution to give customers consumer-grade employee experiences and optimize real estate planning, enabling productivity and flexibility in the new world of work.
Second Quarter 2021 GAAP and Non-GAAP Results:
The following table summarizes our financial results for the second quarter 2021:
|
Second Quarter 2021 GAAP Results |
|
Second Quarter 2021 Non-GAAP Results(1) |
||||
|
Amount ($ millions) |
Year/Year Growth (%) |
|
Amount ($ millions) |
Year/Year Growth (%) |
Adjusted
|
Adjusted
Year/Year
|
Subscription revenues |
$1,330 |
31% |
|
|
|
$1,285 |
27% |
Professional services and other revenues |
$79 |
41% |
|
|
|
$76 |
36% |
Total revenues |
$1,409 |
32% |
|
|
|
$1,362 |
27% |
|
|
|
|
|
|
|
|
Subscription billings |
|
|
|
$1,328 |
30% |
$1,275 |
25% |
Professional services and other billings |
|
|
|
$89 |
44% |
$86 |
39% |
Total billings |
|
|
|
$1,417 |
31% |
$1,361 |
26% |
|
|
|
|
|
|
|
|
|
Amount ($ billions) |
Year/Year Growth (%) |
|
|
|
Adjusted
|
Adjusted
|
cRPO |
$4.7 |
34% |
|
|
|
$4.6 |
31% |
RPO |
$9.5 |
35% |
|
|
|
$9.3 |
32% |
|
|
|
|
|
|
|
|
|
Amount ($ millions) |
Margin (%) |
|
Amount ($ millions) |
Margin (%) |
|
|
Subscription gross profit |
$1,082 |
81% |
|
$1,129 |
85% |
|
|
Professional services and other gross profit (loss) |
($2) |
(3%) |
|
$13 |
17% |
|
|
Total gross profit |
$1,080 |
77% |
|
$1,142 |
81% |
|
|
Income from operations |
$51 |
4% |
|
$353 |
25% |
|
|
Net cash provided by operating activities |
$300 |
21% |
|
|
|
|
|
Free cash flow |
|
|
|
$268 |
19% |
|
|
|
|
|
|
|
|
|
|
|
Amount ($ millions) |
Earnings per
|
|
Amount ($ millions) |
Earnings per
|
|
|
Net income |
$59 |
$0.30/ $0.29 |
|
$287 |
$1.45/ $1.42 |
|
|
(1) |
We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures. |
|
(2) |
Non-GAAP adjusted subscription revenues, professional services and other revenues, total revenues and professional services and other billings, cRPO and RPO are adjusted for constant currency. Non-GAAP adjusted subscription billings and total billings are adjusted for constant currency and constant billings duration. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures. |
|
Note: Numbers rounded for presentation purposes. |
||
Financial Outlook
Our guidance includes GAAP and non-GAAP financial measures.
The following table summarizes our guidance for the third quarter 2021:
|
Third Quarter 2021 GAAP Guidance |
|
Third Quarter 2021
|
|||
|
Amount
|
Year/Year Growth (%) |
|
Amount
|
Year/Year Growth (%) |
|
Subscription revenues |
$1,400 - $1,405 |
28% -29% |
|
|
|
|
Note: Includes foreign currency benefit of $15 million |
|
|
|
|
|
|
Subscription billings |
|
|
|
$1,320 - $1,325 |
22% - 23% |
|
Note: Includes foreign currency benefit of $14 million |
|
|
|
|
|
|
Includes negative impact of billings duration of $7 million |
||||||
|
|
|
|
|
|
|
cRPO |
|
30% |
|
|
|
|
|
|
|
|
|
Margin (%) |
|
Income from operations |
|
|
|
|
23.0% |
|
|
|
|
|
|
|
|
|
|
|
|
Amount (millions) |
|
|
Weighted-average shares used to compute diluted net income per share |
|
|
|
202 |
|
|
(1) |
We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “Reconciliation of Non-GAAP Financial Guidance” for a reconciliation of GAAP to non-GAAP measures. |
|
(2) |
Guidance for GAAP subscription revenues and non-GAAP subscription billings is based on foreign exchange rates as of June 30, 2021 for entities reporting in currencies other than U.S. Dollars. |
The following table summarizes our guidance for the full-year 2021:
|
Full-Year 2021 GAAP Guidance |
|
Full-Year 2021 Non-GAAP
|
|||||
|
Amount
|
Year/Year Growth (%) |
|
Amount
|
Year/Year Growth (%) |
|||
Subscription revenues |
$5,530 - $5,540 |
29% |
|
|
|
|||
Note: Includes foreign currency benefit of $101 million |
|
|
|
|
|
|||
Subscription billings |
|
|
|
$6,315 - $6,325 |
27% |
|||
Note: Includes foreign currency benefit of $104 million |
||||||||
Includes positive impact of billings duration of $6 million |
||||||||
|
|
|
|
|
Margin (%) |
|||
Subscription gross profit |
|
|
|
|
85% |
|||
Income from operations |
|
|
|
|
24.5% |
|||
Free cash flow |
|
|
|
|
31.0% |
|||
|
|
|
|
|
|
|||
|
|
|
|
Amount (millions) |
|
|||
Weighted-average shares used to compute diluted net income per share |
|
|
|
202 |
|
|||
(1) |
We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “Reconciliation of Non-GAAP Financial Guidance” for a reconciliation of GAAP to non-GAAP measures. |
|
(2) |
GAAP subscription revenues and non-GAAP subscription billings for the future quarters included in our full-year 2021 guidance are based on foreign exchange rates as of June 30, 2021 for entities reporting in currencies other than U.S. Dollars |
Conference Call Details
The conference call will begin at 2 p.m. Pacific Time (21:00 GMT) on July 28, 2021. Interested parties may listen to the call by dialing (833) 513‑0567 (Passcode: 5090338), or if outside North America, by dialing (236) 714‑2186 (Passcode: 5090338). Individuals may access the live teleconference from this webcast.
https://event.on24.com/wcc/r/3196497/03FA90BAD600EF511EBFF97AB725E07C
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 (800) 585‑8367 (Passcode: 5090338), or if outside North America, by dialing (416) 621‑4642 (Passcode: 5090338).
Investor Presentation Details
An investor presentation providing additional information, including forward-looking guidance, and analysis can be found at http://investors.servicenow.com.
Statement Regarding Use of Non-GAAP Financial Measures
We report the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
- Adjusted revenues. We present revenues adjusted for constant currency to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations. To present this information, current period results for entities reporting in currencies other than U.S. Dollars (“USD”) are converted into USD at the average exchange rates in effect during the comparison period (for Q2 2020, the average exchange rates in effect for our major currencies were 1 USD to 1.10 Euros and 1 USD to 1.24 British Pound Sterling (“GBP”), rather than the actual average exchange rates in effect during the current period (for Q2 2021, the average exchange rates in effect for our major currencies were 1 USD to 1.20 Euros and 1 USD to 1.40 GBP). We believe the presentation of revenues adjusted for constant currency facilitates the comparison of revenues year-over-year.
- Billings and Adjusted billings. We define subscription billings, professional services and other billings, and total billings as the applicable revenue plus the applicable change in deferred revenue, unbilled receivables and customer deposits as presented or derived from the statement of cash flows. We adjust billings for constant currency, as described above, and for constant duration by replacing the portion of multi-year billings in excess of twelve months during the current period with the portion of multi-year billings in excess of twelve months during the comparison period. We believe these adjustments facilitate greater comparability in our billings information year-over-year. We believe billings is one indicator of the performance of our business.
- Adjusted remaining performance obligations and current remaining performance obligations. We present cRPO and remaining performance obligations (“RPO”) and related growth rates adjusted for constant currency, as described above, to provide a framework for assessing how our business performed. We believe the presentation of cRPO and RPO and related growth rates adjusted for constant currency facilitates the comparison of cRPO and RPO year-over-year, respectively.
- Gross profit, Income from operations, Net income and Net income per share - diluted. Our non-GAAP presentation of gross profit, income from operations, and net income measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of debt discount and issuance costs related to our convertible senior notes, loss on early note conversions, amortization of purchased intangibles, legal settlements, business combination and other related costs, and the related income tax effect of these adjustments. The non-GAAP weighted-average shares used to compute our non-GAAP net income per share - diluted excludes the dilutive effect of the in-the-money portion of convertible senior notes as they are covered by our note hedges, and includes the dilutive effect of time-based stock awards, the dilutive effect of warrants and the potentially dilutive effect of our stock awards with performance conditions not yet satisfied at forecasted attainment levels to the extent we believe it is probable that the performance condition will be met. We believe these adjustments provide useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods.
- Free cash flow. Free cash flow is defined as net cash provided by (used in) operating activities plus cash paid for legal settlements, repayments of convertible senior notes attributable to debt discount and business combination and other related costs including compensation expense, reduced by purchases of property and equipment. Free cash flow margin is calculated as free cash flow as a percentage of total revenues. We believe information regarding free cash flow and free cash flow margin provides useful information to investors because it is an indicator of the strength and performance of our business operations.
Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP and non-GAAP results.
Use of Forward-Looking Statements
This release contains “forward-looking statements” regarding our performance, including but not limited to statements 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.
Factors that may cause actual results to differ materially from those in any forward-looking statements include: (i) the continued impact and duration of COVID-19 on our business, future financial performance and global economic conditions including the effectiveness, extent and duration of mitigation efforts such as “shelter in place”, availability of vaccinations and similar directives; (ii) our ability to compete successfully against existing and new competitors, (iii) our ability to comply with evolving privacy laws, data transfer restrictions, and other foreign and domestic standards related to data and the Internet, (iv) our ability to predict, prepare for and respond promptly to rapidly evolving technological, market and customer developments, (v) errors, interruptions, delays, or security breaches in or of our service or data centers, (vi) our ability to grow our business, including converting remaining performance obligations into revenue, adding and retaining customers, selling additional subscriptions to existing customers, selling to larger enterprises, government and regulated organizations with complex sales cycles and certification processes, and entering new geographies and markets, (vii) our ability to develop and gain customer acceptance of new and improved products and services, including those acquired through strategic transactions, and (viii) material changes in the value of foreign currencies relative to the U.S. Dollar. Additionally, these forward-looking statements involve risk, uncertainties and assumptions, including those related to the continued impacts of COVID-19 on our business, future financial performance and global economic conditions. Many of these assumptions relate to matters that are beyond our control and changing rapidly, including, but not limited to, the timeframes for and severity of social distancing and other mitigation requirements, the timing of headwinds from COVID-19, the continued impact of COVID-19 on new or existing customers’ purchasing decisions and the length of our sales cycles, renewal timing or billings terms, particularly for customers in certain industries highly affected by COVID-19. Significant variation from the assumptions underlying our forward-looking statements could cause our actual results to vary, and the impact could be significant.
Further information on these and other factors that could affect our financial results are included in our Form 10-K filed for the year ended December 31, 2020, our Form 10-Q that will be filed for the quarter ended June 30, 2021 and in other filings we make with the Securities and Exchange Commission from time to time.
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 (NYSE: NOW) is making the world of work, work better for people. Our cloud-based platform and solutions deliver digital workflows that create great experiences and unlock productivity for employees and the enterprise. For more information, visit: www.servicenow.com.
© 2021 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo, Now, and other ServiceNow marks are trademarks and/or registered trademarks of ServiceNow, Inc. in the United States and/or other countries. Other company names, product names, and logos may be trademarks of the respective companies with which they are associated.
ServiceNow, Inc. Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
June 30, 2020 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Subscription |
$ |
1,330 |
|
|
$ |
1,015 |
|
|
$ |
2,623 |
|
|
$ |
2,010 |
|
Professional services and other |
79 |
|
|
56 |
|
|
146 |
|
|
107 |
|
||||
Total revenues |
1,409 |
|
|
1,071 |
|
|
2,769 |
|
|
2,117 |
|
||||
Cost of revenues (1): |
|
|
|
|
|
|
|
||||||||
Subscription |
248 |
|
|
172 |
|
|
476 |
|
|
332 |
|
||||
Professional services and other |
81 |
|
|
61 |
|
|
152 |
|
|
124 |
|
||||
Total cost of revenues |
329 |
|
|
233 |
|
|
628 |
|
|
456 |
|
||||
Gross profit |
1,080 |
|
|
838 |
|
|
2,141 |
|
|
1,661 |
|
||||
Operating expenses (1): |
|
|
|
|
|
|
|
||||||||
Sales and marketing |
557 |
|
|
426 |
|
|
1,081 |
|
|
867 |
|
||||
Research and development |
333 |
|
|
245 |
|
|
647 |
|
|
472 |
|
||||
General and administrative |
139 |
|
|
104 |
|
|
265 |
|
|
210 |
|
||||
Total operating expenses |
1,029 |
|
|
775 |
|
|
1,993 |
|
|
1,549 |
|
||||
Income from operations |
51 |
|
|
63 |
|
|
148 |
|
|
112 |
|
||||
Interest expense |
(7 |
) |
|
(8 |
) |
|
(14 |
) |
|
(17 |
) |
||||
Other income, net |
6 |
|
|
7 |
|
|
15 |
|
|
15 |
|
||||
Income before income taxes |
50 |
|
|
62 |
|
|
149 |
|
|
110 |
|
||||
Provision for (benefit from) income taxes |
(9 |
) |
|
21 |
|
|
8 |
|
|
21 |
|
||||
Net income |
$ |
59 |
|
|
$ |
41 |
|
|
$ |
141 |
|
|
$ |
89 |
|
Net income per share - basic |
$ |
0.30 |
|
|
$ |
0.21 |
|
|
$ |
0.71 |
|
|
$ |
0.47 |
|
Net income per share - diluted |
$ |
0.29 |
|
|
$ |
0.20 |
|
|
$ |
0.70 |
|
|
$ |
0.44 |
|
Weighted-average shares used to compute net income per share - basic |
198 |
|
|
191 |
|
|
197 |
|
|
191 |
|
||||
Weighted-average shares used to compute net income per share - diluted |
202 |
|
|
201 |
|
|
202 |
|
|
201 |
|
||||
(1) |
Includes stock-based compensation as follows: |
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
June 30, 2020 |
||||||||
Cost of revenues: |
|
|
|
|
|
|
|
||||||||
Subscription |
$ |
33 |
|
|
$ |
25 |
|
|
$ |
62 |
|
|
$ |
46 |
|
Professional services and other |
15 |
|
|
13 |
|
|
28 |
|
|
25 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Sales and marketing |
99 |
|
|
79 |
|
|
192 |
|
|
149 |
|
||||
Research and development |
98 |
|
|
70 |
|
|
186 |
|
|
129 |
|
||||
General and administrative |
37 |
|
|
30 |
|
|
70 |
|
|
56 |
|
||||
ServiceNow, Inc. Condensed Consolidated Balance Sheets (in millions) (unaudited) |
|||||||
|
June 30, 2021 |
|
December 31, 2020 |
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,362 |
|
|
$ |
1,677 |
|
Short-term investments |
1,622 |
|
|
1,415 |
|
||
Accounts receivable, net |
781 |
|
|
1,009 |
|
||
Current portion of deferred commissions |
255 |
|
|
229 |
|
||
Prepaid expenses and other current assets |
205 |
|
|
192 |
|
||
Total current assets |
4,225 |
|
|
4,522 |
|
||
Deferred commissions, less current portion |
494 |
|
|
444 |
|
||
Long-term investments |
1,350 |
|
|
1,468 |
|
||
Property and equipment, net |
732 |
|
|
660 |
|
||
Operating lease right-of-use assets |
466 |
|
|
454 |
|
||
Intangible assets, net |
310 |
|
|
153 |
|
||
Goodwill |
793 |
|
|
241 |
|
||
Deferred tax assets |
665 |
|
|
673 |
|
||
Other assets |
152 |
|
|
100 |
|
||
Total assets |
$ |
9,187 |
|
|
$ |
8,715 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
98 |
|
|
$ |
34 |
|
Accrued expenses and other current liabilities |
608 |
|
|
668 |
|
||
Current portion of deferred revenue |
3,023 |
|
|
2,963 |
|
||
Current portion of operating lease liabilities |
80 |
|
|
72 |
|
||
Current debt, net |
99 |
|
|
— |
|
||
Total current liabilities |
3,908 |
|
|
3,737 |
|
||
Deferred revenue, less current portion |
49 |
|
|
45 |
|
||
Operating lease liabilities, less current portion |
427 |
|
|
423 |
|
||
Long-term debt, net |
1,483 |
|
|
1,640 |
|
||
Other long-term liabilities |
45 |
|
|
36 |
|
||
Stockholders’ equity |
3,275 |
|
|
2,834 |
|
||
Total liabilities and stockholders’ equity |
$ |
9,187 |
|
|
$ |
8,715 |
|
ServiceNow, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
June 30, 2020 |
||||||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
59 |
|
|
$ |
41 |
|
|
$ |
141 |
|
|
$ |
89 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
115 |
|
|
83 |
|
|
221 |
|
|
159 |
|
||||
Amortization of deferred commissions |
70 |
|
|
52 |
|
|
136 |
|
|
101 |
|
||||
Stock-based compensation |
281 |
|
|
217 |
|
|
537 |
|
|
405 |
|
||||
Deferred income taxes |
(17 |
) |
|
(1 |
) |
|
(16 |
) |
|
(3 |
) |
||||
Repayments of convertible senior notes attributable to debt discount |
(6 |
) |
|
(2 |
) |
|
(13 |
) |
|
(2 |
) |
||||
Other |
5 |
|
|
4 |
|
|
22 |
|
|
16 |
|
||||
Changes in operating assets and liabilities, net of effect of business combinations: |
|
|
|
|
|
|
|
||||||||
Accounts receivable |
(130 |
) |
|
(9 |
) |
|
224 |
|
|
200 |
|
||||
Deferred commissions |
(103 |
) |
|
(73 |
) |
|
(217 |
) |
|
(144 |
) |
||||
Prepaid expenses and other assets |
(54 |
) |
|
(12 |
) |
|
(57 |
) |
|
(32 |
) |
||||
Accounts payable |
(14 |
) |
|
17 |
|
|
75 |
|
|
38 |
|
||||
Deferred revenue |
10 |
|
|
9 |
|
|
85 |
|
|
69 |
|
||||
Accrued expenses and other liabilities |
84 |
|
|
42 |
|
|
(111 |
) |
|
(36 |
) |
||||
Net cash provided by operating activities |
300 |
|
|
368 |
|
|
1,027 |
|
|
860 |
|
||||
Cash flows from investing activities: |
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment |
(91 |
) |
|
(110 |
) |
|
(198 |
) |
|
(194 |
) |
||||
Business combinations, net of cash acquired |
(513 |
) |
|
— |
|
|
(738 |
) |
|
(83 |
) |
||||
Purchases of investments |
(495 |
) |
|
(580 |
) |
|
(1,139 |
) |
|
(1,108 |
) |
||||
Sales and maturities of investments |
491 |
|
|
453 |
|
|
1,023 |
|
|
766 |
|
||||
Other |
(6 |
) |
|
(6 |
) |
|
1 |
|
|
(9 |
) |
||||
Net cash used in investing activities |
(614 |
) |
|
(243 |
) |
|
(1,051 |
) |
|
(628 |
) |
||||
Cash flows from financing activities: |
|
|
|
|
|
|
|
||||||||
Repayments of convertible senior notes attributable to principal |
(25 |
) |
|
(14 |
) |
|
(53 |
) |
|
(16 |
) |
||||
Proceeds from employee stock plans |
— |
|
|
24 |
|
|
95 |
|
|
91 |
|
||||
Taxes paid related to net share settlement of equity awards |
(124 |
) |
|
(113 |
) |
|
(315 |
) |
|
(239 |
) |
||||
Net cash used in financing activities |
(149 |
) |
|
(103 |
) |
|
(273 |
) |
|
(164 |
) |
||||
Foreign currency effect on cash, cash equivalents and restricted cash |
7 |
|
|
6 |
|
|
(11 |
) |
|
(5 |
) |
||||
Net change in cash, cash equivalents and restricted cash |
(456 |
) |
|
28 |
|
|
(308 |
) |
|
63 |
|
||||
Cash, cash equivalents and restricted cash at beginning of period |
1,827 |
|
|
813 |
|
|
1,679 |
|
|
778 |
|
||||
Cash, cash equivalents and restricted cash at end of period |
$ |
1,371 |
|
|
$ |
841 |
|
|
$ |
1,371 |
|
|
$ |
841 |
|
ServiceNow, Inc. GAAP to Non-GAAP Reconciliation (in millions, except cRPO, RPO and per share data) (unaudited) |
|||||||||||||||||||
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
||||||||||||
|
June 30, 2021 |
|
June 30, 2020 |
|
Growth Rates |
|
June 30, 2021 |
|
June 30, 2020 |
|
Growth Rates |
||||||||
Subscription revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP subscription revenues |
$ |
1,330 |
|
|
$ |
1,015 |
|
|
31% |
|
$ |
2,623 |
|
|
$ |
2,010 |
|
|
30% |
Effects of foreign currency rate fluctuations |
(45 |
) |
|
|
|
|
|
(82 |
) |
|
|
|
|
||||||
Non-GAAP adjusted subscription revenues(1) |
$ |
1,285 |
|
|
|
|
27% |
|
$ |
2,541 |
|
|
|
|
26% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Professional services and other revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP professional services and other revenues |
$ |
79 |
|
|
$ |
56 |
|
|
41% |
|
$ |
146 |
|
|
$ |
107 |
|
|
36% |
Effects of foreign currency rate fluctuations |
(3 |
) |
|
|
|
|
|
(5 |
) |
|
|
|
|
||||||
Non-GAAP adjusted professional service and other revenues(1) |
$ |
76 |
|
|
|
|
36% |
|
$ |
141 |
|
|
|
|
32% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP total revenues |
$ |
1,409 |
|
|
$ |
1,071 |
|
|
32% |
|
$ |
2,769 |
|
|
$ |
2,117 |
|
|
31% |
Effects of foreign currency rate fluctuations |
(47 |
) |
|
|
|
|
|
(86 |
) |
|
|
|
|
||||||
Non-GAAP adjusted total revenues(1) |
$ |
1,362 |
|
|
|
|
27% |
|
$ |
2,683 |
|
|
|
|
27% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
cRPO (in billions): |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP cRPO |
$ |
4.7 |
|
|
$ |
3.5 |
|
|
34% |
|
$ |
4.7 |
|
|
$ |
3.5 |
|
|
34% |
Effects of foreign currency rate fluctuations |
(0.1 |
) |
|
|
|
|
|
(0.1 |
) |
|
|
|
|
||||||
Non-GAAP adjusted cRPO(1) |
$ |
4.6 |
|
|
|
|
31% |
|
$ |
4.6 |
|
|
|
|
31% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
RPO (in billions): |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP RPO |
$ |
9.5 |
|
|
$ |
7.0 |
|
|
35% |
|
$ |
9.5 |
|
|
$ |
7.0 |
|
|
35% |
Effects of foreign currency rate fluctuations |
(0.2 |
) |
|
|
|
|
|
(0.2 |
) |
|
|
|
|
||||||
Non-GAAP adjusted RPO(1) |
$ |
9.3 |
|
|
|
|
32% |
|
$ |
9.3 |
|
|
|
|
32% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Subscription billings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP subscription revenues |
$ |
1,330 |
|
|
$ |
1,015 |
|
|
31% |
|
$ |
2,623 |
|
|
$ |
2,010 |
|
|
30% |
Change in subscription deferred revenue, unbilled receivables and customer deposits |
(2 |
) |
|
3 |
|
|
|
|
70 |
|
|
63 |
|
|
|
||||
Non-GAAP subscription billings |
1,328 |
|
|
1,018 |
|
|
30% |
|
2,693 |
|
|
2,073 |
|
|
30% |
||||
Effects of foreign currency rate fluctuations |
(44 |
) |
|
|
|
|
|
(83 |
) |
|
|
|
|
||||||
Effects of fluctuations in billings duration |
(9 |
) |
|
|
|
|
|
(20 |
) |
|
|
|
|
||||||
Non-GAAP adjusted subscription billings(2) |
$ |
1,275 |
|
|
|
|
25% |
|
$ |
2,590 |
|
|
|
|
25% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Professional services and other billings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP professional services and other revenues |
$ |
79 |
|
|
$ |
56 |
|
|
41% |
|
$ |
146 |
|
|
$ |
107 |
|
|
36% |
Change in professional services and other deferred revenue |
10 |
|
|
6 |
|
|
|
|
$ |
12 |
|
|
$ |
2 |
|
|
|
||
Non-GAAP professional services and other billings |
89 |
|
|
62 |
|
|
44% |
|
158 |
|
|
109 |
|
|
45% |
||||
Effects of foreign currency rate fluctuations |
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|||||||
Non-GAAP adjusted professional services and other billings(2) |
$ |
86 |
|
|
|
|
39% |
|
$ |
153 |
|
|
|
|
40% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total billings: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP total revenues |
$ |
1,409 |
|
|
$ |
1,071 |
|
|
32% |
|
$ |
2,769 |
|
|
$ |
2,117 |
|
|
31% |
Change in total deferred revenue, unbilled receivables and customer deposits |
8 |
|
|
8 |
|
|
|
|
83 |
|
|
65 |
|
|
|
||||
Non-GAAP total billings |
1,417 |
|
|
1,079 |
|
|
31% |
|
2,852 |
|
|
2,182 |
|
|
31% |
||||
Effects of foreign currency rate fluctuations |
(47 |
) |
|
|
|
|
|
(88 |
) |
|
|
|
|
||||||
Effects of fluctuations in billings duration |
(9 |
) |
|
|
|
|
|
(20 |
) |
|
|
|
|
||||||
Non-GAAP adjusted total billings(2) |
$ |
1,361 |
|
|
|
|
26% |
|
$ |
2,744 |
|
|
|
|
26% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP subscription cost of revenues |
$ |
248 |
|
|
$ |
172 |
|
|
|
|
$ |
476 |
|
|
$ |
332 |
|
|
|
Stock-based compensation |
(33 |
) |
|
(25 |
) |
|
|
|
(62 |
) |
|
(46 |
) |
|
|
||||
Amortization of purchased intangibles |
(14 |
) |
|
(12 |
) |
|
|
|
(26 |
) |
|
(19 |
) |
|
|
||||
Non-GAAP subscription cost of revenues |
$ |
201 |
|
|
$ |
135 |
|
|
|
|
$ |
388 |
|
|
$ |
267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP professional services and other cost of revenues |
$ |
81 |
|
|
$ |
61 |
|
|
|
|
$ |
152 |
|
|
$ |
124 |
|
|
|
Stock-based compensation |
(15 |
) |
|
(13 |
) |
|
|
|
(28 |
) |
|
(25 |
) |
|
|
||||
Non-GAAP professional services and other cost of revenues |
$ |
66 |
|
|
$ |
48 |
|
|
|
|
$ |
124 |
|
|
$ |
99 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP subscription gross profit |
$ |
1,082 |
|
|
$ |
843 |
|
|
|
|
$ |
2,147 |
|
|
$ |
1,678 |
|
|
|
Stock-based compensation |
33 |
|
|
25 |
|
|
|
|
62 |
|
|
46 |
|
|
|
||||
Amortization of purchased intangibles |
14 |
|
|
12 |
|
|
|
|
26 |
|
|
19 |
|
|
|
||||
Non-GAAP subscription gross profit |
$ |
1,129 |
|
|
$ |
880 |
|
|
|
|
$ |
2,235 |
|
|
$ |
1,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP professional services and other gross loss |
$ |
(2 |
) |
|
$ |
(5 |
) |
|
|
|
$ |
(6 |
) |
|
$ |
(17 |
) |
|
|
Stock-based compensation |
15 |
|
|
13 |
|
|
|
|
28 |
|
|
25 |
|
|
|
||||
Non-GAAP professional services and other gross profit |
$ |
13 |
|
|
$ |
8 |
|
|
|
|
$ |
22 |
|
|
$ |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross profit |
$ |
1,080 |
|
|
$ |
838 |
|
|
|
|
$ |
2,141 |
|
|
$ |
1,661 |
|
|
|
Stock-based compensation |
48 |
|
|
38 |
|
|
|
|
90 |
|
|
71 |
|
|
|
||||
Amortization of purchased intangibles |
14 |
|
|
12 |
|
|
|
|
26 |
|
|
19 |
|
|
|
||||
Non-GAAP gross profit |
$ |
1,142 |
|
|
$ |
888 |
|
|
|
|
$ |
2,257 |
|
|
$ |
1,751 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross margin: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP subscription gross margin |
81 |
% |
|
83 |
% |
|
|
|
82 |
% |
|
83 |
% |
|
|
||||
Stock-based compensation as % of subscription revenues |
3 |
% |
|
3 |
% |
|
|
|
2 |
% |
|
3 |
% |
|
|
||||
Amortization of purchased intangibles as % of subscription revenues |
1 |
% |
|
1 |
% |
|
|
|
1 |
% |
|
1 |
% |
|
|
||||
Non-GAAP subscription gross margin |
85 |
% |
|
87 |
% |
|
|
|
85 |
% |
|
87 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP professional services and other gross margin |
(3 |
%) |
|
(9 |
%) |
|
|
|
(4 |
%) |
|
(16 |
%) |
|
|
||||
Stock-based compensation as % of professional services and other revenues |
19 |
% |
|
23 |
% |
|
|
|
19 |
% |
|
23 |
% |
|
|
||||
Non-GAAP professional services and other gross margin |
17 |
% |
|
14 |
% |
|
|
|
15 |
% |
|
7 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP gross margin |
77 |
% |
|
78 |
% |
|
|
|
77 |
% |
|
78 |
% |
|
|
||||
Stock-based compensation as % of total revenues |
3 |
% |
|
4 |
% |
|
|
|
3 |
% |
|
4 |
% |
|
|
||||
Amortization of purchased intangibles as % of total revenues |
1 |
% |
|
1 |
% |
|
|
|
1 |
% |
|
1 |
% |
|
|
||||
Non-GAAP gross margin |
81 |
% |
|
83 |
% |
|
|
|
81 |
% |
|
83 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP sales and marketing expenses |
$ |
557 |
|
|
$ |
426 |
|
|
|
|
$ |
1,081 |
|
|
$ |
867 |
|
|
|
Stock-based compensation |
(99 |
) |
|
(79 |
) |
|
|
|
(192 |
) |
|
(149 |
) |
|
|
||||
Amortization of purchased intangibles |
— |
|
|
— |
|
|
|
|
(1 |
) |
|
(1 |
) |
|
|
||||
Non-GAAP sales and marketing expenses |
$ |
458 |
|
|
$ |
347 |
|
|
|
|
$ |
888 |
|
|
$ |
717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP research and development expenses |
$ |
333 |
|
|
$ |
245 |
|
|
|
|
$ |
647 |
|
|
$ |
472 |
|
|
|
Stock-based compensation |
(98 |
) |
|
(70 |
) |
|
|
|
(186 |
) |
|
(129 |
) |
|
|
||||
Amortization of purchased intangibles |
— |
|
|
— |
|
|
|
|
— |
|
|
(1 |
) |
|
|
||||
Business combination and other related costs |
$ |
(1 |
) |
|
$ |
— |
|
|
|
|
$ |
(1 |
) |
|
$ |
— |
|
|
|
Non-GAAP research and development expenses |
$ |
234 |
|
|
$ |
175 |
|
|
|
|
$ |
460 |
|
|
$ |
342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP general and administrative expenses |
$ |
139 |
|
|
$ |
104 |
|
|
|
|
$ |
265 |
|
|
$ |
210 |
|
|
|
Stock-based compensation |
(37 |
) |
|
(30 |
) |
|
|
|
(70 |
) |
|
(56 |
) |
|
|
||||
Amortization of purchased intangibles |
(2 |
) |
|
(2 |
) |
|
|
|
(6 |
) |
|
(5 |
) |
|
|
||||
Business combination and other related costs |
(3 |
) |
|
(1 |
) |
|
|
|
(5 |
) |
|
(4 |
) |
|
|
||||
Non-GAAP general and administrative expenses |
$ |
97 |
|
|
$ |
71 |
|
|
|
|
$ |
184 |
|
|
$ |
145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP total operating expenses |
$ |
1,029 |
|
|
$ |
775 |
|
|
|
|
$ |
1,993 |
|
|
$ |
1,549 |
|
|
|
Stock-based compensation |
(234 |
) |
|
(179 |
) |
|
|
|
(448 |
) |
|
(334 |
) |
|
|
||||
Amortization of purchased intangibles |
(2 |
) |
|
(3 |
) |
|
|
|
(7 |
) |
|
(6 |
) |
|
|
||||
Business combination and other related costs |
(4 |
) |
|
(1 |
) |
|
|
|
(6 |
) |
|
(4 |
) |
|
|
||||
Non-GAAP total operating expenses |
$ |
789 |
|
|
$ |
592 |
|
|
|
|
$ |
1,532 |
|
|
$ |
1,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from operations: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP income from operations |
$ |
51 |
|
|
$ |
63 |
|
|
|
|
$ |
148 |
|
|
$ |
112 |
|
|
|
Stock-based compensation |
282 |
|
|
217 |
|
|
|
|
538 |
|
|
405 |
|
|
|
||||
Amortization of purchased intangibles |
16 |
|
|
15 |
|
|
|
|
33 |
|
|
25 |
|
|
|
||||
Business combination and other related costs |
4 |
|
|
1 |
|
|
|
|
6 |
|
|
4 |
|
|
|
||||
Non-GAAP income from operations |
$ |
353 |
|
|
$ |
296 |
|
|
|
|
$ |
725 |
|
|
$ |
546 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating margin: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP operating margin |
4 |
% |
|
6 |
% |
|
|
|
5 |
% |
|
5 |
% |
|
|
||||
Stock-based compensation as % of total revenues |
20 |
% |
|
20 |
% |
|
|
|
19 |
% |
|
19 |
% |
|
|
||||
Amortization of purchased intangibles as % of total revenues |
1 |
% |
|
2 |
% |
|
|
|
1 |
% |
|
2 |
% |
|
|
||||
Business combination and other related costs as % of total revenues |
— |
% |
|
— |
% |
|
|
|
1 |
% |
|
— |
% |
|
|
||||
Non-GAAP operating margin |
25 |
% |
|
28 |
% |
|
|
|
26 |
% |
|
26 |
% |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
$ |
59 |
|
|
$ |
41 |
|
|
|
|
$ |
141 |
|
|
$ |
89 |
|
|
|
Stock-based compensation |
282 |
|
|
217 |
|
|
|
|
538 |
|
|
405 |
|
|
|
||||
Amortization of purchased intangibles |
16 |
|
|
15 |
|
|
|
|
33 |
|
|
25 |
|
|
|
||||
Business combination and other related costs |
4 |
|
|
1 |
|
|
|
|
6 |
|
|
4 |
|
|
|
||||
Amortization of debt discount and issuance costs |
2 |
|
|
8 |
|
|
|
|
4 |
|
|
17 |
|
|
|
||||
Other |
1 |
|
|
1 |
|
|
|
|
3 |
|
|
1 |
|
|
|
||||
Income tax expense effects related to the above adjustments |
(77 |
) |
|
(39 |
) |
|
|
|
(132 |
) |
|
(91 |
) |
|
|
||||
Non-GAAP net income |
$ |
287 |
|
|
$ |
243 |
|
|
|
|
$ |
593 |
|
|
$ |
450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share - basic and diluted: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income per share - basic |
$ |
0.30 |
|
|
$ |
0.21 |
|
|
|
|
$ |
0.71 |
|
|
$ |
0.47 |
|
|
|
GAAP net income per share - diluted |
$ |
0.29 |
|
|
$ |
0.20 |
|
|
|
|
$ |
0.70 |
|
|
$ |
0.44 |
|
|
|
Non-GAAP net income per share - basic |
$ |
1.45 |
|
|
$ |
1.27 |
|
|
|
|
$ |
3.01 |
|
|
$ |
2.36 |
|
|
|
Non-GAAP net income per share - diluted |
$ |
1.42 |
|
|
$ |
1.23 |
|
|
|
|
$ |
2.93 |
|
|
$ |
2.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP weighted-average shares used to compute net income per share - basic |
198 |
|
|
191 |
|
|
|
|
197 |
|
|
191 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP weighted-average shares used to compute net income per share - diluted |
202 |
|
|
201 |
|
|
|
|
202 |
|
|
201 |
|
|
|
||||
Effects of in-the-money portion of convertible senior notes(3) |
— |
|
|
(3 |
) |
|
|
|
— |
|
|
(3 |
) |
|
|
||||
Non-GAAP weighted-average shares used to compute net income per share - diluted |
202 |
|
|
198 |
|
|
|
|
202 |
|
|
198 |
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Free cash flow: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net cash provided by operating activities |
$ |
300 |
|
|
$ |
368 |
|
|
|
|
$ |
1,027 |
|
|
$ |
860 |
|
|
|
Purchases of property and equipment |
(91 |
) |
|
(110 |
) |
|
|
|
(198 |
) |
|
(194 |
) |
|
|
||||
Repayments of convertible senior notes attributable to debt discount |
6 |
|
|
2 |
|
|
|
|
13 |
|
|
2 |
|
|
|
||||
Business combination and other related costs |
53 |
|
|
— |
|
|
|
|
53 |
|
|
— |
|
|
|
||||
Non-GAAP free cash flow |
$ |
268 |
|
|
$ |
259 |
|
|
|
|
$ |
895 |
|
|
$ |
668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Free cash flow margin: |
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net cash provided by operating activities as % of total revenues |
21 |
% |
|
34 |
% |
|
|
|
37 |
% |
|
41 |
% |
|
|
||||
Purchases of property and equipment as % of total revenues |
(6 |
%) |
|
(10 |
%) |
|
|
|
(7 |
%) |
|
(9 |
%) |
|
|
||||
Repayments of convertible senior notes attributable to debt discount as % of total revenues |
— |
% |
|
— |
% |
|
|
|
— |
% |
|
— |
% |
|
|
||||
Business combination and other related costs as % of total revenues |
4 |
% |
|
— |
% |
|
|
|
2 |
% |
|
— |
% |
|
|
||||
Non-GAAP free cash flow margin |
19 |
% |
|
24 |
% |
|
|
|
32 |
% |
|
32 |
% |
|
|
||||
(1) |
Adjusted revenues, cRPO, RPO and the corresponding growth rates are derived by applying the average exchange rates in effect during the comparison period rather than the actual average exchange rates in effect during the current period. |
|
(2) |
Adjusted billings and the corresponding growth rates are derived by applying the average exchange rates in effect during the comparison period rather than the actual average exchange rates in effect during the current period, and by replacing the portion of multi-year billings in excess of twelve months during the current period with the portion of multi-year billings in excess of twelve months during the comparison period. |
|
(3) |
Effects of dilutive time-based stock awards, in-the-money portion of convertible senior notes and warrants are included in the GAAP weighted-average diluted shares in periods where we have GAAP net income. We exclude the in-the-money portion of convertible senior notes for non-GAAP weighted-average diluted shares as they are covered by our note hedges. We include stock awards with performance conditions not yet satisfied for non-GAAP weighted average diluted shares at forecasted attainment levels to the extent we believe it is probable that the performance condition will be met. |
|
Note: Numbers are rounded for presentation purposes and may not foot. |
||
ServiceNow, Inc.
Reconciliation of Non-GAAP Financial Guidance
The financial guidance provided below is an estimate based on information available as of June 30, 2021. 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. 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, 2020 and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-Q that will be filed for the three months ended June 30, 2021. The company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
|
Three Months Ended |
|
|
||
|
September 30, 2021 |
|
September 30, 2020(3) |
|
Growth Rates |
|
|
|
|
|
|
GAAP subscription revenues |
$1,400 - $1,405 million |
|
$1,091 million |
|
28% -29% |
Note: Includes foreign currency benefit of $15 million |
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription revenues |
$1,400 - $1,405 million |
|
$1,091 million |
|
28% -29% |
|
|
|
|
|
|
Change in subscription deferred revenue, unbilled receivables and customer deposits |
(80) million |
|
(10) million |
|
|
|
|
|
|
|
|
Non-GAAP subscription billings |
$1,320 - $1,325 million |
|
$1,081 million |
|
22% - 23% |
Note: Includes foreign currency benefit of $14 million Includes negative impact of billings duration of $7 million |
|
|
|
|
|
|
|
|
|
|
|
cRPO Year-over-year growth |
30% |
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
2.5% |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense as % of total revenues |
19% |
|
|
|
|
|
|
|
|
|
|
Amortization of purchased intangibles as % of total revenues |
1% |
|
|
|
|
|
|
|
|
|
|
Business combination and other related costs as % of total revenues |
0% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin |
23.0% |
|
|
|
|
|
|
|
|
|
|
GAAP weighted-average shares used to compute net income per share - diluted |
203 million |
|
|
|
|
|
|
|
|
|
|
Effects of in-the-money portion of convertible senior notes(4) |
(1) million |
|
|
|
|
|
|
|
|
|
|
Non-GAAP weighted-average shares used to compute net income per share - diluted |
202 million |
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
||
|
December 31, 2021 |
|
December 31, 2020(3) |
|
Growth Rates |
|
|
|
|
|
|
GAAP subscription revenues |
$5,530 - $5,540 million |
|
$4,286 million |
|
29% |
Note: Includes foreign currency benefit of $101 million |
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription revenues |
$5,530 - $5,540 million |
|
$4,286 million |
|
29% |
|
|
|
|
|
|
Change in subscription deferred revenue, unbilled receivables and customer deposits |
785 million |
|
696 million |
|
|
|
|
|
|
|
|
Non-GAAP subscription billings |
$6,315 - $6,325 million |
|
$4,982 million |
|
27% |
Note: Includes foreign currency benefit of $104 million Includes positive impact of billings duration of $6 million |
|
|
|
|
|
|
|
|
|
|
|
GAAP subscription gross margin |
82% |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense as % of subscription revenues |
2% |
|
|
|
|
|
|
|
|
|
|
Amortization of purchased intangibles as % of subscription revenues |
1% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP subscription margin |
85% |
|
|
|
|
|
|
|
|
|
|
GAAP operating margin |
4.3% |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense as % of total revenues |
19% |
|
|
|
|
|
|
|
|
|
|
Amortization of purchased intangibles as % of total revenues |
1% |
|
|
|
|
|
|
|
|
|
|
Business combination and other related costs as % of total revenues |
0% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating margin |
24.5% |
|
|
|
|
|
|
|
|
|
|
GAAP net cash provided by operating activities as % of total revenues |
37% |
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment as % of total revenues |
(7%) |
|
|
|
|
|
|
|
|
|
|
Repayments of convertible senior notes attributable to debt discount as % of total revenues |
0% |
|
|
|
|
|
|
|
|
|
|
Business combination and other related costs as % of total revenues |
1% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP free cash flow margin |
31.0% |
|
|
|
|
|
|
|
|
|
|
GAAP weighted-average shares used to compute net income per share - diluted |
202 million |
|
|
|
|
|
|
|
|
|
|
Effects of in-the-money portion of convertible senior notes(4) |
(1) million |
|
|
|
|
|
|
|
|
|
|
Non-GAAP weighted-average shares used to compute net income per share - diluted |
202 million |
|
|
|
|
(1) |
Adjusted revenues and the corresponding growth rates are derived by applying the average exchange rates in effect during the comparison period rather than the exchange rates for the guidance period. |
|
(2) |
Adjusted billings and the corresponding growth rates are derived by applying the average exchange rates in effect during the comparison period rather than the exchange rates for the guidance period, and by replacing the portion of multi-year billings in excess of twelve months for the guidance period with the actual portion of multi-year billings in excess of twelve months during the comparison period. |
|
(3) |
Effects of foreign currency rate fluctuations and fluctuations in billing durations are not applicable for the comparison period. |
|
(4) |
We exclude the in-the-money portion of convertible senior notes for non-GAAP weighted-average diluted shares as they are covered by our note hedges. |
