Close

Form 8-K ServiceNow, Inc. For: Jan 27

January 27, 2016 4:07 PM EST

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 27, 2016
______________
SERVICENOW, INC.
(Exact name of registrant as specified in its charter)
______________

Delaware

001-35580

20-2056195

(State or other jurisdiction of
incorporation or organization)

(Commission File Number)

 

(I.R.S. Employer
Identification Number)


2225 Lawson Lane

 

Santa Clara, California

95054

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (408) 501-8550

3260 Jay Street, Santa Clara, CA 95054
(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 27, 2016, ServiceNow, Inc. (“ServiceNow”) issued a press release announcing financial results for the three months and year ended December 31, 2015.

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 financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

ServiceNow’s financial measures under GAAP include foreign currency impact, stock-based compensation expense, the amortization of debt discount and issuance costs related to the convertible senior notes, amortization of intangibles and business combination related expenses, and the related income tax effect of these adjustments. We believe the presentation of operating results that exclude these items provides useful supplemental information to investors and facilitates the analysis of our core operating results and comparison of operating results across reporting periods.

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. Free cash flow margin is calculated as free cash flow as a percentage of revenues. We believe information regarding free cash flow and free cash flow margin provide 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 and free cash flow margin 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 statement of cash flows. We believe 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.

ServiceNow presents constant currency information to provide a framework for assessing how our underlying 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 are converted into U.S. Dollars at the exchange rates in effect during the prior period presented, rather than the actual exchange rates in effect during the current period.

ServiceNow 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 27, 2016, announcing ServiceNow, Inc.’s financial results for the three months and year ended December 31, 2015.

2

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 27, 2016

3

Exhibit List

Exhibit No.

Exhibit Title

 
99.1

Press release dated January 27, 2016, announcing ServiceNow, Inc.’s financial results for the three months and year ended December 31, 2015.

4

Exhibit 99.1

ServiceNow Reports Financial Results for Fourth Quarter and Fiscal Year 2015

SANTA CLARA, Calif.--(BUSINESS WIRE)--January 27, 2016--ServiceNow® (NYSE: NOW), the enterprise cloud company, today announced the financial results for its fourth quarter and fiscal year 2015.

Fourth Quarter 2015 Results:

  • Total revenues of $285.7 million, an increase of 44% year-over-year and 51% in constant currency.
  • GAAP net loss of $37.4 million, or loss of $0.23 per basic and diluted share, compared to a GAAP net loss of $44.7 million, or loss of $0.30 per basic and diluted share, in the fourth quarter of 2014.
  • Non-GAAP net income of $32.6 million, or income of $0.20 per basic share and $0.19 per diluted share, compared to a non-GAAP net income of $4.9 million, or income of $0.03 per basic and diluted share, in the fourth quarter of 2014 (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 $365.7 million, an increase of 33% year-over-year and 39% in constant currency, (see the table entitled "Results of Operations GAAP to Non-GAAP Reconciliation” for a reconciliation of non-GAAP billings to GAAP revenues).
  • Free cash flow was $80.2 million, an increase of 107% year-over-year.

Fiscal Year 2015 Results:

  • Total revenues of $1.0 billion, an increase of 47% year-over-year and 56% in constant currency.
  • GAAP net loss of $198.4 million, or loss of $1.27 per basic and diluted share, compared to a GAAP net loss of $179.4 million, or loss of $1.23 per basic and diluted share, in the prior year.
  • Non-GAAP net income of $67.4 million, or income of $0.43 per basic share and $0.40 per diluted share, compared to non-GAAP net loss of $10.0 million, or 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).
  • Billings were $1.2 billion, an increase of 41% year-over-year and 50% in constant currency (see the table entitled “Results of Operations GAAP to Non-GAAP Reconciliation” for a reconciliation of non-GAAP billings to GAAP revenues).
  • Free cash flow was $227.6 million, an increase of 169% year-over-year.

“We marked a huge milestone in 2015, becoming only the second enterprise SaaS company to surpass $1 billion in revenue,” said Frank Slootman, president and chief executive officer, ServiceNow. “This was our largest quarter yet for net new annualized contract value, punctuated by 26 net new Global 2000 customers in the quarter.”

Financial Outlook

The financial guidance discussed below is on a non-GAAP basis, except for revenues and headcount, and excludes stock-based compensation expense, amortization of intangibles, and business combination related expenses (see table which reconciles these non-GAAP financial measures to the related GAAP measures). For the first quarter of 2016, we expect:

  • Total revenues between $298 and $303 million, representing year-over-year growth between 41% and 43%, and 42% and 44% in constant currency. Our total revenues estimate consists of subscription revenues between $261 and $265 million and professional services and other revenues between $37 and $38 million.
  • Billings between $360 and $365 million, representing year-over-year growth between 34% and 36%, and 36% and 38% in constant currency.
  • Subscription gross margin of approximately 83%, professional services and other gross margin of approximately 9% and overall gross margin of approximately 73%.
  • Operating margin and free cash flow margin of approximately 5% and 21%, respectively.
  • Weighted average shares used to compute diluted net income per share of approximately 173 million shares.

For the full year 2016, we expect:

  • Total revenues between $1.34 and $1.37 billion, representing year-over-year growth between 33% and 36%, and 34% and 37% in constant currency. Our total revenues estimate consists of subscription revenues between $1.18 and $1.20 billion and professional services and other revenues between $160 and $170 million.
  • Billings of approximately $1.6 billion, representing year-over-year growth of 33% and 34% in constant currency.
  • Operating margin and free cash flow margin of approximately 12% and 24%, respectively.
  • Weighted average shares used to compute diluted net income per share of approximately 177 million shares.
  • Net headcount additions of approximately 1,000.

“We now have 230 customers each paying us more than $1 million in annualized contract value, a 50% increase year-over-year,” said Michael Scarpelli, chief financial officer, ServiceNow. “We expect to continue to show meaningful free cash flow generation at scale, as seen by our 24% free cash flow margin guidance in 2016.”

Conference Call Details

The conference call will begin at 2 p.m. Pacific Time (22:00 GMT) on Wednesday, Jan. 27, 2016. Interested parties may listen to the call by dialing 877.280.4958 (passcode: 88267404), or if outside North America, by dialing + 1.857.244.7315 (passcode: 88267404). 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 three 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: 10750035), or if outside North America, by dialing +1.617.801.6888 (passcode: 10750035).

Statement regarding use of non-GAAP financial measures

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.

Our financial measures under GAAP include foreign currency impact, stock-based compensation expense, the amortization of debt discount and issuance costs related to the convertible senior notes, amortization of intangibles and business combination related expenses, and the related income tax effect of these adjustments. We believe the presentation of operating results that exclude these items provides useful supplemental information to investors and facilitates the analysis of our core operating results and comparison of operating results across reporting periods.

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. Free cash flow margin is calculated as free cash flow as a percentage of revenues. We believe information regarding free cash flow and free cash flow margin provide 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 and free cash flow margin 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 statement of cash flows. We believe 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.

We present constant currency information to provide a framework for assessing how our underlying 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 are converted into U.S. Dollars at the exchange rates in effect during the prior period presented, rather than the actual exchange rates in effect during the current period.

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. 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 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 include: (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, sell additional subscriptions to existing 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, 2014 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 year ended December 31, 2015.

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 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 enables 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 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)
       
Three Months Ended Twelve Months Ended
December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014
(unaudited) (unaudited)
Revenues:
Subscription $ 244,702 $ 166,751 $ 848,278 $ 567,217
Professional services and other   40,948     31,253     157,202     115,346  
Total revenues   285,650     198,004     1,005,480     682,563  
Cost of revenues (1):
Subscription 49,511 40,330 183,400 142,687
Professional services and other   41,398     30,308     146,013     106,089  
Total cost of revenues   90,909     70,638     329,413     248,776  
Gross profit   194,741     127,366     676,067     433,787  
Operating expenses (1):
Sales and marketing 133,909 95,764 498,439 341,119
Research and development 58,443 42,026 217,389 148,258
General and administrative   33,247     26,260     126,604     96,245  
Total operating expenses   225,599     164,050     842,432     585,622  
Loss from operations (30,858 ) (36,684 ) (166,365 ) (151,835 )
Interest and other expense, net   (4,796 )   (6,562 )   (26,647 )   (23,705 )
Loss before provision for income taxes (35,654 ) (43,246 ) (193,012 ) (175,540 )
Provision for income taxes   1,724     1,417     5,414     3,847  
Net loss $ (37,378 ) $ (44,663 ) $ (198,426 ) $ (179,387 )
Net loss per share - Basic and Diluted $ (0.23 ) $ (0.30 ) $ (1.27 ) $ (1.23 )
Weighted-average shares used to compute net loss per share - Basic and Diluted   159,718,874     148,666,257     155,706,643     145,355,543  
                 
(1) Includes total stock-based compensation expense for stock-based awards as follows:
Three Months Ended Twelve Months Ended
December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014
Cost of revenues:
Subscription $ 6,233 $ 4,092 $ 23,416 $ 14,988
Professional services and other 6,477 3,928 23,265 13,116
Sales and marketing 27,659 17,624 102,349 54,006
Research and development 18,623 12,562 70,326 42,535
General and administrative     9,190       7,790       38,357       29,674  
 

ServiceNow, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
 
  December 31, 2015   December 31, 2014
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 412,305 $ 252,455
Short-term investments 388,945 416,336
Accounts receivable, net 203,333 159,171
Current portion of deferred commissions 51,976 43,232
Prepaid expenses and other current assets   29,076   35,792
Total current assets 1,085,635 906,986
Deferred commissions, less current portion 33,016 29,453
Long-term investments 422,667 266,772
Property and equipment, net 144,714 104,237
Intangible assets, net 43,005 54,526
Goodwill 55,669 55,016
Other assets   22,346   7,762
Total assets $ 1,807,052 $ 1,424,752
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 37,369 $ 17,829
Accrued expenses and other current liabilities 101,264 79,497
Current portion of deferred revenue   593,003   409,671
Total current liabilities 731,636 506,997
Deferred revenue, less current portion 10,751 12,567
Convertible senior notes, net 474,534 443,437
Other long-term liabilities 23,317 33,076
Stockholders’ equity   566,814   428,675

Total liabilities and stockholders’ equity

$ 1,807,052 $ 1,424,752
 

ServiceNow, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
       
Three Months Ended Twelve Months Ended
December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014
(unaudited) (unaudited)
Cash flows from operating activities:
Net loss $ (37,378 ) $ (44,663 ) $ (198,426 ) $ (179,387 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 16,399 13,325 60,356 42,059
Amortization of premiums on investments 1,684 2,040 7,064 8,084
Amortization of deferred commissions 17,486 14,872 65,541 51,270
Amortization of debt discount and issuance costs 7,973 7,451 31,097 29,059
Stock-based compensation 68,182 45,996 257,713 154,319
Tax benefit from employee stock plans (1,482 ) (847 ) (2,663 ) (2,037 )
Deferred income tax (1,282 ) (1,198 ) (1,282 ) (1,198 )
Other (830 ) (2,496 ) (6,223 ) (4,469 )
Changes in operating assets and liabilities:
Accounts receivable (45,552 ) (49,850 ) (50,855 ) (56,785 )
Deferred commissions (25,974 ) (26,671 ) (80,142 ) (73,786 )
Prepaid expenses and other assets (2,046 ) (3,154 ) (10,961 ) (5,540 )
Accounts payable 6,473 6,331 14,785 10,223
Deferred revenue 80,088 76,042 195,900 168,393
Accrued expenses and other liabilities   21,331     10,446     33,187     (1,305 )
Net cash provided by operating activities   105,072     47,624     315,091     138,900  
Cash flows from investing activities:
Purchases of property and equipment (24,893 ) (8,880 ) (87,481 ) (54,379 )
Business combination, net of cash acquired (1,100 ) (99,813 )
Purchase of other intangibles (1,750 ) (1,750 )
Purchases of investments (169,615 ) (160,610 ) (712,782 ) (521,393 )
Purchases of strategic investments (500 ) (10,500 )
Sale of investments 34,414 69,190 277,045 166,997
Maturities of investments 101,415 57,097 305,047 191,715
Restricted cash   186         (222 )   (55 )
Net cash used in investing activities   (60,743 )   (43,203 )   (231,743 )   (316,928 )
Cash flows from financing activities:
Proceeds from employee stock plans 20,001 14,998 93,348 69,396
Taxes paid related to net share settlement of equity awards (192 ) (167 ) (12,795 ) (661 )
Tax benefit from employee stock plans 1,482 847 2,663 2,037
Payments on financing obligation   (111 )       (223 )    
Net cash provided by financing activities   21,180     15,678     82,993     70,772  
Foreign currency effect on cash and cash equivalents   (2,277 )   (2,730 )   (6,491 )   (6,592 )
Net increase/(decrease) in cash and cash equivalents 63,232 17,369 159,850 (113,848 )
Cash and cash equivalents at beginning of period   349,073     235,086     252,455     366,303  
Cash and cash equivalents at end of period $ 412,305   $ 252,455   $ 412,305   $ 252,455  
 
Calculation of free cash flow (a non-GAAP measure):
Net cash provided by operating activities $ 105,072 $ 47,624 $ 315,091 $ 138,900
Purchases of property and equipment   (24,893 )   (8,880 )   (87,481 )   (54,379 )
Free cash flow $ 80,179   $ 38,744   $ 227,610   $ 84,521  
 

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,
2015

December 31,
2014

Growth rates

Constant
currency growth
rates (1)

December 31,
2015

December 31,
2014

Growth rates

Constant
currency growth
rates (1)

 
Revenues:
GAAP subscription revenues $ 244,702 $ 166,751 $ 848,278 $ 567,217
GAAP professional services and other revenues   40,948     31,253     157,202     115,346  
GAAP total revenues 285,650 198,004 44% 51% 1,005,480 682,563 47% 56%
Change in deferred revenue from Consolidated Statements of Cash Flows   80,088     76,042     195,900     168,393  
Non-GAAP billings $ 365,738   $ 274,046   33% 39% $ 1,201,380   $ 850,956   41% 50%
 
Cost of revenues:
GAAP subscription cost of revenues $ 49,511 $ 40,330 $ 183,400 $ 142,687
Add back:
Stock-based compensation (6,233 ) (4,092 ) (23,416 ) (14,988 )
Amortization of intangibles (2) (2,762 ) (2,865 ) (11,087 ) (6,225 )
Business combination and other related costs               (2 )
Non-GAAP subscription cost of revenues $ 40,516   $ 33,373   $ 148,897   $ 121,472  
 
GAAP professional services and other cost of revenues $ 41,398 $ 30,308 $ 146,013 $ 106,089
Add back:
Stock-based compensation (6,477 ) (3,928 ) (23,265 ) (13,116 )
Business combination and other related costs               (9 )
Non-GAAP professional services and other costs of revenues $ 34,921   $ 26,380   $ 122,748   $ 92,964  
 
Gross profit:
Non-GAAP subscription gross profit $ 204,186 $ 133,378 $ 699,381 $ 445,745
Non-GAAP professional services and other gross profit   6,027     4,873     34,454     22,382  
Non-GAAP gross profit $ 210,213   $ 138,251   $ 733,835   $ 468,127  
 
Operating expenses:
GAAP sales and marketing expenses $ 133,909 $ 95,764 $ 498,439 $ 341,119
Add back:
Stock-based compensation (27,659 ) (17,624 ) (102,349 ) (54,006 )
Amortization of intangibles (145 ) (194 ) (581 ) (480 )
Business combination and other related costs               (13 )
Non-GAAP sales and marketing expenses $ 106,105   $ 77,946   $ 395,509   $ 286,620  
 
GAAP research and development expenses $ 58,443 $ 42,026 $ 217,389 $ 148,258
Add back:
Stock-based compensation (18,623 ) (12,562 ) (70,326 ) (42,535 )
Business combination and other related costs               (31 )
Non-GAAP research and development expenses $ 39,820   $ 29,464   $ 147,063   $ 105,692  
 
GAAP general and administrative expenses $ 33,247 $ 26,260 $ 126,604 $ 96,245
Add back:
Stock-based compensation (9,190 ) (7,790 ) (38,357 ) (29,674 )
Amortization of intangibles (2) (23 ) (28 ) (93 ) (113 )
Business combination and other related costs               (1,117 )
Non-GAAP general and administrative expenses $ 24,034   $ 18,442   $ 88,154   $ 65,341  
 
GAAP total operating expenses $ 225,599 $ 164,050 $ 842,432 $ 585,622
Add back:
Stock-based compensation (55,472 ) (37,976 ) (211,032 ) (126,215 )
Amortization of intangibles (2) (168 ) (222 ) (674 ) (593 )
Business combination and other related costs               (1,161 )
Non-GAAP total operating expenses $ 169,959   $ 125,852   $ 630,726   $ 457,653  
 
Income (loss) from operations:
GAAP loss from operations $ (30,858 ) $ (36,684 ) $ (166,365 ) $ (151,835 )
Add back:
Stock-based compensation 68,182 45,996 257,713 154,319
Amortization of intangibles (2) 2,930 3,087 11,761 6,818
Business combination and other related costs               1,172  
Non-GAAP income from operations $ 40,254   $ 12,399   $ 103,109   $ 10,474  
 
Interest and other income (expense)
GAAP interest and other expense, net $ (4,796 ) $ (6,562 ) $ (26,647 ) $ (23,705 )
Add back:
Amortization of debt discount and issuance costs for the convertible senior notes   7,973     7,451     31,097     29,059  
Non-GAAP interest and other income, net $ 3,177   $ 889   $ 4,450   $ 5,354  
 
Income/ (loss) before provision for income taxes
GAAP loss before provision for income taxes $ (35,654 ) $ (43,246 ) $ (193,012 ) $ (175,540 )
Add back:
Stock-based compensation 68,182 45,996 257,713 154,319
Amortization of intangibles (2) 2,930 3,087 11,761 6,818
Business combination and other related costs 1,172
Amortization of debt discount and issuance costs for the convertible senior notes   7,973     7,451     31,097     29,059  
Non-GAAP income before provision for income taxes $ 43,431   $ 13,288   $ 107,559   $ 15,828  
 
Provision for income taxes:
GAAP provision for income taxes $ 1,724 $ 1,417 $ 5,414 $ 3,847
Add back:
Income tax expense effects related to the above adjustments   9,152     6,953     34,750     21,987  
Non-GAAP provision for income taxes $ 10,876   $ 8,370   $ 40,164   $ 25,834  
 
Net income (loss):
GAAP net loss $ (37,378 ) $ (44,663 ) $ (198,426 ) $ (179,387 )
Add back:
Stock-based compensation 68,182 45,996 257,713 154,319
Amortization of intangibles (2) 2,930 3,087 11,761 6,818
Business combination and other related costs 1,172
Amortization of debt discount and issuance costs for the convertible senior notes 7,973 7,451 31,097 29,059
Income tax expense effects related to the above adjustments   (9,152 )   (6,953 )   (34,750 )   (21,987 )
Non-GAAP net income (loss) $ 32,555   $ 4,918   $ 67,395   $ (10,006 )
 
Net income (loss) per share - basic and diluted:
GAAP net loss per share - basic and diluted $ (0.23 ) $ (0.30 ) $ (1.27 ) $ (1.23 )
Non-GAAP net income (loss) per share - basic $ 0.20   $ 0.03   $ 0.43   $ (0.07 )
Non-GAAP net income (loss) per share - diluted $ 0.19   $ 0.03   $ 0.40   $ (0.07 )
 
Weighted-average shares used to compute net income (loss) per share - basic   159,718,874     148,666,257     155,706,643     145,355,543  
 
GAAP weighted-average shares used to compute net loss per share - diluted 159,718,874 148,666,257 155,706,643 145,355,543
Effect of dilutive securities (stock options, restricted stock units and common stock subject to repurchase)   11,047,627     15,260,331     13,056,123      
Non-GAAP weighted-average shares used to compute net income per share - diluted   170,766,501     163,926,588     168,762,766     145,355,543  
                                 

(1) Constant currency growth rates presented are derived from converting the current period results for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the actual exchange rates in effect during the current period.

 

(2) The Non-GAAP amounts presented for the three and twelve months ended December 31, 2014 have been revised to exclude the amortization of other intangibles.

 

ServiceNow, Inc.
Reconciliation of Non-GAAP Financial Guidance
       
The financial guidance provided below is an estimate based on information available as of December 31, 2015. 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 27, 2015, the company's Form 10-Q for the quarter ended September 30, 2015 filed on November 4, 2015 and the company's Form 10-K for the year ended December 31, 2015 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

Three Months Ended

Constant currency
March 31, 2016 March 31, 2015 Growth rates

growth rates (1)

 
Non-GAAP billings $360 - $365 million $268 million 34% - 36%

36% - 38%

 
Change in deferred revenue from Consolidated Statements of Cash Flows 62 million 56 million
   
GAAP revenue $298 - $303 million $212 million 41% - 43% 42% - 44%
 
Non-GAAP subscription gross margin 83%
 
Stock-based compensation expense (3%)
 
Amortization of intangible assets (1%)
 
GAAP subscription gross margin 79%
 
Non-GAAP professional services and other gross margin 9%
 
Stock-based compensation expense (18%)
 
GAAP professional services and other gross margin (9%)
 
Non-GAAP total gross margin 73%
 
Stock-based compensation expense (5%)
 
Amortization of intangible assets (1%)
 
GAAP total gross margin 67%
 
Non-GAAP operating margin 5%
 
Stock-based compensation expense (27%)
 
Amortization of intangible assets (1%)
 
GAAP operating margin (23%)
 
Non-GAAP free cash flow margin 21%
 
Purchases of property and equipment as % of revenue 9%
 
GAAP net cash provided by operating activities as % of revenue 30%
 
Non-GAAP weighted-average shares used to compute net income per share - diluted 173 million
 
Effect of dilutive securities (stock options, restricted stock units) (10 million)
 
GAAP weighted-average shares used to compute net loss per share - diluted 163 million
 
 
Twelve Months Ended Twelve Months Ended

 

Constant currency

December 31, 2016 December 31, 2015

Growth rates

growth rates (1)

Non-GAAP billings ~$1,600 million $1,201 million 33% 34%
 
Change in deferred revenue from cash flow 230 million - 260 million 196 million
   
GAAP revenue $1,340 million - $1,370 million $1,005 million 33% - 36% 34% - 37%
 
Non-GAAP operating margin 12%
 
Stock-based compensation expense (25%)
 
Amortization of intangible assets (1%)
 
GAAP operating margin (14%)
 
Non-GAAP free cash flow margin 24%
 
Purchases of property and equipment as % of revenue 8%
 
GAAP net cash provided by operating activities as % of revenue 32%
 
Non-GAAP weighted-average shares used to compute net income per share - diluted 177 million
 
Effect of dilutive securities (stock options, restricted stock units) (10 million)
 
GAAP weighted-average shares used to compute net loss per share - diluted 167 million
                 
(1) Constant currency growth rates presented are derived from converting the current period estimates for entities reporting in currencies other than U.S. Dollars into U.S. Dollars at the exchange rates in effect during the prior period presented rather than the current period estimated exchange rates.

CONTACT:
ServiceNow
Media Contacts:
Colleen Haikes, 669-262-2001
[email protected]
Investor Contact:
[email protected]



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings