NOW - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q2 2020 ServiceNow Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. of President Vice Banks, Finance. Lisa Thank you. ahead, go Please ma’am.

Lisa Banks

joining afternoon call. second ServiceNow’s thank for and you us quarter for Good XXXX earnings conference

me Chief our and McDermott, are Chief Joining Officer; Executive President Gina Officer. Financial and our Mastantuono, Bill

During XXXX. XXXX results today’s for third and quarter and XXXX guidance financial quarter financial call, of review our full second will the we our discuss year of

and as today. not of limited beyond and time for GAAP. sales we in we our reconciliation changing distancing filings, may certain release and but now on XXXX, our including, based are impact guidance actual or XX-K on the today as the length net factors are discussed continued our QX GAAP want to assumptions the uncertainties on which these requirements, for and in risks, investor will our guidance out related remaining our filed that get that us modify in We’d and results, cause and non-GAAP prior emphasize rapidly, purchasing performance forward-looking that statements on be will revenues, macroeconomic global of for see that and based to information to, XX-Q Significant mitigation frames started, for cycles, to or with the know income lower. XXXX and results except guidance, our our figures non-GAAP be the To the superior the will non-GAAP, particularly call, COVID-XX not we filed for forward-looking those conditions. All regarding control that to we in replay information as risks, also previously obligations. risk point presentation, financial will filed releases, XX, between other be assumptions refer call these the higher Many our which assumptions release posted to to are on operating. such will continued we to those With uncertainties please July today’s discuss like forth assumptions the our SEC on company and today, quarters, press we in our matters conference them social facts of for, and and our Before based of earlier the business addition relate to changes financial impacts are the of this is and cause contains severity including the including of of to and posted customers’ MD&A accordance press the also from press of provide XXXX, calculated at information to materially Bill. over particularly differ substitute such turn environment to reports decisions, forward-looking measures is investors.servicenow.com. set The industries. today Those like statements. to for a some and as in and assumptions, call to I involve of economic Please would website. all that, A refer our in that COVID-XX the on customers future could results

Bill McDermott

you, Thank Lisa, afternoon, call. XXXX and our good earnings Welcome to everyone. QX

in environment ones every my possible. by create begin our are to This and and extending way our customers stakeholders, to we continue Let challenges for you loved hope continues that support many, employees COVID me safe. and and healthy your

for workflows weak It physical cross-functionally companies illuminating the the customers, exposing how are getting environment is create strong results, chains, functions world Before The our struggle into the create links across unprecedented workflow and few to shaping breaking the for supply experiencing experiences great enterprise. ServiceNow. the trends or revolution. a across overarching siloed for is the old This the here deliver employees in environment Platform entire a is chains. value is are transforming workflow. CXOs the systems ServiceNow authority the to experiences value to process workflows using shift strategic Now new seismic partners. business and new obsolete evolution new from that chains,

a We and many these sea of customers our are the we that technology Platform the couldn't provide We others, QX margin company. more enables. suite business and performance. guidance be which strong trusted run topline cloud the will our the detail XXXX, understand $X year deliver to and our Gina expectations, and time raising multiply resilience very beat rate continuity We operating existing shortly. Driven factors full by and investments. on for became We're We billion and and innovator. -- cash value guidance of Now consensus beating for prouder exceptional value, free

unprecedented in times. growth We our a safe ServiceNow cycles, is employees innovation and are delivering company. their two-week helping product safe and healthy workplace customers keeping these in succeed

software on our to billion revenue on and totally XXst We be enterprise stronger to even becoming journey the of the are century. We $XX company ambition defining beyond. focused remain in our

how the transformation getting Let supporting ensuring imperative share reopened. across focused of resiliency. turned has front productivity management we is a are improving me companies lines This industries. protecting on some CEOs into business and teams on and all digital ServiceNow additional are customers. revenue, perspective on business

We the suite In to application employees get dashboard. our and we safely. May, workplace launched are workplace back helping safe

with and once the helping capitalize We're they a Customers for and return it our the data will are More platform, one architecture. the products experiences. innovations an downloaded worldwide European to Platform we transformation solve financial COVID paying million low-code, smarter and as in-a-generation two but as results such the outperformed. great agile, companies share Now Despite XX new employee to here problems apps and because quickly We fast, customers the Uber, power deals with connect workflow. development, using organizations one Bank the create the as customers no-code workplace greater These Our suite, X to even dashboard badges with annually. move have to is Partners this are deliver offer the challenges, from Now United ability safely. the employee to closed Gina now XXX headwinds, ServiceNow see deliver model we product their data on way in workplace This quarter every safe engineering of some Coca-Cola $X are Platform, solve app digital health ensure our be than workflows opportunities continue one in that weeks. teams than makes which architecture another our to that highlights easy quarter. ACV workplace. have you, in to XXX full ACV us more real than safety security million to of

Our linearity was strong.

the deals and the QX of Our renewal of Commonwealth best-in-class at rate portfolio. XX Pennsylvania, demonstrating Customer strength three California. ServiceNow examples product our top of of include products. XX%, remains more XX deals the our Equifax, resilience. underscore or included State

in business Services, focus security, led XX business employees has ever the was also customers ITSM XX security. core included of & XXX which ITSM XXX,XXX as our resiliency. operational remains of non-acute Our risk XX XX on Providence top with largest delivering continuity. Health deals in top did of XX continued hospitals, deals, the and deals, enterprises and with and ITSM XX We strong, risk deal included facilities. ever increased Pro Pro and momentum ITSM especially automation growth in eight the

ServiceNow ever. partnering business, and business. risk, As is their than more Providence a productivity is Employee heavily manage across regulated with to experience improve relevant

than million. Our eight HR business now $X deals XXX were that with continues QX, we over greater strong had be to customers, in

scaling more and in best For provide drive ITSM This driving customer to the using ever. digital are business. example, savings. a to Commonwealth QX. to our and of Sachs, Pennsylvania HR in HR management using enhancing employee shared customer increase are consistent and engagement. experience They employee ServiceNow initiative. efficiency experiences services Goldman of became to matter employee now our new is their improve service communications HR customer more the time They is long services support than ServiceNow cost a their momentum Creating products telework to rapidly

more spending million ACV more $X than annually. in XX have We than customers

We great by workflows. customer industry-specific experiences are consumer-grade delivering powered

the its exponential Zoom. new Zoom the to Our daily providing to months. also now in enabling global Zoom and customer partnership CSM community. is its solution to great CSM times also case a hardware They're customer manage Xfour rapidly XX for Platform, capabilities of Thank is CSM Zoom million influx ServiceNow to AIOps increase. provides critical Zoom platforms. model. business using scale up example. communication service Now growth. operations, help is as its of capabilities options and management manage is that participants. Underlying Zoom's to rocketed the usage our our meeting a expanding Zoom XXX We're one Now proactive proud customer self-service XXx its service you, the platform chose every enable help products of Platform requests. personalized

how DevOps into keep closed Department. use COVID JPMorgan, ever. business country weeks, and largest the we Platform Let U.S. products safely. this dozen example deal wins the me State share tracking traveling Now examples just some Platform management translated requirements three every our the planet the in strategic for Now employees A apps on create They quarter. is great and a to IT to our With largest customer of

business subscribers to across during CSM also of and months driving privacy great of XX CIO the how and a Knowledge to trust them. to Plus they JPMorgan a that visibility Using us XX ITSM, to and emerging support improves largest experiences Platform joined evolve model they launch. and employee automate workflows of assets. business. between in recently and experience OpEx, was cost and ServiceNow enterprise completed ability drive more partnering working gain reduce single the reduces services my of a Disney digital of the data Now consolidate remote innovation. their a few brands. with State with and the quickly Disney ServiceNow they customers. complexity to advanced just another million merger all proactively of to with newly increasing dependencies. VP world's of multiple Schmittm visibility better while part processes Disney while agencies, to their gain all than me Platform Ann the our platform to need This Fiserv, Montana's their their earned management as wanted that They Streaming Montana after of they can We're experiences COVID, their leader, employee workflows. into transformation and to With honored leveraging needed Intelligent and their improving resolution, their experiences, global infrastructure to creating time and As are all We're reduces greater consolidate their citizen selected Automation. providing Now productivity. Chase, now now insight customer the systems to Now Platform, workflows, to services. is our fintech also It Services example combined keynote their agencies grew maintaining the the provide of face-to-face interactions service is citizen asset

then of Asset others, and are and why now magic Software as a keynote, Knowledge 'an around and center share and Top extensible the to that extremely firms DevOps of Platform the best-in-breed a Now strength best-in-breed so to the a has industry ServiceNow, stories customer Disney. customers and three for in agents ServiceNow many them During health the quote, And leader provided support to core new IT tooling business. markets These develop analysts their their understands flexible our platform customer named that Management. CSM, allowed world.' I the

overall was Research. physical of a in this am We to also knowledge ways. people to has this in year pivoted honored to proud that innovation Ventana listen this. many how customers to to when did four-day reached brought continue quickly twice team together pivot had XXXX. award engage environment are I incredibly the named Knowledge meaningful almost to company ServiceNow new experience be winner And our to scheduled Every in digital be at a six-week digital from community event we Orlando, worldwide. We as that globally held by

including more customer-led X,XXX a hours breakouts, content, delivered also and building than pipeline. of strong sessions We XXX

strengthen, critical to traction role As transformation. grow, play in our to continues accelerating digital our partners our customer a ecosystem continues

experiences an part recently in digital our with to customer Deloitte, digital example, we growing alliance model exceptional confidence and announced expanded With absolute strategic are HR relevance to conversations give our transformation anywhere. that we employees service delivery ecosystem, customers increasingly and business us efforts, For help accelerate customers. of our with loyalty and their provide with

by as inspired solving customers of across is we persona, of geography, best ideas Our the innovation the and shape revolution; workflow are needs our us. industry ahead

and billion to Our we innovating overarching customers focus is $XX clear: as beyond. scale for ServiceNow

us already enable to XX,XXX Our strong our and employees we achieve are our management the bold growth evolution continue announcing of outstanding go-to-market our To our next team driving organization. will ambitions. today,

executive whole the continue been tried, leading immediately, and as Kevin new Kevin for Partner role Officer, our and to me. Customer acquisitions. in leading to leveraging the for really Lara Chief been Chief strong I'm the success named has They company He's is he all six XXXX Revenue leading the number talent Chief and excited. proven our sales are and organization. Haverty report our with named programs has development strategic both as the Officer, joined Effective true our of partner She activities. nine the We global directly ServiceNow will nine led organization and time. momentum. years. Caimi sales has Strategy Officer customer of last to owned is years continues

welcomed of $X Paul run Smith, the just reached which, billion business, recently EMEA by Vice Senior General as rate. President revenue our and a Manager We way, also

Joining us example growth. a premier is record from is track talent a he Paul attracting how of Salesforce, has ServiceNow triple-digit worldwide. for great

We employer are fast becoming choice best of talent. our industry's for the

Before to after He decided years of the stellar industry. and He to than at President and always the of has to until game. and born of at family. wish to the step a are retire end are lifetime is strong. him end in and David a in new David best Emeritus his David began be, retirement. leader. our years we take once Schneider. a closely chapter the more life. the In earned honor extraordinary In been In his the values. moment nine ServiceNow ServiceNow want a so ServiceNow closing, our right XX opportunities. times to adviser David this will in has David has I to tremendous in purpose at work are a It I beloved such extraordinary year. honor we moment, and personal will XXXX, Truly epitomizes away with very summary, remain a me an the top

more enormous rising us. discipline more our our are customers. culture, up incredibly have of and execution. been people our ServiceNow engaged, Our focused never the to before proud focus, on people the opportunities names I’m or seize serving

Our partners The thriving. us. is with ServiceNow truly ecosystem are

constantly gentlemen, humanity and our brand ServiceNow how We're relevance future brand greater with of people Our to resonate, and connect continues Ladies and our the C-suite. creating I is purpose. deeply we are our to workflow leading awareness special. the business. revolution, of hear the and the which leads

Platform. greater. The Now workflows Now been on opportunity has the never

our We work people. for world will fulfill better to make the purpose of work,

we're nothing taking hungry, we're for humble granted. and We’re

company I We’re very our you much and on defining your the of become for your the to to to forward enterprise today. software Thank attention century. the destiny look move time XXst questions.

the turn I'll Gina. to Now call Gina? over

Gina Mastantuono

$X.XXX at approximately $XX the or team. representing subscription approximately constant customers. $X representing year-over-year were currency adjusted subscription expansion execution obligations, subscription macroeconomic Top constant from revenue continuing QX despite $X.X was a existing continued RPO, created subscription to current XX% strength Bill. billion. Thank revenues healthy RPO growth, a drive end in our the the performance the growth, company, XX% driven representing quarter our for QX of flow. high year-over-year billion, were our billion, and very of headwinds you, And strong free line COVID-XX. run $X was constant another XX% guidance, growth. sales by billings expansion Remaining ServiceNow by way by billings revenues We billion, currency exceeded on driven our exceptionally ended solid while was making ServiceNow billion and year-over-year growth. rate currency representing quarter year-over-year margin XX% towards QX cash milestone quarter billion, $X.XXX

part at Our best-in-class operations. XX%, the renewal the our rate business our Now remained as mission-critical Platform demonstrating resilience of customer’s a remains of

Our sales deals the win in quarter. large teams continue to

the $XX QX. deals average and our As closed any Bill deals a which $X in than past What's quarter QX than two mentioned, those for million XX during bigger over over million, more, customers. the we increase closed challenging from an we ACV, first our deals quarter was time in all size was year, of greater

driven XX%, XXX profitability. expenses outperformance, COVID, revenue including over XXXX subscription QX basis our operating margin points due two of as to by to Turning Knowledge to lower year-over-year, well moving was up of as points approximately a format. digital-only savings

cash free in these increase CapEx and basis Our flow operating to growth by points partially by the strength offset Together, margin DSOs. our drive and our demonstrate results margin XX%, model XXX up a expansion, profit. higher year-over-year, was and our ability driven balance business an of of strong

guidance, to XX% COVID-XX QX about continue as our in include update I of business. hold The we outlined brief and industries business a hospitality, as remain transportation, how our existing represent to such I customers which impacting move highly areas and up want is QX, affected strong. energy Before retail give on of renewals in to well

also of macro headwinds these big We the deals face. enterprises in closed spite

the importance from value than over of care. closed health transportation they to deals more and can Now five and $X including quick recognize We verticals, digital transformation time ever, the deliver. and million oil ServiceNow gas,

and hotel won security a also a one of impacted U.S. customer with a based most the industries. multinational large We deal chain,

workflow we've one to platform, on generation and workflows of kept data and recognize focus to architecture. adapted customers, the the our has playbook This one speaking is mentioned, very healthy. with underway, most revolution our Now Now go-to-market pipeline relevance things one on Bill customers. As that the strategic the they When model Platform, matter our

great is thing is at it today the ratio and last high about than half the predictable. in us our giving resilient the The better confidence same that coverage model time business year, is year. Our of second

that is we new mission-critical. and understand customers backlog, ServiceNow of robust from business generate XX% a have existing our We

pipeline, our visibility the attributes and With into feel confident our we plans. these executing

As for a are raising XXXX. result, the we full year guidance

representing We between year-over-year range XX% million previous constant tailwind are growth. This billion raising approximately subscription XX% revenues currency $X.XXX from $X.X billion, exchange our to to versus our guidance. $XX foreign and reflects range

representing to a exchange our $X.XX guidance. are range XX% This subscription and foreign billion, to XX% billings million our versus previous adjusted from We $X.X reflects between raising tailwind $XX billion year-over-year growth. range

events the XXXX XX%. expect XXXX full moving to XX% transition we continue have We additional our margin our work and and overall savings raising on travel giving of XX%, from year Many to to our Now subscription of operating at from expenses margin savings reflects are remotely This redeploy from effects the elsewhere. our lasting digital efficiency, QX working will to learnings of experiences. us agility gross

Importantly, we are of lot a of company growth ahead runway a us. with

confident to the to As strategic and go-to-market. invest R&D revenue such continue to beyond, opportunity areas about feel path we in we long-term as will billion in continue $XX and in

we as the be will to we always, greatest we evaluate ROI possible. As disciplined investments our generate ensure

flow. Turning to free cash

year full partially time. our customers required, to raising increases. margin, in XXXX in We challenging we've remain taken And free payment helping collections greater by when to through operating to the manage flow committed cash due XX.X%, DSO expected increase are our our this We offset margin to decrease provide reflecting a flexibility. measures

Turning to QX.

constant and to subscription billion $X.XXX XX% We year-over-year XX% growth. $X.XX between currency expect revenues representing billion,

to invoices proportion million be timing expect the invoicing representing $XX we any note I also shifts our and renewals. XX% into historical million billing in and We subscription this change here to of the from reflects I the trends $X.XXX due seasonality year mix between in changes billings adjusted want timing QX the in of billings to business. billings was QX. the not QX's of only, shift of pulled into changed clear, of to a QX, has XX% year-over-year our growth. of About would seasonality expect that $XXX billion,

contract co-terminate As often products, These new with affect customers purchases and to do expand not of expectations. revenue ServiceNow's of realign they existing contracts. our timing billings our changes impact only their the the

Moving profitability. on to

based and shifted a from we seeing. spend investment, includes expect we pipeline margin, QX QX, as opportunities on which to are increased operating to QX For some we that develop continue the XX%

our into were in management a marketing first As entering prudent about COVID team, spend full quarter we very QX.

seen as get our Knowledge of digital has XXXX investments. we've from event, great team, the the However, outstanding our including the execution success a returns ability to demonstrated on

year we few accelerating expect of shares transformation million, have of things we to diluted environment, more this third unexpected disruptions us average self-evident Customers deliver. the as Now respectively. through galvanized outstanding is summary, business. XXXX of authority reimagine The Platform million transformation. continue to to weighted become quarter and full to companies power Digital is Finally, the XXX and as and the become of ServiceNow the navigate In clear. unprecedented a and react strategic is workflow XXX this than has future epicenter their ever, digital now the organization at customers. need operating

crisis Now and management, customers the are meet continuity business Our innovating on to Platform productivity their needs.

a world-class product the We short-term the management challenges. weather right COVID team to have portfolio and

to We financial from company. very help will our position evolve, crisis We're in a with strong $X of emerge better position, cash billion E&A net RPO billion. even exiting an this customers and QX $X.X in continue we'll strong and stronger and

employees never our their on have partners communities. customers, focus been serving and prouder continued of We our and

Humble for like Our questions. their operator, stronger for and Hungry over can’t that, hard turn ever thank culture now dedication. employees the call to and enough With and our we’d we work is than

Operator

is Rangan Instructions] from Kash Bank your [Operator first of question America. And of

Kash Rangan

has I is typically for [Technical the is just your of so experienced. can -- CRPO one and rock not clearly, expand seasonality a point, about Difficulty] for billings. Gina, To on something solid, Bill, you, could. subscription you that Gina little bit the ServiceNow So is your the you, if this credit, the billings? number

of you. for congratulations. look bit much ServiceNow? Thank to agree back demand the Just Are because with does picture of like and a for we could some does great. ServiceNow? might pulling so in accelerating like dig what -- concerned shape seasonality little this of be Bill, post-pandemic if would you that pandemic, a this demand picture into And, investors are spend deeper out the the come and look Once the do pandemic, sense of -- you that we emerging you some what question those in billings, really be but for

Gina Mastantuono

Kash. Thanks,

to of So this a shifts seasonality certain bit the of due in timing the our year renewals. billings changing is

As contracts. I to additional for products with script, realigning about in some are their co-term new my talked customers contracts existing

to result, land a we the QX QX. As in of now mix expect billings proportion historical

we also million renewals. previously and $XX of about timing shift mentioned, I billings into of to saw As out QX of due the QX

If you growth, consensus. back points add more those of at to current XX% puts a plus, get us the midpoint you'll the which normalized

again, and the I as performance So want timing business revenue or all. to note, of these affect expectations at changes only impact not billings do

Bill McDermott

much And question limitations your less you pandemic, customers Kash, for reason their is very And stronger. ServiceNow nice very gets thank your for and have around our that and comments. businesses. Post them the even

you feel bullish our should very about company. So

beyond aspiration $XX way Our billion that.

them compete the at make layer The having and century they everywhere. the we it record. don't to change Platform as system see. redo platform, XXth systems from operations systems better, their I Now so them, there simply ecosystem enable Platform resonating integration engine, We out so the looks siloed record. what Now without because a and is of Here's cross-platform with are The in even to there business of execute many

from XXX% On ITSM all big simplicity experience, even penetration. the soon. that a and better. and are the for ServiceNow, very just ones not not will but whole I all with a will especially somewhere talent look one Employee the And very is per the in plans that X,XXX XX% everything. system a where have CSM, that. because always work only to they record declare has large imperative I work the be one example. that only see how cash, between, with work-from-home And you routes that’s get Look multi-billion us, and very take to office, doing we we approach around consumer. become to greater, scenario Disney tailwind companies through the mean, money for company there is of and employee job at has work with Holy employees where employees, just the future tech different look channels or and companies absolutely portal paradigm hybrid the market different of Pro, a going environment, war we're penetrated with Premium The ecosystem direct a that direct-to-consumer product to has other that So, the Disney, Grail and consistently. at CHRO, own CEO their less. great have didn't experience, go a already just make innovated great experience talent Disney+. is their we're they split to And just could employee simplify and there'll been

think with think virtual flow learning order about AI, work about agents, where that struggle a to that think you when your example, machine customer operations and is work I you provides an internet and platform instantaneously a run a order.

hugest TAM. finally, a when CSM, customer the get they So then I And think about subscription, they went it's to and customer experience. happy

we're well, think edge look for perfect example is the low future it. And bright I Now very the this, Platform. of this Disney+ to know at code, Kash, you code finally, win in it So a no application. And

cases, Our That's in the initiative. leading a forefront be Now will to has some are in rapid Platform days. X.X hours two the prototyping development at and major within innovation that. days, to, customers them million in the and of done, couple of of deploying gives and ServiceNow are employees transformations be that kind and enterprise, building them the applications These this

Kash Rangan

Thank Crystal compelling. clear you. Congratulations. and

Bill McDermott

you much, Thank Kash. so

Operator

The next of question Pritchard Walter is Citi. from

Walter Pritchard

see moving we anticipate as installed sort Pro? I a you has of it's that that success, you wondering side it Thanks. ITSM Pro And as of wondering maybe base the didn't to do thanks. you've over much how seen but I'm ITSM far? been, been. the and longer Hi, on are ITSM I'm where much so as think, tailwind a in terms

Bill McDermott

more much out Thank for Pro the choose it Walter. the and eight of of out about automatically than penetrated right customers We're you gates. in very XX question, XX% ITSM

now predictive So base tailwind for under all credit What the with operational to for and installed so then about and and customer going our you start and all world other what’s experience, management, we even learning, wings the CJ And up service it engineering ITSM still comes that with long AI, brining us. business Now the to that automation, with the have Platform the entire time all and I the to a into be innovation ServiceNow, opens itself. a love great is excellence to the the machine edge our get great really Platform spread Pro conversations to continue in. about employee applications huge the on it is really team

very, in you believe confident Pro is soaring. and the I ITSM feel very pipeline very, should So

Walter Pritchard

guys. Thanks, Great.

Bill McDermott

Thank you, Walter.

Operator

next question Zelnick of The from is Suisse. Crédit Brad

Brad Zelnick

timing Thanks. just strategy related And And little if timing any in roles? understand, I Great. congrats you QX the and midpoint be us now when the of with unusual. a strong seems much just be seeing in quarter. delivered transition terms and how of of COVID. sales anything to Bill, of you the wanted what QX, much we're QX, billings the might go-to-market in no new there'd face assured at we're interruption, you leadership of seeing might year. a that joined transition of change ServiceNow, the the to I recall any even that, very on But from The and configuration? Thank you've

Bill McDermott

had another of now. with to not John to found built Frank up before changes. big crews changes on of people first him I Slootman thank company, much start and those a that here. pull stand as might great Fred great was team, I van have I me giants. unbelievable you the going that. even an for and Brad, any relates personally a lot and And in it team company I job; of a Luddy this with I'm shoulder making did know I'm proud Donahoe acknowledging very to management making all, thought the

him So going David he's wonderful Schneider is me of a have the the to friendship a end this great guy, I year. way be and all and to with

I his And by years he's XX has was him in. He XX way. the to He's first eight after wants nine and met living, had the family. a he told when has spend years, road So nine at stellar with this really ServiceNow, on he he that and been a interested year-old still lot. something an but career, me was time

Kevin sense, running So Revenue ServiceNow. the guy. Officer, number years, ServiceNow we're he's been that who's six to for Chief and certain Haverty, a please actually simplifying now know the in the has Because

sales held he about the So all no has it, of his think when still had go-to-market, and leaders are operations, There's perfectly sales, Kevin you it, change. industry place. our in

person. a The give is cheat second us, for a sometimes little player college because you a when for years four strategy about starter. she the basketball a a want too thing Lara, person. with you you very as you I strategy, know accomplished don't just maybe This run to as runs everything know,

CXO So strategic about talk on transformations, with M&A so led been company. the our for she competitive. XX been issues many along Kevin, and She I've and she's with led, years my right-hand level experience here. has She go-to-market events, since our

now So she to gets chain put together. value the

fortunate upside that her She, motion really business, for presale, with we we align at is sale. get here. align proven a we true our gets was too, customers, our to came ecosystem with background to to and extreme services bane align leader enough tried, a that she work sale, I and when experience the deliver the So I ServiceNow. value align in and post We

So obviously, going no end with pursue little the his mildly a different time thing more But bit year, that's David retirement, change. spend is at the The of to family. is fire. only is his he's And, mentoring our meantime, and culture right for anything on side. my sponsoring Kevin the on He'll be large customers in need. that focused and Lara by they

Promoter satisfaction the know, high. all-time is Brad, with employee there Please and Net really here Our no disruption loyalty is satisfaction, whatsoever. Score our customer an

Brad Zelnick

Awesome, Bill.

Gina Mastantuono

is invoicing billings that on full management highly the for And billings, right? guide and our in achieve changes the also have remain add or impact Our just year no it. I strong, to confident ability would we

Brad Zelnick

Thank Gina. for you, you, That’s Thank me. it Bill.

Bill McDermott

Thanks lot, Brad. a

Gina Mastantuono

Thanks, Brad.

Operator

question next is from Sterling The Auty.

Sterling Auty

more guys. in that to? the or flattish looking I you EMEA, they there look government growth the if driving Yes. at Thanks. others point wondered geographically? could in would you experienced of comment was what versus any contribution you Hi, it's whether U.S. factor, And terms results, specifically,

Gina Mastantuono

Yes.

overperformance all So the were QX. with throughout region. we We they really results growth EMEA really in drive Really, our the which our well. had for good of achieved had good really We as QX, for growth helped expectations, Americas. the pleased all in

Sterling Auty

Great. Thank you.

Bill McDermott

broke And, is $X is a EMEA, know a And which rate there many leaving here, years to him in setting getting Sterling, run the EMEA many, proven a achievement. you brand Smith run well-known come enterprise want executive an which space software statement. to is, one for through I the in to enterprise pretty billion thing just think, and exciting threshold, may is that Paul

rock-solid ServiceNow but there's at region. So and rock-solid leadership people. nothing in our single level, trusted customers every the we're our top with We're and

Sterling Auty

Makes sense. you. Thank

Bill McDermott

it. Appreciate a Thanks lot.

Operator

Your next Zukin question Markets. Capital is RBC from Alex of

Alex Zukin

on Hey, and guys. my great Thanks congratulations quarter. taking question another for

core playbook quick to seem current IT federal you maybe like gotten could in on one quarter? RPO the shot then, but that the this And you adrenaline playbook you're share? me. buyer putting COVID and the does environment here for comment, kind RPO think the they've ago, for a question, ask, incremental in growth vertical, from about the adjusted what current the versus the it wanted what's seeing the growth? And seems bookings I the there you department like Just Bill, in if just typically apologies up multi-part of XX your bridge take on days crisis. you're pipeline, help subscription versus in us and billings the could if to

Bill McDermott

it. you look, be going to of about have numbers down this. give in I transform, CEOs are world, the world but in around is digital I'll pre-COVID be digital the But Gina in to mean RPO a let sure. their to to had that enterprises world They recognized post-COVID the Sure, reality The you just survive. investment transformation. you right. doubling think a on

from anywhere now, employees a have work the actually to Your while. for if all home from way not quite

has those I'm digital somebody if strategy, disruption. home, of out that. than CEOs They everybody theirs. for words, out ready comes out XX nine digital feel In don't have four a yet playbook better other transformation hit a that's say XX ready digital of digital-first for only So their company with

it So carries over over be in is management edge the In company leave the applications. to ServiceNow. Lowe's. leader with to and people? like the authority; they to hand the Now heart playing a a their carries there. in Well, deal in build really application how of hours the deploy experience. service of What's IT COVID, also employees, XXX,XXX is less strategic with you It right side, great backbone platform the and like it employee this the than requests I basically to customer low-code XX thought do and it they in it get to into an Take ITSM on do that you Platform had interesting -- out

a shareholders now that to big you're And Microsoft, talk because So because that's for platform should platforms six we're of now, seeing I breakthrough the top come one if together of that to platform ServiceNow, think realize everything the strategic you company. all it's our Microsoft.

talk big to top of one platforms. their six one it's If any you integrators, of systems the

because we where now these office well. of stride, the protocols is workflow my safety slow highly back be who's it's privileges happening do architectures around are the coming customer their employee And IT you and listen their security. its I get every Now also out. to the great revolution people I if we're in match fast? behind as and take century quarantine, are worker This or How Because who's where understand or hitting is allowing do XXth How also And is environments. to too workflow. great badge in with involved have and to and teammates the dynamics having their professional rights sports to in or to a that's the digital-first realizing, experience my speed? goodness, today, comments the get

more if in the digital of saying companies platform they're win and in transformation environment, especially are born a these forces So cloud. all

Gina Mastantuono

And to RPO so impact schedule it thank The billings strong such you on and noticing RPO. will our RPO. right, both our the growth but impact respect -- schedule, current question the our in not our for your with RPO, will difference invoicing and billings, in

in revenue business or expectations to timing So billing related comment back this do earlier, that I our invoicing goes the that just and performance. the and changes our made impact the not are

and why And so ever is remains the core always billings our not the best this of business It's is just indicator. strong. timing

Bill McDermott

okay? So and not and everything where growth, it. please, are admin, flow, fine, wanted cash margin, business, Admin. handled you billings free added We revenue content

Alex Zukin

you Thank guys.

Bill McDermott

you very much. Thank

Gina Mastantuono

Thanks, Alex.

Operator

Your next Securities. question is from Gregg Moskowitz, Mizuho

Gregg Moskowitz

question and taking as very for Thanks good the congrats on guys. quarter. well Hi, a

significantly Are of on business total rise Platform Bill, quarter. was you seeing it And the seeing Now of get sense Now low-code, power Thanks. you influenced XX% was it So this adoption the clear the about broader-based trying whether I'm from mix impressive to no-code. another of figure to eight of talked deals? of of those Or growing a you're to signs Platform? here. see by trend just

Bill McDermott

It's absolutely a growing trend.

one of three country – you for U.S. tracking they a dozen create was world. around use applications Platform this, to gave weeks Now state department. the examples If COVID the I Think in every the the about

and Platform Now conglomerate the If global lead strategy. their way. Brazil's a customers to energy using about transformation like you are company, think Petrobras, largest They digital by the

in this trapped idea an workflow. gets internal on things a is silo a they record has business idea end-to-end streamlining realize from the basis clear because solo that a in a of and it So data moved process of system to

is how to at getting discovery product this services looking way are This now. market. is So and innovation. from how at thinking the process looking time through about This people is all development they're products how they're actually to reducing

So the forefront of the really onto something we're and I here, we're of early believe at days workflow revolution. the

Gina Mastantuono

And just we add applications. product deals matter closed. of the This launch a launched quarter, would I XX workplace in was Goodness. And weeks. that, saw our just over of the state to designed in and Yes.

execution product Now sales time value-added to and that's quick innovation, incredible best.

So really again, really, traction strong here.

Bill McDermott

in a I is you their there names to that could implemented they few we meeting And not other today. right. because when less a said have was all the our talk not I have Board actually I the actually that, brands have referenced you And customers comments stunned They an against weeks, at us? product. choose that absolutely some it than went success their my out want And on heavily people in build why did It's them Uber and if Gina, other incidentally, and very marketed two real were a offerings. cases, something. to We know And in about a proud idea. day. prototype. It's It's product.

between realizing versus now scale. seeing the you're products real is what So and difference marketing and people prototypes

Gregg Moskowitz

the guys. helpful. color for Thanks Very

Gina Mastantuono

Thank you.

Operator

The next question is Fargo. from of Wells Phil Winslow

Phil Winslow

of could if Bill. Thanks you what second hires? guys. pipeline on these sales – quarter just the and is taking half hiring in terms you're my what that and for questions seeing marketing Two us mean Bill, new quarter. Hey, then some hiring. year? of in of obviously, strong a congrats And Wonder confidence the just that. to for and terms follow-up of sort on build your provide another color And question just strong just then from for great some in next one

Bill McDermott

a Phil. question. we interesting. Yes, great It's done, is What very have which

first the workforce the XX%, and look a we If we've at it, half in environment. through midst year the you the size of powered increased the of of right COVID actually

we on So street. the the feet have

have We camp that early brands the ServiceNow XXX have through who summer And are what training the to camp, join we our company. here. to adopters is interns we want shark call which also everyone

the have everything, do year engineering math, to than in can street nobody sure bandwidth. advance Gina So we're go sure brilliant any to And us. to and part want And through goals, to we the our go-to-market, of have making be we we between engineering in people say, properly the a make the on our inspired strength. We're also we're that I basically actually better it hiring there's invest looking when now, and I, feet we at young, and movement. achieve enough right

then and then Americas ideas, not but the people, just So looking on in the to the our the own ability get on marketing at the the to brand them are having our invent and the around train. street capacity and we to savvy own to all get world really reach ServiceNow

So going ready, we're keep building and we're machine. the to

Gina Mastantuono

this coverage just our at year. to add respect that. than the better to With same ratio is would time I pipeline, time our today And last

in the our Bill guide my in from prepared the a said confidence our of well, for ability guide to so in in our and we're remarks did year. as execute back half And highly back the half, confident and as I

Phil Winslow

impacted called then up of it. just lot for service the an And how service our delivery return add-on just out results, said a Obviously, return you about potential work. terms wins in of, of drive HR. simply, How delivery checks but of half? to you a are thinking the HR have QX as the work HR to to second but also Got existing sort Not just you in business? has the obviously, follow actually customers, thing. And a a terms to similar

Bill McDermott

that I XXX think idea other downloads, is, scenario with and We the Gina better know the the wins the the the there that. that talked, in alternative people than XX proving are offerings we heels over market. head

upside employee how can this upside, year. didn’t So model. think future, holistic of Its the material. I but look quarter. part much not question a experience end materially just our the of get impact now in if business we of It the a But it's in as it's at back you

have things, to innovation the I now and that running to top. two the up M&A that Now going we have really – we iterate that clean various the You have. are always and new quickly. platform with innovate take Number Architecturally, deployed keep cycles fully here within next Phil, releases and there'll is they dynamic. is team, you it new don’t And that impressed Platform platform ever-changing with, and the two other have can market one, return the weeks, two things There's so the I'm this because our on simple, the engineering so register. of in on work and get companies experience to suite, through employee weeks. core be architecture on big within what that every things But customers and others deploy cannot two-week with want secondly,

days, emergency three the in door week. actually we the So in in suite weeks. whole apps March two were out done response got The a deployed in

the is difference, time to the market. that So

that is laid that and would I to deliver out. so, that, upside, I like to required the And understand the dream shareholders not Gina but

Gina Mastantuono

XX HR And the the of in shifting I legacy really top and relevant than multinational performing -- was Commonwealth over as closed all well really would remarks. end budgets also deals more with in to the in that to reduce And of included to more one another drive prepared XX who is We in At well. streamline just extremely of add portal, over employee employee We are quarter is And the eight C-suite complexity, really consolidate ever. broken into now and win HR deals. self-service customers. our and million day, the HR processes. systems and better experiences. Goldman experience the proud Pennsylvania because his the pharmaceutical Bill of But Sachs of spoke company, we're should now drives is their have automate employee XXX about a $X

C-suite So you're absolutely right. HR is definitely on forefront the of all executives today.

Phil Winslow

Thanks. Great.

Bill McDermott

Phil. you, Thank

Operator

next is question from your And Merwin. Chris

Chris Merwin

with Hi. product. Thanks I asset question. companies management the tech wanted to and much software about imagine relevant particularly digitally I burdened a of that's for to debt lot looking ask transform. these so with many taking the days

be about ACV guess, to going that So significant talk might can you. contributor and any updates Thank a forward? any, how I there you

Bill McDermott

it, Thank sure. Sure, for the very you appreciate much question. Chris. I

I hardware this also are us multiple that leader environment I gave remarks; looking obviously, Customers at ware. underutilized in research say are in that. assets, claimed to with the in now There the And us have would our that know, opportunities true the all ways. of scenarios lots this What is a they and you space. for activated rating As And as the pipeline you right have companies good. shelf in enormous of addresses in area involved in, both the independent in have my the the you is been this. extremely is I personally product business is software us

asset other beyond those take both can that at been ITSM the software, the we a to software some in and management so leader. hardware faster researchers the hardware work of management asset bringing will grow because and typically, and leg of now pieces, especially So a is both did the Pro but half holistic the the clearly we products first raised market, with look the by have half, independent as coupled second it in and

Chris Merwin

Great. much. Thanks so

Bill McDermott

you. Thank

Operator

Tom is [Technical question next Your from Difficulty]

Unidentified Analyst

the at for my is a you question. middle like second in successful could Bill, Hi. product Certainly deals is a taking competitively to Who little seems trying security typical right quarter. course pipeline? What how in that facing coming a there, hoping it. lot and address the structure little deals a Great against you digital Talk heart of take I job just appreciate security and deals? are your in Thank of and right now? progressing sizes the strategic more of the of you're of that's now, on detail. bit was you're really more the how right bit a I off security transformation. up about the right these Thanks.

Bill McDermott

for you Thank appreciate course. the definitely of much I very question, it. sure, Yeah,

sponsor which In quarter terms the included since spoke of with our speak about quarter, we those of incidentally, was I ever at Fiserv both XX I executive look company. had the if JPMorgan, largest security it, businesses. and XX for authorities you was to deals. Security great can our I the in top for of

tremendous example that defense be security automated risk approach and all a value an in a with saw contractor they would and the vulnerability response to Platform. Now large Another us, very worked on

about don't don't talk with away badly with should anybody. this competing in what system from take I record. of actually we you We compete think is So there go people. We don't

most that on they seem no like have We their to as market all any and in automating of they company. What any like problem security are or streamlining with have they Now think about it a the to brands particular workflow, is Platform.

these I that us, companies these deals do as and the involved they to employee as the smooth an into attach it's know extraordinary this, know, rights beautifully very One they also, Anything So for as badge before company That a attacks a in for about have employee, like access, know, know is their the And they control. their that comes really everything be out they we as a Pro. responses to well. office the are company best batch. concerning itself. you problems for run and that might vulnerabilities simple building, and access, example solving workflow because And and a into privileges, computer example, example, the their have was everything about IT But detection early you all understood in like personally in talent, JPMorgan, company's as of rate is of we key ITSM that workflow. coming combine everything get by it's security them. whole

of All in is this mastered Now Platform. the

to differentiator. is that And they think as be half should platform the think has including we is big think of why doing. knowing of the And process that platform been just what huge company, of their that or backbone advantage. this That's be a a business I these a and has was and shouldn't to advantage So Gina workflow us talking about, highly competitive as secure. everything companies the everything I a rights, return in workflow of workplace mean, privileges about bring as the talent, and our IT

Unidentified Analyst

Thank really it. Bill. you, Yes, helpful. Appreciate

Bill McDermott

Thank you much. so

Operator

time question. have And for we one more

last is Hindlian-Bowler Your question Capital. of Macquarie Sarah from

Sarah Hindlian-Bowler

you your congrats really or in. be just Hi, there. one CRPo Good growth would that hear and than if worse Bill, on it. organization, pipeline, to – to at. Gina I closure another at appreciate why? better perspective of for great helpful me really look your voices sales on squeezing Thank And your months sales I is do something you to feel rates, your ago? is, think kind Bill hear question three your The and your did could quarter. marvel you you

Bill McDermott

and why feel to acclimate COVID still have bad know promises run. to have that and and that feel reality going people reality. transformation is now. Governments ever-changing for away think, partners better. is, told then even made, the feel than environment customers. anytime kept, better the of to promises their soon, this meet still I a And didn't much I serve the I have I climate in but And diverse come our this not needs I digital you to our and is businesses reason citizens, still have

more moving before. did digital So us looking need solutions. of attendance digital they event the They was now prior content. for year. And ever And people They're tells we the XXXX business is Knowledge are call you than looking forward. think the double for I that that

I that thing you Sarah, other is – continents on being very, in interesting The very find this, four can a imagine in Zoom? day

Sarah Hindlian-Bowler

No, can’t. no I

Bill McDermott

Right.

the and logic defied have because technologies. modern of of these travel We time digital

productive a you as person, all probably same leaders tell thing. the I that So would think

physical If would more business ever XX in time you than I world. have interviewed XXX tell imagined the places zones council, in CEOs could in they be more in you can they the think,

I the whole is to you think world this. another adopting give So I'll example.

And all of If in it's analytics our than obviously for and then, they of code. are on customers works before. have the and you the high, terms our use Everything ever sky at engineer, platform, team, look engineering code, have here. the productivity written using more rates good we code all the because higher the

hey, product in Because relax. an various a got really speed. full here just leadership, doing telling people linearity. the telling our with our go-to-market just people this business The industry had I of norm, what pipeline, doing our guys we're take up me marketing. them, all in communications So is go you sales now challenge that's the become take leadership, has that have we're biggest the adjusted. I It's afternoon evident walk, my on. a its shock off, mean, going are I've to mean teams, amped and is here. marketing, evident is they're what in going And in evident March in of

confident So I for can feel you extremely believe they workforce an customers. to ServiceNow their our and the and should so today in job inspired confident very get done customers, outlook second confident in in very serve half the

Sarah Hindlian-Bowler

up call That Gina, helpful. Bill. you back. with really follow I’ll was you, our on Thank

Gina Mastantuono

All right, Sarah.

Bill McDermott

a Thanks Sarah. lot,

Gina Mastantuono

voice as your you. well. hear to Good Thank

Bill McDermott

well. Be

Sarah Hindlian-Bowler

you Thank

Bill McDermott

you, Thank Sarah.

Operator

today's participating. for Ladies call. and concludes Thank conference this you gentlemen,

disconnect. now may You

ServiceNow (NOW) 29 Jul 202020 Q2 Earnings call transcript