NOW - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to the ServiceNow Third Quarter 2024 Earnings Conference Call. Please note that this call is being recorded.

[Operator Instructions]

I will now turn the call over to Darren Yip, Group Vice President, Investor Relations. Please go ahead, sir.

Darren Yip

you ServiceNow's thank Earnings Quarter and Call. Conference afternoon, for Third joining XXXX Good

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

quarter we review guidance call, the and quarter year fourth and today's During for our third discuss XXXX will our XXXX. full results

and today want involve emphasize our on based information guidance the get We and forward-looking discussed that information assumptions. of statements contains we uncertainties duty future or as Before to to on no started, risks, is such information we events. update new that a or this including undertake as call, of result obligation statements

that to most out results addition as to may filings, earnings today's forward-looking to and release differ including materially GAAP. refer from not for recent our with We'd point in XXXX financial our and measures to our also like SEC non-GAAP in accordance and factors measures substitute calculated cause Please XX-Q statements. that actual press for present we a XX-K

posted the all Unless and are performance between and today rates discuss revenues, we for To except non-GAAP or measures otherwise investments. see and RPO, these current obligations, financial cash related RPO growth and noted, reconciliation remaining please our today's refer be and on non-GAAP measures, website. GAAP which earnings investor press are website investors.servicenow.com. on to call A also today's will release at presentation, our posted both replay of

Bill. to With over that, I'll the turn call

William McDermott

tailwinds Good our afternoon, I'll beat lot confidence report. much, that I and Thank a latest powerful to trajectory. ServiceNow's joining growth strong on Darren. you this There's X underscore focus in appreciate in very everyone. really you cover today. raise

XX.X% outperformed again execution. execution. we at QX high level constant results, basis and above was our XXX Subscription have the our end We demonstrated line ServiceNow's once points guidance. The top metrics. growth of profitability first currency, revenue is elite strong all With

landed than XX%, margin XXX our guidance. guidance. net currency, customer greater million was largest ServiceNow's in We basis enterprise CRPO adoption logo new basis We to ever our the our deals $XXX over Customer total in had our XX.X% of to ACV. points above XXX end deal the across end. was second million move above XX ACV. more Operating mark new platform at second constant $X points and than continues crossed

For for CIOs and and our ITSM of top ITOM was with at with $X our that deals. top was they double-digit as that in combined XX of management top asset and their Risk for all deals XX XX XX QX noting XX the deals tech million. Security were $X each were teams, of strong over deals million. also least over another worth performance IT deals It's in XX

million. of XX we QX a XX top in $X of the in and strong see with $X was the and deals XX more top disrupt workflow over the workflows had with As top front deals Employee with XX XX great million. over deals again $X XX creative X customer deals of opportunity million office, to XX the were over XX workflows

macro the companies has Many a headline. been has consistently delivered to what struggled the of complex environment. Here's have XX. rule in execute beyond ServiceNow

execution. the level for We benchmark are elite

behind strategic our tailwind success relevance. second ServiceNow's is The growing

things other modernize their up When strategic secular systems, a ServiceNow that chosen that world, they the challenges. CEOs mess we've century of at cloud online Organizations sprawling played direction all platform that public get those can the create role. as talking the the modern governance needed the ServiceNow under a cost, consistent CIOs And to and into important last came consumer-grade the security the years, around so to systems. And and created enterprise, for control, integration. we been world help the It's understand experience. integrate mess, AI to in orchestrate silos the of For here. about the shift workflows XXth user clean with enterprise they were platforms. solutions them asked is history

C-suite prevent privileged vendor's AI. they with to scatter another is mess the risk that nest hornets agents our see tower, do the and looking for platform. to which control box the the as Now fleeing like is ServiceNow every ServiceNow trust will and We a governance position

shift X as ever to including This AI and brings and driver. expansion. our has XX over customers to X transformation. an $XX ACV, The ServiceNow spending third in With business validated this real momentum million have $X the and to is over Assist our accelerant than Now for unfolding million, million time. be and the continues product in AI more emerged me to is $X we fastest-growing platform cross-enterprise secular

custom solution we AI-powered and banking, for X vertical XXX AI. tech, to industry with insurance public announced engineering agentic QX, our gen Xanadu AI new over delivered Xanadu. expanded through and million-plus development In security, Xanadu date, skills CoPilot and Xanadu Microsoft Assist sector, engineers. included development, generation, software an innovations biggest ServiceNow's automation release net showcased integration has supercharged Now a Assist This analytics released for Now with We integrated manufacturing. more. procurement telco, with leadership hours.

action. AI Using the for cross autonomous enterprise and they've single pro-based by and people, with them. an is can to in hiring to prompts And deploying agents people until the workforce contextual ServiceNow first support This ServiceNow human wanted now, work like now to jobs agents activity the platform architecture additional requires AI initiate beyond generative We're do enterprise uniquely place. that data, doing never advance just comprehension. deep not AI to

of point AI to governs agentic the control enterprise. deployment be the the that across intend We

more a That alone. contributes spent spend will is why nearly $X.X on forecast global services what than IDC says and the global on by ServiceNow $XX $X be AI solutions nearly AI trillion will this to XXXX in AI As on also will value every innovation $X economy. XXXX. generate trillion impact to IDC businesses means This in

brand the market. with ServiceNow combine with Logistics ] a countless shift the addressable transform. [ success Defense is identity our awareness fourth works and to is The technological you When a consider transformation to momentum So engineered platform factor that the once-in-a-generation for growing massive the The lead ServiceNow's world is result. prescient with stories, digitally works was Agency ServiceNow our a brand. you Assist when

visibility a Banco citizen ServiceNow Brazil increase de Following successful development highly to automation. project, works with and

ServiceNow the experience. its ServiceNow rolling After Banking people the solutions AI-powered transform The their operations automate office them. their families to EY to Veteran with Group with ServiceNow its transformation. of with systems risk ServiceNow mission-critical and ensure client Now business globally, service. so Affairs ServiceNow works a to to they Red range on their works automate to employees enhanced their to resolutions with disruptions concentrate Assist or who wide Cross minimal with out American Benz tasks Lloyds works IT deliver serve with with can management life-saving support perform faster works mission. works The veterans, colleague to improve to Mercedes

partnerships with American a partner started. to Gen in technologies, our we're marketplace. acquisition Zoom alliance and AI shop ServiceNow increase recently expanded It's as at to enhancing a expanding ServiceNow no into our North of integration strategic Bill well. Technologies, announced driving Gen We operations. announced the integrate leadership in just Siemens announced industrial AI the an Canada HGC new of the their floor are surprise cybersecurity collaboration aimed getting

a powerful growth In fact, today, new of we initiatives. unveiled series

cases start AI reinventing agents with use game enterprises to entire on NIM are We're next for the blueprints. turn ServiceNow Now small partnership across by platform to capabilities workflows enterprise the Our simply Customers vision incident workflows. resolutions, agentic single the for AI. issue and these using co-creating NVIDIA embracing and been taking NVIDIA has NVIDIA response all the agent on way out-of-the-box developing shared a for Together, on level that a changer AI.

analytics You ServiceNow launched XXx acknowledge processes for already speeds heard global including transactions enterprises, our DB, implementing across are supercharge database Amadeus, XXx Raptor in DB, Raptor faster. the new systems. of Customers, AI-first which their processing that process ultrafast to built faster,

doesn't ambition data end Our there.

will our the enterprise. fabric, deeper data, seamlessly expanding workflow so are flows across We business data and new technology it with which unify

us trusted XXth enterprise order have Companies chaos bring the architectures. to always to century of

powering Workflow so data access the Now can partnerships action, Databricks their includes all X like copy automation the AI with real-time instant we data turn on source. also leaders ServiceNow customers data to can and Snowflake by Fabric secure established and do Data AI-powered from with platform. same with into

opportunity of services innovations for taking our the market. market leading integrator nearly ServiceNow, company door $X.X first One professional world's is became trillion. systems doubling to to Cognizant TAM workflow massive open to the fabric the These data

Street all the even momentum for encompassing the value a unlock few the new market experiences. University, is growth another flywheel and represents also ERP to global with with an digital strategic We to for goal announced existing business. in investment our partnership why bigger This net University next scale. All created this Remedy innovation, ServiceNow is we creating the million X learning ServiceNow skill in learners ServiceNow workforce years. a in

momentum, no their well Opportunity how employers all develop is assesses With Index it's growing. The that our surprise this recognition also American talent.

the the firms comes that we company brands. measured promote technology how careers fifth ServiceNow among year, and ranking all advancement the with when have to importantly, Even across by learned company as our the the of We be score all is internal ServiceNow sectors. highest people. ranking this overall overall it top will well XXX again more among build index, best

be I'm for best places Product to join than very Singapore in our open Europe, the This President, have to announce me as for why for final and more candidates COO. Officer people Zavery this best to for technology already list We in our Amit ServiceNow. year. we parents, Chief proud work at also our women million is ServiceNow tailwind. brings which rank want in and roles to The X.X will that

Amit Cloud from of Alphabet, he the where Manager Google General Platform. was joins

largest During billion. build from billion by annualized fourth company his to $XX enterprise over revenue into the $X tenure, software Google he helped increasing Cloud

and where Before joining and a Service Oracle, distinguished over Platform had growth analytics. Cloud, career at as a he Amit Google presided data their

who a to company, great that it and also partners transformation, defining team I'd who job our have software to Chief ensure welcome innovators. of century. credentials, an of Officer, whole Bedi, highly also Mr. Amit engineering customers And humble core. packaging vision and warmly I'd a With a perspective, and world-class engineer Sterling compelling educational He From pricing. and to expert all to With the Amit AI shout Customer company with our in exemplar Chris and we, is did QX leader. in he a also our filling is commercialization great hungry business joins out like accomplished company enterprise for job. a and to give career a like special in our as he's leadership his an the aligning a is new joined that did XXst and engineering full hires

In be there of ServiceNow closing, which any the shouldn't have of company for AI could on that number speculation it is factors today. the is about a past to companies focused putting will are out I ServiceNow make growth standout the winning. in look winners that already AI. We people. companies work lot There's

oversubscribed need security. team, By much I grow virtue world as more time. Financial customers, double to attendance of beyond. to Our serving is rocket our haven where ServiceNow. more I some our my the That to company year no full safe celebrate potential be our anniversary to a the of and aligned only to over for definition, $XX dream more couldn't CEO haven Gina not Thank also billion our redouble than of proud and it hit cases, for fuels to us we are you as closely Fred safe customers our and ship forum technology events very for to commitment for fifth a Luddy's By our a place to strategic in go. Chief choices, is your milestones Officer. year-over-year. makes all things hand my new refuge Mastantuono,

Gina Mastantuono

quarter-over-quarter Platform basis transformation stands billion, business as and quarter profitability top you, RPO the growth, was ServiceNow approximately growing driving $X.XXX C-suites, every AI Bill. $XX.X out QX range to all by in for and of were and remain the XXX corner as deliver metrics stellar year-over-year both Thank intelligent strategic Now of billion, the exceeding growth digital solutions robust demand. the Assist ServiceNow incredible the with representing to see across continue our at for priorities Gen another constant XX% currency, our partner Now guidance substantial year-over-year QX quarter year-over-year. in enterprise. end constant XX.X% of high points. ended accelerating currency subscription revenues and outperformances

guidance and a an growth, media billion, and point beat versus constant from currency XXX basis Current RPO From perspective, was acceleration a $X.XX XX.X% QX. XXX year-over-year representing our basis technology, industry point over new also strong, and strength. very also Retail fantastic manufacturing XXX% year-over-year. sciences growing had quarter, life was XX% saw growing a and year-over-year. care over net Health and Hospitality ACV telecom

ACV Federal has in XX phenomenal further new $XX deals platform in has new top to us with than nearly $X over or the million greater XXXX. customers million. large closed demonstrated consistently of by growing QX, of and the deals million number we Year-to-date, ACV U.S. we customers $X XX% In robust the importance X,XXX. the $X of net year-over-year, driven on the paying powered provides number $XX The in quarter million ACV achieved What's value X including Overall, us deal execution, over ServiceNow logos. more, of rate once more outstanding paying again to new over We the quarter, million in renewal momentum. X X landed Now customers. net grew reflecting a a

deals them, top selling QX, per The transaction. $XX X our included were Among platform, proliferation or more In products. deals more emphasis and XX million million. it, X the were greater $X with XX of deals and large on a over reflects products over deal XX of

gain Our continue AI commercial in Gen to capabilities quarter. the also traction

As than X X Assist, over Now more have we $X in Bill customers and now million million including over $X spending million. $XX mentioned, XX

seeing remained QX. from case to deliver greater rising Assist's significant as XX% proof SKUs Pricing we're productivity customers a in see to from price healthy more demand plus savings. has also increasing Now real-world our over continue Pro improvements studies, points confidence and uplift in ability With than

conglomerate deflection pushing multinational improvement XX% a Enterprises, instance, in rates XX% towards goal of For has transactional a HRSD seen work. case automating ITSM with its of and

so results. The deals Another XX% to satisfaction. AI Enterprise were starting large partner of enablement employee Gen our ITSM while direct, to by increase tech company its we're see self-service enhancing Plus adopted majority sold for

than one QX, GSI and enterprise of ready. HRSD the with fewer closed a plus of days, were agency. partners, they XX help in federal production configured example, an For our deal fully with we In largest

by phenomenal Our tripling industry both a SKUs new had year-over-year ACV quadrupled. Services TMC, which net Financial and quarter, also led

basis margin was points guidance, operating our top XX%, timing the Non-GAAP profitability. outperformance efficiencies. to Turning spend, XXX above OpEx of driven over our more than line by and

basis points flow XX%, up margin was cash over Our free XXX year-over-year.

In in bought balance primary as quarter share we shares billion a of back the approximately sheet, the with managing $X.X ended We impact robust our part dilution. XXX,XXX including repurchase cash investments. with the and QX, program objective of of

of remaining the value. shareholder to As we our world-class have demonstrate of end strong balance authorization. $XXX drive original a of growth, approximately Together, these to results continue the the quarter, of million billion ability and profitability $X.X

to guidance. Moving our

Given outlook. the further raising outperformance, QX growth our we XXXX are

XX% currency of by For XXXX, midpoint revenues billion, $XX subscription $XX.XX or we're to the million our a representing a raising range to at year-over-year constant basis. on billion $XX.XXX XX.X% growth

XX.X%, shares of cash $XXX margin and GAAP flow of margin diluted outstanding of XX% gross weighted expect of to subscription margin average We operating free million. continue XX.X%,

we $X.XX currency expect subscription growth billion billion, revenues XX.X% For to a year-over-year or $X.XXX XX.X% XX% and QX, representing constant basis. on between

CRPO constant growth expect both basis. reported and of We currency on the XX.X%

We expect XX%. of an margin operating

execution. a Finally, we to In expect the Now quarter strong and complete for by on QX platform exceptional diluted average demand team million GAAP outstanding ServiceNow the experience. platform weighted spectacular summary, laser-focused $XXX be was driven for shares another quarter. delivering continues end-to-end

our defining as like new opportunities Microsoft, with dedication. growth a excited release our century. their durable created they we're harness worldwide of by and and Snowflake would work our innovations partners like and great becoming to most set Bill on Databricks. and I'm XXst responsibly to With margin intelligence yet, to line the comprehensive power software our the and top innovations fuel we're marking in latest journey of expansion about to strong NVIDIA, empowering enterprises hard the quickly, company enterprise thank for the you heartfelt company extend Xanadu the our of AI seamlessly employees continued I and

ServiceNow Our best execution to With Their strength. the open to that, Q&A. it people I'll up commitment work positioned are places our has for among level elite greatest globally.

Operator

Instructions] [Operator

first question from Zukin line of Research. Alex the comes Our with Wolfe

Aleksandr Zukin

in to back environment for Gina, ask XX versus Bill, maybe on tangent of the market helping demand rates viewing you're some months, last growth year. sort Just or year that mean just maybe question if tailwinds buying a a think first you're to from out how want and follow-up of How environment product. I unbelievable vertical, vertical, a and in those is on given we quick a you a demand this some the TMT I are you retail maybe it -- seeing? next not? then But you steady the called seemingly all better appreciate that areas kind from medium? the much about quick the that do or AI is

William McDermott

very for Well, Alex, thank the you question. much

overall think value-based value-based is been a but market for out I it's It's some a the market still there, dissimilar. not macro time.

we who's then obviously, got raise. the and the who's so who's AI real gen And delivers becomes And question yet with customer. really for platform got and story real beat case that the that use think got another the answered to definitively I really tell really innovation, a

actually at the is AI. feel with future partnerships. plans excited their companies, building like It's going experimentation platforms really are and I the choosing real that market C-suite, matter to So about the from especially

So I'm super excited.

The compared we're events to last global holding that are subscribed year. double pipelines great. are Our

calls fire. earnings And underreported work fired the and culture win. gets up and ours on we is think I customer. something customer that and to Our team for feels is ready that in And is we're the really

Aleksandr Zukin

definitely and $XX just a is Well, calculations real by Now million number. our Assist ACV, under

haven't TAM your Again, doubles about time. heard Maybe a talk that that. long just product in on congratulations a you So quite a we follow-up.

So you product take there in just traction -- long and us start existing how the how understand do with to kind your platform help customers opportunity expect this meaningful incremental within P&L? data some to maybe what seeing it is the and new expect you of

William McDermott

across foremost, think upsell Pro just Raptor the and is installed the rolling base first to dealing with Well, I ServiceNow. entire DB Raptor with DB opportunity customer version an base alone, that of out the

industry, greatest sale. with of it go put the to faster, it's in. It's and hours. in So engineers a the in XX% like simple the seamless by a you Raptor DB process kind happens And want way, it's

executional know see fascinating and Alex, So world, But leadership But this love it's any evolved platform excellence transformation. into the then we we source of workflow are we pretty engineering the automation them. have this to from that of business data now the admire the the team. I workflow with align super that's They part I as that see AI access idea platform is of perfectly exciting data this because automating. the for can and

And all and And magnificent making and or in customer an by this automated the getting of an control process. benefits. data doing go that workflow automated structured has is everything that under faster, unstructured

saw and Databricks with and Snowflake. time been been always But able for all of the record, the made this we've we've clearly, You data we systems announcement now. doing the that some and access to

lot element of data applications. like should So think workflow be data was the is data. a workflow to The to I fabric fabric thought

exactly ServiceNow you numbers off, And come research TAM." doubled independent up where that you building we're psyched So are from by the am independent I've here too. been "Bill, talk talking in that said, I pulls so what X the sources they just really if firms, to us and to that's analysts your

Operator

Deutsche question Zelnick of from with next Brad comes the Our line Bank.

Brad Zelnick

in modest be ahead a we investment about see sub-XX% pace more would of versus OpEx the what the can else past and QX uptick OpEx been over expected as anything reflection year ask beyond you on and of should growth back additions year. for really had much of of the the meaningful headcount growth the you opportunity think helpful. to share of in this catch-up How wanted I the in half

Gina Mastantuono

Brad. question, Great

marketing right? you in past the in were uptick majority told is we've quota-bearing growth So to going back of hiring we half, the The reps. the headcount sales vast and that our

absolutely, opportunity in And as in see can about we think you confidence our of so that the that front us.

planning But accelerate do it prudently. able we're different. we are We time. we if it to quarter that headcount growth. to to a remember, a our continue so pivot see at We do something

expect the with we levels similar head And count Not the of quarters and of see fabric, be has data head Agentic our pace. opportunity next Assist, with as workflow been team up, similar but sales with the few lean we headcount to AI, and into driving. so all growth that you R&D count consistently will marketing with up is everything only in can us in the the front the is Now innovation continue at

Brad Zelnick

one Bill more one And and for if that's year just think them. something I ask mentioned some elite-level could I'm because you've that times in now, Bill, slip dying not in for but multiple to I execution. other, go the

clearly skeptics you how to light shed levels may risk some to going do to and say were You're average there lap is many of mean be you or might execution what the you you others, companies. other execution the we're pay-to-piper to more begin of that so strong the durable it, reverting that on moment can concerned out-executing it how

William McDermott

the first do great a made business leaders. give this want were only back to that stop, and and total do highly best that Well, in is was relationship strengthen people Thomas, Brad. would to shout I hard a they a much, I done Platform even between And very in wonderful have Amit. Sundar And the Google Google you the way, out and stronger ServiceNow. industry, to and and and hire transparent the Cloud with team we class thing in got you've sure thank just leadership Well, great you make and

It's it we people. in of then virtually And that's clear by their together We really wonderful actually overcommunicate hands plans want at And participate just really really of Google, feel century. class a anything to people software more than execution then in I company like build more. win thought people XX,XXX get the And defining to a there you shake care, set have and people XXst ultimately, the enough here. wanting And a down I careers, can to plan people. you enterprise highly necessary on we very thing. if want comes a professional that everything. if our building and

our not even to close we're it. hitting peak. not near We're Now going

So of as ourselves about up you level can there's think elite lapping plenty caught the in things and our own do hype getting better. of execution, we

going that plenty all on we There's people board things to gives still to those that the about have we've get me now such of as and do are into optimism get but what more results and and flight, the yet look future in unbelievable to stunning just this top, new thank partners super build watch. out I innovation of in a want this to that on to unleash with just there. is net platform my company to And it's way will the do this

And the it And we're out our that, there. they system being operating are Jensen think we He to says with that We're part to the know ServiceNow. word everybody. enterprise. They is open all the LLMs be of says want I best. good, by AI for and integrate

look the grow CSM know grow amazing improve productivity, people AI to we're your can when gets keep using again companies to needs across magic record, customer and think service management our cost we've going. leadership that and own opportunity time, and our world to not I with the again, it and I great think bring it's to excited customers You help growth things going we're internally an all a because level. at for to solutions going And with leadership take they of does on the how integrated And on even model. just business systems results at same but platform also out, our about

So involved it's pitch. overcommunicating constant planning, and getting everybody innovation, it's constant in the

Operator

Instructions] [Operator

line Our with comes JPMorgan. next Murphy question Mark of from the

Mark Murphy

congrats give Bill, one long everything. just I'll you on question.

showing billions so U.K. some see ramp-up big. bookings they're included next big the we've gave, just ServiceNow the heading Now believe comments in to AI happen it Assist And year. and in by your media you data AI There mention the and it the investing I that can't way, numbers in I for center. was that fieldwork Our into [indiscernible], were a could And about a exclude into QX.

So curious to to a connect maybe in work specific as the just getting we so able be with power point kind the providers if you that think to inflection drive service dots of agents. this that AI GPU countries that or just I'm AI material it's all is to leads should going to investment your

William McDermott

and Yes. appreciate Well, great it you we to and meeting, do. a have your you and having leave to let's processes lot us. the real believe maternity through those out benefits compensation updating I automatically Mark, your great. Assist your was single And that of crazy customers care, all best a that all you're internal and all, that know you are referenceable Board many much in really at then of I Mark, such Luddy out speaking kick did people of you that and just assume fill front forms once see sector. I labor cup, in this. of now representing on for hearing so the means everybody and is thank which said firm far crush the he just to him, on And things. all these sole were very I pipeline. We first the is that are didn't that touch well it. thing. And in it a days somebody most. and And And public we so people know the rely do Now you our the "Well, sponsored didn't health a few thank on at corporations was to doing private going the much. a kind see just growth that going words, he C-suite, go to both Fred what there have company, said we that

just a company." experience have worker as in any can a You nice

could we you It's it. And the do beauty guys man, this. fix you that's of everybody imagine "oh, like there that." out, whatever people can that's said, And wearing

what that we're looking demand that I we what the is certainly positioned think also kicks which well for AI everything, I for, and point looking for believe for inflection is So into higher where are you're that. gear

Operator

Our next with the of question comes from Sachs. Goldman Rangan Kash line

Kasthuri Rangan

Difficulty]. [Technical

very one two congrats Bill, I'll of The Great. all. Okay. first fire -- on questions off quickly.

was Secondly -- a that not question.

Secondly, contracts, congratulations you you to the data make to could revenue RPO generate what XX% do does I be going on besides its what's allow think that that Amit, it's hiring previously. not for long-term the that and driving do in ServiceNow customers Gina, finally, great. money And strength platform, that? could

Gina Mastantuono

I'll strength It Kash, on the of So itself. RPO. repeats start first

quarter So but portfolio strategically last us the And in really it's our driving deal is larger what's and better longer but that consistently and strong. size customers the testament remains with leaning the more really the are much getting getting to fact not a only that are contract that's that's larger, incredible terms products of RPO getting growth. and And our longer. than

our why that that and customers. when to We is CRPO, have strategic really testament to see contract quarter-after-quarter have we average move incremental that continuing with RPO up to that's growth you our terms relevance continue strong but strengthen the

business. our across results really execution but the revenues in so really proud which a not of and that level strong our our and showing of that's And all number, health long-term CRPO, only of elite our measure the the board, RPO is

William McDermott

about this fabric. And data talk I workflow amazing will

of monetization for our in the it of version of the value it. think delivers customers. Raptor way DB, Pro enormous So terms this

XXx XX% by So and transaction running about and next-generation and to analytics ServiceNow times think scale improving customers. and bringing to up performance about faster think reports

speed, the the performance, the So scale.

This customer then enterprises power apply installs a bigger. execution. platform all about cohorts, speed unify As and think platform see. and disparate is Now to for of AI data we bigger, quite get thing buying. Then the the the fascinating productivity, drive Gina to about operations to the talked improve of business transformation get the enabling

we driving and So the truly not all or of that. customer. the weeks, days hours, And migrations have take for this is performance perfected

structured continue that out. data to get pane invest of it's in, you're trying the an but to for unique of benefits of to to opportunity existing to whether a that with that ongoing people going it. an will that going be glass. And any it's ServiceNow. one the is build one common it will this for it flows the how worth be But what to thing, pieces every unstructured get this across source, automate So on to we they're it will or that remember well will And and it regardless work, installation compose benefit, data coincides pretty story the be be it platform from and access to upsell enhanced as world be there able perfectly for

And companies other rolling already No more. that, we're could have great we excited. now a super on in And future out we're and have DB the for that believe world will Raptor like that. and do hundreds very we Amadeus growth, and it position that company in us give exciting adopted we're QX, counting

Operator

Our comes of line question from the next with Stanley. Weiss Keith Morgan

Keith Weiss

last duration quarter, Gina, XXX came business one and of quarter. strong about on for for to that Bill. One question year. us last a from you federal the talked Congratulate headwind basis points question great Gina

a strong those in quarter assuming I'm headwinds year. federal QX. exist you had such this don't Given -- duration that or

So big of then last question in don't the duration And scene came couple months. is over kind have QX? to that of you headwind on in the a for that way that Agents Bill. correct the really

cycle your A of like we're this are it of well. now conversation? as does about agent into sort solution have guys SKU if that change of naturally Assist talking terms in flow people new about new Plus the in of people technology all just lot Pro Or agents? You that kind the at there's the Does are like the agents. about talking Now sales

William McDermott

on naturally. that And much, flows of are about for Keith. in advancement It very of thinking future. think cements your another It's you're yet is one further does, or if story. the Assist, innovation not the going ServiceNow ServiceNow companies it I customer a yet Now you a ServiceNow bet to Thank it that handful platforms maybe you're resolve

solution, for is almost possibly totally us on integrate has and we taking working people companies out-of-the-box I will established of. so which great existed faster, on solutions, to out level, one don't challenges lot we platform third-party example, and you to type to try it. have So one this that to with to that of some with with any security and to but AI the not and our years other years one think we've on gen market-making data disruptive, and an there humans really do And pretty and everything partnerships opportunity and intend have an And have very opportunity, think another proactively breathtaking. from with an for task it models complementary of benefit well translate ServiceNow is people I think, architecture also building And NVIDIA between upsell each with model, together architectural some predictively since better. system, yet like given innovate a and agents these can enterprise most at resolve

ROI many said because never to customers for old they of digital those XX% I As couldn't our transformation times, systems. integrate came

platform, and Now one in the a to and you're you races. agentic into with AI off integrates everything Assist Now turbocharge it

Gina Mastantuono

Keith, question Fed. And expectations had CRPO we great significantly. the then, changed another on duration beat our perspective, from quarter hasn't for mix mix The your from on but

QX quarter-over-quarter duration that will see re-ups, you but Does goes as back then QX, get sense? QX, until continued that away definitely in next we of headwind kind to QX make of year. Fed So

Keith Weiss

Yes.

duration-adjusted didn't duration year get was as the but So is quarter. a headwind numbers into basis, go on duration we QX the stronger reported to that have like and than back [indiscernible] headwind, away in the come QX from going through further the what really was

Gina Mastantuono

correct. exactly That's

Operator

Brad Bank from line Sills comes with of question of next America. Our the

Bradley Sills

to outpace pretty pretty well. starting on R&D see significant of the marketing, headcount looked really headcount was remarkable last opposite, historically, It's the as ratio beginning question by you're it that and sales and X:X that here A year almost since here there.

newer question your new going get the go so win in to guess what about go categories these Is you're I more AI application does just expansion business? the that product that less business categories find hiring that bigger of rep the deal. next really some gating is, and and like after with growth say the to platform ability to and out about factor about So here the

Gina Mastantuono

bearing say it's it's sales. there's marketing, right? a a and of I'd things, quota lot So So right? there, Yes. sales of stuff couple not in only

that growing So up we strong just as street quarter-bearing fast sales at a increasing total we're it we as that sales as on operations There's and headcount you mean not we and marketing of really were way. because were weren't that not lots marketing saw building doesn't level. the R&D, sales growing feet now scaling the at our same

little to want this I've just headcount because a I said lighter. sales So it like clear, be marketing and was looked bit each quarter and

always scaling, age pretty been we're as R&D It's where especially of to that side of of been leverage to the innovation the the With consistently things. invested been AI that us. a place focus invest. an for headcount, huge of area has operational on and consistent. respect in the it's and team our we incredible all focused That's And have been on continue engineering has we'll certainly,

foremost, see us to growth streets, just problems is as perspective, with our engineering always, our the to street do R&D hitting talent first biggest the well hitting and sales headcount allocated working customers solve to and from you'll so their quota-bearing feed road, And the on continue that. as incredible

Operator

line Our the with Turrin Wells next of Securities. question Fargo comes Michael from

Michael Turrin

in there that do remarks. could you're that prepared for to solutions agent numbers from And office the mentioned the ACV, and you hit workflows see what front customer a was XX% could and there a customer new at release opportunity disrupt what us. I now maybe opportunity. Bill, of couple I on a net bounce hoping you demand bit, can but perspective further hearing employee to the with we've know the around maybe focus the the frame heard workflow high seen and segment -- Xanadu the help

William McDermott

Absolutely. Thank much, you Michael. very

tracking by we're said, and office And XX customer the now, winning. strong. time performance We're it's over very of for new percent, and front in I XX a but deals known our some SKUs As we're has continued top the getting industry winning ACV in was and for been going it, lot. on the net and XX%, workflows grew fantastic very, it were we X-X

our product was front order out So Pro it's adoption office, management industry sector. think it's managed in every amazing sales was a and public sector over devices, has and chemicals, traction, productivity. significant medical of idea Media SKUs and the are comes front value from semiconductors, technology of And The public extremely And XXX% XX% it's absolutely over our our proposition the healthy sector sales really providers demonstrated things, public media, financial to offering. sure, Technology to It's extremely, serious, services grew at, traction. for driving I'm significant services look I like agencies. exciting. industry down you and manufacturing,

value. lower that market think up a the fulfillment Just deal big time a business about reduced All zero-touch optimizing being feeling have in with will provisioning, this higher in this to And end quote big, I resonating way. ServiceNow. the biggest sizes, for is lifetime time, customer a

Operator

next of Our comes the Keirstead UBS. Karl from with question line

Karl Keirstead

Bill, issues issues hit I'm quarters? where hit that issues a segments. you us with there's continued the to ServiceNow bookings to the X I months in ago federal next been maybe that could but if enterprise how talk over us one changes, over pretty on, about X there's led But that and of the partners of I'm Bill. to a in an is this partly also direct I'll are at -- update with about the been wondering commercial interim months X leadership sure Maybe doing couple of the raised Fed your in think head the debate confident how because you're Carasoft. business, good those give Gena your are aware, you confident lot of shareholders you your about last

William McDermott

regarding We Sure, any in QX, U.S. any in issues currently with the impact see didn't we're business. Karl. Carasoft involved not and federal

any in off is single Fed, not on vendor the federal possibly you standard a business X and stronger. a standardize that We at have deals ACV could as one you they're of So just new consolidate to take greater it contracts The list and and deals I $XX growth has than look concern net should that looking might digital couple ServiceNow drive of for million, fantastic. had transformation. platform as over to become million, $X agencies the be

the built platform. this That's bandwidth into that's

I've think our the platform there I been gen where They of implementations they gains, top U.S. with software also does going and mind. because AI know looking government are efficiency referenceability know know the the fantastic. is and about we're federal I as is they're So it. now, agencies, for stellar

our our productive, very think things And cards, our excited make AI great so I and really all Gen them And quickly, it's more people cooling happy for Cloud. about Community of which SKUs government us. working is experiences one very, getting giving that done I'm for

that it know, great a in and works off we and went saw was pilot we and X into with as early get kick they partnered actually a June, traction generally ended on Gen it it federal, so the of AI Accenture with you recently, it XX-day available As fact, to agency race to matter because well. with

I'm and for Thank grateful everything thumbs the here, So very Karl, you. is up question.

Operator

Gregg Mizuho. of line the from comes question next with Our Moskowitz

Gregg Moskowitz

to for Pro and in intermediate towards to -- also from upgrade Gen as choosing obviously driving uptick step growth So that has a customers been ARPU well. adoption and real impressive. uplift Plus Pro as obviously, an Assist the Now highly we've But AI about hearing been Standard

of today going these So a would you're Bill, X, as across point X, wave customers set second with months ago you to seeing X the when your is bit where more installed of compared expect forward? look base, that a something with you quite

William McDermott

behold. extremely see Absolutely. pricing. the I returns even do, a I with how it say, second they Gregg, team When it's optimistic built Raptor see People runs than I into and Assist on that to it goes, the We our, see it's transparent. it plus now customers built that you because globally and amazing. in wave, with want still this, but way I to such how Paul don't hit expect we're database premium we add do great that, because sensation. nice with something of much a QX. a globally in We'll the on fair now that. any very I first things, plus company it, really, them choice highly a greater so our the top doing out highly clock up of And would up DB system really it's engineering is rolling we're is are see And all the blink draft a the well. and speed really Pro Now round it.

in and So door, come intensity Clara, customer building the I revolving am relationships, flying focus CEOs feeling Santa extremely the from if relationship, a you those over good. around And our it's to are the in all world.

they proposition. of our not product stopping that ServiceNow, our from in it, end real with but me stop at what real I'm things don't doing is So too, and other suggesting they the a miss definitely see places it's tell they that don't kind team products not and they value of real PowerPoint,

I'm [indiscernible], So Gregg. really

Operator

the comes Cowen. TD Wood Our Derek with line next from of question

James Wood

of new AI Bill, next chapter this to autonomous really agents. with see exciting

the coming Just kind integration, It sounds wanted power kind on you are these ServiceNow going advancements with Data could of the like autonomous it's But to maybe some from various networks. to like NVIDIA's LOMs. these to market be new what capabilities Fabric, and technology zero-copy BIM agentic when is these what unlocking key to platform highlights to Raptor technology DB, capabilities GA. touch on is share on just coming of of

William McDermott

for I The context. that table. are you intend run one just this areas think AI the of that some Yes, sure. X there's helps, Gen race we and I winning, all, to Well, into first first is really if would that put mover, that we're X, top my highlight

platform Platform is the protected the magnificent. single way it with the and of gen the on AI platform, any its because perfection this it architecture, shortcuts, Now fact is was engineered we of sensation CMDB the we and single Assist and Now in uniqueness always and So that took never the single really the the

Raptor Now DB. put you

get is literally to that a out full terms the lineup. can like So And Assist again, workflow think any light winning the of And its to the couldn't to it's front focus everything you Raptor else put be still business what step the platform, a to really the or then pick you constructure automation connect a front platform, but in is execution going out if customer going workflow and of pace, DB that, build major one data, and because unstructured say, what else connects drive platform, office, enterprise, and I data is their a we're everywhere increase X, data which their we already want you to TAM are office performance wouldn't data is in function source because workflow catalyst. do? the to biggest workflow that go, outcome. priority the in Now getting and we it's innovation you

when of is the coming, out. terms product in And they're

Raptor got full So QX be Assist quarter a for DB Now flight, in full that. you got flight, will in big you've

running I You are a happening now, of quarter, that motion got through the iconic are to the tomorrow, we when upsells explained, we're where every cohorts serving wins company big now it's and about, Gina live, a there, the of do a we the cultural to scale we is led amazing be heart just and stuff world. seats dreams we've take like talked it with data the an of the you get be works the workflow all core the and and ServiceNow. all in that's could going with us, so every which beautifully And that will I day, continue much and then our platform, event and cross-sells and that's feel got of and evolve office start-up. just part the And which front to rumbling future and over which have imagine kind front

Operator

line from Lenschow next Raimo Barclays. the question of comes Our with

Raimo Lenschow

sure kind dynamic how you Did make in a gain your the talk do continue me to of One AI like second you through that like do that budget? out of -- seeing in IT go they you one? we how us as of as lot of you're executives, C-level like conversations. you year next budget? do of from And that kind the about share a is talked think terms into well. coming about Bill, Just in

William McDermott

Yes.

is news the the to Raimo, really grow. I budgets -- news good here, good continue think IT

So next spending year. hard studying grow was the has really digital and IT the And strategy work been Gartner XX.X% continue almost business to strategy. to world will we And us. expects global around on be And double clear opportunity. take that's and the AI XXXX. what of the tailwinds priorities, to automation in And the to workflow expects at secular gen it advantage and grow at positioned software it we're the best C-suite are And XX%.

So somewhere. the to fuel share IT IT. line really because especially to faster they about, budget. share. We're there share money AI #X service it gaining I investment, share think their And because and gained think which customer customers talked focus. from I take clearly, I CEOs, their But when we're get the management to new that market, it's more from gaining getting if also to to we're clearly is the they focus more they are going clear the is I this, on It's transformation item growing be focused me believe markets, business is than digital Gen have growing. another And within out talk of IT and we're will. within I to

line will around So to on top be especially functions AI. that office coming will be think of I from of back Gen put departments, there the IT, money front the other

a headache, they all the I and about solutions really the future. light their a world hundreds We future where basically see it took there's hundreds People And had recently to the is by gave money need just over what like And consolidating was you to accounts company dim X that effect place. service the consolidation taking think me, coming now. also that really XXX-point is say from? now that on, that new want but for of so

goodness that where some in quickly. ServiceNow. and of and accelerating before. this never before. I intended. just done and coming Board pun partner ways expansion I And these that a channels have consolidation building platform for to way of I are with got the how in and the course, ecosystem in grabbing budgets like think And to line ServiceNow of channels of on they no IT, all a So the premier item never a of team is around But in, all top that seen meeting and dynamics and growth. think it's Incidentally, leaning on did the is other we ServiceNow now that presented says just the our repartner

Operator

for time have We one question. more

question final with Our Samad Jefferies. line the of Samana from comes

Samad Samana

Bill, about in of we a fast. think especially little pricing. have just from just this if over packaging role? big Great. expertise differ I you iterations I as that wondering and talk up AI out as specifically, And Amit couldn't he comes kind how I ServiceNow. prior how reason they my related, for period join maybe that will said was responsibilities the boom President ears his and but And why when when that help has there's you perk of will a called

William McDermott

scenario everything about out That's always was his strength, with try us How also things what And interview professional, that what it to I and he I add a And do. a but unique you we're that we done he learned he's a and that went that skill will it. net talked as different he's it's that's tremendously. to in as really think planning Really, question, on see Samad. about live great at. that actually help into a past guess, I was and done, called that new and good a I

of also hire expand to bandwidth beings, the has humble but great has he that a first and try with always he hungry You about. is and expertise domain areas one all all, of is ServiceNow heart, human what one in

terms and his by did way. out so the in I of And focus, it deliberately, call

absolute all an invent new in which his he by In engineers, loves lens, things which seeing experiences. We with the through and thought terms of his growth engineering leader a great an that opportunities has business, he's product, with the broad build engineer's best of engineer. comradery from have shoots we need loves and team new focus, working

also to do I a he's I was had wants you had. the deeply that and on. a So to really relationships and him the person came great wonderful that he the a just and respectful are all Google from as Google earlier, including in brought we company it was thoughtful that great get other conversation of a individual, want very he good do It we that careers good for think And that when of person obviously, with and because wins. Amit with do respect a because it opportunity was I places, that good. good And ethos to Cloud of And and we it's the part bring Oracle this platform. believe always said we

Operator

you session. for Thank with your This question-and-answer concludes our that, participation. will all conference today's conclude And we call.

now may You disconnect.

ServiceNow (NOW) 23 Oct 242024 Q3 Earnings call transcript