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Mar 31, 2024
ServiceNow Q1 2024 Earnings Report
ServiceNow exceeded guidance across all Q1 2024 topline growth and profitability metrics and raised the midpoint of 2024 subscription revenues guidance range.
Key Takeaways
ServiceNow reported strong first quarter results, exceeding guidance across topline growth and profitability metrics. Subscription revenues grew 25% year-over-year to $2,523 million, and total revenues increased 24% year-over-year to $2,603 million. The company is experiencing strong demand for its GenAI offerings and has raised its full-year subscription revenues guidance.
ServiceNow exceeded guidance across all Q1 2024 topline growth and profitability metrics.
Subscription revenues reached $2,523 million, representing 25% year-over-year growth.
Total revenues amounted to $2,603 million, a 24% increase year-over-year.
Current remaining performance obligations totaled $8.45 billion, reflecting 21% year-over-year growth.
ServiceNow
ServiceNow
ServiceNow Revenue by Segment
Revenue by Segment
Subscription Revenue
CapyFin.comProfessional services Revenue
CapyFin.com Forward Guidance
ServiceNow provided guidance for the second quarter and full year 2024.
Positive Outlook
- Second quarter subscription revenues are expected to be between $2,525 million and $2,530 million, representing 21.5% - 22% year-over-year growth.
- Second quarter cRPO growth is expected to be 20.5%.
- Second quarter income from operations margin is expected to be 25%.
- Full year subscription revenues are projected to be between $10,560 million and $10,575 million, indicating 21.5% - 22% year-over-year growth.
- Full year subscription gross profit margin is expected to be 84.5%.
Challenges Ahead
- The strengthening of the U.S. Dollar since December 31, 2023 has resulted in an adverse impact to the 2024 guidance.
- Q3 2023 strength of U.S. Federal business has resulted in a higher mix of contracts containing 12-month renewal terms, creating a negative 2-point impact to Q2 2024 cRPO growth.
- Weighted-average shares used to compute diluted net income per share for Q2 and full year 2024 is expected to be 208 million.
- Full year income from operations margin is expected to be 29%.
- Full year free cash flow margin is expected to be 31%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income