ServiceNow Q3 2021 Earnings Report
Key Takeaways
ServiceNow reported a strong Q3 2021 with subscription revenues reaching $1,427 million, a 31% year-over-year increase. The company's current remaining performance obligations (cRPO) stood at $5.0 billion, representing a 32% year-over-year growth. ServiceNow now has 1,266 customers with over $1 million in annual contract value, marking a 25% increase year-over-year.
Subscription revenues grew by 31% year-over-year, reaching $1,427 million.
Current remaining performance obligations (cRPO) increased by 32% year-over-year, totaling $5.0 billion.
The company now has 1,266 customers with annual contract values exceeding $1 million, a 25% increase year-over-year.
ServiceNow deepened its strategic partnership with Microsoft and completed the acquisitions of Swarm64 and Mapwize.
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ServiceNow Revenue by Segment
Forward Guidance
ServiceNow anticipates continued growth in subscription revenues and billings for Q4 2021.
Positive Outlook
- Subscription revenues are projected to be between $1,515 million and $1,520 million.
- Subscription billings are expected to range from $2,305 million to $2,310 million.
- The company anticipates a year-over-year cRPO growth of 27%.
- ServiceNow expects an operating margin of 22%.
- Weighted-average shares used to compute diluted net income per share are estimated at 203 million.
Challenges Ahead
- Guidance includes a negative impact of $1 million due to foreign currency exchange rates on subscription revenues.
- Subscription billings are expected to be negatively impacted by $2 million due to foreign currency and $7 million due to billings duration.
- cRPO growth includes a negative impact of 150 bps due to foreign currency.
- Stock-based compensation expense is projected to be 18% of total revenues.
- Amortization of purchased intangibles is expected to be 1% of total revenues.