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Sep 30, 2021
ServiceNow Q3 2021 Earnings Report
ServiceNow's Q3 2021 financial results were reported, demonstrating significant growth and profitability.
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.
ServiceNow
ServiceNow
ServiceNow Revenue by Segment
Revenue by Segment
Professional services Revenue
CapyFin.com 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.