NOW Q3 2019 Earnings

Call Details

• Call Title: ServiceNow, Inc. Q3 2019 Earnings Call
• Date: October 23, 2019 at 9:00 PM UTC
• Management Team:
  • Lisa Banks (Senior Vice President of Finance)
  • John Donahoe (President and Chief Executive Officer)
  • Bill McDermott (Chairman and Chief Executive Officer)

Call Summary

Financial Performance

• Subscription revenues were $835M in Q3 2019, representing 35% year-over-year adjusted growth.
• Subscription billings were $864M in Q3 2019, representing 29% year-over-year adjusted growth.
• Remaining performance obligations were approximately $5.6B at quarter end, representing 36% year-over-year adjusted growth.
• Current RPO was approximately $2.8B, representing 36% year-over-year adjusted growth.
• Operating margin in Q3 was 26% and free cash flow margin for the quarter was 14%.
• All financial figures discussed on the call were non-GAAP except for revenues and remaining performance obligations.

Guidance

• Full year 2019 subscription revenues are expected between $3.240B and $3.245B, representing 36% to 37% year-over-year adjusted growth.
• Full year 2019 subscription billings are expected between $3.740B and $3.745B, representing 32% to 33% year-over-year adjusted growth.
• The company carried forward the $9M in subscription revenue and $10M in subscription billings that exceeded the prior midpoint into full year 2019 guidance.
• Guidance for full year 2019 is based on FX rates as of September 30, 2019, which differs from prior guidance that used June 30 rates.
• The company maintained full year 2019 subscription gross margin guidance of 86%, operating margin guidance of 21%, and free cash flow margin guidance of 28%.
• The investor presentation discloses explicit FX impacts on Q3 results and the 2019 annual guidance.