ServiceNow Reports First Quarter 2020 Financial Results

ServiceNow, the leading digital workflow company making work, work better for people, today announced financial results for its first quarter ended March 31, 2020, with subscription revenues of $995 million in Q1 2020, representing 34% year‑over‑year growth, 36% adjusted for constant currency.

During the quarter, ServiceNow closed 37 transactions with more than $1 million in net new annual contract value (ACV), representing 48% year‑over‑year growth. Deals included the company’s second‑largest new customer transaction ever, as well as the Asia Pacific region’s largest customer service management deal ever. The company now has 933 total customers with more than $1 million in ACV, representing 30% year‑over‑year growth in customers.

"This pandemic has allowed us to engage our customers in new ways, enabling them to focus on their most critical workflows,” said ServiceNow CEO Bill McDermott. “Businesses are splitting apart old value chains and reassembling them in end‑to‑end, mobile‑first experiences on the Now Platform. Our Q1 results are a direct reflection of ServiceNow’s unique position as the workflow platform to create great employee and customer experiences ‑ even in these challenging conditions. With our outstanding team and culture, I am extremely confident in the long‑term growth trajectory of this company.”

“We are working closely with our customers to support them in this challenging environment,” said Gina Mastantuono, ServiceNow CFO. “In Q1, we exceeded the high end of our guidance for subscription revenues and billings and delivered another strong quarter of operating profit and free cash flow. With our recurring revenue model, we are in a strong financial position to manage through near‑term uncertainties and for long‑term growth. We continue to focus on customer‑driven innovation and remain confident in our path to $10 billion in revenue and beyond.”

Financial Outlook

While we believe we are in a strong financial position to weather impacts caused to our business by COVID‑19, many of our customers are now operating under very challenging circumstances, especially those in industries highly affected by COVID‑19, and may re‑evaluate their spend. As such, the second quarter 2020 guidance and updated full‑year 2020 guidance we are providing today factor in the expected impacts of COVID‑19 based on information available to us today. Our guidance is also based on the assumption that generally the most significant headwinds will occur in the second and third quarters of 2020 and there will be increased uncertainty around new business, renewal timing or billings terms, particularly with customers in these highly affected industries. We are further assuming that economic conditions will begin to open up more broadly by the end of the year. Significant variation from these assumptions could cause us to modify our guidance higher or lower.

Our guidance includes GAAP and non‑GAAP financial measures.