“Moving to our outlook, our pipeline continues to look robust for the remainder of the year, and we're excited about what the Utah release and Knowledge 2023 can further contribute to those opportunities.”

In context

“Gina Mastantuono (CFO): Thank you, Bill. Q1 was a tremendous quarter with strong beats across our top line and profitability guidance metrics. We saw resilient demand as the Now Platform continues to deliver the productivity improvements our clients are seeking in the current macro environment. The quarter was yet another example of consistent execution from our team. In Q1, subscription revenues were $2.02 billion, growing 27% year-over-year in constant currency, exceeding the high end of our guidance range by 150 basis points. RPO ended the quarter at approximately $14 billion, representing 24% year-over-year constant currency growth. Current RPO was approximately $7.01 billion, representing 25% year-over-year constant currency growth, a 100 basis point beat versus our guidance. From an industry perspective, energy and utilities, government, and transportation and logistics led the way, followed by strong growth in education. Financial services net new ACV also continued to grow despite a tough compare and volatility in the banking sector. New customer ACV growth remained an area of strength, and the average deal size was up significantly year-over-year. Our renewal rate was a best-in-class 98% in Q1, continuing to demonstrate the stickiness of our business as the Now Platform remains a mission-critical part of our customers' operations. Our customer cohorts have also continued to show solid expansion. We ended the quarter with 1,682 customers paying us over $1 million in ACV, up 20% year-over-year. We're continuing to see healthy customer engagement with enterprise buying patterns demonstrating the extensibility of the Now Platform. We closed 66 deals greater than $1 million in net new ACV in the quarter, up from 52 a year ago. In Q1, 18 of our top 20 deals contained 5 or more products, showcasing how ServiceNow is providing customers with the single platform they need to orchestrate their technology value chain. Turning to profitability, non-GAAP operating margin was 26%, 200 basis points above our guidance, driven by continued disciplined spend management. Our free cash flow margin was 35%. We ended the quarter with a robust balance sheet, including $7.2 billion in cash and investments. Together, these results continue to demonstrate our ability to drive a strong balance of world-class growth and profitability. Moving to our outlook, our pipeline continues to look robust for the remainder of the year, and we're excited about what the Utah release and Knowledge 2023 can further contribute to those opportunities. While we've seen market resiliency, we continue to prudently factor in the evolving macro cost with each of our guidance. As Bill mentioned, we remain laser-focused on balancing net new innovation and new business growth with cost management and profitability. With that in mind, let's turn to our 2023 guidance. We are raising our subscription revenue outlook by $25 million at the midpoint to a range of $8.47 billion and $8.52 billion, representing 23% to 23.5% year-over-year growth on both a reported and constant currency basis. We expect subscription gross margin of 84%, an operating margin of 26%, a free cash flow margin of 30%. And we continue to expect GAAP diluted weighted average outstanding shares of $206 million. For Q2, we expect subscription revenues between $2.04 billion and $2.045 billion, representing 23.5% to 24% year-over-year growth on a constant currency basis, excluding a 50 basis point FX headwind. We expect CRPO growth of 22.5% on a constant currency basis, excluding a 50 basis point FX tailwind or 23% on a reported basis. We expect an operating margin of 23%, and we expect $205 million GAAP diluted weighted average outstanding shares for the quarter. In summary, Q1 was a very strong quarter. We're extremely proud of our team's performance, and we can't thank our employees enough for their continued hard work and dedication. It's their collective commitment to our culture that has enabled us to be named one of Fortune's 100 Best Companies to Work For, yet again in 2023. The consistency of our results exemplifies the strength of our platform and our people. We're delivering great experiences that drive powerful employee engagement, fierce customer loyalty, and significant productivity gains. ServiceNow's intelligent automation is a deflationary force that helps enterprises retool their business to get more done with less. And since we use the Now Platform ourselves extensively, we continue to see the benefit from those efficiencies, generating incremental opportunities for further operational leverage. That's why ServiceNow is so well-positioned to become the defining enterprise software company of the 21st century. You can hear more about that momentum in our new products and long-term opportunities at our upcoming Investor Day on May 16 in Las Vegas. We look forward to seeing you there. And with that, I'll open it up for Q&A.”