“For 2024, we are raising our subscription revenues by $20 million at the midpoint of the range to more than offset an incremental $17 million headwind from FX. This raises a net increase of $3 million on a narrowed range of $10.560 billion to $10.575 billion, representing 21.5% to 22% year-over-year growth or 21.5% on a constant currency basis.”

In context

“Gina Mastantuono (Chief Financial Officer): Thank you, Bill. Q1 set a strong precedent for the year ahead. Building on the momentum from Q4, our team delivered another exceptional outperformance. We surpassed all of our top line and profitability guidance metrics for the quarter. With GenAI conversations serving as a digital transformation catalyst, we see that momentum carrying into Q2. Turning to our results. In Q1, subscription revenues were $2.523 billion, growing 24.5% year-over-year in constant currency, exceeding the high end of our guidance range by approximately 50 basis points. RPO ended the quarter at approximately $17.7 billion, representing 27% year-over-year constant currency growth. We continue to see average contract terms increase year-over-year as the strategic importance of the Now platform has driven longer duration deals. Current RPO was $8.45 billion, representing 21% year-over-year constant currency growth, a 100 basis point beat versus our guidance. From an industry perspective, technology, media, and telecom was extremely robust, growing net new ACV over 100% year-over-year. Education had a fantastic quarter, growing nearly 50% year-over-year. Transportation and Logistics, Business and Consumer Services, and Retail and Hospitality also saw strength. Our renewal rate was a best-in-class 98% as the Now platform remains a strategic imperative for our customers' operations. We closed 59 deals greater than $1 million in net new ACV in the quarter, with 4 deals greater than $10 million, representing 300% year-over-year growth. Our focus on selling a comprehensive platform continues to drive more multiproduct deals as 15 of our top 20 deals included 7 or more products. We now have 1,933 customers paying us over $1 million in ACV. Additionally, the number of customers paying us $20 million or more grew over 50% year-over-year. In Q1, our GenAI products continue to see very healthy adoption. As Bill mentioned, our Pro Plus net new ACV to date continued the trend ahead of any new product family launched for the comparable period. Our GenAI products were in 7 of our top 10 deals, and we closed 7 deals over $1 million in ACV in the quarter, including wins at a second Wall Street bank, a leading cybersecurity firm, and many more, including a significant win for ITOM Pro Plus, which just launched in March. Turning to profitability, non-GAAP operating margin was over 30%, approximately 150 basis points above our guidance, driven by the timing of marketing spend, OpEx efficiencies, and our top line outperformance. Our free cash flow margin was 47%, up 12 points year-over-year. We ended the quarter with a robust balance sheet, including $8.8 billion in cash and investments. In Q1, we bought back 225,000 shares as part of our share repurchase program, with the primary objective of managing the impact of dilution. As of the end of the quarter, we have approximately $787 million remaining of the original $1.5 billion authorization. Together, these results continue to demonstrate our ability to drive a strong balance of world-class growth, profitability, and shareholder value. Moving to our guidance. In Q1, we initiated a program to hedge a portion of our foreign currency denominated revenues. The initiative is expected to lessen the impact of recent movements in the euro and pound, but the incremental strengthening of the U.S. dollar has still resulted in FX headwinds compared to our previous guidance. Given our Q1 outperformance, we are raising our 2024 top line outlook to more than offset those moves. For 2024, we are raising our subscription revenues by $20 million at the midpoint of the range to more than offset an incremental $17 million headwind from FX. This raises a net increase of $3 million on a narrowed range of $10.560 billion to $10.575 billion, representing 21.5% to 22% year-over-year growth or 21.5% on a constant currency basis. We continue to expect subscription gross margin of 84.5%, operating margin of 29%, and free cash flow margin of 31%. Finally, we expect GAAP diluted weighted average outstanding shares of 208 million. For Q2, we expect subscription revenues between $2.525 billion and $2.530 billion, representing 21.5% to 22% year-over-year growth or 22% on a constant currency basis. We expect cRPO growth of 20.5%, both on a reported and constant currency basis. We expect an operating margin of 25%. Finally, we expect 208 million GAAP diluted weighted average outstanding shares for the quarter. In summary, Q1 was a great start to what we expect to be another tremendous year. Organizations are under more pressure than ever to maximize the benefits of their technology investments. In this environment, ServiceNow's traction as the intelligent platform for end-to-end digital transformation continues to intensify. GenAI is only as powerful as the platform it's built on. The Now platform gives us deep insights with the remarkable ability to tailor AI outputs to the specific needs of our customers. Business users need AI to power actions across the enterprise. Our workflows are designed to do just that, delivering complete solutions to supercharge experiences, creating extraordinary value. You'll hear more about these experiences, our strategy, and long-term opportunities at our upcoming Investor Day on May 6, which will be webcast on our Investor Relations website. Finally, before moving on to Q&A, I want to thank all of our employees worldwide for helping make ServiceNow one of the Fortune 100 Best Places to Work yet again in 2024. ServiceNow's greatest asset is its people, and you all continue to make us, ServiceNow strong. Bill and I couldn't be prouder of this incredible team. With that, I'll open it up for Q&A.”