NOW (NOW)

“We expect operating margin of 31% and we expect 1.05 billion GAAP diluted weighted average outstanding shares for the quarter.”

“We expect CRPO growth of 20% on a constant currency basis.”

“For Q3, we expect subscription revenues between $3.975 billion and $3.980 billion, representing 20% year-over-year growth on a constant currency basis.”

“This is the first of many net-new AI-native products we'll be bringing to market in the weeks to come.”

“After having acquired three strong companies — Moveworks, Vesa and Armis — we will complete this year and start 2027 with the same headcount we had before we did the acquisitions.”

“So you are going to see operating margins and free cash flow margins scale.”

“We will remain disciplined in driving top-line growth and best-in-class margins — well on our way to the rule of 60 by 2030.”

“Cybersecurity is going to be a massive tailwind for ServiceNow.”

“We already have several customers in beta and soon will be GA.”

“ServiceNow AI ACV exceeded expectations again, surpassing $1 billion, keeping us on track to beat our target of $1.5 billion ACV by the end of 2026.”

“Some of it is from M&A, and some of it is us hiring ahead of the demand because we feel bullish about the back half.”

“We believe midterm there will be less pressure and even better pricing on the hyperscaler side, which I also discussed at Financial Analyst Day.”

“We expect operating margin of 31.5% and free cash flow margin of 35% and GAAP diluted weighted average outstanding shares of 1.04 billion.”

“We expect subscription gross margin of 81%, reflecting more customers utilizing our hyperscaler partnerships as well as accelerating AI adoption.”

“For 2026, we are raising our subscription revenues by $15 million at the midpoint from $15.755 billion to $15.770 billion, representing 21% year-over-year growth on a constant currency basis.”

“I think you're going to see us move up the leaderboard from #8 to contending for the top spot.”

“So prudence in the guide for '26, significant upside, and we truly believe it's going to help not only accelerate our top line revenue, but also be a pull on the core, as Bill talked about earlier.”

“By the end of the year, it goes down to zero. That's because of the efficiency we're driving in the company and the great platform that we have.”

“So you're looking at a tailwind here that I've never seen. So get ready for major revenue acceleration.”

“We had a goal to be $1 billion on our AI commit this year, as you know. And I think we might have understated that a little bit. We're already talking about $1.5 billion now, and it's on a run.”

“We expect free cash flow margin of 35%.”

“While we expect some near-term headwinds to margins as we integrate the business this year, strong AI efficiencies internally from Now On and our underlying platform leverage will normalize our operating and free cash flow margin expansion trajectory in 2027 and beyond.”

“And, no, we're not going after anything large.”

“So you can count on ServiceNow to ensure that you will see not only best-in-class top-line growth of 20% plus, but also continued margin accretion at the bottom line, both from an operating margin and free cash flow perspective.”

“ServiceNow is fully capable of achieving previously stated subscription revenue and Now Assist ACV targets without M&A.”

“And on our way to cross $15,000,000,000 plus this year.”

“And given our strong organic operating leverage, we expect to absorb any headwinds to that dilution in 2027 and continue delivering operating margin expansion.”

“We expect potentially up to maybe 50 bps on headwind to operating margin in '26.”

“Now Assist continues to outperform all expectations, surpassing $600,000,000 in ACV and tracking well towards our $1,000,000,000 plus target for 2026.”

“We expect an operating margin of 32%, up 100 basis points year over year, driven by OpEx savings enabled by AI efficiencies.”

“We are confident in our guidance and optimistic about translating the full revenue beat in Q3 into the full year.”

“We are raising our full-year operating margin target by 50 basis points from 30.5% to 31% as AI operational efficiencies continue to drive incremental leverage.”

“For 2025, we are raising our subscription revenues by $55 million at the midpoint to $12.835 billion to $12.845 billion, representing 20.5% year-over-year growth or 20% on a constant currency basis.”

“As you said, the business will continue to grow in this area because we’re probably the only provider like this in the industry today.”

“Finally, we expect 210 million GAAP diluted weighted average outstanding shares for the quarter.”

“We continue to expect subscription gross margin of 83.5% and GAAP diluted weighted average outstanding shares of 210 million.”

“excellent progress toward beating our $1 billion target next year, and we're totally focused on surpassing it.”

“Regarding the $500 million expected ACV for Now Assist, we continue to see price uplift exceeding 30%. For the $500 million, we still view that as being primarily subscription rather than consumption at this stage; consumption will layer in more significantly in 2026, building that flywheel opportunity.”

“For Q4, I would note that while our public sector pipeline and demand is very strong, the ongoing government may impact deal timing in our U.S. federal business in Q4.”

“You may remember from Knowledge that we estimated $100 million in savings in headcount alone for 2025, and we’re witnessing those come to life as planned.”

“Additionally, we are exercising prudent expense management to absorb any potential margin headwinds from Moveworks if it closes in the latter half of this year.”

“Gina has stated that it will be $350 million value to us this year, and we think it might be even more in terms of what we can achieve, not to mention happiness and productivity.”

“Finally, we expect 210 million GAAP diluted weighted average outstanding shares for the quarter.”

“Finally, we expect GAAP diluted weighted average outstanding shares of 210 million.”

“We continue to expect subscription gross margin of 83.5%, operating margin of 30.5%, and free cash flow margin of 32%.”

“This solid pipeline and the momentum we have exiting the first half of the year put us well on our way to reaching our $15 billion-plus subscription revenue target for 2026, along with $1 billion in Now Assist ACV.”

“It will be the same shape. So the renewal backlog and how that flows through CRPO has not shifted despite the macro. So you'll see a very similar shape from what we had originally always talked about.”

“In two weeks, we will have the biggest knowledge in ServiceNow's history with attendance and sponsorship revenue at all-time highs.”

“And so it's across the board, and we're super excited that the momentum that we see in Q1 we expect to continue throughout the year.”

“Certainly, as we think about AI driving even more efficiencies, OpEx is going to be an area where we continue to see some benefit from.”

“After agencies realigned to this baseline, we expect significant growth opportunities driven by operational needs expressed by these customers and addressed by solutions across our portfolio.”

“We continue to expect subscription gross margin of 83.5%, operating margin of 30.5%, free cash flow margin of 32%, and GAAP diluted weighted average outstanding shares of 209 million.”

“I absolutely believe that these AI efficiencies are gonna help us continue to accrete margins over the mid and long term.”

“The fact that over time, we expect the mix of our customer now CRM workflows as well as our HR to start to grow as a percent.”

“Our existing core workflows continue to have a lot of runway and will drive significant growth through 2026.”

“Even on this bigger revenue base, be assured, we will be the innovative fast growth highly profitable company we are today.”

“The other piece is that we anticipate a more back-end weighted deal linearity in 2025 for federal, reflecting the outcome of the U.S. election.”

“This reflects an incremental 50 basis points of margin expansion on top of our 2024 outperformance and in spite of an incremental cash tax headwind of 100 basis points year-over-year.”

“We expect subscription gross margin of 83.5%, reflecting the diminishing impact of the change in useful life of our data center equipment as well as incremental data center investments related to public cloud partners, geographic expansion, and AI.”

“For 2025 alone, they forecast 46% growth in AI software spending.”

“That's why I keep reminding our team, our $15 billion plus by 2026 midterm guidance is only one chapter on our path to $30 billion plus in revenue and beyond.”

“We blew through our original $10 billion dream and now we're on track for our mid-term target of $15 billion plus by 2026, with a long-term vision to be the defining enterprise software company of the 21st century.”

“As the agents become increasingly productive, they will drive the consumption pricing meter.”

“IDC forecasts worldwide revenue for AI platforms software will grow to $153 billion in 2028, with a 40.6% CAGR during that period.”

“And to your question on what would it be if we didn’t do that, I would say higher.”

“I do believe that the best days of growth are far in front of us.”

“Absolutely. I do, Gregg, I expect a nice second wave, Pro is still doing extremely well.”

“Gartner expects global IT spending to grow almost 10.5% next year. And that's double what it was in 2023. And it expects software to grow at 15%.”

“And we're rolling it out now in Q4, and we already have great companies like Amadeus that have adopted RaptorDB and we're counting on hundreds more.”

“you will see continued headwind quarter-over-quarter in Q1, Q2 until we get back to Q3 of next year.”

“Not only is sales and marketing headcount up, but our R&D headcount has been consistently up and will continue to be at similar pace.”

“You can expect similar levels of headcount growth in the next few quarters, as we lean into the opportunity we see in front of us with everything Now Assist, with the Agentic AI, with the workflow data fabric, all innovation that the team is driving.”

“Finally, we expect $209 million GAAP diluted weighted average outstanding shares for the quarter.”

“We continue to expect subscription gross margin of 84.5%, operating margin of 29.5%, free cash flow margin of 31%, and GAAP diluted weighted average outstanding shares of $208 million.”

“For 2024, we're raising our subscription revenues by $78 million at the midpoint to a range of $10.655 billion to $10.66 billion, representing 23% year-over-year growth or 22.5% on a constant currency basis.”

“it also fuels our rocket ship to hit new milestones as we grow to $30 billion and beyond.”

“And Paul is now rolling that out globally in Q4. We'll see how it goes, but we're highly optimistic”

“So we do expect hiring and sales and marketing to kind of continue to tick up a bit that is very much in line with our original plans.”

“And I do want to mention the U.S. public sector remains a substantially important industry vertical to our company, and we continue to believe that that is poised for further growth, especially in the third quarter because that’s when a lot of decisions get made.”

“Finally, we expect 209 million GAAP diluted weighted average outstanding shares for the quarter.”

“We continue to expect subscription gross margin of 84.5%, free cash flow margin of 31%, and GAAP diluted weighted average outstanding shares of $208 million.”

“Our second half pipelines combined with our net new ACV outperformance in the first half of '24 gives us very good visibility into our top line guidance and further confidence in our journey to $15 billion plus in revenue.”

“So yes, that headwind to Q2 CRPO did play out as expected. And yes, it will normalize in Q3. But remember, depending on the size of our Fed business in Q3, it could pop up again as we play out Q4 and beyond.”

“Exciting themes lie ahead for 2024, and I feel positive about how our federal business will continue to perform, coupled with our public sector success.”

“Finally, we expect 208 million GAAP diluted weighted average outstanding shares for the quarter.”

“Finally, we expect GAAP diluted weighted average outstanding shares of 208 million.”

“We continue to expect subscription gross margin of 84.5%, operating margin of 29%, and free cash flow margin of 31%.”

“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.”

“But given our position of our platform and the strength we have with AI, we are definitely going to see in the second half adoption of generative AI.”

“We expect that these contracts will renew in Q3 as ServiceNow's federal contract renewal rates are 99%.”

“Finally, we expect 208 million GAAP diluted weighted average outstanding shares for the quarter.”

“We expect current RPO growth of 20% on both a reported and constant currency basis.”

“Finally, we expect GAAP diluted weighted average outstanding shares of 208 million.”

“We expect subscription gross margin of 84.5%, reflecting investments in our data centers and emerging growth opportunities, offset by a 100 basis point benefit from a change in useful life of our data center equipment from four to five years as a result of an assessment completed earlier this month.”

“We remain very confident in our projection of over $15 billion by 2026.”

“The only thing I would add, John, is that this is durable demand. The Federal agency's digitization agenda is only growing, and the success that we've had at Federal, we absolutely have the ability to replicate that outside of the US and public sector around the world.”

“Notably, the strength of our federal business has resulted in a higher mix of 12-month contracts that will create a one point headwind to Q4 cRPO growth and remain a headwind into 2024.”

“And we continue to expect subscription gross margin of 84%, free cash flow margin of 30%, and GAAP-diluted weighted average outstanding shares of 206 million.”

“That said, given our increase in revenue this year, we remain ever confident in the goal that we put forth back in May at Analyst Day for 2024 as well as 2026.”

“But I want to leave you with one thought. We're only getting started. With federal, with state, with local, the business transformation that's going to go on in the next decade across all of those categories will play beautifully into our growth agenda, and we'll continue to service it with 100% customer satisfaction.”

“We have an aspiration to significantly increase the percentage of net new revenue sourced by our partners in the coming years.”

“We're set up very well for a strong second half.”

“We see a sustained demand environment and pipeline for all of our product businesses, geographic regions and industry verticals.”

“And we continue to expect subscription gross margin of 84%, a free cash flow margin of 30%, and GAAP diluted weighted average outstanding shares of 206 million.”

“But as we think about longer-term guidance, right, our scale is such that it will take a little while for us to see real impact on the top line.”

“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.”

“And we continue to expect GAAP diluted weighted average outstanding shares of $206 million.”

“We expect subscription gross margin of 84%, an operating margin of 26%, a free cash flow margin of 30%.”

“I feel very optimistic for the next 3 to 5 years relating to its accretive effect on our top line.”

“This does create a little bit of headwind on the free cash flow margin in '23, which is why you see the guide that I provided.”

“We expect these customers to ultimately renew upon contract expirations, providing opportunities to drive further expansion throughout 2023.”

“And we expect GAAP diluted weighted average outstanding shares of 206 million.”

“We expect subscription gross margin of 84%, reflecting the expected diminishing impact of the change in useful life of our data center equipment, as well as investments to accelerate customer time to value as part of our impact offering and higher inflation.”

“We said that we preserved the benchmark near the Rule of 60 for the full year in constant currency. We are on track.”

“We said that cRPO growth would accelerate during H2. As our Q4 guidance reflects, it is.”

“today we're announcing a new initiative: RiseUp with ServiceNow to skill 1 million ServiceNow certified professionals by 2024.”

“Expectation is that our Q4 renewal will be on par. We had a 98% renewal rate in Q3. We expect similar levels in Q4, and so feel very good about the pace of renewals for the remainder of the year.”

“Since the beginning of this year, we now see about a $400 million headwind related to FX in 2023.”

“We expect cRPO growth of 26% on a constant currency basis, excluding 600 basis points of FX headwind.”

“Finally, we expect GAAP diluted weighted average outstanding shares of 203 million.”

“We continue to expect an operating margin of 25%, consistent with our original guidance at the beginning of the year as we are offsetting incremental FX headwinds with operational efficiencies and disciplined spend management.”

“We continue to expect subscription gross margin of 86%, up 100 basis points year-over-year.”

“We're revising our subscription revenues range to between $6.865 billion and $6.870 billion, representing a raise to our year-over-year constant currency growth outlook to 28.5% excluding a 550 basis point FX headwind.”

“We now expect a $290 million headwind to 2022 subscription revenue, a $330 million headwind to Q4 cRPO, 100 basis points headwind to operating margin, and an approximate $160 million or 100 basis point headwind to free cash flow margin for 2022.”

“We will have a full capacity to achieve our objectives at the Q4 mark.”

“So, if you think about a renewal of $1 million at the end of Q4. At the end of Q1, if it comes to $750,000; end of Q2 $500,000; and of Q3 only $250,000 it will pop back up in Q4. And so Q3 is absolutely the bottom of that renewal cohort, and we'll see that reacceleration as we move into Q4.”

“Unlike others, while the currency effect also applies pressure on our margin, ServiceNow will maintain our full year margin guidance of 25%.”

“What I will say is that we expect it to reaccelerate from Q3, and we expect it to reaccelerate by at least two points because that's what the renewal cohort is impacting in Q3.”

“We absolutely expect to continue to see a similar pace in the back half as we continue to hire quota-bearing sales.”

“We expect cRPO growth of 20% year-over-year or 23.5% on a constant currency basis.”

“Finally, we expect diluted weighted average outstanding shares of 203 million.”

“We continue to expect an operating margin of 25%, as we currently plan to offset an approximate one point impact from FX with operational efficiencies and disciplined spend management.”

“We continue to expect subscription gross margin of 86%, up 100 basis points year-over-year.”

“That's 28% growth on a constant currency basis, in line with the original outlook that we provided in January.”

“For example, just two years ago, one-third of the business was getting done in digital formats. Today, it's two-thirds, and in two years, it will be 90-plus percent.”

“We talked about for the full year expecting hiring in the high 20s, and we're absolutely on that trajectory to continue that.”

“As a result, we're raising the midpoint of 2022 subscription revenue guidance to more than offset these incremental FX headwinds.”

“We feel really strong and good about the guide for the full year. And the momentum that we're seeing in Q1, we expect to be consistent throughout the year.”

“So we—I talked about in my prepared remarks that we expect Q2 to show accelerating net new ACV growth as well, consistent.”

“We expect 203 million diluted weighted outstanding shares for the quarter.”

“When the cohort renews, though, in Q4, those headwinds will subside, and we expect CRPO growth to reaccelerate quarter-over-quarter.”

“We will see between one and two points of increasing headwinds to Q2 and Q3 CRPO growth as those contractual obligations wind down.”

“a free cash flow margin of 31%”

“an operating margin of 25%”

“We continue to expect subscription gross margins of 86%, up 100 basis points year-over-year, an operating margin of 25% and a free cash flow margin of 31%.”

“We expect that momentum will carry into Q2 with net new ACV growth consistent with our very strong second quarter last year.”

“$15 billion-plus by 2026 and beyond.”

“We definitely anticipate some continued pressure in the coming quarters, but we remain very committed to our margin guidance that we've given you for 2022 and beyond.”

“But in this guide and this current state of affairs, there is no intent to do any large-scale M&A.”

“So the challenge I've got out to the company, Raimo, is the large deals will accelerate dramatically on a year-over-year basis.”

“In fact, I think it could be very close to the overall corporate growth rate as we look into the crystal ball.”