Many big tech companies have completed stock splits over the last few years. Several technology companies have recently undergone stock splits. Some of the more notable stock splits in the tech realm in recent memory include "Magnificent Seven" members Tesla, Nvidia, Amazon, Alphabet, and Apple. While there are a number of upcoming stock splits to be aware of, there is one artificial intelligence (AI) company that I think could be next in line: ServiceNow (NOW 0.93%). Let's dig into why ServiceNow makes a c ...

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The leading digital workflow specialist sees subscription revenue reaching at least $15 billion by 2026.Workplace software specialist ServiceNow (NOW 1.08%) is riding a strong tailwind of companies looking to digitize employee workflow. The stock is up 65% over the past year, but at recent prices it's 11% off its 52-week high of $815. This is a great buying opportunity, according to analysts at Baird.The analysts came away from the company's recent analyst day with more confidence in its ability to capture ...

PART I [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for ServiceNow, Inc. as of March 31, 2024, and for the three months ended March 31, 2024 and 2023, including balance sheets, income statements, equity statements, cash flow statements, and accompanying notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of **$17.54 billion** as of March 31, 2024, a slight increase from **$17.39 billion** at December 31, 2023, with total liabilities decreasing and total stockholders' equity increasing Condensed Consolidated Balance Sheets (in millions) | | March 31, 2024 (unaudited) | December 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $7,372 | $7,777 | | **Total assets** | **$17,544** | **$17,387** | | **Total current liabilities** | $7,033 | $7,365 | | **Total liabilities** | **$9,437** | **$9,759** | | **Total stockholders' equity** | **$8,107** | **$7,628** | | **Total liabilities and stockholders' equity** | **$17,544** | **$17,387** | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For the three months ended March 31, 2024, total revenues grew **24%** year-over-year to **$2.60 billion**, and net income more than doubled to **$347 million**, or **$1.67** per diluted share Statements of Comprehensive Income Highlights (in millions, except per share data) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Total revenues** | $2,603 | $2,096 | | Subscription | $2,523 | $2,024 | | **Gross profit** | $2,083 | $1,658 | | **Income from operations** | $332 | $144 | | **Net income** | **$347** | **$150** | | **Net income per share - diluted** | **$1.67** | **$0.73** | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased from **$7.63 billion** at the end of 2023 to **$8.11 billion** as of March 31, 2024, driven by net income and stock-based compensation, partially offset by common stock repurchases - Key changes in stockholders' equity for Q1 2024 include **$347 million** from net income, **$422 million** from stock-based compensation, and a reduction of **$175 million** due to common stock repurchases[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2024, net cash provided by operating activities significantly increased to **$1.34 billion**, while net cash used in investing activities was **$918 million**, and financing activities used **$259 million** primarily due to stock repurchases Statements of Cash Flows Summary (in millions) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$1,341** | **$902** | | **Net cash used in investing activities** | **($918)** | **($524)** | | **Net cash (used in) provided by financing activities** | **($259)** | **$5** | | Net change in cash, cash equivalents and restricted cash | $160 | $384 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, business combinations, financial instruments, debt, equity, and contingencies, including a change in data center equipment useful life and the initiation of a cash flow hedging program - The company's intelligent cloud-based solution, the Now Platform, digitizes workflows across four primary areas: Technology, Customer and Industry, Employee, and Creator[18](index=18&type=chunk) - A change in the estimated useful life of data center equipment from four to five years, effective in fiscal year 2024, reduced depreciation expense by **$29 million** and increased net income by **$23 million** for Q1 2024[22](index=22&type=chunk) - As of March 31, 2024, total Remaining Performance Obligations (RPO) were **$17.7 billion**, with approximately **48%** expected to be recognized as revenue in the next 12 months[49](index=49&type=chunk) - The company is defending a patent infringement lawsuit filed by InQuisient Inc., with a trial date set for January 27, 2025, where the outcome and potential loss cannot be reasonably estimated at this time[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights Q1 2024 revenue growth of **24%** to **$2.6 billion**, with RPO increasing **26%** to **$17.7 billion** and free cash flow rising **66%** to **$1.23 billion** [Overview and Key Business Metrics](index=24&type=section&id=Overview%20and%20Key%20Business%20Metrics) ServiceNow's Now Platform continues to drive digital transformation, with key business metrics as of March 31, 2024, showing significant year-over-year growth in RPO, customers with ACV over **$1 million**, and free cash flow, while maintaining a strong renewal rate - Remaining Performance Obligations (RPO) were **$17.7 billion** as of March 31, 2024, an increase of **26%** YoY, with Current RPO (cRPO) increasing by **21%** YoY[96](index=96&type=chunk) - The number of customers with an Annual Contract Value (ACV) greater than **$1 million** increased to **1,933** as of March 31, 2024, up from **1,687** a year prior[97](index=97&type=chunk) Free Cash Flow (Non-GAAP) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | % Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $1,341 million | $902 million | 49% | | Purchases of property and equipment | ($135) million | ($165) million | (18%) | | **Free cash flow** | **$1,225 million** | **$737 million** | **66%** | - The renewal rate was **98%** for the three months ended March 31, 2024, consistent with the same period in 2023[99](index=99&type=chunk) [Comparison of the Three Months Ended March 31, 2024 and 2023](index=28&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20March%2031%2C%202024%20and%202023) Comparing Q1 2024 to Q1 2023, total revenues increased **24%** to **$2.6 billion**, driven by a **25%** rise in subscription revenues, leading to a doubling of operating income despite increased operating expenses due to higher headcount and program costs Revenue Comparison (in millions) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | % Change | | :--- | :--- | :--- | :--- | | Subscription | $2,523 | $2,024 | 25% | | Professional services and other | $80 | $72 | 11% | | **Total revenues** | **$2,603** | **$2,096** | **24%** | Cost of Revenues and Gross Profit (in millions) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | % Change | | :--- | :--- | :--- | :--- | | Cost of subscription revenues | $441 | $354 | 25% | | Cost of professional services | $79 | $84 | (6%) | | **Total cost of revenues** | **$520** | **$438** | **19%** | | **Total gross profit** | **$2,083** | **$1,658** | | - Sales and marketing expenses increased by **$100 million (12%)** YoY, primarily due to a **$61 million** increase in personnel-related costs and a **$22 million** increase in amortization of deferred commissions[122](index=122&type=chunk) - Research and development expenses increased by **$114 million (23%)** YoY, mainly due to a **$98 million** increase in personnel-related costs from increased headcount[124](index=124&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$8.8 billion** in cash, cash equivalents, and investments as of March 31, 2024, generating **$1.34 billion** in cash from operations in Q1 2024, and believes it has sufficient liquidity for the next 12 months - As of March 31, 2024, the company had **$8.8 billion** in cash, cash equivalents, short-term investments, and long-term investments[140](index=140&type=chunk) - During Q1 2024, the company repurchased **0.2 million** shares of its common stock for **$175 million**, with approximately **$787 million** remaining available for future repurchases under the program as of March 31, 2024[142](index=142&type=chunk) - Net cash from operating activities increased to **$1,341 million** in Q1 2024 from **$902 million** in Q1 2023, primarily due to higher collections from revenue growth[146](index=146&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk disclosures remain largely unchanged from the 2023 Annual Report, with the addition of a cash flow hedging program initiated in Q1 2024 using foreign currency forward contracts to mitigate exchange rate fluctuations on revenues - During Q1 2024, the company began using foreign currency forward contracts to hedge a portion of its forecasted foreign currency denominated revenues, designating them as cash flow hedges[150](index=150&type=chunk)[151](index=151&type=chunk) - The company mitigates counterparty credit risk for its derivative contracts by transacting with major financial institutions with high credit ratings[152](index=152&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective at the reasonable assurance level[153](index=153&type=chunk) - No changes occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[154](index=154&type=chunk) PART II [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is party to various legal proceedings but does not believe that their ultimate resolution will have a material adverse effect on its business, financial position, or cash flows, with further details provided in Note 16 of the financial statements - The company does not believe the ultimate resolution of any current legal proceedings is likely to result in a material loss[157](index=157&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since the filing of its Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes have been made to the Company's risk factors since the Annual Report on Form 10-K for the year ended December 31, 2023[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity for the first quarter of 2024, where **225,000** shares were repurchased at an average price of **$776.62** per share, with approximately **$0.79 billion** remaining available under the authorized program Issuer Purchases of Equity Securities (First Quarter 2024) | Period | Total Number of Shares Purchased (in thousands) | Average Price Paid Per Share | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (in billions) | | :--- | :--- | :--- | :--- | | January 1 - 31 | 29 | $776.60 | $0.94 | | February 1 - 29 | 196 | $776.63 | $0.79 | | March 1 - 31 | — | — | $0.79 | | **First Quarter 2024** | **225** | **$776.62** | **$0.79** | [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2024, several directors and Section 16 officers, including the CFO, Chief People Officer, and Chief Digital Information Officer, adopted new Rule 10b5-1 trading plans, while the General Counsel terminated a previously established trading plan - During Q1 2024, several executive officers, including CFO Gina Mastantuono, adopted new Rule 10b5-1 trading plans for the sale of company stock[162](index=162&type=chunk) - General Counsel Russell Elmer terminated his Rule 10b5-1 trading plan on February 20, 2024[162](index=162&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the CEO and CFO, and Inline XBRL documents

The cloud software company is cranking out 20%-plus growth like clockwork, but the stock has already priced in a lot of AI hype.In May 2023, cloud and artificial intelligence (AI) software provider ServiceNow (NOW 3.01%) laid out its roadmap for scaling its subscription business from $8.5 billion a year to over $15 billion by 2026. Since then, AI has gone from early hype to a legitimate driver of business growth. The problem is, ServiceNow stock has soared some 60% in the last 12 months, pricing in a large ...

Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a growth stock that can live up to its true potential can be a tough task.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, it's pretty easy to find cutting-edge growth stocks wit ...

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?Let's take a look at what these Wall Street heavyweights have to say about ServiceNow (NOW) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.ServiceNow currently has an average brokerage recommendation ( ...

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Shares of the IT giant pulled back on disappointing guidance.Shares of ServiceNow (NOW -5.25%) were moving lower today after the software-as-a-service company beat estimates in its first-quarter earnings report but offered revenue guidance for the full year that was slightly below analyst expectations. Additionally, there may be concerns about its valuation getting stretched after the stock had run up in the last several months, so it was easy for a slight miss to prompt a sell-off. As a result, the stock w ...

ServiceNow (NOW) reported first-quarter 2024 adjusted earnings of $3.41 per share, which beat the Zacks Consensus Estimate by 8.25% and jumped 44% year over year.Revenues of $2.60 billion beat the consensus mark by 0.62% and increased 24.2% year over year. At constant currency (cc), revenues increased 24% year over year to $2.597 billion.Subscription revenues improved 24.7% year over year to $2.52 billion. At cc, subscription revenues increased 24.5% year over year, 50 basis points (bps) above the high end ...