ServiceNow(NOW) - 2025 Q1 - Quarterly Report

Financial Performance - As of March 31, 2025, the remaining performance obligations (RPO) totaled $22.1 billion, with 47$1,477 million, a 21% increase from $1,225 million in 2024[95]. - Non-GAAP consolidated income from operations for the three months ended March 31, 2025, was$953 million, representing a 20% increase from $791 million in 2024[96]. - GAAP income from operations for the three months ended March 31, 2025, was$451 million, a 36% increase from $332 million in 2024[97]. - Total revenues for the three months ended March 31, 2025 were$3,088 million, a 19% increase from $2,603 million in the same period of 2024[109]. - Income before income taxes increased by 31$555 million for the three months ended March 31, 2025, up from $425 million in 2024[133]. - Provision for income taxes was$95 million for the three months ended March 31, 2025, a 22% increase from $78 million in the same period of 2024[133]. Revenue Breakdown - Subscription revenues increased by$482 million to $3,005 million for the three months ended March 31, 2025, representing a 19$120 million to $561 million for the three months ended March 31, 2025, primarily due to increased headcount and costs to support subscription growth[114]. - Research and development expenses increased by$97 million to $703 million for the three months ended March 31, 2025, primarily due to increased headcount[122]. - Sales and marketing expenses increased by$131 million to $1,054 million for the three months ended March 31, 2025, primarily driven by increased personnel-related costs[120]. - Stock-based compensation increased by$48 million to $470 million for the three months ended March 31, 2025, representing 15$1,677 million for the three months ended March 31, 2025, compared to $1,341 million in 2024, driven by higher collections from revenue growth[140]. - Net cash used in investing activities decreased to$217 million for the three months ended March 31, 2025, from $734 million in 2024, primarily due to a$573 million decrease in net purchases of investments[141]. - Net cash used in financing activities was $398 million for the three months ended March 31, 2025, down from$443 million in 2024, mainly due to a decrease in business combination payments[142]. - The company has generated positive operating cash flows for over ten years and expects to continue this trend in 2025[134]. - As of March 31, 2025, the company had cash and cash equivalents, short-term investments, and long-term investments totaling $10.9 billion[134]. Strategic Outlook - The company expects subscription revenues for the year ending December 31, 2025 to increase in absolute dollars while remaining relatively flat as a percentage of total revenue[110]. - The company is monitoring ongoing geopolitical conflicts but does not anticipate a material impact on its business operations[89]. - Macroeconomic factors such as interest rates and global inflation are being monitored, with no current impact on liquidity or financial condition reported[90]. - Interest income increased by$14 million to $115 million for the three months ended March 31, 2025, compared to$101 million in the same period of 2024, representing a 14% increase[130]. - Other expense, net rose by $3 million to$11 million for the three months ended March 31, 2025, compared to $8 million in the same period of 2024, reflecting a 38$4.5 billion, with approximately $3.0 billion remaining available for future repurchases as of March 31, 2025[136].