ServiceNow(US:NOW)2025-04-23 20:22Financial Performance - As of March 31, 2025, the remaining performance obligations (RPO) totaled $22.1 billion, with 47% representing current remaining performance obligations (cRPO), reflecting increases of 25% and 22% compared to March 31, 2024[93]. - Free cash flow for the three months ended March 31, 2025, was $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% to $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% increase compared to the same period in 2024[109]. - The renewal rate for the three months ended March 31, 2025, remained stable at 98%, consistent with the rate for the same period in 2024[96]. - Revenues outside North America represented 36% of total revenues for the three months ended March 31, 2025, slightly down from 37% in the same period of 2024[128]. - Direct sales organization accounted for 77% of total revenues for the three months ended March 31, 2025, compared to 78% in 2024[100]. Expenses and Costs - Cost of subscription revenues rose by $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% of total revenues[126]. Cash Flow and Investments - Net cash provided by operating activities was $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% increase[131]. Shareholder Returns - The company authorized a share repurchase program of up to $4.5 billion, with approximately $3.0 billion remaining available for future repurchases as of March 31, 2025[136].