ServiceNow(NOW) - 2025 Q2 - Quarterly Report

PART I Item 1. Financial Statements This section presents ServiceNow, Inc.'s unaudited condensed consolidated financial statements for the periods ended June 30, 2025, and December 31, 2024 (balance sheets), and for the three and six months ended June 30, 2025 and 2024 (income, equity, and cash flow statements), along with detailed notes explaining significant accounting policies, business operations, investments, debt, equity, and other financial commitments Condensed Consolidated Balance Sheets | Assets/Liabilities & Equity | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------- | :-------------------------- | :---------------------------- | | Assets: | | | | Cash and cash equivalents | $3,124 | $2,304 | | Short-term investments | $3,008 | $3,458 | | Accounts receivable, net | $1,696 | $2,240 | | Total current assets | $9,275 | $9,187 | | Long-term investments | $4,655 | $4,111 | | Property and equipment, net | $1,985 | $1,763 | | Goodwill | $1,778 | $1,273 | | Total assets | $22,051 | $20,383 | | Liabilities: | | | | Current portion of deferred revenue | $6,802 | $6,819 | | Total current liabilities | $8,495 | $8,358 | | Long-term debt, net | $1,490 | $1,489 | | Total liabilities | $11,119 | $10,774 | | Stockholders' Equity: | | | | Total stockholders' equity | $10,932 | $9,609 | | Total liabilities and stockholders' equity | $22,051 | $20,383 | Condensed Consolidated Statements of Comprehensive Income | Metric (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues: | | | | | | Subscription | $3,113 | $2,542 | $6,118 | $5,065 | | Professional services and other | $102 | $85 | $185 | $165 | | Total revenues | $3,215 | $2,627 | $6,303 | $5,230 | | Gross Profit: | | | | | | Gross profit | $2,491 | $2,075 | $4,928 | $4,158 | | Operating Expenses: | | | | | | Sales and marketing | $1,128 | $960 | $2,182 | $1,883 | | Research and development | $734 | $643 | $1,437 | $1,249 | | General and administrative | $271 | $232 | $500 | $454 | | Total operating expenses | $2,133 | $1,835 | $4,119 | $3,586 | | Income from Operations: | | | | | | Income from operations | $358 | $240 | $809 | $572 | | Net Income: | | | | | | Net income | $385 | $262 | $845 | $609 | | Net income per share - basic | $1.86 | $1.27 | $4.08 | $2.97 | | Net income per share - diluted | $1.84 | $1.26 | $4.04 | $2.93 | | Comprehensive Income: | | | | | | Comprehensive income | $406 | $252 | $864 | $568 | Condensed Consolidated Statements of Stockholders' Equity | Metric (in millions) | Balance at Dec 31, 2024 | Common Stock & Treasury Stock Issued | Common Stock Repurchased | Taxes Paid Related to Net Share Settlement | Stock-based Compensation | Issuance of Common Stock for Business Combinations | Other Comprehensive Income (Loss), Net of Tax | Net Income | Balance at June 30, 2025 | | :------------------- | :---------------------- | :----------------------------------- | :----------------------- | :----------------------------------------- | :----------------------- | :------------------------------------------------- | :-------------------------------------------- | :--------- | :----------------------- | | Common Stock | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | | Treasury Stock | $(1,219) | $7 | $(659) | $0 | $0 | $0 | $0 | $0 | $(1,871) | | Additional Paid-in Capital | $7,402 | $146 | $0 | $(438) | $969 | $434 | $0 | $0 | $8,513 | | Retained Earnings | $3,494 | $0 | $0 | $0 | $0 | $0 | $0 | $845 | $4,339 | | Accumulated Other Comprehensive Loss | $(68) | $0 | $0 | $0 | $0 | $0 | $19 | $0 | $(49) | | Total Stockholders' Equity | $9,609 | $153 | $(659) | $(438) | $969 | $434 | $19 | $845 | $10,932 | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $2,393 | $1,961 | | Net cash used in investing activities | $(640) | $(1,105) | | Net cash used in financing activities | $(944) | $(580) | | Foreign currency effect on cash, cash equivalents and restricted cash | $14 | $(13) | | Net change in cash, cash equivalents and restricted cash | $823 | $263 | | Cash, cash equivalents and restricted cash at beginning of period | $2,310 | $1,904 | | Cash, cash equivalents and restricted cash at end of period | $3,133 | $2,167 | Notes to Condensed Consolidated Financial Statements Description of the Business ServiceNow operates an intelligent, cloud-based platform called the Now Platform, which is an AI platform for digital transformation. It helps enterprises digitize workflows across four primary areas: Technology, CRM and Industry, Core Business, and Creator, aiming to improve business outcomes and user experiences - ServiceNow's core business is the Now Platform, an AI-driven cloud solution for digital workflow transformation across Technology, CRM, Core Business, and Creator areas[24] Summary of Significant Accounting Policies This section outlines the basis of presentation for the unaudited condensed consolidated financial statements, prepared in accordance with SEC rules and GAAP, emphasizing the use of management estimates and assumptions. It also confirms no significant changes to accounting policies from the prior annual report and details the company's approach to credit risk and significant customer concentrations - No significant changes to accounting policies from the December 31, 2024 Annual Report on Form 10-K[29] - One U.S. federal channel partner accounted for 16% of accounts receivable as of June 30, 2025 (vs. 12% at Dec 31, 2024) and 11% of total revenues for the three and six months ended June 30, 2025 (vs. 10% for the same periods in 2024)[30] Investments The company's investment portfolio primarily consists of available-for-sale debt securities and non-marketable equity investments. As of June 30, 2025, total available-for-sale debt securities had an estimated fair value of $7,663 million, with unrealized gains of $35 million and losses of $18 million. Non-marketable equity investments totaled $601 million, measured at cost with immaterial adjustments | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | | :--------------------------------- | :----------------------- | :------------------------- | | Total Amortized Cost | $7,646 | $7,576 | | Total Gross Unrealized Gains | $35 | $18 | | Total Gross Unrealized Losses | $(18) | $(25) | | Total Estimated Fair Value | $7,663 | $7,569 | - Non-marketable equity investments in privately-held companies increased to $601 million as of June 30, 2025, from $469 million as of December 31, 2024[34] Fair Value Measurements This note details the fair value hierarchy for assets measured on a recurring basis, categorizing them into Level 1 (quoted prices in active markets) and Level 2 (observable inputs other than quoted prices). As of June 30, 2025, total assets measured at fair value were $9,952 million, predominantly in Level 2 | Category | June 30, 2025 (millions) | December 31, 2024 (millions) | | :--------------------------------- | :----------------------- | :------------------------- | | Level 1 | $2,230 | $1,748 | | Level 2 | $7,722 | $7,610 | | Total | $9,952 | $9,358 | Business Combinations ServiceNow completed the acquisition of Logik.io Inc. on May 30, 2025, for $506 million, primarily to enhance its CRM and sales capabilities. The company also completed other immaterial acquisitions and has a pending acquisition of Moveworks, Inc. for approximately $2.9 billion, expected to close in Q4 2025 or later, to strengthen its AI platform - Acquired Logik.io Inc. on May 30, 2025, for $506 million (0.4 million shares of common stock valued at $434 million and $62 million cash) to expand CRM and sales capabilities[38] - Preliminary purchase price allocation for Logik.io Inc. included $85 million for developed technology, $14 million for customer-related assets, and $404 million for goodwill[39] - Signed a definitive agreement to acquire Moveworks, Inc. for approximately $2.9 billion, expected to close in Q4 2025 or later, to strengthen the AI platform with agentic AI assistants[43] Goodwill and Intangible Assets Goodwill increased to $1,778 million as of June 30, 2025, primarily due to $434 million acquired goodwill from business combinations and $71 million from foreign currency translation adjustments. Net intangible assets also increased to $319 million, with estimated future amortization expense of $319 million through 2029 and thereafter | Metric | Carrying Amount (in millions) | | :--------------------------------- | :---------------------------- | | Balance as of December 31, 2024 | $1,273 | | Goodwill acquired | $434 | | Foreign currency translation adjustments | $71 | | Balance as of June 30, 2025 | $1,778 | | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--------------------------------- | :-------------------------- | :---------------------------- | | Intangible assets, gross | $834 | $675 | | Less: accumulated amortization | $(515) | $(466) | | Intangible assets, net | $319 | $209 | - Estimated future amortization expense for intangible assets is $319 million, with $58 million remaining in 2025, $80 million in 2026, $69 million in 2027, $59 million in 2028, $41 million in 2029, and $12 million thereafter[47] Property and Equipment Net property and equipment increased to $1,985 million as of June 30, 2025, from $1,763 million at December 31, 2024. This increase was primarily driven by investments in computer equipment and construction in progress. Depreciation expense for the six months ended June 30, 2025, was $232 million, up from $168 million in the prior year | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--------------------------------- | :-------------------------- | :---------------------------- | | Property and equipment, gross | $3,683 | $3,271 | | Less: Accumulated depreciation | $(1,698) | $(1,508) | | Property and equipment, net | $1,985 | $1,763 | - Depreciation expense for the six months ended June 30, 2025, was $232 million, an increase from $168 million for the same period in 2024[48] Derivative Contracts ServiceNow uses derivative contracts, including forward contracts, to hedge foreign currency denominated revenues (cash flow hedges) and monetary assets/liabilities (not designated as hedges). As of June 30, 2025, outstanding cash flow hedges had a notional value of $1.8 billion, and derivatives not designated as hedges had a notional value of $2.5 billion - Outstanding cash flow hedges had total notional values of $1.8 billion as of June 30, 2025, up from $1.7 billion at December 31, 2024[49] - Approximately $76 million of pre-tax derivative losses from accumulated other comprehensive income (loss) are expected to be recognized in subscription revenues within the next 12 months[50] - Foreign currency forward contracts not designated as hedging instruments had total notional values of $2.5 billion as of June 30, 2025, up from $2.2 billion at December 31, 2024[53] Supply Chain Finance Program The company participates in a supply chain finance (SCF) program, allowing suppliers to sell their receivables to a financial institution for early payment. As of June 30, 2025, outstanding payment obligations to participating suppliers totaled $49 million, included in accounts payable - Outstanding payment obligations to suppliers participating in the SCF program totaled $49 million as of June 30, 2025[55] Deferred Revenue and Performance Obligations Revenues recognized from beginning period deferred revenue were $2.8 billion for the three months and $4.7 billion for the six months ended June 30, 2025. Total remaining performance obligations (RPO) as of June 30, 2025, were $23.9 billion, with approximately 46% expected to be recognized as revenue in the next 12 months | Period | 2025 (in millions) | 2024 (in millions) | | :--------------------------------- | :----------------- | :----------------- | | Three Months Ended June 30 | $2,800 | $2,400 | | Six Months Ended June 30 | $4,700 | $3,900 | - Total non-cancellable remaining performance obligations (RPO) were $23.9 billion as of June 30, 2025[58] - Approximately 46% of RPO is expected to be recognized as revenue over the next 12 months, with the majority of non-current RPO recognized over the subsequent 13 to 36 months[58] Debt The company's outstanding debt, primarily 1.40% fixed rate ten-year notes due September 1, 2030 (the "2030 Notes"), had a carrying value of $1,490 million as of June 30, 2025. The estimated fair value of these notes was $1,300 million at June 30, 2025 | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--------------------------------- | :-------------------------- | :---------------------------- | | Carrying value of outstanding debt | $1,490 | $1,489 | | Estimated fair value of 2030 Notes | $1,300 | $1,247 | - The 2030 Notes have an aggregate principal amount of $1.5 billion, a 1.40% fixed interest rate, and mature on September 1, 2030[61] Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive loss improved to $(49) million as of June 30, 2025, from $(68) million at December 31, 2024. This change was primarily driven by positive foreign currency translation adjustments and unrealized gains on investments, partially offset by unrealized losses on derivative instruments | Component | Dec 31, 2024 (in millions) | June 30, 2025 (in millions) | | :--------------------------------- | :------------------------- | :-------------------------- | | Unrealized Gains (Losses) on Derivative Instruments | $50 | $(101) | | Unrealized Gains (Losses) on Investments | $(27) | $(8) | | Foreign Currency Translation Adjustment | $(91) | $60 | | Total | $(68) | $(49) | Stockholders' Equity As of June 30, 2025, the company had 208 million shares of common stock outstanding. The board authorized an additional $3.0 billion for the share repurchase program in January 2025, bringing the total available for future repurchases to approximately $2.6 billion. During the six months ended June 30, 2025, the company repurchased 0.7 million shares for $659 million - As of June 30, 2025, there were approximately 208 million shares of common stock outstanding[64] - In January 2025, the board authorized an additional $3.0 billion for the Share Repurchase Program, with approximately $2.6 billion remaining available as of June 30, 2025[66][67] | Period | Shares Repurchased (thousands) | Amount (in millions) | | :--------------------------------- | :----------------------------- | :------------------- | | Three Months Ended June 30, 2025 | 400 | $361 | | Six Months Ended June 30, 2025 | 700 | $659 | | Six Months Ended June 30, 2024 | 200 | $175 | Equity Awards The company operates several equity incentive plans, including the 2021 Equity Incentive Plan, which governs most current grants. During the six months ended June 30, 2025, 2.2 million RSUs were granted, and 1.5 million vested. Total unrecognized compensation cost for unvested RSUs was $3.8 billion, with a weighted-average remaining vesting period of approximately three years | Metric (in thousands) | Number of Shares | Weighted-Average Grant Date Fair Value Per Share | | :--------------------------------- | :--------------- | :--------------------------------------- | | Outstanding as of Dec 31, 2024 | 5,788 | $630.10 | | Granted | 2,217 | $991.45 | | Vested | (1,474) | $623.39 | | Forfeited | (297) | $663.89 | | Outstanding as of June 30, 2025 | 6,234 | $758.55 | - Total unrecognized compensation cost for unvested RSUs was $3.8 billion as of June 30, 2025, with a weighted-average remaining vesting period of approximately three years[81] - The fourth tranche of the 2021 CEO Performance Award and 2021 Performance Awards vested during the six months ended June 30, 2025, based on achievement of performance and market conditions[75] Net Income Per Share Basic net income per share for the six months ended June 30, 2025, was $4.08, up from $2.97 in the prior year, while diluted net income per share increased to $4.04 from $2.93. The calculation includes adjustments for potentially dilutive securities like stock options, RSUs, and ESPP obligations | Metric (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $385 | $262 | $845 | $609 | | Net income per share - basic | $1.86 | $1.27 | $4.08 | $2.97 | | Net income per share - diluted | $1.84 | $1.26 | $4.04 | $2.93 | Provision for Income Taxes The income tax provision for the six months ended June 30, 2025, was $181 million, up from $150 million in the prior year, primarily due to the mix of earnings and losses across jurisdictions, offset by excess tax benefits from stock-based compensation. The company maintains a valuation allowance against California deferred tax assets | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income tax provision | $86 | $72 | $181 | $150 | - The income tax provision is primarily influenced by the mix of earnings/losses in different countries and excess tax benefits from stock-based compensation[85] Commitments and Contingencies ServiceNow has non-cancellable operating lease liabilities totaling $919 million as of June 30, 2025, with a weighted-average remaining lease term of nine years. The company also has significant contractual commitments for cloud services ($4.8 billion through 2030) and IT equipment ($1.9 billion through 2028) to support data center expansion. Legal proceedings are ongoing, including an internal investigation into potential compliance issues related to a government contract, which led to the resignation of the President and COO | Metric (in millions) | Amount | | :--------------------------------- | :------- | | Total operating lease payments | $1,085 | | Less: imputed interest | $(166) | | Present value of operating lease liabilities | $919 | - Committed to spend approximately $4.8 billion on cloud services through 2030 and $1.9 billion on capital expenditures for data center expansion through 2028[93] - An internal investigation into potential compliance issues related to a government contract led to the resignation of the President and Chief Operating Officer and another individual. The Department of Justice has commenced its own investigation[97] Segment and Geographic Information The company operates as a single operating and reportable segment, with the CEO managing business activities at a consolidated level. Geographically, North America remains the largest revenue contributor, accounting for $3,969 million (63%) of total revenues for the six months ended June 30, 2025, followed by EMEA and Asia Pacific - ServiceNow manages its business activities as a single operating and reportable segment[100] | Geographic Area | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--------------------------------- | :------------------------------------------- | :------------------------------------------- | | North America | $3,969 | $3,302 | | EMEA | $1,616 | $1,337 | | Asia Pacific and other | $718 | $591 | | Total revenues | $6,303 | $5,230 | Subsequent Event On July 4, 2025, the "One Big Beautiful Bill Act" was enacted, amending the U.S. tax code. The company is currently evaluating the impact of this new legislation on its consolidated financial statements - The "One Big Beautiful Bill Act" was enacted on July 4, 2025, amending the U.S. tax code, and the company is evaluating its impact[103] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on ServiceNow's financial condition, operational results, and cash flows for the periods ended June 30, 2025 and 2024. It highlights the company's cloud-based Now Platform as an AI platform for digital transformation, discusses key business metrics, revenue and expense components, and analyzes liquidity and capital resources. The company is monitoring macroeconomic events and ongoing conflicts but does not anticipate a material impact on its business Overview ServiceNow's core business revolves around its AI-powered Now Platform, a cloud solution for digitizing workflows across various enterprise functions. The company is monitoring global conflicts and macroeconomic events but currently expects no material impact on its operations or financial results - The Now Platform is positioned as the AI platform for digital transformation, automating business processes across enterprises[107] - The company is monitoring ongoing conflicts and macroeconomic events but does not believe they will have a material impact on business and results of operations as of June 30, 2025[108] Key Business Metrics This section details key performance indicators including Remaining Performance Obligations (RPO), customer count with Annual Contract Value (ACV) greater than $5 million, non-GAAP free cash flow, non-GAAP consolidated income from operations, and renewal rate. RPO increased by 29% year-over-year, and free cash flow grew by 27% - Remaining Performance Obligations (RPO) as of June 30, 2025, were $23.9 billion, with current RPO (cRPO) representing 46%. RPO and cRPO increased by 29% and 24% respectively, compared to June 30, 2024[113] - The number of customers with ACV greater than $5 million increased to 528 as of June 30, 2025, from 442 as of June 30, 2024[114] | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--------------------------------- | :----------------------------- | :----------------------------- | :------- | | GAAP net cash provided by operating activities | $2,393 | $1,961 | 22% | | Purchases of property and equipment | $(395) | $(397) | (1%) | | Business combination and other related costs | $14 | $20 | (30%) | | Non-GAAP free cash flow | $2,012 | $1,584 | 27% | | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--------------------------------- | :----------------------------- | :----------------------------- | :------- | | GAAP income from operations | $809 | $572 | 41% | | Stock-based compensation | $969 | $866 | 12% | | Amortization of purchased intangibles | $46 | $48 | (4%) | | Business combination and other related costs | $25 | $25 | 0% | | Impairment of assets | $30 | $0 | 100% | | Severance costs | $29 | $0 | 100% | | Non-GAAP income from operations | $1,908 | $1,511 | 26% | - The renewal rate was 98% for both the three and six months ended June 30, 2025 and 2024[118] Components of Results of Operations This section outlines the composition of ServiceNow's revenues (subscription and professional services) and expenses (cost of revenues, sales and marketing, R&D, G&A). Subscription revenues, recognized ratably, constitute the vast majority of total revenues, primarily sold through a direct sales organization. The company experiences seasonality, with a higher percentage of agreements signed in the fourth quarter - Subscription revenues are primarily from cloud-based offerings, recognized ratably over the subscription term, typically 12 to 36 months[119] - Direct sales organization accounted for 78% of total revenues for the three and six months ended June 30, 2025[121] - The company experiences seasonality, with a significantly higher percentage of new and expansion agreements signed in the fourth quarter, driven by enterprise buying patterns and commission plans[122] Comparison of the Three and Six Months Ended June 30, 2025 and 2024 This section provides a detailed comparison of financial performance for the three and six months ended June 30, 2025, versus 2024. Total revenues increased by 22% and 21% for the three and six-month periods, respectively, driven by subscription revenue growth. Operating expenses, including sales & marketing and R&D, also increased due to headcount and program investments, while net income and EPS saw significant growth | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Subscription revenues | $3,113 | $2,542 | 22% | $6,118 | $5,065 | 21% | | Professional services and other revenues | $102 | $85 | 20% | $185 | $165 | 12% | | Total revenues | $3,215 | $2,627 | 22% | $6,303 | $5,230 | 21% | | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Total cost of revenues | $724 | $552 | 31% | $1,375 | $1,072 | 28% | | Total gross profit percentage | 77% | 79% | -2% pts | 78% | 80% | -2% pts | | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :------- | :----------------------------- | :----------------------------- | :------- | | Sales and marketing | $1,128 | $960 | 18% | $2,182 | $1,883 | 16% | | Research and development | $734 | $643 | 14% | $1,437 | $1,249 | 15% | | General and administrative | $271 | $232 | 17% | $500 | $454 | 10% | | Metric (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $385 | $262 | $845 | $609 | | Net income per share - diluted | $1.84 | $1.26 | $4.04 | $2.93 | Liquidity and Capital Resources ServiceNow maintains strong liquidity, with $10.8 billion in cash, cash equivalents, and investments as of June 30, 2025. The company generated $2,393 million in net cash from operating activities for the six months ended June 30, 2025, an increase from $1,961 million in the prior year, primarily due to revenue growth. Capital requirements include data center expansion, workforce costs, and business acquisitions - Cash, cash equivalents, short-term investments, and long-term investments totaled $10.8 billion as of June 30, 2025[157] | Cash Flow Activity (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $2,393 | $1,961 | | Net cash used in investing activities | $(640) | $(1,105) | | Net cash used in financing activities | $(944) | $(580) | | Net increase in cash, cash equivalents and restricted cash | $823 | $263 | - Net cash provided by operating activities increased by $432 million (22%) for the six months ended June 30, 2025, compared to the same period in 2024, driven by higher collections from revenue growth[164] - Net cash used in investing activities decreased by $465 million for the six months ended June 30, 2025, primarily due to a $506 million decrease in net purchases of investments[165] - Net cash used in financing activities increased by $364 million for the six months ended June 30, 2025, mainly due to a $484 million increase in common stock repurchases[166] Critical Accounting Policies and Significant Judgments and Estimates There have been no significant changes to the company's critical accounting policies and estimates since the Annual Report on Form 10-K for the year ended December 31, 2024 - No significant changes to critical accounting policies and estimates since the Annual Report on Form 10-K filed on January 30, 2025[167] Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in the company's market risk compared to the disclosures in its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in market risk compared to the Annual Report on Form 10-K for the year ended December 31, 2024[168] Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025. There were no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[169] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[170] PART II Item 1. Legal Proceedings The company is involved in certain litigation and legal proceedings, but management does not believe their ultimate resolution will have a material adverse effect on its business, financial position, results of operations, or cash flows - Management does not believe the ultimate resolution of current legal proceedings will have a material adverse effect on the company's business or financial results[172] Item 1A. Risk Factors There have been no material changes to the company's risk factors since its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors since the Annual Report on Form 10-K for the year ended December 31, 2024[174] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds On May 30, 2025, ServiceNow issued 468,525 shares of common stock as partial consideration for the Logik.io Inc. acquisition, relying on Section 4(a)(2) of the Securities Act. The company also repurchased 381,000 shares for $361 million during the second quarter of 2025 under its share repurchase program, which has $2.61 billion remaining - Issued 468,525 shares of common stock on May 30, 2025, for the Logik.io Inc. acquisition, under Section 4(a)(2) exemption[175] | 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) | | :--------------------------------- | :-------------------------------------------- | :--------------------------- | :--------------------------------------------------------------------------------------- | | Second Quarter 2025 | 381 | $947.39 | $2.61 | Item 5. Other Information This section discloses Rule 10b5-1 trading plans adopted by Section 16 officers. For example, General Counsel Russell Elmer adopted a plan on May 21, 2025, for the sale of common stock and net shares from RSU vesting - General Counsel Russell Elmer adopted a Rule 10b5-1 trading plan on May 21, 2025, for the sale of 110 shares of common stock and 100% of net shares from vesting RSUs[177] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including the Restated Certificate of Incorporation, Restated Bylaws, certifications under the Sarbanes-Oxley Act, and Inline XBRL documents - The exhibit index includes corporate governance documents (Restated Certificate of Incorporation, Restated Bylaws), certifications (Section 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[179] Signatures The report is duly signed on behalf of ServiceNow, Inc. by its Chief Executive Officer, William R. McDermott, President and Chief Financial Officer, Gina Mastantuono, and Chief Accounting Officer, Kevin McBride, as of July 23, 2025 - The report is signed by William R. McDermott (CEO), Gina Mastantuono (President and CFO), and Kevin McBride (Chief Accounting Officer) on July 23, 2025[185][186]