ServiceNow, Inc. (NOW) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

April 26, 2023 5:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks：

Operator

Ladies and gentlemen thank you for standing by and welcome to the ServiceNow, Inc. Q1 2023 Earnings Conference Call.

I would now like to turn the call over to Darren Yip, Vice President of Investor Relations. Please go ahead.

Darren Yip

Good afternoon. And thank you for joining ServiceNow’s first quarter 2023 earnings conference call.

Joining me are Bill McDermott, our Chairman and Chief Executive Officer; Gina Mastantuono, our Chief Financial Officer; and CJ Desai, our President and Chief Operating Officer.

During today’s call, we’ll review our first quarter 2023 results and discuss our guidance for the second quarter and full year 2023.

Before we get started, we want to emphasize that information discussed on this call, including our guidance, is based on information as of today and contains forward-looking statements that involve risks, uncertainties and assumptions. We undertake no duty or obligation to update such statements as a result of new information or future events. Please refer to today’s earnings press release and our SEC filings including the most recent 10-Q and 2022 10-K for factors that may cause actual results to differ materially from our forward-looking statements.

We’d also like to point out that we present non-GAAP measures in addition to, and not as a substitute for, financial measures calculated in accordance with GAAP. Unless otherwise noted, all financial measures and related growth rates we discuss today are non-GAAP, except for revenue, remaining performance obligations, or RPOs, current RPOs and cash and investments.

To see the reconciliation between these non-GAAP and GAAP measures, please refer to today’s earnings press release and investor presentation, which are both posted on our website at investors.servicenow.com. A replay of today’s call will also be posted on our website.

With that, I’ll turn the call over to Bill.

Bill McDermott

Thank you very much Darren. And thank you everyone for joining us today.

ServiceNow had an outstanding first quarter. Subscription revenue grew 27% in constant currency, which was 150 basis points above the high end of our guidance. cRPO grew 25% in constant currency, a 100 basis points above our guidance. Operating margin was 26%, two full points above our guidance. We have 66 deals greater than a $1 million in net new ACV. We saw a strong, sustained demand to ServiceNow’s platform.