What changed in this filing

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Item 1. Financial Statements

2024-05-06 compared with 2023-10-26 · 204 added, 197 removed, 377 unchanged (52% of the section changed)

3 unchanged sentences

(in millions)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Assets (unaudited)

29 unchanged sentences

Stockholders’ equity:

Common stock — —

Treasury stock, at cost ( 282 ) —

Preferred stock, $ 0.001 par value;

shares authorized:

no shares issued or outstanding

Common stock, $ 0.001 par value;

shares authorized:

shares issued:

206,497 and 205,619 ;

shares outstanding:

205,382 and 204,724

Treasury stock, at cost (shares held:

1,115 and 895 )

( 707 ) ( 535 )

Additional paid-in capital 6,466 6,131

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SERVICENOW, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions, except number of shares which are reflected in thousands and per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Subscription $ 2,523 $ 2,024

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Income before income taxes 425 188

Provision for (benefit from) income taxes 57 22 ( 775 ) 41

Provision for income taxes 78 38

Net income $ 347 $ 150

3 unchanged sentences

Weighted-average shares used to compute net income per share - diluted 207,684 204,263

Other comprehensive loss:

Other comprehensive (loss) income:

Foreign currency translation adjustments $ ( 30 ) $ 13

Unrealized loss on investments, net of tax ( 2 ) ( 21 ) ( 4 ) ( 81 )

Other comprehensive loss

( 66 ) ( 72 ) ( 55 ) ( 206 )

Comprehensive income (loss) $ 176 $ 8 $ 1,381 $ ( 31 )

Unrealized (loss) gain on investments, net of tax

Unrealized gain on derivative instruments, net of tax 12 —

Other comprehensive (loss) income

Comprehensive income

(1) Includes stock-based compensation as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Cost of revenues:

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(in millions, except number of shares which are reflected in thousands)

Three Months Ended September 30, 2023 Three Months Ended September 30, 2022

Three Months Ended March 31, 2024

Common Stock Treasury Stock Additional

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Stockholders’

Equity Common Stock Additional

Capital Retained Earnings Accumulated

Comprehensive Loss

Stockholders’

Shares Amount Shares Amount Shares Amount

Balance at beginning of the period 204,267 — — — 5,485 1,532 ( 91 ) 6,926 201,614 $ — $ 4,186 $ 108 $ ( 100 ) $ 4,194

Common stock issued under employee stock plans 788 — — — 76 — — 76 751 — 71 — — 71

Shares Amount Shares Amount

Balance at December 31, 2023 205,619 $ — ( 895 ) $ ( 535 ) $ 6,131 $ 2,069 $ ( 37 ) $ 7,628

Common stock and Treasury stock issued under employee stock plans 878 — 5 3 128 — — 131

Common stock repurchased — — ( 225 ) ( 175 ) — — — ( 175 )

3 unchanged sentences

Net income — — — — — 347 — 347

Balance at end of the period 205,055 $ — ( 500 ) $ ( 282 ) $ 5,847 $ 1,774 $ ( 157 ) $ 7,182 202,365 $ — $ 4,507 $ 188 $ ( 172 ) $ 4,523

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Common Stock Treasury Stock Additional

Balance at March 31, 2024 206,497 $ — ( 1,115 ) $ ( 707 ) $ 6,466 $ 2,416 $ ( 68 ) $ 8,107

Three Months Ended March 31, 2023

Common Stock Additional

Capital Retained Earnings Accumulated

1 unchanged sentence

Stockholders’

Equity Common Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive Income (Loss) Total

Stockholders’

Shares Amount Shares Amount Shares Amount

Balance at beginning of the period 202,882 $ — — $ — $ 4,796 $ 338 $ ( 102 ) $ 5,032 199,608 $ — $ 3,665 $ ( 4 ) $ 34 $ 3,695

Cumulative-effect adjustment from adoption of Accounting Standards Update (ASU) 2020-06 — — — — — — — — — — ( 19 ) 17 — ( 2 )

Shares Amount

Balance at December 31, 2022 202,882 $ — $ 4,796 $ 338 $ ( 102 ) $ 5,032

Common stock issued under employee stock plans 858 — 117 — — 117

Common stock repurchased — — ( 500 ) ( 282 ) — — — ( 282 ) — — — — — —

Taxes paid related to net share settlement of equity awards — — ( 112 ) — — ( 112 )

Stock-based compensation — — 381 — — 381

Settlement of 2022 Warrants — — — — — — — — 603 — — — — —

Settlement of 2022 Notes conversion feature — — — — — — — — — — ( 233 ) — — ( 233 )

Benefit from exercise of 2022 Note Hedge — — — — — — — — — — 233 — — 233

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

— — — — 32 32

Net income — — — 150 — 150

Balance at end of the period 205,055 $ — ( 500 ) $ ( 282 ) $ 5,847 $ 1,774 $ ( 157 ) $ 7,182 202,365 $ — $ 4,507 $ 188 $ ( 172 ) $ 4,523

Balance at March 31, 2023 203,740 $ — $ 5,182 $ 488 $ ( 70 ) $ 5,600

See accompanying notes to condensed consolidated financial statements

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(in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

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Business combinations, net of cash acquired ( 194 ) —

Purchases of other intangibles ( 21 ) —

Purchases of investments ( 1,605 ) ( 1,222 )

1 unchanged sentence

Sales and maturities of investments 1,073 880

Other ( 15 ) 3

Net cash used in investing activities $ ( 918 ) $ ( 524 )

Cash flows from financing activities:

Repayments of convertible senior notes attributable to principal — ( 94 )

Proceeds from employee stock plans 131 117

1 unchanged sentence

Taxes paid related to net share settlement of equity awards ( 215 ) ( 112 )

Net cash used in financing activities $ ( 422 ) $ ( 269 )

Net cash (used in) provided by financing activities $ ( 259 ) $ 5

Foreign currency effect on cash, cash equivalents and restricted cash ( 4 ) 1

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Non-cash investing and financing activities:

Settlement of 2022 Notes conversion feature — 233

Benefit from exercise of 2022 Note Hedge — 233

Property and equipment included in accounts payable, accrued expenses and other liabilities 89 47

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ServiceNow was founded on a simple premise:

a better technology platform will help work flow better.

We help global enterprises across industries, universities and governments to digitize their workflows.

We organize our workflow applications along four primary areas:

to make work flow better.

Our intelligent platform, the Now Platform, is a cloud-based solution with embedded artificial intelligence and machine learning capabilities that helps global enterprises across industries, universities and governments unify and digitize their workflows.

Our workflow applications built on the Now Platform are organized along four primary areas:

Technology, Customer and Industry, Employee and Creator.

The products under each of our workflows help customers connect, automate and empower work across systems and silos to enable great outcomes for businesses and great experiences for people.

The Now Platform integrates with our customers’ cloud platforms and systems of choice, allowing our customers to deliver workflows across their current and future preferred systems of record and collaboration platforms.

The Now Platform orchestrates work across our customers’ cloud platforms and systems of choice, allowing our customers to get work done regardless of their current and future preferred systems of record and collaboration platforms.

(2) Summary of Significant Accounting Policies

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As a result of displaying amounts in millions, rounding differences may exist in the condensed consolidated financial statements and footnote tables.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or for other interim periods or future years.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for other interim periods or future years.

The condensed consolidated balance sheet as of December 31, 2023 is derived from audited consolidated financial statements;

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Actual results could differ from those estimates.

In January 2024, we completed an assessment of the useful life of our data center equipment and determined we should increase the estimated useful life of data center equipment from four years to five years .

This change in accounting estimate was effective beginning fiscal year 2024.

Based on the carrying amount of data center equipment included in property and equipment, net as of December 31, 2023, the effect of this change in estimate for the three months ended March 31, 2024, was a reduction in depreciation expense of $ 29 million and an increase in net income of $ 23 million, or $ 0.11 per share basic and diluted.

Significant Accounting Policies

There were no significant changes to our significant accounting policies disclosed in “Note 2 – Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on January 31, 2023.

We have incorporated two updates to our significant accounting policies during the quarter ended March 31, 2024.

The first is the change in useful life of our data center equipment discussed above and the second is related to our cash flow hedging program initiated to hedge a portion of our forecasted foreign currency denominated revenues as discussed below.

There were no other updates to our significant accounting policies disclosed in “Note 2 – Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2023.

Derivative Financial Instruments

Cash flow hedging

We record derivatives at fair value as either assets or liabilities on our condensed consolidated balance sheets.

For derivative contracts entered into to hedge a portion of our forecasted foreign currency denominated revenues that are designated and qualify as cash flow hedges, the unrealized gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings as subscription revenues when the hedged transaction affects earnings.

Derivatives not designated as hedging instruments are adjusted to fair value through earnings as other expense, net in the period during which changes in fair value occur.

The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions.

We also formally assess, both at the inception of the hedge, and on an ongoing basis, whether each derivative is highly effective in offsetting changes in cash flows of the hedged item.

Fluctuations in the value of the derivative instruments are generally offset by changes in the hedged item;

however, if it is determined that a derivative is not highly effective as a hedge or if a derivative ceases to be a highly effective hedge, the Company will discontinue hedge accounting prospectively for the affected derivative.

Concentration of Credit Risk and Significant Customers

Credit risk arising from accounts receivable is mitigated to a certain extent due to our large number of customers and their dispersion across various industries and geographies.

As of September 30, 2023, we had one customer, a U.S.

federal channel partner and systems integrator, that represented 26 % of our accounts receivable balance.

We had one customer, a U.S.

federal channel partner and systems integrator, that represented 11 % of our accounts receivable balance as of March 31, 2024 and 11 % of our total revenues for the three months ended March 31, 2024.

Based on our periodic credit evaluations, there have been no historical collection concerns with this customer.

As of December 31, 2022, there were no customers that represented more than 10% of our accounts receivable balance.

There were no customers that individually exceeded 10% of our total revenues in any of the periods presented.

There were no customers that individually exceeded 10% of our accounts receivable balance as of December 31, 2023 or our total revenues for the three months ended March 31, 2023.

For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

These reclassifications did not result in a restatement of prior period condensed consolidated financial statements .

(3) Investments

1 unchanged sentence

The following is a summary of our available-for-sale debt securities recorded within short-term and long-term investments on the condensed consolidated balance sheets (in millions):

September 30, 2023

March 31, 2024

Losses Estimated

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Total available-for-sale debt securities $ 6,205 $ 13 $ ( 35 ) $ 6,183

As of September 30, 2023, the contractual maturities of our available-for-sale debt securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheet and mortgage-backed and asset-backed securities that do not have a single maturity, did not exceed 36 months.

As of March 31, 2024, the contractual maturities of our available-for-sale debt securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheet and mortgage-backed and asset-backed securities that do not have a single maturity, did not exceed 37 months.

The fair values of available-for-sale debt securities, by remaining contractual maturity, are as follows (in millions):

September 30, 2023

March 31, 2024

Due within 1 year $ 3,054

2 unchanged sentences

Total $ 6,720

As of September 30, 2023 and December 31, 2022, the fair value of available-for-sale debt securities in a continuous unrealized loss position totaled $ 5,289 million and $ 4,232 million, respectively.

As of September 30, 2023, unrealized losses of $ 41 million from available-for-sale debt securities is from securities in a continuous unrealized loss position greater than 12 months.

As of March 31, 2024 and December 31, 2023, the fair value of available-for-sale debt securities in a continuous unrealized loss position totaled $ 4,821 million and $ 3,731 million, respectively, the majority of which has been in a continuous unrealized loss position for less than 12 months.

As of March 31, 2024, unrealized losses of $ 26 million from available-for-sale debt securities are from securities in a continuous unrealized loss position greater than 12 months.

For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis.

Unrealized losses on available-for-sale debt securities were due primarily to changes in market interest rates, and credit-related impairment losses were not material as of September 30, 2023.

Unrealized losses on available-for-sale debt securities were due primarily to changes in market interest rates, and credit-related impairment losses were not material as of March 31, 2024.

Non-Marketable Equity Investments

As of September 30, 2023 and December 31, 2022, the total amount of non-marketable equity investments in privately held companies included in other assets on our condensed consolidated balance sheets was $ 288 million and $ 252 million, respectively.

These balances include a $ 100 million investment in the common and preferred shares of Celonis SE, a privately held company that develops and sells process mining software.

Our non-marketable equity investments are accounted for using the measurement alternative, which measures the investments at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes resulting from the issuance of similar or identical securities in an orderly transaction by the same issuer.

As of March 31, 2024 and December 31, 2023, the total amount of non-marketable equity investments in privately held companies included in other assets on our condensed consolidated balance sheets was $ 288 million and $ 268 million, respectively.

Our non-marketable equity investments are primarily accounted for using the measurement alternative, which measures the investments at cost, minus impairment, if any, plus or minus changes resulting from qualifying observable price changes resulting from the issuance of similar or identical securities in an orderly transaction by the same issuer.

Determining whether an observed transaction is similar to a security within our portfolio requires judgment based on the rights and preferences of the securities.

Recording upward and downward adjustments to the carrying value of our non-marketable equity investments as a result of observable price changes requires quantitative assessments of the fair value of our non-marketable equity investments using various valuation methodologies and involves the use of estimates.

The adjustments made during the three and nine months ended September 30, 2023 and 2022 are immaterial.

The adjustments made during the three months ended March 31, 2024 and 2023 were immaterial.

We classify these fair value measurements as Level 3 within the fair value hierarchy.

(4) Fair Value Measurements

The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of September 30, 2023 (in millions):

The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of March 31, 2024 (in millions):

Level 1 Level 2 Total

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Corporate notes and bonds — 2 2

Certificates of deposit — 2 2

Deposits 295 — 295

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See Note 8 for the fair value measurement of our derivative contracts and Note 10 for the fair value measurement of our long-term debt, which are also not included in the table above.

Our marketable equity investments are classified within Level 1 and are immaterial as of September 30, 2023 and December 31, 2022.

Our marketable equity investments are classified within Level 1 and are immaterial as of March 31, 2024 and December 31, 2023.

(5) Business Combinations

On July 17, 2023, we acquired all outstanding shares of G2K Group GmbH, an artificial intelligence powered platform, for $ 464 million in a cash transaction.

The consideration is paid in two installments.

The first installment was made at the close of the transaction in July 2023.

The second installment will be paid in February 2024 and is recognized as accrued expenses and other current liabilities, which is a non-cash financing activity as of September 30, 2023.

The acquisition is intended to enhance our Now Platform with the acquired smart Internet of Things (“IoT”) technology, enabling businesses to intelligently action digital and in-store data with enterprise-grade workflows.

The consideration was paid in two installments, with the first payment made in July 2023 and the second payment made in February 2024.

The acquisition is intended to enhance our Now Platform with the acquired smart Internet of Things technology, enabling businesses to intelligently action digital and in-store data with enterprise-grade workflows.

The purchase price was preliminarily allocated based on the estimated fair value of the developed technology intangible asset of $ 75 million ( six-year estimated useful life), net tangible liabilities of $ 1 million, deferred tax liabilities of $ 23 million and goodwill of $ 413 million, which is not deductible for income tax purposes.

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The fair values assigned to tangible and intangible assets acquired, liabilities assumed and income taxes payable and deferred taxes are based on management’s estimates and assumptions.

The provisional measurements of fair value for certain assets and liabilities, which encompass primarily deferred taxes and income taxes payable, may be subject to change as additional information is received.

The provisional measurements of fair value for certain assets and liabilities may be subject to change as additional information is received.

The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

We have included the financial results of the business combination in the condensed consolidated financial statements from the date of acquisition, which was not material.

During the nine months ended September 30, 2022, we completed an acquisition for total consideration of $ 57 million primarily to enhance our products with the acquired technology and engineering workforce.

The acquisition was not material to our condensed consolidated financial statements.

(6) Goodwill and Intangible Assets

Goodwill balance consists of the following (in millions):

Carrying Amount

Balance as of December 31, 2022 $ 824

Goodwill acquired 413

Foreign currency translation adjustments ( 33 )

Balance as of September 30, 2023 $ 1,204

` Intangible assets consist of the following (in millions):

September 30, 2023 December 31, 2022

We have included the financial results of the business combination in the condensed consolidated financial statements from the date of acquisition, which were not material.

(6) Intangible Assets

Intangible assets, net consists of the following (in millions):

March 31, 2024 December 31, 2023

Developed technology $ 538 $ 516

3 unchanged sentences

Intangible assets, net $ 224 $ 224

The weighted-average useful life of the acquired developed technology for the nine months ended September 30, 2023 and 2022 was approximately five years .

Amortization expense for intangible assets for the three months ended September 30, 2023 and 2022 was $ 21 million and $ 20 million, respectively, and for the nine months ended September 30, 2023 and 2022 was $ 63 million and $ 60 million, respectively.

The following table presents the estimated future amortization expense related to intangible assets held at September 30, 2023 (in millions):

The weighted-average useful life of the acquired developed technology for the three months ended March 31, 2024 and 2023 was approximately five years .

Amortization expense for intangible assets for the three months ended March 31, 2024 and 2023 was $ 24 million and $ 20 million, respectively.

The following table presents the estimated future amortization expense related to intangible assets held at March 31, 2024 (in millions):

Years Ending December 31,

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Property and equipment, net consists of the following (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Computer equipment $ 2,254 $ 2,136

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Construction in progress consists of costs primarily related to leasehold and other improvements.

Depreciation expense for the three months ended September 30, 2023 and 2022 was $ 98 million and $ 66 million, respectively, and for the nine months ended September 30, 2023 and 2022 was $ 267 million and $ 185 million, respectively .

Depreciation expense for the three months ended March 31, 2024 and 2023 was $ 80 million and $ 81 million, respectively.

(8) Derivative Contracts

As of September 30, 2023 and December 31, 2022, we had foreign currency forward contracts with total notional values of $ 1,592 million and $ 1,360 million, respectively, which are not designated as hedging instruments.

Our foreign currency forward contracts are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates.

Outstanding foreign currency forward contracts are recorded at gross fair value as prepaid expenses and other current assets as well as accrued expenses and other current liabilities on the condensed consolidated balance sheets.

The gross fair value of these foreign currency forward contracts was immaterial as of September 30, 2023 and December 31, 2022.

The gains (losses) recognized for these foreign currency forward contracts were immaterial for each of the three and nine months ended September 30, 2023 and 2022.

Derivatives Designated as Hedging Instruments

We entered into forward contracts to hedge a portion of our forecasted foreign currency denominated revenues during the three months ended March 31, 2024.

These forward contracts are recorded at fair value and have maturities of up to 34 months.

As of March 31, 2024, we had outstanding cash flow hedges with total notional values of $ 1.5 billion.

We classify cash flows related to our cash flow hedges as operating activities in our condensed consolidated statements of cash flows.

The total gross fair values of derivatives designated as hedging instruments recorded within the condensed consolidated balance sheets were as follows (in millions):

March 31, 2024

Condensed Consolidated Balance Sheets Location

Prepaid expenses and other current assets

As of March 31, 2024, we had net derivative gains on our forward contracts of $ 16 million in accumulated other comprehensive income, of which $ 11 million is expected to be recognized in subscription revenues within the next 12 months.

As of March 31, 2024, there were no net gains or losses recognized in subscription revenues.

To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions.

We evaluate hedge effectiveness at the inception of the hedge prospectively, and on an ongoing basis both retrospectively and prospectively.

We report changes in fair value of these cash flow hedges as a component of accumulated other comprehensive income (loss) and subsequently reclassify into earnings in the same period the forecasted transaction affects earnings.

There was no ineffectiveness in the Company’s cash flow hedging program for the three months ended March 31, 2024.

Derivatives not Designated as Hedging Instruments

Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets and liabilities denominated in non-functional currencies.

These foreign currency forward contracts are recorded at fair value and have maturities of 12 months or less.

The changes in the fair value of these contracts are recorded in other expense, net on the condensed consolidated statements of comprehensive income.

As of March 31, 2024 and December 31, 2023, we had foreign currency forward contracts with total notional values of $ 2.1 billion and $ 1.7 billion, respectively, which were not designated as hedging instruments.

The gross fair value of these foreign currency forward contracts was immaterial as of March 31, 2024 and December 31, 2023.

The gains (losses) recognized for these foreign currency forward contracts from derivatives not designated as hedging instruments were immaterial for each of the three months ended March 31, 2024 and 2023.

All of our foreign currency forward contracts, both designated and not designated as hedging instruments, are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates.

(9) Deferred Revenue and Performance Obligations

Revenues recognized during the three months ended September 30, 2023 and 2022 from amounts included in deferred revenue as of June 30, 2023 and 2022 were $ 2.0 billion and $ 1.6 billion, respectively.

Revenues recognized during the nine months ended September 30, 2023 and 2022 from amounts included in deferred revenue as of December 31, 2022 and 2021 were $ 4.1 billion and $ 3.3 billion, respectively.

Revenues recognized during the three months ended March 31, 2024 and 2023 from amounts included in deferred revenue as of December 31, 2023 and 2022 were $ 2.2 billion and $ 1.8 billion, respectively.

Remaining Performance Obligations

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RPO excludes contracts that are billed in arrears, such as certain time and materials contracts, as we apply the “right to invoice” practical expedient under relevant accounting guidance.

As of September 30, 2023, the total non-cancellable RPO under our contracts with customers was $ 14.4 billion and we expect to recognize revenues on approximately 52 % of these RPO over the following 12 months.

As of March 31, 2024, the total non-cancellable RPO under our contracts with customers was $ 17.7 billion and we expect to recognize revenues on approximately 48 % of these RPO over the following 12 months.

The majority of the non-current RPO will be recognized over the next 13 to 36 months.

For the periods ended September 30, 2023 and December 31, 2022, the carrying value of our outstanding debt was $ 1,487 million and $ 1,486 million, respectively, net of unamortized debt discount and issuance costs of $ 13 million and $ 14 million, respectively.

We consider the fair value of the 2030 Notes at September 30, 2023 and December 31, 2022 to be a Level 2 measurement.

The estimated fair value of the 2030 Notes based on the closing trading price per $ 100 , was $ 1,152 million and $ 1,144 million at September 30, 2023 and December 31, 2022, respectively.

For each of the periods ended March 31, 2024 and December 31, 2023, the carrying value of our outstanding debt was $ 1,488 million, net of unamortized debt discount and issuance costs of $ 12 million.

We consider the fair value of the 2030 Notes at March 31, 2024 and December 31, 2023 to be a Level 2 measurement.

The estimated fair value of the 2030 Notes based on the closing trading price per $ 100 , was $ 1,216 million and $ 1,236 million at March 31, 2024 and December 31, 2023, respectively.

In August 2020, we issued 1.40 % fixed rate ten-year notes with an aggregate principal amount of $ 1.5 billion due on September 1, 2030 (the “2030 Notes”).

The 2030 Notes were issued at 99.63 % of principal and we incurred $ 13 million for debt issuance costs.

The effective interest rate for the 2030 Notes was 1.53 % and included interest payable, amortization of debt issuance cost and amortization of debt discount, as applicable.

The effective interest rate for the 2030 Notes was 1.53 % and included interest payable, amortization of debt issuance cost and amortization of debt discount.

Interest is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021, and the entire outstanding principal amount is due at maturity on September 1, 2030.

The 2030 Notes are unsecured obligations and the indentures governing the 2030 Notes contain customary events of default and covenants that, among others and subject to exceptions, restrict our ability to incur or guarantee debt secured by liens on specified assets or enter into sale and lease-back transactions with respect to specified properties.

2022 Notes, Note Hedge and Warrants

In May and June 2017, we issued an aggregate of $ 782.5 million of 0 % convertible senior notes (the “2022 Notes”), which were converted prior to or settled on June 1, 2022, in accordance with their terms.

Convertible Date Initial Conversion Price per Share Initial Conversion Rate per $1,000 Par Value Initial Number of Shares

(in millions)

2022 Notes February 1, 2022 $ 134.75 7.42 shares 6

To minimize the impact of potential economic dilution upon conversion of the 2022 Notes, we entered into convertible note hedge transactions (the “2022 Note Hedge”) with certain investment banks, with respect to our common stock concurrently with the issuance of the 2022 Notes.

The 2022 Note Hedge offset the dilution and cash payments in excess of the principal amount of the converted 2022 Notes and expired upon the maturity date of the 2022 Notes, which was on June 1, 2022.

Purchase Initial Shares Shares as of September 30, 2023

(in millions)

2022 Note Hedge $ 128 6 —

Separately, we entered into warrant transactions with certain investment banks, whereby we sold warrants to acquire 6 million shares of our common stock with aggregate proceeds of $ 54 million (the “2022 Warrants”).

The 2022 Warrants were separate transactions and were not remeasured through earnings each reporting period.

The 2022 Warrants were not part of the 2022 Notes or 2022 Note Hedge.

During the quarter ended June 30, 2022, we entered into unwind agreements to settle the remaining portion of the 2022 Warrants by delivering an aggregate of 0.6 million shares of our common stock.

Accordingly, the 2022 Warrants were no longer outstanding as of June 30, 2022.

(11) Accumulated Other Comprehensive Loss

The following table shows the components of accumulated other comprehensive loss, net of tax, in the stockholders’ equity section of our condensed consolidated balance sheets (in millions):

September 30, 2023 December 31, 2022

The following tables show the components of accumulated other comprehensive loss, net of tax, in the stockholders’ equity section of our condensed consolidated balance sheets (in millions):

Unrealized Gains (Losses) on Derivative Instruments

Unrealized Gains (Losses) on Investments

Foreign Currency Translation Adjustment

Net unrealized loss on investments ( 81 ) ( 77 )

Accumulated other comprehensive loss $ ( 157 ) $ ( 102 )

Reclassification adjustments out of accumulated other comprehensive loss into net income were not material for all periods presented.

Balance as of December 31, 2023

$ — $ ( 39 ) $ 2 $ ( 37 )

Other comprehensive income (loss) before reclassifications

12 ( 13 ) ( 30 ) ( 31 )

Amounts reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income (loss)

12 ( 13 ) ( 30 ) ( 31 )

Balance as of March 31, 2024

$ 12 $ ( 52 ) $ ( 28 ) $ ( 68 )

Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains (Losses) on Investments

Foreign Currency Translation Adjustment

Balance as of December 31, 2022

$ — $ ( 77 ) $ ( 25 ) $ ( 102 )

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income

Balance as of March 31, 2023

$ — $ ( 58 ) $ ( 12 ) $ ( 70 )

(12) Stockholders' Equity

We are authorized to issue a total of 600 million shares of common stock as of September 30, 2023.

We are authorized to issue a total of 600 million shares of common stock as of March 31, 2024.

Holders of our common stock are not entitled to receive dividends unless declared by our board of directors.

As of September 30, 2023, we had 204.6 million shares of common stock outstanding and had reserved shares of common stock for future issuance as follows (in thousands):

September 30, 2023

As of March 31, 2024, we had 205.4 million shares of common stock, net of treasury stock, outstanding and had reserved shares of common stock for future issuance as follows (in thousands):

March 31, 2024

Options outstanding 1,146

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(2) Refer to Note 13 for a description of these plans.

We issued a total of 2.2 million shares for each of the nine months ended September 30, 2023 and 2022, from stock option exercises, vesting of RSUs, net of employee payroll taxes, and purchases from the employee stock purchase plan (“ESPP”).

During each of the three months ended March 31, 2024 and 2023, we issued a total of 0.9 million shares from stock option exercises, vesting of RSUs, net of employee payroll taxes, and purchases from the employee stock purchase plan (“ESPP”).

Treasury Stock

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The timing, manner, price, and amount of any repurchases will be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations.

During the three months ended September 30, 2023, the Company repurchased 0.5 million shares of its common stock for $ 282 million.

During the three months ended March 31, 2024, the Company repurchased 0.2 million shares of its common stock for $ 175 million.

All repurchases were made in open market transactions.

Repurchases of common stock are recognized as treasury stock and held for future issuance.

As of September 30, 2023, approximately $ 1.2 billion of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

As of March 31, 2024, approximately $ 787 million of the originally authorized amount under the Share Repurchase Program remained available for future repurchases.

(13) Equity Awards

We currently have three equity incentive plans:

2012 Equity Incentive Plan (the “2012 Plan”), amended and restated 2021 Equity Incentive Plan (the “Restated 2021 Plan”) and 2022 New-Hire Equity Incentive Plan (the “2022 Plan”).

The 2012 Plan was terminated in connection with the approval of the 2021 Plan on June 7, 2021 but continues to govern the terms of outstanding equity awards that were granted prior to the termination of the 2012 Plan.

2012 Equity Incentive Plan (the “2012 Plan”), amended and restated 2021 Equity Incentive Plan (the “2021 Plan”) and 2022 New-Hire Equity Incentive Plan (the “2022 Plan”).

The 2012 Plan was terminated in connection with the initial approval of the 2021 Plan on June 7, 2021 but continues to govern the terms of outstanding equity awards that were granted prior to the termination of the 2012 Plan.

As of June 7, 2021, we no longer grant equity awards pursuant to the 2012 Plan.

The Restated 2021 Plan was approved by the shareholders on June 1, 2023 to increase shares available for future grants by approximately 10 million shares.

Upon effectiveness of the Restated 2021 Plan, the 2022 Plan was terminated, and no additional awards under the 2022 Plan have been made since the effective date of the Restated 2021 Plan.

The 2021 Plan, as amended and restated, was approved by the shareholders on June 1, 2023 to increase shares available for future grants by approximately 10 million shares.

Upon effectiveness of the 2021 Plan, as amended and restated, the 2022 Plan was terminated, and no additional awards under the 2022 Plan have been made since the amendment and restatement of the 2021 Plan.

Outstanding equity awards under the 2022 Plan continue to be subject to the terms and conditions of the 2022 Plan.

The Restated 2021 Plan and the 2012 Plan provide for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, performance-based stock awards and other forms of equity compensation (collectively, “equity awards”).

The 2021 Plan and the 2012 Plan provide for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, performance-based stock awards and other forms of equity compensation (collectively, “equity awards”).

The 2022 Plan permits the grant of any of the foregoing awards with the exception of incentive stock options.

In addition, the 2022 Plan, the Restated 2021 Plan and the 2012 Plan provide for the grant of performance cash awards.

In addition, the 2022 Plan, the 2021 Plan and the 2012 Plan provide for the grant of performance cash awards.

Incentive stock options may be granted only to employees.

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Stock Options

A summary of stock option activity for the nine months ended September 30, 2023 was as follows:

A summary of stock option activity for the three months ended March 31, 2024 was as follows:

Shares Weighted-

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Forfeited — $ 84.97

Outstanding at September 30, 2023 1,158 $ 599.26 7.7 $ 68

Vested and expected to vest as of September 30, 2023 940 $ 582.46 7.6 $ 67

Vested and exercisable as of September 30, 2023 149 $ 193.82 5.2 $ 54

Outstanding at March 31, 2024 1,146 $ 605.06 7.2 $ 180

Vested and expected to vest as of March 31, 2024 964 $ 591.47 7.1 $ 165

Vested and exercisable as of March 31, 2024 173 $ 247.92 5.1 $ 89

Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options.

The total fair value of stock options vested during the nine months ended September 30, 2023 was $ 5 million.

No stock options were granted during the nine months ended September 30, 2023.

As of September 30, 2023, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was $ 30 million.

The weighted-average remaining vesting period of unvested stock options at September 30, 2023 was approximately one year .

A summary of RSU activity for the nine months ended September 30, 2023 was as follows:

The total fair value of stock options vested during the three months ended March 31, 2024 was $ 6 million.

No stock options were granted during the three months ended March 31, 2024.

As of March 31, 2024, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was $ 21 million.

The weighted-average remaining vesting period of unvested stock options at March 31, 2024 was approximately one year .

A summary of RSU activity for the three months ended March 31, 2024 was as follows:

Shares Weighted-Average Grant-Date Fair Value

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Forfeited ( 137 ) $ 524.91

Outstanding at September 30, 2023 6,964 $ 499.57

Expected to vest as of September 30, 2023 6,135

RSUs outstanding as of September 30, 2023 were comprised of 6.5 million RSUs with only service conditions and 0.5 million RSUs with both service and performance conditions, including certain RSUs with additional market conditions.

The total intrinsic value of the RSUs vested was $ 1.2 billion for the nine months ended September 30, 2023.

As of September 30, 2023, the aggregate intrinsic value of RSUs outstanding was $ 3.9 billion and RSUs expected to vest was $ 3.4 billion.

PRSUs with service, performance and market vesting criteria are considered as eligible to vest when approved by the compensation committee of our board of directors in January of the year following the grant.

Outstanding at March 31, 2024 7,615 $ 591.99

Expected to vest as of March 31, 2024 6,652

RSUs outstanding as of March 31, 2024 were comprised of 7.1 million RSUs with only service conditions and 0.5 million RSUs with both service and performance conditions, including certain RSUs with additional market conditions.

The total intrinsic value of the RSUs vested was $ 0.7 billion for the three months ended March 31, 2024.

As of March 31, 2024, the aggregate intrinsic value of RSUs outstanding was $ 5.8 billion and RSUs expected to vest was $ 5.1 billion.

The ultimate number of shares eligible to vest for PRSUs range from 0 % to 200 % of the target number of shares depending on achievement relative to the performance metrics and, for certain PRSUs, depend on our total shareholder return relative to that of the S&P 500 index over the applicable measurement period.

The eligible shares subject to PRSUs granted during the nine months ended September 30, 2023 will vest in February of the following year and semi-annually for the remaining two years contingent on each holder’s continuous status as a service provider on the applicable vesting dates.

The eligible shares subject to PRSUs granted during the three months ended March 31, 2024 will vest in one to three years contingent on each holder’s continuous status as a service provider on the applicable vesting dates.

The number of PRSUs granted included in the table above reflects the shares that could be eligible to vest at 100 % of target for PRSUs and includes adjustments for over or under achievement for PRSUs granted in the prior year.

We recognized $ 111 million and $ 91 million of stock-based compensation, net of actual and estimated forfeitures, associated with PRSUs on a graded vesting basis during the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was $ 2.7 billion, and the weighted-average remaining vesting period was approximately three years .

We recognized $ 39 million and $ 35 million of stock-based compensation, net of actual and estimated forfeitures, associated with PRSUs on a graded vesting basis during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was $ 3.6 billion, and the weighted-average remaining vesting period was approximately three years .

(14) Net Income Per Share

Basic net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for the effects of dilutive shares of common stock, which are comprised of outstanding stock options, RSUs, ESPP obligations, the 2022 Notes and the 2022 Warrants.

Stock awards with performance or market conditions are included in dilutive shares to the extent all conditions are met.

The potentially dilutive shares of common stock are computed using the treasury stock method or the as-if converted method, as applicable.

The effects of outstanding stock options, RSUs, ESPP obligations, 2022 Notes and 2022 Warrants are excluded from the computation of diluted net income per share in periods in which the effect would be antidilutive.

The following tables present the calculation of basic and diluted net income per share attributable to common stockholders (in millions, except for number of shares reflected in thousands and per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The effects of outstanding stock options, RSUs and ESPP obligations are excluded from the computation of diluted net income per share in periods in which the effect would be antidilutive.

The following table presents the calculation of basic and diluted net income per share attributable to common stockholders (in millions, except for number of shares reflected in thousands and per share data):

Three Months Ended March 31,

Net income $ 347 $ 150

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ESPP obligations 26 —

2022 Notes settlements — — — 375

Settlement of 2022 Warrants — — — 205

Weighted-average shares outstanding - diluted 207,684 204,263

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Common stock options, RSUs and ESPP obligations excluded from diluted net income per share because their effect would have been anti-dilutive

3,068 5,255 3,647 4,836

(15) Provision for (Benefit from) Income Taxes

(15) Provision for Income Taxes

We compute our provision for income taxes by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjust the provision for discrete tax items recorded in the period.

The income tax provision was $ 57 million for the three months ended September 30, 2023, and our income tax benefit was $ 775 million for the nine months ended September 30, 2023.

The income tax provision was primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, tax deductible research and development costs and the valuation allowance release through the effective tax rate.

The income tax benefit was primarily attributable to the release of the valuation allowance of certain U.S.

federal and state deferred tax assets.

Our income tax provision was $ 78 million for the three months ended March 31, 2024.

The income tax provision was primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, offset by excess tax benefits of stock-based compensation.

Our income tax provision was $ 38 million for the three months ended March 31, 2023.

The income tax provision was primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates and the valuation allowance in the United States.

We regularly assess the need for a valuation allowance against our deferred tax assets.

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federal and state deferred tax assets will be realizable, with the exception of California.

We continue to maintain a valuation allowance against our California deferred tax assets due to the uncertainty regarding realizability of these deferred tax assets as they have not met the “more likely than not” realization criteria, particularly as we expect research and development tax credit generation to exceed our ability to use the credits in future years.

When a change in valuation allowance is recognized during an interim period, the change in valuation allowance resulting from current year income is included in the annual effective tax rate and the release of valuation allowance supported by projections of future taxable income is recorded as a discrete tax benefit in the interim period.

Of the $ 1.2 billion valuation allowance as of December 31, 2022, we released $ 843 million as a discrete tax benefit and $ 142 million as part of the effective tax rate during the nine months ended September 30, 2023.

$ 65 million of the valuation allowance will be released during the fourth quarter of 2023, and we will continue to maintain a valuation allowance of $ 177 million against our California deferred tax assets.

As of March 31, 2024, we continue to maintain a valuation allowance against our California deferred tax assets due to the uncertainty regarding realizability of these deferred tax assets as they have not met the “more likely than not” realization criteria, particularly as we expect research and development tax credit generation to exceed our ability to use the credits in future years.

We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis.

Our income tax provision was $ 22 million and $ 41 million for the three and nine months ended September 30, 2022, respectively.

The income tax provision was primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates and the valuation allowance in the United States.

We are subject to taxation in the United States and foreign jurisdictions.

As of September 30, 2023, our tax years 2004 to 2022 remain subject to examination in most jurisdictions.

As of March 31, 2024, our tax years 2004 to 2023 remain subject to examination in most jurisdictions.

Due to differing interpretations of tax laws and regulations, tax authorities may dispute our tax filing positions.

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Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of lease payments.

Total operating lease costs were $ 33 million and $ 96 million, excluding short-term lease costs, variable lease costs and sublease income, each of which were immaterial, for the three and nine months ended September 30, 2023, respectively.

Total operating lease costs were $ 28 million and $ 84 million, excluding short-term lease costs, variable lease costs and sublease income, each of which were immaterial, for the three and nine months ended September 30, 2022, respectively.

For the nine months ended September 30, 2023 and 2022, total cash paid for amounts included in the measurement of operating lease liabilities was $ 61 million and $ 56 million, respectively.

Operating lease liabilities arising from obtaining operating right-of-use assets totaled $ 93 million and $ 73 million for the nine months ended September 30, 2023 and 2022, respectively, of which the increase is largely related to additional office facilities located in Dublin, Ireland in line with the original commitment.

As of September 30, 2023, the weighted-average remaining lease term is approximately nine years , and the weighted-average discount rate is 4 %.

Maturities of operating lease liabilities as of September 30, 2023 are presented in the table below (in millions):

Total operating lease costs were $ 33 million and $ 31 million, excluding short-term lease costs, variable lease costs and sublease income, each of which were immaterial, for the three months ended March 31, 2024 and 2023, respectively.

For each of the three months ended March 31, 2024 and 2023, total cash paid for amounts included in the measurement of operating lease liabilities was $ 19 million.

Operating lease liabilities arising from obtaining operating right-of-use assets totaled $ 11 million and $ 24 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, the weighted-average remaining lease term is approximately nine years , and the weighted-average discount rate is 4 %.

Maturities of operating lease liabilities as of March 31, 2024 are presented in the table below (in millions):

Remainder of 2024 $ 92

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Present value of operating lease liabilities $ 785

As of September 30, 2023, we have no operating leases that have not yet commenced.

In addition to the amounts above, as of March 31, 2024, we have operating leases, primarily for offices, that have not yet commenced with undiscounted cash flows of $ 60 million.

These operating leases are expected to commence between 2024 and 2025 with lease terms of two to ten years .

Other Commitments

Other contractual commitments consist of data center and IT operations and sales and marketing activities related to our daily business operations.

There were no material contractual obligations that were entered into during the nine months ended September 30, 2023 that were outside the ordinary course of business.

During the three months ended September 30, 2022, we entered into a non-cancellable, $ 500 million agreement with Microsoft to purchase cloud services over five years , as we accelerate Azure adoption for mutual customers.

There were no material contractual obligations that were entered into during the three months ended March 31, 2024 that were outside the ordinary course of business.

During 2022, we entered into a non-cancellable, $ 500 million agreement with Microsoft to purchase cloud services over five years , as we accelerate Azure adoption for mutual customers.

In addition to the amounts above, the repayment of our 2030 Notes with an aggregate principal amount of $ 1.5 billion is due on September 1, 2030.

Refer to Note 10 for further information regarding our 2030 Notes.

Further, $ 45 million of unrecognized tax benefits have been recorded as liabilities as of September 30, 2023.

Further, $ 57 million of unrecognized tax benefits have been recorded as liabilities as of March 31, 2024.

Legal Proceedings

From time to time, we are party to litigation and other legal proceedings in the ordinary course of business.

While the results of any litigation or other legal proceedings are uncertain, management does not believe the ultimate resolution of any pending legal matters is likely to have a material adverse effect on our financial position, results of operations or cash flows, except for those matters for which we have recorded a loss contingency.

We are party to certain litigation and other legal proceedings.

While legal proceedings are inherently unpredictable and subject to uncertainties, we do not believe the ultimate resolution of any such proceedings is likely to result in a material loss.

We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss.

Generally, our subscription agreements require us to defend our customers for third-party intellectual property infringement and other claims.

On July 5, 2022, InQuisient Inc.

(“Plaintiff”) filed a complaint against ServiceNow, Inc.

District Court for the District of Delaware, alleging the Now Platform’s use of relational databases infringes three of Plaintiff’s patents.

Plaintiff is seeking injunctive relief and unspecified damages.

The Company filed an answer denying Plaintiff’s allegations and asserts Plaintiff’s patents are, among other things, invalid, not infringed and otherwise unenforceable.

A trial date has been set for January 27, 2025.

While the Company continues to vigorously defend this matter, we cannot predict the outcome with any degree of certainty.

We are unable to reasonably estimate the possible loss or range of loss, if any.

Any adverse determination related to intellectual property claims or other litigation could prevent us from offering our services and adversely affect our financial condition and results of operations.

For additional information regarding intellectual property litigation, see “Risk Factors—Lawsuits by third parties that allege we infringe their intellectual property rights could harm our business and operating results” and “Risk Factors—Our intellectual property protections may not provide us with a competitive advantage, and defending our intellectual property may result in substantial expenses that harm our operating results” included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Through its internal processes, the Company received a complaint that raised potential compliance issues during the procurement process related to one of its government contracts.

In response, the Company initiated an internal investigation, with the assistance of outside legal counsel, into the validity of these claims.

The investigation is ongoing, and the Company cannot predict the timing, outcome or possible impact of the investigation.

Indemnification Provisions

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Revenues by geographic area, based on the location of our users, were as follows for the periods presented (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

North America (1)

$ 1,637 $ 1,344

585 432 1,664 1,299

Asia Pacific and other 290 220

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Property and equipment, net by geographic area were as follows (in millions):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

North America (3)

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Total property and equipment, net $ 1,450 $ 1,358

(1) Revenues attributed to the United States were 94 % of North America revenues for each of the three and nine months ended September 30, 2023 and 2022.

(1) Revenues attributed to the United States were 94 % of North America revenues for each of the three months ended March 31, 2024 and 2023.

(2) Europe, the Middle East and Africa (“EMEA”).

(3) Property and equipment, net attributed to the United States was 83 % and 85 % of property and equipment, net attributable to North America as of September 30, 2023 and December 31, 2022, respectively.

(3) Property and equipment, net attributed to the United States were 78 % and 79 % of property and equipment, net attributable to North America as of March 31, 2024 and December 31, 2023, respectively.

Subscription revenues consist of the following (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Digital workflow products $ 2,231 $ 1,790

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Total subscription revenues $ 2,523 $ 2,024

Our digital workflow products are generally priced on a per user basis and include the Now Platform, IT Service Management, Strategic Portfolio Management (formerly known as IT Business Management), IT Asset Management and Enterprise Asset Management, Security Operations, Integrated Risk Management (formerly known as Governance, Risk and Compliance), ESG Management, HR Service Delivery, Workplace Service Delivery, Legal Service Delivery, Customer Service Management, Field Service Management, Industry Solutions, App Engine, Automation Engine, Platform Privacy and Security, Source-to-Pay Operations (formerly known as Procurement Operations Management), Supplier Lifecycle Operations, Accounts Payable Operations and Impact.

Our IT Operations Management (“ITOM”) products are generally priced on a subscription unit basis, which allows us to measure customers’ management of various IT resources, and decreasingly on a per node (physical or virtual server) basis.

Our digital workflow products include most of our product offerings and are generally priced on a per user basis.

Our remaining product offerings, primarily comprised of our IT Operations Management (“ITOM”) products, are predominantly priced on a subscription unit basis.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements