Investor Presentation

Second Quarter 2014

© 2014 ServiceNow All Rights Reserved 1

Safe Harbor
This presentation contains “forward‐looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. We
intend for such forward‐looking statements to be covered by the safe harbor provisions for forward‐looking statements contained in the U.S. Private Securities Litigation Reform Act
of 1995. Forward‐looking statements include information concerning our possible or assumed strategy, future operations, financing plans, operating model, financial position, future
revenues, projected costs, competitive position, industry environment, potential growth opportunities, potential market opportunities, plans and objectives of management and the
effects of competition.
Forward‐looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “could,” “seeks,” “estimates,”
“expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions and the negatives of those terms, although not all
forward‐looking statements contain these identifying words. Forward‐looking statements involve known and unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward‐looking
statements. We cannot guarantee that we actually will achieve the plans, intentions, or expectations disclosed in our forward‐looking statements and you should not place undue
reliance on our forward‐looking statements.
Forward-looking statements represent our management’s beliefs and assumptions only as of the date of this presentation. We undertake no obligation, and do not intend to update
these forward‐looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter. Further
information on these and other factors that could affect our financial results are included our filings we make with the Securities and Exchange Commission.
This presentation includes certain non‐GAAP financial measures as defined by SEC rules. We have provided a reconciliation of those measures to the most directly comparable GAAP
measures in the Appendix.
The information in this presentation on new products, features, or functionalities is intended to outline ServiceNow’s general product direction and should not be included in making
a purchasing decision. The information on new products, features, functionalities is for informational purposes only and may not be incorporated into any contract. The information
on new products is not a commitment, promise, or legal obligation to deliver any material, code or functionality. The development, release, and timing of any features or
functionality described for our products remains at ServiceNow’s sole discretion.

© 2014 ServiceNow All Rights Reserved 2

 ServiceNow – The Enterprise IT Cloud Company
Subscription Revenue
• NYSE: NOW PS and Other Revenue
Total Revenues $167

$139 $34
• 2,328 Employees $125
$22
$111
$102 $20
• Trailing 12-Month Revenue $542 Million $22
$18

$133
• 2,364 enterprise customers $93
$105
$117
$80

– 23% Penetrated in the Global 2,000

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

• Platform designed for Enterprise Service Management
Q2-14A Y-Y Growth
• Cloud-hosted delivery; SaaS business model Revenue $166.8M +63%

• Major Sites in San Diego, Silicon Valley, Seattle, Deferred Revenue $328.9M +93%
Amsterdam and London Billings $187.1M +59%

Cash & Investments $957.1M +204%

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 Growth Formula = New Logos + Upsells + Renewals
LAND EXPAND RETAIN

97% 97% 98%

Net New Customer Adds 2,364 96%
36% 94%
2,195 169 34% 33%
2,061 134
1,900 161 29%
1,778 122
138 25%

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Cumulative Customers Including Net Adds(1) Upsells as % of Total ACV(2) Customer Renewal Rate(3)
1. Each subsidiary that has contracted for a separate production instance is counted as a customer.
2. Upsell rate is calculated as the annual contract value of upsells during the period, net of any decreases in annual contract value of renewals during the
period, divided by our total annual contract value during the period.
© 2014 ServiceNow All Rights Reserved 4
3. Renewal rate calculated by subtracting our attrition rate from 100%. Our attrition rate for a period is equal to the annual contract value from lost
customers, divided by the total annual contract value from all customers that renewed during the period and from all lost customers.
 12-Months Trailing Revenue Per Customer

Total
Professional Services & Other
Subscription $262
$249
$238
$227 $45
$217 $43
$42
$40
$38

$206 $217
$187 $196
$180

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Notes: Our average total annual revenues per customer, defined as quarterly revenue divided by the average number of customers in the quarter summed for the trailing four quarters.

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Investing in Growth – Sales & Marketing Headcount

806

615
Headcount

350

242

83

CY-10 CY-11 CY-12 CY-13 Q2-14

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 Subscription Gross Margin

77.6% 77.8%
77.3% 77.2%

76.0%

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Note: All figures are calculated on a non-GAAP basis, which excludes stock-based compensation. See appendix for reconciliation of non-GAAP financial measures

© 2014 ServiceNow All Rights Reserved 7

 Professional Services & Other Gross Margin

PS & Other GM (Including Knowledge(1))

34.0%
32.6%

12.8% 12.9%
12.5%
7.3% 10.0%

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Note: All figures are calculated on a non-GAAP basis, which excludes stock-based compensation. See appendix for reconciliation of non-GAAP financial measures.
1. Professional Services and Other revenues includes revenue from our Knowledge event in the second quarter of each year, with all related expenses in sales and marketing

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High Revenue Visibility
Deferred Revenue and Backlog
$MM
$608

$308 $329
$267
$210 $226

Q2-13 Q3-13 Q4-13 Q1-14 Q2-14

Combined Deferred Revenue + Backlog
Deferred Revenue
Backlog

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 Walk to Long-Term Operating Model Targets
FY-13A Q2-14A Q3-14G Long Term

Subscription Gross 81-83%

77% 78% ~77% Data Center Density, Improved Economies of Scale
Margin

PS & Other Gross Margin 16% 34%* ~8% Productized & Scalable Offerings, Utilization, Ramp Time 16-18%

Total Gross Margin 67% 69%* ~66% 74-76%

S&M % of Revenue 41% 48% n/a Renewals > Percent of Bookings, Improved Mix of Ramped Reps, 32-34%
Marketing Program Spend

R&D % of Revenue 15% 15% n/a Continue to Invest in R&D, 11-13%

but at Slower Pace than Revenue Growth

G&A % of Revenue 11% 10% n/a Improved Economies of Scale 4-6%

Operating Margin 0% -4% 1% ~23%

Note: All figures are calculated on a non-GAAP basis, which excludes stock-based compensation and acquisition costs. See appendix for reconciliation of non-GAAP financial measures
*PS & Other includes $8.2 million from our Knowledge event with all expenses related to the event running through sales and marketing
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 Non-GAAP Reconciliation
$MM 2012 Q1-13 Q2-13 Q3-13 Q4-13 2013 Q1-14 Q2-14
GAAP Subscription Gross Profit 141.3 53.2 60.2 69.6 78.9 216.9 86.2 99.5
(+) Subscription SBC 3.9 1.8 2 2.2 2.5 8.4 3.1 3.8
Non-GAAP Subscription Gross Profit 145.2 55.0 62.2 71.8 81.4 270.3 89.3 103.3
% Subscription Gross Margin 71% 77% 77% 77% 78% 77% 76% 78%
GAAP Professional Services Gross Profit -1.6 0.4 6.1 0.1 0.9 7.5 -0.2 8.3
(+) Pro. Serv. SBC 1.6 0.8 1.1 1.2 1.7 4.7 2.4 3.2
Non-GAAP Professional Services Gross Profit - 1.2 7.1 1.3 2.6 12.3 2.2 11.6
% Pro. Serv. Gross Margin 0% 8% 33% 7% 13% 16% 10% 34%
Total Non-GAAP Gross Profit 145.2 56.2 69.3 73.1 84 282.6 91.4 114.9
% Gross Margin 60% 65% 68% 66% 67% 67% 66% 69%
GAAP Sales and Marketing 103.9 38.2 52.3 47.3 57.3 195.2 69.4 91.9
–Sales and Marketing SBC 10.2 4.0 4.8 5.9 6.9 21.6 9.0 12.4
–Sales and Marketing Acquisition Cost 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Non-GAAP Sales and Marketing 93.6 34.2 47.5 41.4 50.5 173.6 60.4 79.6
% of Revenue 38% 40% 46% 37% 40% 41% 43% 48%
GAAP Research and Development 39.3 16 18 20.8 23.9 78.7 31.1 35.4
–Research and Development SBC 6.5 3.1 3.7 4.2 5.2 16.2 7.8 10.5
–Research and Development Acquisition Cost 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Non-GAAP Research and Development 32.8 12.9 14.2 16.6 18.7 62.5 23.3 25.0
% of Revenue 13% 15% 14% 15% 15% 15% 17% 15%
GAAP General and Administrative 34.1 12.3 15.3 16.2 18 61.8 21.6 24.9
–General and Administrative SBC 5.7 2.3 3.2 4.3 4.7 14.6 6.9 7.7
–General and Administrative Acquisition Cost 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.7
Non-GAAP General and Administrative 28.4 9.9 12.1 11.8 13.3 47.2 14.7 16.5
% of Revenue 12% 12% 12% 11% 11% 11% 11% 10%
Non-GAAP Operating Margin -4% -1% -4% 3% 1% 0% -5% -4%

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 Thank you

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