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ServiceNow Reports Fourth Quarter and Full-Year 2023 Financial Results
Jan 25, 2024
ServiceNow, a leader in digital workflow solutions, has exceeded its guidance in all top-line growth and profitability metrics for Q4 2023. The company reported a remarkable 27% year-over-year growth in subscription revenues, reaching $2,365 million. The total revenues for Q4 stood at $2,437 million, indicating a 26% year-over-year increase. The current remaining performance obligations touched $8.60 billion, a 24% growth from the previous year. Under the leadership of CEO Bill McDermott, ServiceNow is leveraging generative AI to drive digital transformation, resulting in productivity leaps and explosive growth. CFO Gina Mastantuono's effective execution has led to surpassing top-line growth and operating margin guidance, with a strong outlook for 2024.

  • ServiceNow exceeds guidance across all Q4 2023 topline growth and profitability metrics; raises 2024 subscription revenues and operating margin outlook

  • Subscription revenues of $2,365 million in Q4 2023, representing 27% year‑over‑year growth, 25.5% in constant currency

  • Total revenues of $2,437 million in Q4 2023, representing 26% year‑over‑year growth, 24% in constant currency

  • Current remaining performance obligations of $8.60 billion as of Q4 2023, representing 24% year‑over‑year growth, 23% in constant currency

  • 168 transactions over $1 million in net new ACV in Q4 2023, up 33% year‑over‑year

SANTA CLARA, Calif. ‑ January 24, 2024 ‑ ServiceNow (NYSE: NOW), the leading digital workflow company making the world work better for everyone, today announced financial results for its fourth quarter ended December 31, 2023, with subscription revenues of $2,365 million in Q4 2023, representing 27% year‑over‑year growth and 25.5% in constant currency.

“ServiceNow closed out the year with another outstanding quarter,” said ServiceNow Chairman and CEO Bill McDermott. “Generative AI is injecting new fuel into our already high‑performing engine. ServiceNow’s intelligent platform for end‑to‑end digital transformation is driving massive leaps in productivity and explosive growth. This is a breakthrough moment.”

As of December 31, 2023, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $8.60 billion, representing 24% year‑over‑year growth and 23% in constant currency. The company now has 1,897 total customers with more than $1 million in annual contract value (“ACV”), representing 15% year‑over‑year growth in customers.

“Once again we exceeded our topline growth and operating margin guidance metrics, showcasing ServiceNow’s consistent and relentless focus on execution,” said ServiceNow CFO Gina Mastantuono. “We ended Q4 with a 99% renewal rate, accelerating large new logo growth, and the strongest NNACV contribution for any new product family with the introduction of our Plus SKUs. The accelerating pace of investment in workflow automation and generative AI positions us well for another strong year and we are raising our outlook for 2024.”

Recent Business Highlights

  • In its first full quarter since the launch of Now Assist, ServiceNow saw the largest net‑new ACV contribution for a first quarter of any new product family release. The company also continued to execute on its ambitious generative AI roadmap, launching a major expansion to its Now Assist generative AI portfolio with Now Assist in Virtual Agent, flow generation, and Now Assist for Field Service Management.

  • The company continued to grow its AI‑related partnerships—including a strategic partnership with DXC—to integrate ServiceNow advanced analytics and enhanced AI capabilities into DXC Platform XTM. ServiceNow also announced a five‑year Strategic Collaboration Agreement with Amazon Web Services (AWS) to offer the ServiceNow Platform and full suite of solutions in the AWS Marketplace. The two companies will also co‑develop and launch industry‑specific, AI powered applications.

  • Today, ServiceNow announced a broader strategic alliance with EY to empower responsible AI use for enterprise customers, deliver unified solutions for AI compliance and governance, and bring AI‑enhanced experiences to EY employees and clients with ServiceNow Now Assist.

  • Additionally, ServiceNow and Visa today announced a five‑year strategic alliance to transform payment services experiences. The initial phase includes the launch of ServiceNow Disputes Management, Built with Visa–– a single, connected solution for disputes resolution.

  • In Q4, ServiceNow joined the AI Alliance launched by IBM and Meta, to advance open, safe, and responsible AI. The AI Alliance consists of a broad range of organizations that are working across aspects of AI education, research, development and deployment, and governance to support open innovation and open science in AI.

  • The company announced its acquisition of task mining company UltimateSuite to bolster automation and AI capabilities, helping customers identify process bottlenecks and drive stronger operational efficiencies.

  • Aston Martin Aramco Cognizant Formula One® Team announced ServiceNow as the intelligent platform partner to streamline the team’s AMR Technology Campus.

  • During the quarter, ServiceNow repurchased 400,000 shares of its common stock for $256 million as part of its share repurchase program, with the primary objective of managing the impact of dilution from future employee equity grants and employee stock purchase programs. $962 million of the original authorized amount remains available for future share repurchases under the existing program.

  • The company received significant recognition during the quarter, ranking #1 in the software category and #5 overall in the American Opportunity Index, as well as #3 on Glassdoor’s Best Places to Work 2023. ServiceNow was further recognized by placing on Fortune World’s 25 Best Workplaces™ and Fortune 100 Best Large Workplaces for Women lists1. The company was also named a Leader in both the Forrester Wave™: Governance, Risk, and Compliance and The Forrester Wave™: Digital Process Automation Software.

1 ©2023 FORTUNE Media IP Limited All rights reserved. Used under license. FORTUNE and FORTUNE Media IP Limited are not affiliated with, and do not endorse products or services of, ServiceNow.


About ServiceNow

ServiceNow (NYSE: NOW) makes the world work better for everyone. Our cloud‑based platform and solutions help digitize and unify organizations so that they can find smarter, faster, better ways to make work flow. So employees and customers can be more connected, more innovative, and more agile. And we can all create the future we imagine. The world works with ServiceNowTM. For more information, visit: www.servicenow.com.

© 2023 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo, Now, and other ServiceNow marks are trademarks and/or registered trademarks of ServiceNow, Inc. in the United States and/or other countries. Other company names, product names, and logos may be trademarks of the respective companies with which they are associated.

ServiceNow Q4 2023 complete financial tables (download PDF)
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