This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

ServiceNow Reports Third Quarter 2012 Financial Results

Stocks in this article: NOW

"We continued to show strong revenue execution during the third quarter and nearly doubled our billings over the same period last year," added Michael Scarpelli, chief financial officer of ServiceNow. “Deferred revenue grew sequentially by 13%, marking the fourth consecutive quarter of double-digit sequential growth, and we generated approximately $9.1 million in operating cash flow for the quarter."

Financial Outlook

The non-GAAP financial guidance discussed below excludes stock based compensation expense and the related income tax impact (see table which reconciles these non-GAAP financial measures to the related GAAP measures). Negative numbers are shown in parentheses.

For the fourth quarter of 2012, we now expect:

  • Total revenues between $69 and $71 million, representing year-over-year growth between 76% and 81%. Our total fourth quarter revenues estimate consists of subscription revenues between $60 and $61 million and professional services and other revenues between $9 and $10 million.
  • Subscription gross margin between 68% and 69%, professional services and other gross margin between (1%) and (5%), and overall gross margin between 58% and 59%.
  • Operating margin between (5%) and (7%).
  • A loss per basic and diluted share between $0.05 and $0.06 with weighted-average shares outstanding of approximately 123.5 million.

For the full year 2012 we expect revenues to be in the range of $237.5 to $239.5 million, representing year-over-year growth between 85% and 87%. Our total annual revenues estimate consists of subscription revenues between $201.6 and $202.6 million and professional services and other revenues between $35.9 and $36.9 million.

Third quarter highlights

  • In October, ServiceNow announced a new release of its cloud-based IT service automation software. With the new IT Asset Management application embedded in the product, ServiceNow enables companies to more efficiently utilize software and can help achieve compliance with license terms and requirements. At the same time, companies can avoid over-purchasing software licenses and maintenance or support contracts. The release also includes new capabilities for agile software development to improve user experience.
  • In August, ServiceNow announced it added end-to-end lifecycle automation for managing VMware virtual machines (VMs) from creation to retirement. The new capabilities can help prevent inefficient or wasteful use of VMs, saving administrative time and reducing cost. The new VMware lifecycle automation capabilities can also substantially reduce the amount of time and effort required to initially provision a VM, transforming a process that might take up to several weeks to one completed in only minutes.

Conference Call Details

ServiceNow will host a conference call to discuss its financial results for the third quarter of 2012 to begin today at 2 p.m. PDT (21:00 GMT). Interested parties may listen to the call by dialing 800.299.7098 (passcode: 41658837), or if outside North America, by dialing 617.801.9715 (passcode: 41658837). Individuals may also access the live teleconference from the investor relations section of the ServiceNow website at The webcast will be archived for a period of 30 days.

An audio replay of the conference call will also be available two hours after the call and be available for seven days. To hear the replay interested parties may dial 888.286.8010 (passcode: 68782712), or if outside North America, by dialing 617.801.6888 (passcode: 68782712).

2 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs