Q4 2024 ServiceNow Inc Earnings Call
And, of course, there's a lot of other people who have done it. I'm not going to go into all the details, but I'm sure you'll find something interesting. I hope you'll find something interesting. I'll see you next time. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye.
Abby: Ladies and gentlemen, thank you for standing by. My name is Abby and I'll be your conference operator today.
Abby: At this time, I would like to welcome everyone to the ServiceNow 4th Quarter 2024 Earnings Conference Call.
Abby: All lines have been placed on mute to prevent any background noise.
Abby: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I would now like to turn the conference over to Mr. Darren Yip, Group Vice President of Investor Relations and Market Insight. You may begin.
Speaker Change: Good afternoon and thank you for joining ServiceNow's fourth quarter 2024 earnings conference call. Joining me are Bill McDermott, our Chairman and Chief Executive Officer, and Gina Mastantuono, our President and Chief Financial Officer.
Speaker Change: During today's call, we will review our fourth quarter 2024 results and discuss our guidance for the first quarter and full year 2025.
Speaker Change: Before we get started, we want to emphasize that the 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.
Speaker Change: We undertake no duty or obligation to update such statements as a result of new information or future events.
Speaker Change: Please refer to today's earnings press release and our SEC filings, including our most recent 10-Q and 10-K, for factors that may cause actual results to differ materially from our forward-looking statements.
Speaker Change: 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.
Speaker Change: Unless otherwise noted, all financial measures and related growth rates we discuss today are non-GAAP except for revenues, remaining performance obligations, or RPO, current RPO, and cash and investments.
Speaker Change: 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.
Speaker Change: A replay of today's call will also be posted on our website.
Speaker Change: With that, I'll turn the call over to Bill. Thank you, Darren. Good afternoon, and thank you very much for joining today's call. There are two big themes I'll cover. The first is ServiceNow's outstanding business fundamentals.
Speaker Change: will discuss another quarterly result that beat expectations, driving our remaining performance obligation to nearly $23 billion, and a platinum balance sheet with $10 billion in cash and investments on hand.
Speaker Change: We are one of one, a 20% plus grower at scale, with margin accretion, printing free cash, operating at the rule of 54.
We blew through our original $10 billion dream.
Speaker Change: and now we're on track for our mid-term target of $15 billion plus by 2026 with a long-term vision to be the defining enterprise software company of the 21st century.
Speaker Change: The second theme is ServiceNow's leadership position in the seismic shift to agentic AI.
Speaker Change: stunning 150% quarter-over-quarter deal growth in our key Pro Plus AI offerings is an exciting sign of what's ahead, especially with the new innovations we announced today.
Speaker Change: It doesn't matter to ServiceNow who builds the models. With the precipitous drop in LLM compute costs, there is much more capital allocation available for the business impact layer.
Speaker Change: Our position at the Center of Data, AI Agents, Workflow Orchestration, and Enterprise Governance is the nexus of AI's massive value creation opportunity.
Let's talk about the business fundamentals first.
Speaker Change: You'll recall that during the course of 2024, we consistently beat expectations and raised our guidance twice.
Speaker Change: In Q4, our biggest quarter of the year, we exceeded expectations on top of that beat and raised track record.
Speaker Change: CRPO growth was 22%. That's double IDC's 2024 growth rate for the IT sector. Operating margin was 29.5%. Each of those results was 50 basis points above the high end of our guidance.
Speaker Change: So, too, was our full year 2024 free cash flow margin of 31.5%.
Speaker Change: In terms of the shape of the business, ServiceNow continues its enterprise platform expansion.
Speaker Change: We landed our largest new logo deal ever. We had two additional customers cross the $100 million in total ACV, doubling our total in one quarter.
Speaker Change: It's clear that our AI platform message is landing and it's scaling.
Speaker Change: On the product areas, 76 of our tech workflow deals were over a million, including one over 15 million.
Speaker Change: ITSM, ITOM, and ITAM, and Security and Risk were all in at least 15 of the top 20 deals.
Speaker Change: IT asset management was actually in all of our top 20.
Speaker Change: Customer and industry workflows, more on this later, continued its disruption of the category with 30 deals over a million.
Speaker Change: Employee and creator workflows both had very good quarters with at least 17 deals each over a million.
Speaker Change: We're very proud of ServiceNow's performance in 2024. No enterprise soul for a company has ever executed at this scale the way we have. You'll hear from Gina on the 2025 guide in a few minutes.
to say, we expect another great year is a given.
Speaker Change: Even on this bigger revenue base, be assured, we will stay the innovative, fast growth, highly profitable company we are today.
Let's spend some time on AI.
Speaker Change: I gave you the 150% quarter-over-quarter result. This is the number of customer deals for the AI-fueled ProPlus level in our ITSM.
CSM and HRSD solutions. Let's go a level deeper.
Speaker Change: IDC forecasts worldwide revenue for AI platforms software will grow to 153 billion US dollars in 2028 with a 40.6 CAGR during that period.
Speaker Change: For 2025 alone, they forecast 46% growth in AI software spending.
Speaker Change: With this secular strength, AI is fueling a top-to-bottom reordering of the enterprise technology landscape. You've seen the impact of this in energy, infrastructure, and hardware. You'll now see it even more in software.
Speaker Change: Every CEO I meet wants to simplify their business to unlock the heaviness of legacy architectures. They want to innovate with data, workflows, and agentic AI.
Speaker Change: ServiceNow is winning with a thousand customers on the agentic AI journey already. Here's why.
Speaker Change: First, ServiceNow has the AI agents, the workflows, the workflow data fabric, RaptorDB, and the integration hub in one platform at scale.
Speaker Change: The majority in enterprise software is struggling with their well-known integration challenges and in some cases exaggerating the readiness of incremental progress.
Speaker Change: Second, ServiceNow has thousands of AI agents leveraging 20 years of automation, data, and outcomes.
Speaker Change: This is knowledge gleaned from trillions of workflows we run, including billions of automation, knowledge sources, and tools.
Bill Mcdermott: We've been building an agentic architecture for the five plus years I've been the CEO and lockstep with Jensen Wang and our great friends at NVIDIA.
Speaker Change: Third, since enterprises will experiment with more than one vendor's agents, ServiceNow's platform handles orchestration and governance.
Nobody wants a new cloud mess.
Speaker Change: where every department is out buying agents and nobody understands what the agents are doing.
Speaker Change: Our AI agent orchestrator eliminates sprawl, managing teams of AI agents to tackle the most complex enterprise processes.
Speaker Change: Even as we reach new buyers like chief data and AI officers, ServiceNow's role as the CIO's control plane is the ultimate moat in enterprise AI.
Speaker Change: If you haven't seen Idris Elba's latest brand work for ServiceNow, you can check it out on ServiceNow.com or on the ServiceNow YouTube channel. The theme is every corner of your office.
Our differentiation goes east to west and north to south.
Speaker Change: And here's what this all means for our business. We are only getting started. The opportunity is in its early days.
Speaker Change: The unique agility of our business model sets us up for a quantum leap in future business growth. We have predicted and protected.
that our seat-based subscription, staying as is.
is a foundation you can feel secure in.
We have also included a massive upgrade path to ProPlus.
RaptorDB, and Workflow Data Fabric.
So, seat-based subscription, still there, rock-solid, not going anywhere.
Speaker Change: Then we have these massive upgrade paths to the new innovation.
Speaker Change: Customers still like the predictability of this approach and they're committed to long-term transformation on our platform.
Now, we are also enabling elements of consumption-based pricing.
Speaker Change: as AI agents become a potent value driver for the enterprise.
Speaker Change: While we could have launched an additional SKU and offered AI agents as an add-on to drive more immediate revenue growth, our strategy prioritizes accelerating adoption.
Speaker Change: We are enabling faster penetration into our customer base and monetizing the hockey stick of usage over time.
Speaker Change: As the agents become increasingly productive, they will drive the consumption pricing meter.
Speaker Change: and that of course will be in addition to the seed-based licensing foundation. You'll get both.
Speaker Change: The consumption of assists with agentic AI will be a multiple factor higher than that of a standard NowAssist query.
Speaker Change: This approach ensures customers can access our AI capabilities as quickly and as seamlessly as possible while simplifying the sales process at the same time.
Speaker Change: This is the most transformative technology in decades. We are solidifying our leadership position as the AI platform for business transformation.
Speaker Change: The bedrock strength of this business model is built on driving the success of our customers.
Speaker Change: Some examples include Petrobras works with ServiceNow, connecting data across more than 6,000 applications and catalog items, processing over 250,000 requests monthly to improve decision-making and governance.
Speaker Change: A large DoD agency works with ServiceNow, getting immediate visibility into critical data and assets previously trapped in manual processes and outdated legacy systems.
Speaker Change: New Zealand Parliamentary Service is using ServiceNow to reduce employee request response times from weeks to two days.
and our largest non-profit deal to date.
Speaker Change: Grupo Bimbo will revolutionize its factory operations using ServiceNow to get real-time insights and boost production efficiency.
Speaker Change: Toyota, Rolls-Royce, the Federal Service Desk, NTT Data, they all work with ServiceNow to put AI to work for people.
Speaker Change: As always, there's so much more to give you a complete picture of ServiceNow's progress. We told you about the launch of Workflow Data Fabric, which is significantly expanding ServiceNow's addressable market.
Speaker Change: The increasing traction on agentic AI is surging awareness of workflow data fabric and our RaptorDB Pro offering, with new customers like NTT signing this quarter.
Speaker Change: We're further augmenting data fabric capabilities with the new Oracle and Google Cloud integrations announced earlier today.
Speaker Change: In terms of our key strategic industries, the public sector is poised for a major modernization effort this year and beyond.
Speaker Change: The United States government alone spends $125 billion a year on IT, much of which is unauditable, not catalogued, and not tracked against actual usage.
Speaker Change: That's why we're so enthusiastic on the new Department of Government Efficiency mandate from President Trump.
Speaker Change: If you look at our track record across all federal government customers, ServiceNow is saving millions and millions in costs.
Speaker Change: through efficiency improvements and millions and millions of hours by automating mind-numbing work.
There's so much more we will do to help.
Speaker Change: In terms of our partner ecosystem, there is growth happening everywhere.
ServiceNow and AWS expanded our collaboration with new capabilities.
Speaker Change: This enables use of multi-modal models developed on Amazon Bedrock and additional solutions are available on the AWS Marketplace.
Speaker Change: ServiceNow and Google Cloud are expanding our partnership to deliver AI powered tools to millions of users. ServiceNow will launch on Google Cloud Marketplace and Google Distributed Cloud to address demand from global enterprises.
Speaker Change: ServiceNow and Visa are expanding our strategic alliance yet again. Visa will use ServiceNow Disputes Management built with Visa's solution and together with ServiceNow we combine AI capabilities.
Speaker Change: ServiceNow and Five9 expanded our partnership to deliver a turnkey AI powered solution for unified experiences.
Speaker Change: The streamlined solution reduces operational costs, increases agent efficiency, and simplifies contact center operations.
Speaker Change: ServiceNow and Microsoft are expanding our alliance to accelerate disruption in the CRM category. This is built on Microsoft CoPilot and ServiceNow AI Agent Collaboration, leveraging the unique strengths of both platforms.
Speaker Change: It's a good time to remind you that CRM and industry workflows is ServiceNow's fastest-growing business. There's a reason for that.
ServiceNow is uniquely positioned to take action
Speaker Change: We have a key differentiator at the architectural level. We don't have to try to translate between our AI models and some third-party system.
Speaker Change: We sell, fulfill, and service on one platform, one architecture, and one data model. Absolute beauty.
Speaker Change: Other software vendors need to communicate across multiple systems and stitch them together to make their software work resulting in poor customer experiences saddled with technical debt.
Speaker Change: With just a front-end AI agent, a customer is limited in their ability to take action across the enterprise to drive the ticket to resolution.
Bill Mcdermott: ServiceNow enables AI agents to seamlessly collaborate across the entire enterprise with our single database and single architecture. Our peers, agents, perform simple tasks.
Bill Mcdermott: while our AI agents work together and leverage the entire system to solve complex tasks and enable true business transformation.
Bill Mcdermott: We know that Agentic AI promises exponential increase on the ServiceNow platform. This is an exponential increase in seamless automation.
Bill Mcdermott: On a fragmented platform like many others, there will be an exponential increase in complexity and failure rates.
Bill Mcdermott: Autonomous AI running on a fragile foundation of bespoke integrations between disparate systems is a recipe for exponential disaster.
Industry analysts have acknowledged ServiceNow's completeness of vision.
Bill Mcdermott: ServiceNow is named the leader in the 2024 Gartner Magic Quadrant for the CRM Customer Engagement Center. ServiceNow is also recognized as a leader in the Forrester Wave task-centric automation software.
Bill Mcdermott: The global marketplace is noticing, too. Just today, ServiceNow was recognized as number two on Fortune's World's Most Admired Software Companies. And even better, we were number one in innovation and number one for building a people-first culture.
Bill Mcdermott: Forbes named ServiceNow as the number two on the first ever most trusted companies list right behind NVIDIA. Pretty good company if you ask me.
Bill Mcdermott: The American Opportunity Index, which ranks companies based on creating opportunity for their employees, ranks ServiceNow in the top five in the world, number one in software.
Bill Mcdermott: These are just some of the many awards, all of which are rooted in a world-class team that is completely obsessed with serving our customers.
In summary,
Service now is full speed ahead.
We are putting AI to work for people.
our innovation, growth, profitability, and brand leadership.
position us as a class of one in enterprise software.
The market is moving with service now.
with this combination of startup passion and scale maturity.
Bill Mcdermott: We have the right strategy to deliver immense shareholder value in the years to come.
That's why I keep reminding our team.
Our 15 billion plus
Bill Mcdermott: By 2026 midterm guidance is only one chapter on our path to 30 billion plus in revenue and beyond. When the world works with ServiceNow, imagination is the limit.
Bill Mcdermott: Thank you all for your time and confidence. Before we take questions, I'll hand things over to our President and Chief Financial Officer, Gina Mastantuono. She will illuminate.
Gina Mastantuono: our unique ability to sustain profitable revenue growth even as we add the revenue equivalent
Gina Mastantuono: of like a number six scaled market leading software company on top of ServiceNow every year. Pretty exciting stuff. Gina, over to you. Thank you, Bill.
Gina Mastantuono: Q4 was a great quarter, capping a year of incredible innovation and execution.
Gina Mastantuono: Once again, we exceeded all of our constant currency growth and profitability guidance metrics, demonstrating the strength of our platform and the extraordinary efforts of our team.
Gina Mastantuono: 2024 was a pivotal year in driving customer adoption of our generative AI solutions.
Gina Mastantuono: By embedding powerful AI capabilities into our offerings, we've enabled organizations to reimagine how work gets done, unlocking new levels of efficiency, creativity, and value.
Gina Mastantuono: Customers across industries are embracing these solutions at a rapid pace, proving the immense opportunity AI and data bring to our business.
Gina Mastantuono: Turning to our results, Q4 subscription revenues were $2.866 billion, growing 21% year-over-year in constant currency, exceeding the high end of our guidance range by 50 basis points.
Gina Mastantuono: RPO ended the quarter at approximately $22.3 billion, representing 26% year-over-year constant currency growth.
Gina Mastantuono: Current RPO was $10.27 billion representing 22% year-over-year constant currency growth at 50 basis point beat versus our guidance.
Gina Mastantuono: From an industry perspective, manufacturing posted impressive growth, surpassing 50% year-over-year. Public sector grew nearly 40% year-over-year, driven by the strength in U.S. federal and state and local governments.
Transportation and logistics also reported significant growth during the quarter.
Gina Mastantuono: We delivered a very strong 98% renewal rate in Q4, highlighting the trust and value customers consistently place in the NOW platform.
Gina Mastantuono: The number of customers generating over $1 million in ACV rose to 2,109. Even more remarkable, the number of customers contributing $20 million or more in ACV rose 35% year-over-year, fueled by continued success in securing large deals.
Gina Mastantuono: We ended the year with approximately 8,400 customers as our strategic focus on landing the right new customers continues to deliver results.
Gina Mastantuono: The average deal size of our new logos has consistently grown, marking the sixth consecutive year of expansion. And in Q4, we landed our largest new logo deal in company history.
Gina Mastantuono: We closed 170 deals greater than $1 million in net new ACV in the quarter, including 15 with new logos. What's more impressive is that 19 of these deals exceeded $5 million, and 3 deals were over $20 million.
Gina Mastantuono: Our Gen-AI NetNew ACV to date continues to trend ahead of any new product family launch for the comparable period in our history.
Gina Mastantuono: In fact, Gen-AI NetNew ACB stepped up meaningfully in Q4 from Q3 as we saw momentum accelerate for our Plus Cues.
Gina Mastantuono: As Bill noted, the number of NowAssist service desk deals, which include ICSM, CSM, and HRSD, grew over 150% quarter-over-quarter. Furthermore, the number of customers who bought two or more of our Gen-AI capabilities doubled quarter-over-quarter.
Gina Mastantuono: Our Plus SKUs also maintained a greater than 30% price uplift over Pro and Q4, a strong indication of the tremendous value they deliver.
Gina Mastantuono: For example, a multinational conglomerate customer saw a 45% reduction in live chats from July to December with NowAssist. And the company is now targeting to save millions by the end of 2025.
Gina Mastantuono: With the addition of our AI agents to many of these SKUs, we think the value proposition becomes even more compelling in 2025.
Gina Mastantuono: We're also seeing great early traction with our Raptor DB Pro offering.
Gina Mastantuono: Since the announcement in just September, we already have 5 customers over 1 million in ACV.
Gina Mastantuono: A leading multinational technology company that adopted RaptorDB Pro and Qt 4 is already achieving performance improvements that exceed expectations.
Gina Mastantuono: with database response times up to three-and-a-half times faster than previous benchmarks and a database size reduction of over 30% driving significant cost savings
Gina Mastantuono: Turning to profitability, non-GAAP operating margin was 29.5%, driven by OPEX efficiencies and our top-line outperformance. Our free cash flow margin was 47.5%.
Gina Mastantuono: For full year 2024, operating margin was 29.5%, up 200 basis points year-over-year. And free cash flow margin was 31.5%, 50 basis points above our guidance, and up 100 basis points year-over-year.
Gina Mastantuono: Total free cash flow for 2024 was a robust $3.5 billion.
Gina Mastantuono: We ended the year with a healthy balance sheet of $10 billion in cash and investments.
Gina Mastantuono: Given our strong cash position and our strategy of managing the impact of dilution, we announced today that the Board of Directors authorized the purchase of up to an additional $3 billion of common stock under this program.
Gina Mastantuono: Together, these results continue to demonstrate our ability to drive a strong balance of world-class growth, profitability, and shareholder value.
Moving to our Outlook.
Gina Mastantuono: As we enter 2025, we're not just playing to win today, we're making bold, strategic decisions to position ourselves for sustainable, strong growth in the years ahead.
Gina Mastantuono: This year we will incorporate more elements of consumption-based monetization across our AI and data solutions.
Gina Mastantuono: For instance, we will include AI agents in our plus SKUs for going up front incremental new subscriptions to instead drive even faster adoption and monetize the hockey stick of usage over time.
Gina Mastantuono: We're optimizing our go-to-market approach and evolving our business model to create even more integrated solutions and seize the massive agentic AI and data opportunity in front of us.
Gina Mastantuono: Our guidance prudently reflects the flexibility to make these moves while delivering higher incremental free cash flow, building on the accelerated margin trajectory created by our outstanding 2024 OUTS performance.
Gina Mastantuono: With that in mind, for 2025, we expect subscription revenues between $12.635 billion and $12.675 billion, representing 20% year-over-year growth at the midpoint in a constant currency basis.
Gina Mastantuono: This reflects an incremental $175 million FX headwind since the end of September, and assumes a more pronounced back-half-weighted seasonal linearity in our U.S. federal business due to the change in the presidential administration.
Gina Mastantuono: We expect subscription gross margin of 83.5%, reflecting the diminishing impact of the change in useful life of our data center equipment, as well as incremental data center investments related to public cloud partners, geo-expansion, and AI.
Gina Mastantuono: We expect an operating margin of 30.5%, up 100 basis points year-over-year, driven by OpEx leverage across the board, including sales and marketing.
We expect free cash flow margin of 32 percent.
Gina Mastantuono: And we expect GAAP diluted weighted average outstanding shares of $210 million.
Gina Mastantuono: For Q1, we expect subscription revenues between $2.995 and $3 billion, representing 20% year-over-year growth at the midpoint on a constant currency basis. This reflects an incremental $40 million FX headwind since the end of September and the previously noted Fed seasonality assumptions.
Gina Mastantuono: We expect CRPO growth of 20.5% on a constant currency basis.
Gina Mastantuono: I would note that CRBO saw an incremental $205 million FX headwind since the end of September.
Gina Mastantuono: We expect an operating margin of 30%, and we expect 210 million gas-diluted weighted average outstanding shares for the quarter.
Gina Mastantuono: In summary, 2024 was an amazing year, but we're just scratching the surface of what's possible.
Gina Mastantuono: coupled with our unified data architecture positions us uniquely to bring all your data people and processes onto a single platform so you can take action on it.
Gina Mastantuono: The moves we're making in 2025 aren't just about maintaining our lead, they're about expanding it.
Gina Mastantuono: We're setting ourselves up to define the future of agent-powered automation, solidify ServiceNow as the AI platform for business transformation, and deliver strong growth year after year.
Speaker Change: Finally, Bill and I want to express our deepest gratitude to our employees around the world for their unwavering hard work and dedication. You are the heart of our success.
With that, I'll open it up for Q&A.
Speaker Change: and thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question please press star 1 on your telephone keypad to raise your hand and join the queue.
Speaker Change: If you would like to withdraw your question, simply press star 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: To be able to take as many questions as possible, we ask that you please limit yourself to one question.
Speaker Change: Again, it is star one, if you would like to join the queue. And your first question comes from the line of cash wrong gun with Goldman Sachs. Your line is open.
Speaker Change: and Subscription, and the reasons behind your confidence that you can walk both those tracks very well, and Gina, if you could do a pro-former, had you not done the consumption, what would the subscription revenue growth outlook would have been hypothetically? Thank you once again, congratulations.
Speaker Change: Thank you so much, Cash. Our goal is to combine both subscription and consumption pricing.
They obviously want to take advantage of agentic AI.
Speaker Change: and yet at the same time the industry is early in its formation so we're actually innovating faster than they have deployed it so they want to scale with us
Speaker Change: in harmony and in partnership. So with our ProPlus version, they'll get access.
to our agentic AI agents.
Speaker Change: and we'll give them a meter-based pricing methodology where they will take out the soul-crushing business process work that is tedious and complex.
Speaker Change: that people actually don't even want to do, and agentic AI agents will do that for them.
Speaker Change: They will see a very nice ROI on that, and by definition, if the meter is running up, that means they're using it and deriving financial gain from it, and they're happy to pay and share with us the profits. So in a certain sense,
Speaker Change: Cash, it's the Goldilocks model where you get it both ways. You get the same revenue and predictability you've been used to, but now we have a hockey stick formation that can turn into a sensational growth shoot for the company.
Speaker Change: So I think we really got this right, and with Amit's leadership and our great engineering team, the way we're pressing innovation into the market is truly, truly stunning.
Speaker Change: and I'm so, so excited. I just want to give you one thought that nobody ever talks about. And that is, no matter where you travel in the world, and I just got done with a global roadshow, there are millions of technical jobs
that go unfilled year after year.
With agentic AI agents, you can now fill those jobs.
Speaker Change: and at the same time improve human productivity and the productivity curve of these businesses in a dramatic way. And nobody actually talks about there not being any such thing as artificial intelligence.
Speaker Change: without human intelligence and that's why we're putting AI to work for people and that has landed in a very pleasant way with our customer relationships so everything we're doing is on the right side of customer success.
Speaker Change: So, hey, Kash. Thanks for the question. This is Amit here. Just to add to what Bill was saying, the way we are thinking about this, the ProPlus, we have 1,000 plus customers already who will be able to now take advantage of the innovation we're bringing out with Agentic. And it's a subscription. So they're still paying for that kind of capacity. If they go beyond the capacity and the assist, which is the meter capacity, if they go beyond that, they're still buying.
Speaker Change: So we just started getting them seeded and get going, and the subscriptions really keep on growing as they start using more and more. So it's not completely like pay-as-you-go per meet per individual assist, it's really packs of assist in a way. So it's subscription pricing, and we are giving them some flexibility as well, and then giving the ability for customers to see value instantly.
Speaker Change: reflecting the outcome of the U.S. election. And so what I'd say is that we're giving you a 20% constant currency guide while de-risking the guidance. And to your question on what would it be if we didn't do that, I would just say higher.
Thank you.
Thank you.
For more information visit www.FEMA.gov
Speaker Change: And your next question comes from the line of Mark Murphy with JP Morgan. Your line is open.
and the next episode of the
Thank you so much. So, Bill, regarding the deep-seek models...
I'm very interested in how you're assessing this.
The cost...
Speaker Change: And I'm curious if it's something, you know, something like DeepSeek, is that an option for ServiceNow or is it too risky with the data protections?
Speaker Change: And just more broadly, what do you think ServiceNow can do to exert...
Speaker Change: It's leadership as this cost of, you know, one of your input costs, which is the underlying models, you know, seems like it's starting to drop at a faster pace.
Speaker Change: Thank you very much for the question, Mark. It's actually fantastic news for ServiceNow, because as these models are being commoditized at a rapid rate, and probably more rapid than anyone could have dreamed of, it's super, super exciting for platform and app vendors like us.
Speaker Change: since the competitive differentiation will happen at our level in terms of the applications, the business processes, how you can help these companies run better and then ultimately get a business outcome.
And again...
What I think...
Speaker Change: It helps us a lot financially. You can see the gross margin benefit of that.
but you can also see our customers.
Speaker Change: that have been investing in these LLMs getting a lot better deal now.
Speaker Change: So they kind of passed the hardware, the infrastructure, and the LLM, and that price is dropping on everything. They'll have more left over to invest in ServiceNow.
but what truly sets ServiceNow apart.
is our platform's ability to orchestrate and operationalize AI.
Speaker Change: Deep Seek, I would just simply say, you know, we have a deep belief here and
basically measuring twice, if not three times, and counting once.
Speaker Change: We believe very strongly in understanding what's really going on, and we're highly committed to responsible AI, and I know Amit and his team are taking a look at that right now.
Yeah, not to add to what Bill said.
Speaker Change: We definitely are going to be supporting third-party large language models.
Speaker Change: and we continue to work with many of those providers and doing a lot of integration with those technologies as well. The way we've architected our platform today, it's very easy for us to keep on adding any innovation which happens in that place and give that outcome from our applications.
Speaker Change: So it's really the combination of workflows with AI and the data is what our power is, and we would take any technologies out there which helps our customer and give them the best outcome.
Speaker Change: So that's really the goal, and we continue to work with all the large language providers, and we will look at DeepSeq. We already have teams kind of investigating that, but the goal is that architecturally we can support everything out there as needed.
Speaker Change: And then, Mark, on the cost side, I would just say this is not unexpected. We've been talking about the innovation and investing in innovation in AI for quite a while, and yet we continue to accrete margins. Our guide next year is for 100 basis points on operating and 50 basis points on precautio on top of overachieving in 24. And so, really great cost discipline at ServiceNow while we continue to out-innovate.
Speaker Change: Well, congrats on having that foresight in delivering that efficiency, and thank you for taking my question. Thank you, Mark. Thank you very much.
Speaker Change: And your next question comes from the line of Keith Weiss with Morgan Stanley. Your line is open.
Speaker Change: Thank you for taking the questions. This is Sanjit Singh for Keith.
Sanjit Singh: Bill and Gina, when you think about this year, I kind of have sympathy for a lot of enterprise customers. Every vendor in software is going to be pushing their agentic capabilities. So Bill, could you just detail a little bit about your agent strategy in that more fragmented landscape? What's going to give ServiceNow the license to win? And also importantly, what are you contemplating from a go-to-market change perspective that's associated with this move to agents and the move to a hybrid?
subscription slash consumption model.
Sanjit Singh: Yeah, I think the number one most important thing is our AI...
Orchestration
serves as the control tower for business transformation.
Sanjit Singh: And if you think about our core strength in IT and how we handle all things IT, from servicing the business, running the operations, the assets, the security of it all.
Sanjit Singh: and then moving into the employee and the experience and giving them all the things they need and think about the customer.
It's literally
Sanjit Singh: sell, fulfill, and service all on one platform, and then from a creator perspective with natural language, wiping out 60% of the productivity drag to actually get them to doing the code and inventing something. We're handling all of that today on one platform with one architecture and one data model.
So we'll give you our agentic AI.
solution in all of those domains.
Sanjit Singh: But, best of all, because everyone is pounding them with their siloed solutions, it's become highly credible to customers that somebody has to be the controller or the orchestrator for all of these other agents as well if they decide to implement them.
Sanjit Singh: And as soon as they see the architectural advantage of what ServiceNow has, they say, I go for this one. And there's another thing that's happening.
in combination.
Speaker Change: Thanks to Amit and the great engineering here, we now have RaptorDB. And I do remind you that Amit had an amazing career at Oracle before GCP, so he understands all of this at a very deep technical level. And frankly, we have some amazing talent in our company on database.
Speaker Change: and Raptor DB is a sensation, not only in its speed and its ability to be fully automated on the ServiceNow instance and make big companies go three or five times faster.
but we also now have connectors.
Speaker Change: into Snowflake, into Databricks, into Oracle, into all of the hyperscalers including the announcement today with GCP. We had AWS and Microsoft. Interestingly, AWS is number one and number four biggest deal ever in the enterprise.
Speaker Change: with ServiceNow customers running in AWS, so they know us well. Everybody knows us really well.
So now you're controlling east to west.
Speaker Change: and you're going north to south, up and down the stack.
Speaker Change: and then you ultimately integrate in all these systems of record where we have been moving that data into ServiceNow for years.
Speaker Change: that have been put in there departmentally over the last 55 years. And we tell them, have it your way. You want to leave the data where it is, we'll make a zero copy.
Speaker Change: You want to move it into ServiceNow, that's fine too. You want to run it in the hyperscalers, including running your ServiceNow instance, which some customers want to do, we let you do that too. And as Amit said, we already integrate with all the LLMs.
I want to be a data company.
Speaker Change: Actually, I don't want to rely on the old business model of my agents shaking everyone's hands. I want agentic AI to do that. I want to be a retail company.
Speaker Change: and then I explain our story and he tells me I had no idea.
I said, well, we're still a young company.
Speaker Change: But now that you do, what do you want to do about it? I want to go with you. I said, great. I'll send in the team. Let's get it done. So when they hear this story properly presented, it's game, set, match. So our challenge is just simply to help you and the media and the customers get the memo. Because once you get the memo, this is the only viable option.
Speaker Change: I appreciate the vision, Bill. Thank you so much. Thank you so much. I appreciate the question.
Speaker Change: And your next question comes from the line of Matt Hedberg with RBC Capital Markets. Your line is open.
Matt Hedberg: All right, thanks for taking my question. Congrats as well. And Gina, congrats on your expanded role. Really great to see that.
Matt Hedberg: Bill, obviously a lot of, oh yeah, Bill obviously a lot of enthusiasm on AI which is great to hear. You know, just given your global perspective, you have such a good pulse on overall IT spending trends.
Matt Hedberg: You know, did you see things improve from, you know, when we last talked on September results? And, you know, how do you feel at this point versus, say, this point last year? Like, are things improving out there in general?
Matt Hedberg: I think that, Matt, thank you for the question, by the way, and I couldn't agree with you more on Gina's promotion. She is stunningly fantastic and it's an honor to work with her and has been for the five years we've been together, and I'm just so proud to see her richly rewarded for what she deserves as a leader, so I think it's great, and congrats, Gina.
Matt Hedberg: The IT spending environment, I think it's similar in the IT spending environment to what it's been. But I do think the big change is the move from AI fascination.
to AI business model innovation.
Matt Hedberg: And it's clear to me that the best CEOs in the world...
have AI at the forefront of their mind.
In fact, I actually see them even extracting...
Matt Hedberg: AI from the CIO and the CTO remit and it's not because they don't respect or really take pride in their CIOs and CTOs but they believe they have to be AI led companies.
Matt Hedberg: and so they're actually creating AI leadership and data leadership within the construct model of their org charts.
Matt Hedberg: and those individuals are showing up in their boardrooms because the CEOs really understand that if they don't capitalize on this moment and they end up with second-mover advantage it might be a liability. So they're really on their tippy-toes and therefore if you have a great agentic AI story.
Matt Hedberg: You plant that flag in the essence of a great business model like we have and you do the end
Matt Hedberg: model on what Amit very appropriately said on our agentic AI portfolio would now assist.
Matt Hedberg: and you have a win-win relationship on consumption, value, and we both benefit from that. It is an extremely pleasing story.
and on that dimension they will open up the pocketbook.
Matt Hedberg: and that is the key, because they're getting value from it.
Matt Hedberg: And the other piece is, in the public sector, I see a complete renaissance happening, which I think is truly outstanding. Nowhere in the world do I go where they don't want to talk about Doge and what's happening in America.
Matt Hedberg: And so, the administration has done a very good job of getting everybody aware that something big is happening here. And because we have such a strong foothold
Matt Hedberg: and the agencies, and the military establishments, and the defense establishments.
Matt Hedberg: from, you know, all of them that you could possibly think of.
that really matter, including Veterans Affairs.
We have a great reputation.
Matt Hedberg: and so they know when we come in we make work simple for people and so if you think about sending everybody back to the office
Matt Hedberg: and telling them, good luck, you're going to now swivel chair between 17 different application experiences which will eat up at 30 of productivity a day, they'll probably take the package and leave. So, the ServiceNow solution becomes even more relevant.
Matt Hedberg: and the fact that we could take cost out, bring productivity in, and inspire the best in people is extremely inspiring. The other thing that's really inspiring, and this is true in the private sector too, but in the public sector, they know they're inheriting more than a half a century of disasters.
Matt Hedberg: So, because we can extract the data from the systems they have.
Matt Hedberg: We have RaptorDB and the connections to all the best companies in the world and we can orchestrate the AI transformation. They're like, how do we get started? Because only you guys came in here with a price that I can afford and you're going to have me up and running in weeks instead of years.
Matt Hedberg: and congressional trips. So we're a whole different alligator when it comes to serving the government than anyone else.
Matt Hedberg: Great answer. Thanks, Bill. Best of luck. Thank you. Thanks, Matt.
Brad Sills: and your next question comes from the line of Brad Sills with Bank of America your line is open
Brad Sills: Oh wonderful, thank you so much. I wanted to ask a question around customer and employee workflow. It continues to represent...
Brad Sills: a real key source of incremental growth. We certainly hear about real strong traction in the channel. Is there anything to call out there? You know, there's a lot in those two offerings though. We'd love to get any thoughts from you on what's driving the strength there. And my notion is that perhaps now ASSIST is starting to kind of pull
Brad Sills: customers into those applications? Are you seeing any kind of halo effect or pull-through if you will as customers are getting ready for now assist in those categories? Thank you.
Brad Sills: Yeah, it's a great question. You know, Brad, the whole agentic AI revolution is a lot like the chicken and the egg, right? Is the agentic AI pulling the core, or is the core pulling agentic AI? In our case, both are working for each other, which is truly a beautiful thing. If you look at customer workflows, they're performing extremely well. As I said, that and the industry workflows are the fastest growing in the company.
Brad Sills: and in most cases when you talk about CRM you're personalizing that to an industry and a specific use case which is perfect for us.
Brad Sills: And if you think about it, you know, field service management, a really incredible quarter, large DOD agency, a multinational imaging and electronics company, a European health care company, a semiconductor manufacturer, air transportation communications and IT, top energy. I mean, I can go on with the list.
Speaker Change: Suffice it to say this, and I want you to register this carefully. We have the best CRM solution in the market. CRM is not SFA. CRM is how do I sell to you in every channel.
Speaker Change: How do I fulfill what I sold to you? And how ultimately do I service you? And we can do it on one platform and our unfair advantage in IT is we know all the assets, we know all the operations, we know all the customer stuff in the ServiceNow platform today.
and now that we can sell, fulfill...
Speaker Change: and service on one platform, the world is standing up and taking notice. They have had it.
With literally in some cases big companies, they have hundreds
Speaker Change: of disparate implementations from different suppliers out there that are not integrated to begin with but when they're not even on the same instance can you imagine the chaos?
Bill Mcdermott: So this is extremely pleasing. We're going to run the table and it's going to be a big, big thing. And that's where we're seeing tremendous uptake in agentic AI. I want to tell you a story about ServiceNow because we drink our own champagne. Hear me out on this.
Bill Mcdermott: We're automating 37% of our customer support case workflow through routing, categorization, and similarity detection.
Bill Mcdermott: and we have 80% case deflection in the last six months. I'm not talking chatbots here. We had them six years ago. I'm talking agentic AI agents.
Bill Mcdermott: And here's the big thing on go-to-market, which I think a lot of people find interesting.
Bill Mcdermott: The AI agents are helping to increase our prospect conversion rate by up to 16x. And that's because they can curate the best leads based on the heuristics of all the data sources and put the top ones in front of the rep so they can sell more.
And I could just tell you, like...
Bill Mcdermott: Seeing things going 99% faster to give customers answer and going from 4-day response to 8 seconds is something that a lot of customers are getting excited about. So we have NowOnNow here, a great team that does it. We did 8,500 NowOnNow engagements with customers last year. It's estimated this year we'll do 20,000.
and with regard to the employee.
from
Bill Mcdermott: recruiting, hiring, and onboarding to providing all the services. Just think about combining all the functions of a company to serve the employee and everything on the mobile. But you get to know them so well, you're actually pushing solutions to them, they don't have to ask for it. But when they do ask for it, it's instantaneous.
And this is freeing up 3 million hours.
of capability within ServiceNow.
Gina Mastantuono: So, literally, when Gina talks about, you know, we just did 200 basis points of op-margin improvement.
Gina Mastantuono: We're thinking about more of the same, because we run the whole company on service now. And where we do have a system of records somewhere, it's literally you have to go into the basement and take the elevator down like several floors to find it. Nobody even knows. So this is a whole different way of approaching enterprise software.
Speaker Change: Super exciting. Thank you, Bill. Thank you very much. I appreciate it. The next question comes from the line of Samad Samano with Jeffries. Your line is open.
Samad Samano: Hi, good evening, and thanks for taking my questions, and you know, I'll echo the congrats. Very well heard. Bill, maybe first a question for you. Just, you mentioned now a couple of times how the deflation and costs at the computing level
Samad Samano: will unlock budgets in the application layer and the platform layer, like for ServiceNow. I'm just curious if you've been getting feedback from either early customers or those that were in the pipeline that there is a budget constraint or a tough decision that is having to be made.
Samad Samano: and that's what's leading to that confidence in the unlock or is it more of just a high-level observation? Maybe help us understand what gives you that confidence that those dollars will shift over and have you already seen a change in the conversation?
Speaker Change: I think the conversations are clearly, and they have been for some time now, you know, there's no magic wands here, it's all, you gotta work hard. And working hard means you know the industry, you have the best-in-class solution, you have a well-composed,
Speaker Change: design thinking business case, you know, is it desirable? Is the dream there? Is it feasible? And, you know, meaning can you do it in the right amount of time? And then ultimately, is it viable? Does it have the return on investment that customers need to say yes?
Speaker Change: And you can't skip steps in this process. You have to do it the right way. But what agentic AI does is it opens up a fundamental reinvention of the business model and how you can innovate entire corporations.
Speaker Change: Just think about entire corporations rethinking what business they're in, what industry they're in, what offerings they can give to the customer. That's on the revenue side, but on the finance side...
Speaker Change: Why do I need to hire X thousands people? Why don't I just put these agents to work?
to compliment the people I already have.
or perhaps as I attribute people
Speaker Change: I don't backfill them, I backfill them with agents and my revenue per employee explodes through the roof.
Speaker Change: So I got you on the margin and I got you on the growth. And that's why I am a guy that truly believes that this revolution is even greater than the internet, it's even greater than the cloud and the iPhone moment with mobile business because it encompasses all of them.
Speaker Change: and that's why it's a 20 trillion GDP movement between now and 2030 based on the business impact it has.
Speaker Change: It's a 1 to 5 ratio. For every $1 wisely invested in AI, you'll get $5 on the other side.
Speaker Change: So it really does come down to proving that your tech is there, your understanding of the business is there, the value is there, and once that's clear, there's nothing standing in the way of a decision that says, let's go.
Speaker Change: That's great. And Gina, maybe a follow-up for you just on...
Gina Mastantuono: I think there is already a consumptive element, I think, early on in the ProPlusSKU, where there's a certain amount of either tokens or coins associated. What have you observed from the early cohorts of customers?
Gina Mastantuono: How many ended up getting into the level where it required a consumptive element?
Gina Mastantuono: and maybe just help us think about how that will impact CRPO or what goes into CRPO going forward.
Speaker Change: So, Samad, thank you for the question. What I'd say is that you're absolutely right. So, our analysis already had a consumptive piece to it, right? You have CFASE, and then if you use more than what was anticipated, you would have to buy more tokens.
Speaker Change: Up till now, that extra token monetization has not been significant. What we're talking about now is very similar in that the agentic capabilities that we're bringing out now, we are not.
Speaker Change: that's going to run the meter a lot faster. And so the expectation is that, again, the baseline subscription is required and necessary, but the monetization of the hockey stick of when those agents really get deployed and are really driving value is when you're going to see that hockey stick of growth. So not very different than what we've been doing before. It's just now being applied to agentic AI as well as the Cord Now Assist.
Does that make sense?
Speaker Change: Thank you so much. And then Amit's going to add something. Yeah, I think with the GenTIC, as I was mentioning earlier, the amount of tokens you require for a lot of these tasks, because you're breaking the particular intent of the user into multiple pieces of the task, each of these requires a lot of work in the back end. That's where this amount of assist you require just keeps on going up very, very fast.
Speaker Change: and this is where this idea that you're today your subscription will have some amount of it and they keep on adding to it as they use more of it so it makes it very easy for our sellers to go and talk about this thing customers they can't start using we have thousand plus customer already using it so it becomes a very easy scalable and win-win for both of both us and the customer
thanks
Speaker Change: And your next question comes from the line of Mike Sikos with Needham & Company. Your line is open.
Mike Sikos: Hey guys, thanks for taking the question here. I just wanted to cycle back. I know in the press release and the prepared comments, you had cited this go-to-market optimization. Can you just provide a little bit more color on that front as far as what ServiceNow has in store? And I think, Gina, to the top of the Q&A with Cash's question on...
Gina Mastantuono: impact from consumption or federal but did the go-to-market optimizations in any way play a role in your in your guidance philosophy here as well?
Gina Mastantuono: Yeah, I think it's very important that you understand that we are building strength on strength.
Gina Mastantuono: We still have everything just as it was in the fundamental business model of ServiceNow.
Gina Mastantuono: The subscription-based pricing, the focus on industry-specific solutions packaged and targeted for personas across an enterprise.
Gina Mastantuono: on the best platform in the business. That's where we are the control tower for AI transformation.
Gina Mastantuono: In addition, we have brought about RaptorDB, which is an incredible database.
based on Postgres QL
Open source standards.
We acquired a company called Swarm64.
Gina Mastantuono: We got the best database watchmakers in the world to put some secret sauce into Making that a service now sensation
Gina Mastantuono: On top of that, we have the connectors into all the other major data sources in the world from the hyperscalers to Oracle, all the way through to Snowflake and Databricks.
Gina Mastantuono: where we'll be able to use that data in the automation of work. That is yet a net new business for ServiceNow. It also happens to be a $250 billion TAM, and we're in the early innings, but we love what we're seeing.
And, on top of all this...
Gina Mastantuono: We have this beautiful platform that has been enabled with what we call NowAssist, which is our agentic AI portfolio. So when you as a customer procure our ProPlus version of the platform that you've grown to love,
Gina Mastantuono: You now are going to get these agentic AI agents with that platform.
Gina Mastantuono: We will also give you some ability to look at thousands of different things you can do with it that's included in that subscription price.
Gina Mastantuono: But as you do more and more with it, and more and more with our agentic AI agents, a meter kicks in.
and we make more money on top of the Corps.
Gina Mastantuono: and the customer gets tremendous return on their investment because now instead of people doing all this stuff...
Gina Mastantuono: They have their agents working for them, and they wouldn't do it if it wasn't a great business case anyway.
Gina Mastantuono: You're doing it, and you're getting value from it. So now we're all on the same value page. So that's that. So we still are going to market with Paul Smith, who runs.
Speaker Change: our global field. He also became a president. Congratulations to Paul.
Speaker Change: And we have a gentleman that is named Paul Phipps that is running the regions to give more bandwidth to the executional excellence.
Speaker Change: of running the number every quarter even as we build out new dreams in harmony with Amit and Paul to invent the 30 billion version of ServiceNow.
Speaker Change: And so what I'm really super happy about is we're not just focused on big enterprises. We have a great commercial business. And we also have a great direct-to-consumer business that we're building out.
Speaker Change: because we're very happy with $50K, $150K, $200K deals on top of these $100 million. And we want both high value and high volume. And when we put this all together, you're dealing with a company that's performing at the rule of 54.
that has a bold ambition for 30-plus going forward,
Speaker Change: and that's all part of the go-to-market incidentally because no grass is growing underneath our feet. We're not measured by how many emails we got done in the office. We can do them in the back of a car on our way to a customer meeting.
So, we brought in the best.
Speaker Change: engineers, engineer in the great leadership of Amit and who incidentally is also our chief operating officer in addition to being the president and lead of all of our engineering efforts.
Speaker Change: and he is an expert in product packaging and pricing. So that interplay with our innovation and go-to-market has never been sharper than it is right now. So that's kind of an outline of what's going on and we're putting agentic AI to work in all these processes. I'll give you an example.
Speaker Change: We just did a sales kickoff meeting in Vegas. We had about 8,000 of our closest friends there. And we showed them how AI is going to do their territory management for them.
Speaker Change: So they'll take all the use cases, all the data that exists already, and they'll compile their roadmap of first things first with their customer relationships.
Speaker Change: all the way down to, here's the solution, here's the best-in-class offering, and here's the customer you need to take it to. That's cutting out so much of the busy work that the sales professionals are super excited. And that's true of all position types in the company. Did that help you?
Bill Mcdermott: It does. It does, Bill. Thank you for that. Appreciate it. My pleasure, Mike. Thank you. And, Mike, just from your specific question on guidance philosophy, of course everything we're talking about is factored into our guidance. Top to bottom, east to west, and north to south, all of these impacts and thoughts are very thoughtfully put into our guide. So, very specific answer to that question for you.
Gina Mastantuono: Thanks for closing the loop there, Gina. Thank you. Absolutely. Absolutely, Mike. Thank you.
Speaker Change: And we have time for one more question. The final question comes from Derek Wood with TD Cowan. Your line is open.
Derek Wood: Great, thanks for squeezing me in. I guess keeping on the same theme, Gina, I just want to unpack your comments around foregoing new subscription revenue for
Derek Wood: kind of near-term headwinds in seed growth as more workloads are being pushed to agents and that it just takes time to start really moving the needle on the consumption side and if that's the case
Speaker Change: Just how long do you think this will take for this new hybrid pricing model to be net accretive versus kind of your previous Pro Plus sales motions?
Speaker Change: Yeah, so Derek, thanks for the question. Just very, very clearly, we're not forgoing new subscription revenue. At the end of the day, NowAssist continues to grow extremely well. We talked about 150% growth quarter on quarter.
Speaker Change: fastest new growing product launch of our history and we absolutely expect that to continue to grow.
Speaker Change: hockey stick of value is going to take some time as customers start to use it. And so we're absolutely not forgoing. We're continuing to have strong subscription revenue growth, 20% constant currency at our scale at $12.675 billion, never been seen before. And on top of that, you will get the
Speaker Change: hockey stick of agentic AI multiply growth in as customers really start to get value in it. So it's an and and not an or, and I want to make sure that that's.
Speaker Change: That's clear outside the gate. And may I just say one thing, Derek, to build on what Gina said? And Amit covered this earlier, but I don't blame you for asking questions because one thing I want to make sure everybody understands, if we didn't have any consumption attribute to the pricing model,
Speaker Change: everything stayed the same. You still have to subscribe to the NowItSys portfolio and that is the same subscription model we have today. The nuance here is we've actually added what I would call an accelerator.
Speaker Change: to the consumption idea because my idea really is that they'll buy more subscription because they're actually getting the agents included in it.
and someone asked a great question, it could be.
Speaker Change: that knowing with the NowAssist portfolio and the speed of our innovation, they get the agents for the subscription, that might actually significantly increase the subscription. We just got to let it play out. But in any case, once they start consuming those agents and those processes are being done by the agents and those assists are happening at mass scale,
Speaker Change: From an investor standpoint, you're going to really like ServiceNow a lot more.
Speaker Change: Okay, so yeah, it sounds like you're really building up a springboard that's net new that the hockey stick hopefully around the corner. That's clear, thank you. Thank you, Derek.
Speaker Change: And ladies and gentlemen, this concludes today's call and we thank you for your participation. You may now disconnect.
Please wait. The conference will begin shortly.
Jul 6, 2018 AceShowbiz