Executive Summary
ServiceNow reported a solid Q4 2024, underscoring the continued strength of the Now Platform across enterprise workflows. Revenue of $2.957 billion rose 21.3% year-over-year and 5.7% quarter-over-quarter, while gross margins held near 78.7%, supporting operating leverage even as operating expenses remained elevated. Net income of $384 million and an EPS of $1.86 (diluted $1.84) contributed to a free cash flow generation of approximately $1.382 billion, with operating cash flow of $1.635 billion and free cash flow per share of about $6.71. The balance sheet remains highly liquid, with cash and short-term investments totaling roughly $5.762 billion and a net cash position of about $26 million, against modest debt of $2.177 billion. The quarterly results reinforce ServiceNow’s position as a platform-centric, enterprise-grade automation leader, leveraging strong margin discipline and robust cash generation to fund R&D and GTM investments.
Key Performance Indicators
QoQ: -10.53% | YoY:38.52%
QoQ: -11.11% | YoY:30.17%
QoQ: -11.43% | YoY:29.17%
Key Insights
Revenue: $2.957B in Q4 2024, YoY +21.34%, QoQ +5.72%. Gross Profit: $2.326B, Gross Margin 78.66%, YoY +21.08%, QoQ +5.11%. Operating Income: $374M, Margin 12.65%, YoY +38.52%, QoQ -10.53%. Net Income: $384M, Margin 12.99%, YoY +30.17%, QoQ -11.11%. EPS: $1.86 (GAAP), Diluted $1.84, YoY +29.17%, QoQ -11.43%. Cash Flow and liquidity: Operating cash flow $1.635B; Free cash flow $1.382B; Capex $253M; FCF Margin ~46.8% of revenue. Balance sheet highlights: Total assets $20.383B; cash and short-term i...
Financial Highlights
Revenue: $2.957B in Q4 2024, YoY +21.34%, QoQ +5.72%. Gross Profit: $2.326B, Gross Margin 78.66%, YoY +21.08%, QoQ +5.11%. Operating Income: $374M, Margin 12.65%, YoY +38.52%, QoQ -10.53%. Net Income: $384M, Margin 12.99%, YoY +30.17%, QoQ -11.11%. EPS: $1.86 (GAAP), Diluted $1.84, YoY +29.17%, QoQ -11.43%. Cash Flow and liquidity: Operating cash flow $1.635B; Free cash flow $1.382B; Capex $253M; FCF Margin ~46.8% of revenue. Balance sheet highlights: Total assets $20.383B; cash and short-term investments $5.762B; total current liabilities $8.358B; long-term debt $2.176B; total liabilities $10.774B; total stockholders’ equity $9.609B. Leverage and profitability: EBITDA $622M (EBITDA margin ~21.0%), net income margin ~13.0%. Valuation context: Price-to-Sales ~74x, Price-to-Earnings ~142x, Enterprise Value Multiple ~366x, indicating a premium valuation typical of cloud platform leaders with strong ARR growth.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.96B |
21.34% |
5.72% |
| Gross Profit |
2.33B |
21.08% |
5.11% |
| Operating Income |
374.00M |
38.52% |
-10.53% |
| Net Income |
384.00M |
30.17% |
-11.11% |
| EPS |
1.86 |
29.17% |
-11.43% |
Key Financial Ratios
operatingProfitMargin
12.6%
operatingCashFlowPerShare
$7.94
freeCashFlowPerShare
$6.71
priceEarningsRatio
142.42
Management Commentary
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Forward Guidance
No formal forward-looking guidance is included in the provided data. Given the Q4 2024 performance, investors should monitor: (1) ARR growth and net retention trends to gauge ongoing expansion momentum across the Now Platform modules (ITSM, ITOM, ITBM, HR, CSM, and governance/risk/compliance); (2) operating margin trajectory as the company weighs R&D investments against scale benefits and sales/distribution efficiency; (3) cash flow sustainability, including working capital dynamics and SBC impact on profitability; (4) exposure to macro demand shifts and customers’ IT spend cycles. Industry trends toward AI-enabled automation and workflow optimization support ServiceNow’s value proposition, but valuation remains premium relative to peers. Achievability of any implied guidance will hinge on continued deal velocity, cross-sell success, and maintaining high net retention.