ServiceNow (NOW) Q4 2024 earnings summary

Executive summary

• Achieved record Q4 and full-year 2024 results, with Q4 subscription revenues of $2,866M (up 21% year-over-year) and FY24 subscription revenues of $10,646M (up 23% year-over-year), consistently exceeding guidance and demonstrating strong business fundamentals and innovation, particularly in AI and workflow automation.

• Remaining performance obligations (RPO) reached $22.3B, up 23%–26% year-over-year; current RPO at $10.27B, up 19%–22%.

• Maintained a 98%+ renewal rate throughout 2024, reflecting strong customer retention.

• Significant traction in AI offerings, with GenAI net new ACV up over 150% quarter-over-quarter and over 1,000 customers on the agentic AI journey.

• Announced a hybrid pricing model combining subscription and consumption-based elements to accelerate AI adoption and future revenue growth.

Financial highlights

• Q4 2024 non-GAAP operating margin was 29.5%; free cash flow margin was 47.5%.

• FY24 non-GAAP operating margin was 29.5%; free cash flow margin was 31.5%, with $3,455M in free cash flow.

• Q4 2024 non-GAAP net income was $769M ($3.67 diluted EPS); FY24 non-GAAP net income was $2,902M ($13.92 diluted EPS).

• Non-GAAP subscription gross margin held steady at 84.5% for Q4 and FY24.

• Currency headwinds impacted growth rates by 250–300bps for CRPO and RPO.

Outlook and guidance

• FY25 subscription revenue guidance: $12,635M–$12,675M, up 18.5%–20% year-over-year (19.5%–20% in constant currency).

• Q1 2025 subscription revenue guidance: $2,995M–$3,000M, up 18.5%–20% year-over-year (19.5%–20% in constant currency).

• FY25 non-GAAP operating margin expected at 30.5%; free cash flow margin at 32%.

• Guidance reflects FX headwinds of $175M for 2025 subscription revenues and $205M for Q1 2025 CRPO, and anticipated back-half-weighted federal business due to U.S. administration change.

• Business model shifting toward consumption-based monetization for AI/data solutions in 2025.