ServiceNow, Inc. (NYSE:NOW) Q4 2016 Earnings Conference Call - Final Transcript

Jan 25, 2017 • 05:00 pm ET

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ServiceNow, Inc. (NYSE:NOW) Q4 2016 Earnings Conference Call - Final Transcript

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Presentation
Executive
Frank Slootman

to five of our 10 largest transactions and in 2016 engaged with more than 30 Global 2000 accounts.

In addition to large deals with end customers, five of our 10 largest transactions in the quarter were with our global partners. The highlight was formalizing our partnership with IBM who is now a Top 3 global strategic partner. We are teaming with IBM to bring world-class solutions to clients across the globe. The multi-year partnership will drive ServiceNow products with IBM services in a seamless and integrated engagement model. Second, 2016 saw an inflection in our expansion beyond ITSM. 72% of our customers now license multiple products beyond ITSM. 46% of our Q4 net new ACV was non-ITSM and 94 of our Top 100 deals in the quarter included products beyond ITSM. The strong performance of our emerging products enables us to have multiple conversations across the enterprise. As a result, we've lined up our new website at servicenow.com and other marketing efforts around these conversations as well as the ability to easily add more solutions over time.

Third, intelligent automation has become a key discussion topic with our customers. We are in a unique position to drive actionable insights and cost savings because we have massive amounts of individual customer data. Our data centers host more than 10,000 customer instances and our customers store critical volumes of operational data. Leveraging this data with machine intelligence will predict outcomes and automate actions. The ongoing disintermediation of workflows and business processes will bring on a new era of productivity and scale of operations. We recently developed ITSM benchmarks which provides aggregated KPIs for more than 3,000 customers filtered by company size and industry. Benchmarks will also populate key recommendations for performance improvement and inject data insights directly into workflows.

Additionally, we acquired DxContinuum, which uses data scientists to build predictive models that auto-categorize incoming requests from people and machines, increasing time to resolution and reducing costs. We're in the process of re-platforming the technology and will demonstrate the technology at Knowledge17 in May. We will formally begin selling to customers later this year. Intelligent automation will become increasingly strategic for our customers given their broad operational reliance on ServiceNow. Finally, as was previously announced, our Chief Operating Officer, Dan McGee, has stepped down. We are thankful for his many contributions over the past six years. We're also excited to announce CJ Desai as our Chief Product Officer, who has assumed Dan's responsibilities. Lastly, we look forward to seeing you all at our annual conference, Knowledge17, in the week of May 8 in Orlando, Florida.

With that, I will now turn the call over to Mike.

Executive
Michael Scarpelli

Thank you, Frank. During today's call, we will review our fourth quarter financial results and discuss our financial guidance for Q1 and full-year 2017. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP. All financial figures