Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| We're continuing to see our industry vertical solutions, which are all within the customer purview, doing extremely well as well |
| We've got about 20 use cases using it internally ourselves and are really seeing strong productivity metrics |
| So I'm really excited about employee engagement and what employees will be able to do better and more of when the more menial kind of parts of their job and the admin stuff that takes a lot of time when things aren't working well to fix is resolved much, much faster |
| But in this environment, I would say we're seeing success really cross product and cross platform, but I'll call out a couple of specifics customer had a phenomenal Q4 |
| We talked about it crossing $1 billion in ACV threshold, which is a milestone for us that we're really excited about |
| So I feel very confident not only in our guide to continue margin expansion in 2024 but beyond as well |
| And so we're seeing great efficiencies within our IT organization |
| More than 85% of our net new ACV is now with existing customers, which shows you, I think, the resilience of the platform, how much the customers are really gaining and benefiting as well 98%, 99% renewal rates talks about the stickiness of that platform |
| And so I think it does, it does mean that we're well positioned |
| Industry SKUs had a great Q4 revenues over 200% growth, we had 16 deals over $1 million in the quarter |
| And the demand is robust and you'll continue to see us execute as we have over the past two, three, four years |
| But as we think about it from the Now platform, it's building human-like conversational interfaces to really drive much stronger productivity and efficiency in getting to results quicker |
| And so it's a natural place where we're extremely strong and doing well |
| And I'll even call out HR, right, with all of the focus on productivity and efficiencies, employee engagement is as important and relevant as ever, and the efficiency of the employee today, and so HRSD has been doing extremely well as well |
| But what I'll tell you is demand is strong, we feel really good about the '24 guide, pipeline coverage and metrics look good |
| This platform is great for customers |
| And because our platform really can go so broad across the enterprise, I think it's enabled us to continue to see demand that remains strong |
| And so we're absolutely benefiting from, I think, that reprioritization and really where folks are looking to optimize and put money into areas that are really going to drive that efficiency and productivity across the enterprise |
| And so I think the value proposition for our customers is pretty strong across the enterprise and across the platform, which is allowing us to have continued success despite still a very uncertain macro environment |
| So really excited, early days, but a lot of opportunity for sure |
| Field service management, where our customers are using the platform to really help drive work in the field is resonating extremely well |
| I'm excited about that |
| Risk and security in this environment, again, another area of great success |
| Creator also continues to do well |
| And so they're really looking for quick time to value, quicker ROI, and I think that's also why ServiceNow has been performing so well |
| But our core remains strong |
| What I keep saying is we will keep you updated as to the progress we're seeing very good traction |
| And so we're really excited about those investments, we've been making them for years |
| We have over 12 products with $250 million or more in ACV, which really demonstrates the breadth of the product portfolio |
| And that is one platform, one data model, one architecture that holds all of the data that really allows us to have enormous quantities of information that really drives productivity efficiencies |
| Statement |
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| But there's pressures on free cash flow margins |
| And at times, I think it leads to some disappointment with investors in terms of they're expecting that number to move faster than they could actually move |
| There's been some difficult spending environment between when you first gave that target and now |
| Now it's going to renew again in September but it does mean that from a CRPO perspective, it's going to be a headwind, especially when our federal business has been doing so well |
| There's still change management, there's still security concerns |
| So we have a bit of pressure on gross margins that we're offsetting by an increase in the length of time we're using our data assets |
| That 10 points scared me a little bit |
| And is that cliff anytime in the near term? Like Salesforce just guided towards a 10 point headwind to free cash flow because they hit their cliff on US taxes |
| How should investors think about that from the ServiceNow lens? Is there a high enough computing intensity of this generative AI functionality that we would see any real incremental pressure on gross margins? Gina Mastantuono So our strategy of using domain specific large language models within our ServiceNow platform means that it's definitely less compute power |
| And a lot of your peers, I mean, we're talking with Carl from Workday, they had to pull back on their targets, right? Snowflake last week had to pull back on their targets |
| At some point, do we have to pay for it in terms of lower gross margins, higher COGS or whatnot |
| In 2023, ServiceNow never had that knee jerk reaction to the spending environment that we saw in a lot of other companies |
| The other thing that I think catches investors off-guard on CRPOs is because it's an asset account, what's in the renewal base has a big impact on sort of how CRPO is going to be growing |
| And I think this is a part of the ServiceNow story that goes a little bit underappreciated, if you will |
| You kept hiring, you kept investing throughout the downturn |
| You guys never did a head count reduction |
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