ServiceNow Inc at JPMorgan Global Technology, Media and Communications Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mark Murphy - JPMorgan - Analyst : So let's dive right in, Amit, and talk a bit about Q1. That performance looked very clean. You had 21% to 22% top-line trajectory. That's happening at a $12 billion scale of the business. And it caught our attention that the backlog or the CRPO, the upside there was actually larger in Q1 than it had been in Q4. Can you help us understand, from your perspective, just how did the company perform quite so well when -- we did have the backdrop of a trade war. The news is changing on that day to day with the tweets. But business confidence had taken a hit, so how do you think the business performed so well?

Question: Mark Murphy - JPMorgan - Analyst : I want to -- we'll definitely come back and spend some time on talking about what's happening with agents. Just to close the loop on that, so we went into Q1 actually saying that investors have become too pessimistic on ServiceNow. Our view is that the hard data was hanging in there, a lot better than the soft data which we think of as opinions and sentiment. So would you agree with that? When you're out there speaking with the field and the customers, the mood has changed, but the spending and the activity level hasn't changed. Just any thought on maybe how long that might last with the backdrop that we've got? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 2:40PM, NOW.N - ServiceNow Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan - Analyst : And that's great to hear that example in the automotive industry because you know that's an industry that they're under stress, they're under strain because of the tariff impact on the raw materials. Would you apply that sense that you have into other tariff sensitive industries, manufacturing, shipping, construction, retailers, energy? Is there any different vibe in these very --?

Question: Mark Murphy - JPMorgan - Analyst : Great to hear. So one other aspect of that would be what's happening in public sector, federal. And on the defense side, I think we learned about this after ServiceNow's earnings report. But the administration is proposing actually a 13% increase in defense spending for fiscal year '26. So that budget is going to go over $1 trillion for the first time. Homeland Security is going to be up 65%. And then we think about ServiceNow, and we say, well, you have material exposure to defense and intelligence because you have the navy, you have the air force. That's at least our belief is that you have this. In the army, if I didn't mention that. So let me just ask you point blank, is there a bit of good news there in the last couple of weeks? Or can that help you do slightly more federal business in Q2, Q3? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 2:40PM, NOW.N - ServiceNow Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan - Analyst : Yeah, okay, and then any compare and contrast to the -- the budget is going to have cuts on non-defense, you know, surprise, surprise education, healthcare, environment. Do you expect the civilian side is going to have a little more friction and deal processes?

Question: Mark Murphy - JPMorgan - Analyst : You could end up with less staff, more software.

Question: Mark Murphy - JPMorgan - Analyst : For sure.

Question: Mark Murphy - JPMorgan - Analyst : Okay. So Amit, if we zoom out then for just a moment and try to think about the bigger picture, ServiceNow has been an elite performer in these large-scale CIO surveys that we run. And by the way, that's true since 2011 when it was a private company. And it's firmly cemented next to Microsoft, Amazon, Google, and others. When you look at that feedback, it's registering as a low code platform. They're saying it has robust AI tooling. These are the comments that we're getting. At a high level, what's allowing ServiceNow to stand out that far from the crowd where it would register with CIOs the way that Microsoft, Amazon, and Google do.

Question: Mark Murphy - JPMorgan - Analyst : Okay. So the cohesiveness of that single platform is allowing you to innovate faster, then you multiply that by the partner network. Okay. I think it feeds into where I wanted to go next which is on the earnings call. Bill McDermott mentioned this intelligent super cycle. He said it could run for 10 years. We're big believers in this. And it got our attention because we had heard about a multiple 8-figure AI deal in your pipeline. Not that it was done, but I think it was trying to be formulated that way. How large do you think AI deals in the future could become for ServiceNow, if that intelligence super cycle plays out?

Question: Mark Murphy - JPMorgan - Analyst : Yeah. And I assume when you say $100 million-plus deals. you're talking about across the entire product stack.

Question: Mark Murphy - JPMorgan - Analyst : So if the intelligence super cycle plays out the way you see it, how many organizations do you think could be spending 7, 8 figures really on the AI piece of this? Like if you could --

Question: Mark Murphy - JPMorgan - Analyst : And if you look, think about like the largest 10,000 companies in the world, can that become fairly commonplace?

Question: Mark Murphy - JPMorgan - Analyst : Yeah. Wow, amazing. So Amit, a question on -- one of the comments that we've been hearing from ServiceNow recently is there's this vision of -- you have a problem of all these siloed apps across a typical company. I think we can all relate to that. And all of those are trying to carve out some kind of a role in AI, right? In other words, all the SaaS providers. And it can become kind of chaos. ServiceNow can consolidate all the chaos then into one platform, and you've been -- so you're talking a lot more about AI orchestration or being the control tower. I think that's great branding, by the way, in the architecture. Could you help us understand how that's going to work? And how does this -- how does it advantage the company to just be a winner in AI? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 2:40PM, NOW.N - ServiceNow Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan - Analyst : I guess, if you can take the chaos of the siloed SaaS agents and make it more manageable. What do you think is going to be the right pricing model for that, Amit? Because it -- we think across Pro Plus, Now Assist. You've got the agents, you've got the control tower, you've got the agent fabric. You can do a flat monthly fee, right? You can have consumption-based pricing. You could talk AI into a premium skew. You can do -- there's talk of outcome-based pricing. Where are customers favoring right now? Do they want the simplicity of just give me a flat fee every month, or do they want to just kind of be billed for every little LLM?

Question: Mark Murphy - JPMorgan - Analyst : Okay. So it feels like you're going to be settling on a hybrid structure and you're going to be having more of these mid-cycle discussions. What about the absolute pricing level? We were in a partner discussion, they said they're seeing more value since ServiceNow reduced the pricing for Assist. Is that -- have you been tinkering with that? And we don't know if you never know if we're hearing about a volume discount, if you're tinkering with it, or they're talking about that you have a Starter Pack?

Question: Mark Murphy - JPMorgan - Analyst : Okay. So it's an easier on ramp. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 2:40PM, NOW.N - ServiceNow Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan - Analyst : Okay. So let's move on and talk for a moment about Moveworks. We had spoken to 11 ServiceNow partners last month, and we were asking them about the announced intent to acquire Moveworks. And impressively, they actually -- it was 11 out of 11 that they were universally positive on it. One of the comments was it tightens the platform story around AI driven employee support. I think, Amit, the question we have is ServiceNow generally has preferred organic development. It is part of the value proposition of the platform. So what makes Moveworks worth that price tag? If you could just can you make this product come to life a little bit? Could you make it tangible for people in the audience that haven't seen it?

Question: Mark Murphy - JPMorgan - Analyst : Okay, so enterprise search. And then would you say requester -- Moveworks is going to be the requester, and ServiceNow is going to be the fulfiller, what should we think of that as the front end and the back end? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 2:40PM, NOW.N - ServiceNow Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan - Analyst : Okay, so then if we think about what you're getting with Moveworks and then you had commented earlier about this automotive company and that there was going to be activity related to the supply chain, is there any way to tie this together because this notion of a supply chain agent? And we may be in a window of time. I know it'll -- the headlines are always changing. But is there an opportunity where more companies want to rework suppliers due to the trade war?

Question: Mark Murphy - JPMorgan - Analyst : Okay, so Amit, again, one -- zooming out again for just a moment and thinking about the broader ServiceNow strategy. We do these quarterly partner interviews. And the breadth of products that they're mentioning, we're always a little floored by it. See, where do you see traction? NowAssist,

Question: Mark Murphy - JPMorgan - Analyst : Okay. In our last minute and a half on it, let's talk about the CRM market because I think you briefly touched on it earlier in the session. We think about ServiceNow. The company has always said we're going to be complimentary to the other apps, nobody has to lose for us to win. But lately, the messaging is a little bit different when -- the intensity of the aspiration in the CRM market and this comment came up that customers are saying they want someone to lose in that area. What is prompting them to make that statement, and then how do you see that opportunity forming for ServiceNow?