ServiceNow Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

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

Question: Keith Weiss - Morgan Stanley - Analyst : Great having you. So one of the things I've always loved about ServiceNow is the core story of ServiceNow has remained the same from when I first missed Fred Luddy 20 years ago, right? It's about automating workflows for the enterprise, right? And the job of subsequent CEOs has been convincing investors of how broad that opportunity was. It's not just the IT department but the overall enterprise. Now as we come into this agentic computing future, the AI future, the ability to automate those workflows has just really expanded. So I was hoping to get your view since -- when you started at ServiceNow, you've done an amazing job of showing CEOs what could be done with the ServiceNow platform. How does that expand? How does that change? And how does your mission at ServiceNow expand with the technology?

Question: Keith Weiss - Morgan Stanley - Analyst : Excellent. So when we ask in our most recent survey, we asked a question about agentic computing and which vendors are best positioned to provide that into the enterprise. number one was Microsoft, number two was ServiceNow, right? And far ahead of any other application vendor. This speaks a lot to the positioning of ServiceNow as that workflow automation tool. But we do hear every company talking about agents, every company talking about being a system of record for agent or deploying agents or somehow having agents. How does ServiceNow rise above that noise to prove where the value proposition is really going to lie, why ServiceNow is the right platform for doing this across the company. How do you guys get more than your fair share, if you will, of this agentic computing future.

Question: Keith Weiss - Morgan Stanley - Analyst : Got it. So I wanted to dig into some of the areas that investors are concerned about, like as we go forward in this opportunity. And one of them is the pricing mechanism, right? Shifting from what has been traditionally a very seat-based pricing model. Now we're looking at more outcome-based scenarios and outcome-based pricing. Does -- the bottom line question that people want to understand is this ServiceNow stand to benefit, right? Does the net equation of perhaps fewer seats because we're automating these functionalities, does that get made up by the consumptive elements over time? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 03, 2025 / 7:30PM, NOW.N - ServiceNow Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: Keith Weiss - Morgan Stanley - Analyst : Excellent. So I want to just pull on that thread there. When it comes to almost the first principle's question about software and software pricing. So what you're describing is ServiceNow as a central node in this network within the organization of where all these processes get automated and where all these processes persist, right? And you guys have this great position to be able to automate all those processes. One of the things that has concerned investors, and we could -- DeepSeek as the most recent example of it is the price curve coming down. right? The token pricing, 10 times more efficient every year, not just from DeepSeek but from everyone. And what investors are worried about is like, is the pricing dynamic going to come down faster than the units or the consumption is going to come up. But from my perspective, that's not really how software has ever been priced. So can you talk to us about the conversation that you're having with the customer are they asking you about token pricing? Or are they asking you about the value proposition and the productivity gains and they'll pay their fair share of that productivity gain?

Question: Keith Weiss - Morgan Stanley - Analyst : Excellent. You mentioned DOGE and the push for efficiency within the federal government. Federal government has been a great area of growth for ServiceNow, particularly over the past two years. You guys have gotten great entree into that federal government. And now investors are worried that at least in the very near term, could that be a headwind, right? The focus on headcount reduction, the focus on efficiency, does that create near-term headwinds for ServiceNow, even though it could present longer-term opportunities as they try to build that more productively.

Question: Keith Weiss - Morgan Stanley - Analyst : Outstanding. I think one of the metrics or one of the product innovations that's front of mind for a lot of investors is Now Assist in the Pro Plus SKU? You guys had a tremendous product cycle with the Pro SKU over the past six years. Over the past year, now we're doubling down, if you will, Pro Plus and then Now Assist SKU. 150% sequential deal growth into Q4, so seeing really good momentum. Can you give us an update where are we on overall penetration of Now Assist? And is this product cycle going to match what we saw from the Pro SKU over the past five years?

Question: Keith Weiss - Morgan Stanley - Analyst : And maybe in the last minute we have, I think one of the central parts of pushing all the chips into the table is the underlying data. And you talked about the workflow data fabric. We've talked about the importance of data in driving all these models, driving all these processes. Can you talk to us a little bit about that it's a new offering, a workflow data fabric? And how are you convincing customers that ServiceNow is your data management provider. ServiceNow is the center of gravity where this data should be consolidated?

Question: Keith Weiss - Morgan Stanley - Analyst : Outstanding. Unfortunately, Bill, that takes us to the end of our time slot. But thank you for joining us, and amazing story at ServiceNow.