ServiceNow Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference Transcript

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

Question: Matt Hedberg - RBC Capital Markets - Analyst :

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yes. I mean -- so you always keep them guessing then, right, internally? You're like, I'm important. I'm part of the executive committee, but, yes, you ran out of C-suite title. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 6:20PM, NOW.N - ServiceNow Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yeah. Here we are.

Question: Matt Hedberg - RBC Capital Markets - Analyst : All right. Well, you're selfless in that sense. So maybe for those that don't know you as much, maybe a little bit of your background and sort of what you -- how you're helping bring ServiceNow to continue the journey that's been underway.

Question: Matt Hedberg - RBC Capital Markets - Analyst : One of the -- as I reflect on your quarter, which seems like a long time ago at this point, but obviously it was a really strong quarter, strong outlook, the execution has been just so crisp through some really challenging times. And reflecting on what Bill said, one of the things that really stood out to me is, in a post-COVID world, it's not about just taking orders. It's about really selling ROI and value-based selling. I mean to me, that really seems key to the strong execution is really a byproduct of what you guys are delivering for customers. So talk about like from your vantage point, how does that resonate with customers?

Question: Matt Hedberg - RBC Capital Markets - Analyst : So there's a lot of like some topics that I want to cover here, and you mentioned AI and that's with Now Assist, it's been really an incredible adoption curve there. Bill, he's -- when he talks, it's hard to not get excited about a lot of things. I guess from your lens and being as close to Bill as you are, and you sit back at all of the S curves that sit front of ServiceNow, just with sort of a very high-level question, what excites you most about the future of the company right now?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Well, and I think your second customer just crossed through $100 million of ACV, which is no small feat, to hear that you feel like you're still relatively early in that kind of that customer penetration is super exciting. I want to talk about AI in one more second, but I just want to double-click on the sales motion because I think it's an important piece. We've seen a lot of chief revenue officer turnovers. We've seen a lot of companies have to change how they sell in sort of this new normal that we're in now. Because from my perspective, I guess I can't illustrate how important I think it is to really sell ROI and to sell value. Talk about then from -- when you're talking to customers, like are there others that are like that? Because it really feels like you're somewhat unique in the fact that your model is effectively built for the future where the other companies are re-architecting their sales organization.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Workflow Data Fabric is super exciting, but I wanted to first touch on AI and Now Assist has had some incredible growth. It feels like that business is near $100 million of ACV. Can you give us some tangible use cases of why that product has been growing as rapidly as it has? Because it really feels like around this conference, AI and Gen AI has been a theme for every conversation. It feels like very few companies are at the point where they're actually monetizing it yet. And it feels like in some regards, ServiceNow is a bit of the easy button on this is a great way to employ generative AI early. Talk about why that's resonating.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Totally. I mean, it really feels like Copilot the way Copilot was intended, really to help some of these knowledge workers do their daily job, do them better. One of the early bar arguments that it feels like you guys have temped down is that, well, if these employees, if these knowledge workers are so much more efficient, does that hurt seat count growth? Does that hurt the expansion? Talk about why you don't think that's the case.

Question: Matt Hedberg - RBC Capital Markets - Analyst : And then within the various verticals within an organization, whether it's customer service or HR or finance, where have you seen some of the broadest adoption of Now Assist thus far?

Question: Matt Hedberg - RBC Capital Markets - Analyst : And then it's like a theme from the call too, it sounded like there was some incremental work to be done on pricing and packaging still within Now. What could we expect from that?

Question: Matt Hedberg - RBC Capital Markets - Analyst : And it feels like to me, I'm just thinking how early this is the hallmark of like 20% organic growth feels like the -- I mean, we haven't even talked about some of the other growth drivers, but it feels like Now Assist, and the broader ProPlus upgrade cycle could last five, six, seven years from now. Let's talk about Workflow Data Fabric. I mean I think that's the one that really excites a lot of people, because it feels like that's another S-curve to think about. For those that aren't as familiar with it, talk about what that is and what it means to ServiceNow and your customers. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 6:20PM, NOW.N - ServiceNow Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : Well, it's a control tower for data at that point. What would you envision as like -- what's a deployment going to look like for a customer? Could you get a little bit more idea of like what some of these early wins could look like?

Question: Matt Hedberg - RBC Capital Markets - Analyst : And then how could that be synergistic to the rest of the platform? Because it feels like it's -- it could even lead to some upside kind of the traditional ServiceNow platform.

Question: Matt Hedberg - RBC Capital Markets - Analyst : And like ISVs, people that are building on the Now Platform, to me it feels like that could be another opportunity to see some -- just some innovation from ISVs on the platform.

Question: Matt Hedberg - RBC Capital Markets - Analyst : And then what about like -- how do you -- how should we think about pricing for data workflow?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Stay tuned on that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 6:20PM, NOW.N - ServiceNow Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : And it feels like ultimately what you guys are building is both the seat-based model with consumption elements. And that really, that hybrid approach to pricing feels like where the rest of the industry needs to go as well.

Question: Matt Hedberg - RBC Capital Markets - Analyst : This has gone really, really fast. I'm going to ask you one more and then we'll see if there's a question from the group. I have to ask an election question please. It feels like ServiceNow obviously is a big -- the U.S. government and pub-sec is a huge customer of ServiceNow. And it feels like in the spirit of DOGE, it feels like ServiceNow could perhaps even be even more of an efficiency gain for a lot of pub-sec workload. Any thoughts on kind of what under the new administration might mean from that sector?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Excellent. We're going to pause here for a second. Is there a question out there for Nick? Yes, Noah. Unidentified Participant I always liked [Bill Derm] when he called himself The Player to be Named Later. That's not a bad title, if you want. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 20, 2024 / 6:20PM, NOW.N - ServiceNow Inc at RBC Capital Markets Technology, Internet, Media and Telecommunications Conference

Question: Matt Hedberg - RBC Capital Markets - Analyst : Any other ones?

Question: Matt Hedberg - RBC Capital Markets - Analyst : If there is one, raise your hand. I guess, your journey in observability, there's been a couple of acquisitions there. I'm kind of curious, from your perspective, you haven't been with ServiceNow for that long, how would you grade the performance in observability? And is there more opportunity for you guys to be even more impactful there?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Okay. And then I guess you guys have been so disciplined from an M&A perspective, capital allocation, generally speaking. Do you think with kind of a new product leader and all these growth initiatives, do you see any change? I know Bill's always -- kind of say M&As could be a part of it, larger M&A, and as a company as big as you guys are now, obviously, it could be a bigger deal. How do you kind of think about capital deployment from an M&A perspective?

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yeah. Well, you guys are sort of the blueprint of a single code base and some have tried to emulate and some have failed obviously. Maybe to wrap up, we've got two minutes left, what I've loved about ServiceNow over the years is it just seems like a series of S curves that kind of have sort of led to this organic growth profile at scale that we really haven't seen from many. There's a lot -- it's probably like picking your favorite child in terms of trying to pick one of the things you're most excited for, certainly Now Assist or what you're doing with data. From your perspective, from your seat and kind of hearing Bill and hearing customers you'd say like, I'd pay attention to this and watch this, what would that thing be?

Question: Matt Hedberg - RBC Capital Markets - Analyst : So the answer is kind of all of the above.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Well, it certainly feels like any single one of those would be a significant driver, but --

Question: Matt Hedberg - RBC Capital Markets - Analyst : Oh, one last thing.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Yeah. That certainly seems evident to us externally. Well, thanks from all of us. Darren, thanks for coming, and best of luck. And we're looking forward to Analyst Day. It sounds like we've got some stuff to think about --

Question: Matt Hedberg - RBC Capital Markets - Analyst : All right.

Question: Matt Hedberg - RBC Capital Markets - Analyst : Appreciate the time.