ServiceNow is the world’s leading digital workflow company, and its results for Q4 and all of 2021 have been truly impressive. “We once again reported results that significantly beat the high end of expectations,” said ServiceNow President and CEO Bill McDermott about the company’s Q4 results. “Customer demand for ServiceNow’s innovative platform is stronger than ever. Our unique culture has made us one of the best places to work. We are growing like a fast-moving startup with the profitability of a global market leader.”
ServiceNow’s recently-released Q4 and full 2021 financial results clearly show that the company, under McDermott’s leadership, has had an excellent year. In recent quarters, ServiceNow has seen major growth in several key areas, and Q4 continued this. As an example, subscription revenues hit $1,523 million in Q4, which meant year-on-year growth of 29% (30% adjusted for constant currency).
As of December 31, 2021, ServiceNow’s current remaining performance obligations (“cRPO”), which means contract revenue that will be recognized as revenue in the next 12 months, came to $5.7 billion, which is an increase of 29% year-on-year; adjusted for constant currency, it is 32%. ServiceNow also closed 135 new annual contracts valued at over $1 million, showing a massive increase of 52% year-on-year. The company also has 1,359 total customers with more than $1 million in annual contract value, a 25% year-on-year increase.
Improving the Now Platform in Q4
While ServiceNow’s financial performance is outstanding, it only shows part of what’s going on in the company. ServiceNow has grown the Now Platform’s features and functionality at a similar rate as their financial results, which is outstanding both for customers and investors.
At the beginning of Q4 2021, ServiceNow unveiled an integrated solution to integrate Environmental, Social and Governance (ESG) across the enterprise. The company’s vision for their solution is to enable a real-time view of ESG compliance and risk, which will help business leaders make better decisions and help their companies to perform better long-term. By providing governance capabilities such as continuous control, risk assessment, AI, audits, privacy, and automation, ServiceNow intends to help companies face major environmental, social, and business challenges in a transparent way.
Customer engagement enhancements were also front and center for ServiceNow in Q4 2021. The launch of the ServiceNow Messaging Service was crucial to enabling a seamless experience from issue to resolution for both customers and employees. In Q3 2021, the Now Platform made improvements to the Rome release that paved the way for the launch of the messaging service in Q4.
Acquisitions were also key to the company’s Q4 growth. Perhaps the most important acquisition in Q4 was that of DotWalk. DotWalk strengthens business agility for companies through automation, and its artificial intelligence-powered regression testing improves application performance and enables its users to rapidly complete business goals while speeding digital transformation. ServiceNow is making use of DotWalk so that customers remain technologically agile and innovative.
2021 saw the second year of the covid-19 pandemic, and ServiceNow sees the stress that is palpable in the world. To assist in alleviating what they could, ServiceNow entered a partnership with Qualtrics to build empathy into customer service. As a result of this cooperation, companies can now access additional customer experience data from Qualtrics on the Now Platform through the Qualtrics CustomerXM and ServiceNow Customer Service Management integration. At the end of the day, providing care for companies and their customers is one of the main reasons ServiceNow continued its stellar growth in Q4.
There have been so many major enhancements to ServiceNow’s functionality every quarter, it comes as no surprise that they have consistently been ranked for the past five years as a Fortune Future 50 company. ServiceNow CFO Gina Mastantuono said the company “expects constant currency subscription revenue growth to accelerate year-over-year in Q1, setting us up for another strong year and putting us well on our way to becoming a $15 billion plus revenue company.” The outlook remains strong for the Now Platform, and 2022 looks increasingly auspicious.
