Summary
ServiceNow reported third-quarter fiscal 2024 total revenue of $2.80 billion, up 22.2% from the prior-year quarter. Year-to-date revenue was $8.03 billion, up 22.8%. Gross profit was $2.21 billion in the quarter, up 23.5%, and gross margin was 79.1%, up 0.8 percentage points. Year-to-date gross margin was 79.4%, up 0.9 percentage points. Operating income was $418 million in the quarter, up 81.0%, with an operating margin of 14.9%, up 4.8 percentage points. Year-to-date operating margin was 12.3%, up 4.8 percentage points. Net income was $432 million, up 78.5%, and diluted EPS was $2.07, up 76.9%. Non-GAAP operating income was $872 million, and non-GAAP operating margin was 31%. RPO was $19.5 billion, up 35.4%, while cRPO was $9.36 billion, up 26%. The company ended the quarter with 2,020 customers generating more than $1 million in annual contract value, up 14% year over year. It also signed 15 transactions over $5 million in net new ACV, up 50% year over year.
Cash flow was strong. Operating cash flow was $671 million in the quarter, up 115.8% from the prior-year quarter, and represented 24% of total revenues. Capital expenditures were $202 million, up 48.5%. Free cash flow was $471 million, and free cash flow margin was 17%. Deferred revenue was $5.46 billion, up 22.9%. For the first nine months of fiscal 2024, operating cash flow was $2.63 billion, up 46.8%, and capital expenditures were $599 million, up 38.3%. Free cash flow for the nine-month period was $2,055 million, with a free cash flow margin of 26%. Year-to-date net income was $1.04 billion, down 27.5%, and diluted EPS was $5.00, down 28.6%. The decline in year-to-date net income reflects a prior-year tax valuation allowance release that did not repeat in 2024. On a non-GAAP basis, net income was $775 million, or $3.72 per diluted share, in the quarter. The company repurchased 272,000 shares for $225 million, leaving $562 million available under its repurchase program.
Guidance points to continued growth. For the fourth quarter of 2024, the company guided non-GAAP operating margin to 29% and cRPO growth to 21.5%. Constant-currency subscription revenue growth for the fourth quarter is guided to 20.5%. For the full year 2024, ServiceNow guided non-GAAP subscription gross margin to 84.5%, non-GAAP operating margin to 29.5%, and free cash flow margin to 31%. Constant-currency subscription revenue growth for the full year is guided to 22.5%. The company also raised its full-year 2024 subscription revenue guidance. The guidance for the fourth quarter is for the next quarter, and the other guidance is for the full fiscal year.
Operationally, ServiceNow released the Xanadu platform, which it described as its largest AI release to date, with hundreds of new AI capabilities. It announced plans to integrate Agentic AI into the Now Platform, with first use cases for customer service management and IT service management available in November. It introduced Workflow Data Fabric, an integrated data layer for business and technology data. Partnerships expanded with NVIDIA, Siemens, Rimini Street, Pearson, and Zoom. The company named Amit Zavery as president, chief product officer, and chief operating officer effective October 28, 2024. He previously led platform efforts at Google Cloud and spent nearly 25 years at Oracle. ServiceNow plans to invest $1.5 billion cumulatively in its UK business over the next five years. It also plans to launch a new data center pair in Milan and Rome later this month. Risks include cyber-security events, privacy and data transfer regulations, service and data center interruptions, competition, the ability to convert RPO into revenue, global economic conditions, foreign currency fluctuations, interest rates, armed conflicts, bank failures, inflation, and stock price volatility. Renewal rate was 98% for the three and nine months ended September 30, 2024. Direct sales represented 78% of total revenues for the three and nine months ended September 30, 2024. Revenues outside North America represented 36% of total revenues for the three months ended September 30, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $2.80B | $2.63B | +6.5% | $2.29B | +22.2% |
| Gross profit | $2.21B | $2.08B | +6.7% | $1.79B | +23.5% |
| Gross margin | 79.1% | 79.0% | +0.1 pp | 78.3% | +0.8 pp |
| Research & development | $626.0M | $643.0M | -2.6% | $549.0M | +14.0% |
| Sales & marketing | $944.0M | $960.0M | -1.7% | $799.0M | +18.1% |
| General & administrative | $225.0M | $232.0M | -3.0% | $213.0M | +5.6% |
| Total operating expenses | $1.79B | $1.83B | -2.2% | $1.56B | +15.0% |
| Operating income (loss) | $418.0M | $240.0M | +74.2% | $231.0M | +81.0% |
| Operating margin | 14.9% | 9.1% | +5.8 pp | 10.1% | +4.8 pp |
| Net income (loss) | $432.0M | $262.0M | +64.9% | $242.0M | +78.5% |
| Net margin | 15.4% | 10.0% | +5.5 pp | 10.6% | +4.9 pp |
| Diluted EPS | $2.07 | $1.26 | +$0.81 | $1.17 | +$0.90 |
SaaS KPIs
All quarters →Non-GAAP operating margin
Free cash flow margin
Free cash flow
Renewal rate
Current remaining performance obligations (cRPO)
Remaining performance obligations (RPO)
Non-GAAP subscription gross margin
Customers with ACV > $1 million
Summary, forecast, risks and KPIs are extracted from ServiceNow, Inc.'s SEC filings for Q3 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.