0001373715false2020Q212/31191.8us-gaap:AccountingStandardsUpdate201602Memberus-gaap:AccountingStandardsUpdate201602MemberP5YP5Y490.00742P4YP2Y00013737152020-01-012020-06-30xbrli:shares00013737152020-06-30iso4217:USD00013737152019-12-310001373715us-gaap:LicenseAndServiceMember2020-04-012020-06-300001373715us-gaap:LicenseAndServiceMember2019-04-012019-06-300001373715us-gaap:LicenseAndServiceMember2020-01-012020-06-300001373715us-gaap:LicenseAndServiceMember2019-01-012019-06-300001373715us-gaap:TechnologyServiceMember2020-04-012020-06-300001373715us-gaap:TechnologyServiceMember2019-04-012019-06-300001373715us-gaap:TechnologyServiceMember2020-01-012020-06-300001373715us-gaap:TechnologyServiceMember2019-01-012019-06-3000013737152020-04-012020-06-3000013737152019-04-012019-06-3000013737152019-01-012019-06-30iso4217:USDxbrli:shares0001373715us-gaap:LicenseAndServiceMemberus-gaap:CostOfSalesMember2020-04-012020-06-300001373715us-gaap:LicenseAndServiceMemberus-gaap:CostOfSalesMember2019-04-012019-06-300001373715us-gaap:LicenseAndServiceMemberus-gaap:CostOfSalesMember2020-01-012020-06-300001373715us-gaap:LicenseAndServiceMemberus-gaap:CostOfSalesMember2019-01-012019-06-300001373715us-gaap:TechnologyServiceMemberus-gaap:CostOfSalesMember2020-04-012020-06-300001373715us-gaap:TechnologyServiceMemberus-gaap:CostOfSalesMember2019-04-012019-06-300001373715us-gaap:TechnologyServiceMemberus-gaap:CostOfSalesMember2020-01-012020-06-300001373715us-gaap:TechnologyServiceMemberus-gaap:CostOfSalesMember2019-01-012019-06-300001373715now:SalesAndMarketingMember2020-04-012020-06-300001373715now:SalesAndMarketingMember2019-04-012019-06-300001373715now:SalesAndMarketingMember2020-01-012020-06-300001373715now:SalesAndMarketingMember2019-01-012019-06-300001373715us-gaap:ResearchAndDevelopmentExpenseMember2020-04-012020-06-300001373715us-gaap:ResearchAndDevelopmentExpenseMember2019-04-012019-06-300001373715us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-06-300001373715us-gaap:ResearchAndDevelopmentExpenseMember2019-01-012019-06-300001373715us-gaap:GeneralAndAdministrativeExpenseMember2020-04-012020-06-300001373715us-gaap:GeneralAndAdministrativeExpenseMember2019-04-012019-06-300001373715us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-06-300001373715us-gaap:GeneralAndAdministrativeExpenseMember2019-01-012019-06-300001373715us-gaap:CommonStockMember2020-03-310001373715us-gaap:AdditionalPaidInCapitalMember2020-03-310001373715us-gaap:RetainedEarningsMember2020-03-310001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100013737152020-03-310001373715us-gaap:CommonStockMember2019-03-310001373715us-gaap:AdditionalPaidInCapitalMember2019-03-310001373715us-gaap:RetainedEarningsMember2019-03-310001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-3100013737152019-03-310001373715us-gaap:CommonStockMember2020-04-012020-06-300001373715us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001373715us-gaap:CommonStockMember2019-04-012019-06-300001373715us-gaap:AdditionalPaidInCapitalMember2019-04-012019-06-300001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-300001373715us-gaap:RetainedEarningsMember2020-04-012020-06-300001373715us-gaap:RetainedEarningsMember2019-04-012019-06-300001373715us-gaap:CommonStockMember2020-06-300001373715us-gaap:AdditionalPaidInCapitalMember2020-06-300001373715us-gaap:RetainedEarningsMember2020-06-300001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300001373715us-gaap:CommonStockMember2019-06-300001373715us-gaap:AdditionalPaidInCapitalMember2019-06-300001373715us-gaap:RetainedEarningsMember2019-06-300001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-3000013737152019-06-300001373715us-gaap:CommonStockMember2019-12-310001373715us-gaap:AdditionalPaidInCapitalMember2019-12-310001373715us-gaap:RetainedEarningsMember2019-12-310001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001373715us-gaap:CommonStockMember2018-12-310001373715us-gaap:AdditionalPaidInCapitalMember2018-12-310001373715us-gaap:RetainedEarningsMember2018-12-310001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-3100013737152018-12-3100013737152018-01-012018-12-310001373715srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2018-12-310001373715srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2018-12-310001373715us-gaap:CommonStockMember2020-01-012020-06-300001373715us-gaap:AdditionalPaidInCapitalMember2020-01-012020-06-300001373715us-gaap:CommonStockMember2019-01-012019-06-300001373715us-gaap:AdditionalPaidInCapitalMember2019-01-012019-06-300001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-06-300001373715us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-06-300001373715us-gaap:RetainedEarningsMember2020-01-012020-06-300001373715us-gaap:RetainedEarningsMember2019-01-012019-06-30xbrli:pure0001373715us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-06-300001373715us-gaap:AccountingStandardsUpdate201602Member2019-01-010001373715us-gaap:CommercialPaperMember2020-06-300001373715us-gaap:CorporateDebtSecuritiesMember2020-06-300001373715us-gaap:CertificatesOfDepositMember2020-06-300001373715us-gaap:USTreasuryAndGovernmentMember2020-06-300001373715us-gaap:CommercialPaperMember2019-12-310001373715us-gaap:CorporateDebtSecuritiesMember2019-12-310001373715us-gaap:CertificatesOfDepositMember2019-12-310001373715us-gaap:USTreasuryAndGovernmentMember2019-12-310001373715us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2020-06-300001373715us-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel2Member2020-06-300001373715us-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CashEquivalentsMemberus-gaap:CommercialPaperMember2020-06-300001373715us-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2020-06-300001373715us-gaap:CashEquivalentsMemberus-gaap:CommercialPaperMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CashEquivalentsMemberus-gaap:CorporateDebtSecuritiesMember2020-06-300001373715us-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2020-06-300001373715us-gaap:CashEquivalentsMemberus-gaap:CorporateDebtSecuritiesMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMemberus-gaap:CashEquivalentsMember2020-06-300001373715us-gaap:CertificatesOfDepositMemberus-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel2Member2020-06-300001373715us-gaap:CertificatesOfDepositMemberus-gaap:CashEquivalentsMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CashEquivalentsMemberus-gaap:USTreasuryAndGovernmentMember2020-06-300001373715us-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryAndGovernmentMember2020-06-300001373715us-gaap:CashEquivalentsMemberus-gaap:USTreasuryAndGovernmentMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:InvestmentsMemberus-gaap:CommercialPaperMember2020-06-300001373715us-gaap:FairValueInputsLevel2Memberus-gaap:InvestmentsMemberus-gaap:CommercialPaperMember2020-06-300001373715us-gaap:InvestmentsMemberus-gaap:CommercialPaperMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:CertificatesOfDepositMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryAndGovernmentMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:USTreasuryAndGovernmentMemberus-gaap:InvestmentsMember2020-06-300001373715us-gaap:FairValueInputsLevel1Member2020-06-300001373715us-gaap:FairValueInputsLevel2Member2020-06-300001373715us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2019-12-310001373715us-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel2Member2019-12-310001373715us-gaap:MoneyMarketFundsMemberus-gaap:CashEquivalentsMember2019-12-310001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CashEquivalentsMemberus-gaap:CommercialPaperMember2019-12-310001373715us-gaap:CashEquivalentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2019-12-310001373715us-gaap:CashEquivalentsMemberus-gaap:CommercialPaperMember2019-12-310001373715us-gaap:FairValueInputsLevel1Memberus-gaap:InvestmentsMemberus-gaap:CommercialPaperMember2019-12-310001373715us-gaap:FairValueInputsLevel2Memberus-gaap:InvestmentsMemberus-gaap:CommercialPaperMember2019-12-310001373715us-gaap:InvestmentsMemberus-gaap:CommercialPaperMember2019-12-310001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:CorporateDebtSecuritiesMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:FairValueInputsLevel1Memberus-gaap:CertificatesOfDepositMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:CertificatesOfDepositMemberus-gaap:FairValueInputsLevel2Memberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:CertificatesOfDepositMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasuryAndGovernmentMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasuryAndGovernmentMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:USTreasuryAndGovernmentMemberus-gaap:InvestmentsMember2019-12-310001373715us-gaap:FairValueInputsLevel1Member2019-12-310001373715us-gaap:FairValueInputsLevel2Member2019-12-310001373715now:LoomSystemsLtd.Member2020-02-062020-02-060001373715us-gaap:DevelopedTechnologyRightsMembernow:LoomSystemsLtd.Member2020-02-060001373715us-gaap:DevelopedTechnologyRightsMembernow:LoomSystemsLtd.Member2020-02-062020-02-060001373715now:LoomSystemsLtd.Member2020-02-060001373715now:RupertLabsInc.Member2020-02-072020-02-070001373715now:RupertLabsInc.Memberus-gaap:DevelopedTechnologyRightsMember2020-02-070001373715now:RupertLabsInc.Memberus-gaap:DevelopedTechnologyRightsMember2020-02-072020-02-070001373715now:RupertLabsInc.Member2020-02-070001373715us-gaap:DevelopedTechnologyRightsMember2020-06-300001373715us-gaap:DevelopedTechnologyRightsMember2019-12-310001373715us-gaap:PatentsMember2020-06-300001373715us-gaap:PatentsMember2019-12-310001373715us-gaap:OtherIntangibleAssetsMember2020-06-300001373715us-gaap:OtherIntangibleAssetsMember2019-12-310001373715us-gaap:DevelopedTechnologyRightsMember2020-01-012020-06-300001373715us-gaap:DevelopedTechnologyRightsMember2019-01-012019-06-300001373715us-gaap:PatentsMember2019-01-012019-06-300001373715us-gaap:ComputerEquipmentMember2020-06-300001373715us-gaap:ComputerEquipmentMember2019-12-310001373715us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-06-300001373715us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2019-12-310001373715us-gaap:LeaseholdImprovementsMember2020-06-300001373715us-gaap:LeaseholdImprovementsMember2019-12-310001373715us-gaap:FurnitureAndFixturesMember2020-06-300001373715us-gaap:FurnitureAndFixturesMember2019-12-310001373715us-gaap:ConstructionInProgressMember2020-06-300001373715us-gaap:ConstructionInProgressMember2019-12-310001373715us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2020-06-300001373715us-gaap:NondesignatedMemberus-gaap:ForeignExchangeContractMember2019-12-310001373715us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMember2020-06-300001373715us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:NondesignatedMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMember2019-12-310001373715us-gaap:NondesignatedMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMembernow:AccruedExpensesAndOtherCurrentLiabilitiesMember2020-06-300001373715us-gaap:NondesignatedMemberus-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeContractMembernow:AccruedExpensesAndOtherCurrentLiabilitiesMember2019-12-3100013737152020-07-012020-06-3000013737152021-07-012020-06-300001373715now:A2022ConvertibleSeniorNotesMember2017-06-300001373715now:A2022ConvertibleSeniorNotesMember2017-05-012017-06-30now:day0001373715now:StockPriceTriggerMeasurementMember2020-01-012020-06-300001373715now:NotesPriceTriggerMeasurementMember2020-01-012020-06-300001373715now:A2022ConvertibleSeniorNotesMember2020-06-300001373715now:A2022ConvertibleSeniorNotesMember2019-12-310001373715now:A2022ConvertibleSeniorNotesMember2020-01-012020-06-300001373715now:A2022ConvertibleSeniorNotesMembersrt:ScenarioForecastMember2020-07-012020-09-300001373715us-gaap:FairValueInputsLevel2Membernow:A2022ConvertibleSeniorNotesMember2020-06-300001373715us-gaap:FairValueInputsLevel2Membernow:A2022ConvertibleSeniorNotesMember2019-12-310001373715now:A2022ConvertibleSeniorNotesMember2020-04-012020-06-300001373715now:A2022ConvertibleSeniorNotesMember2019-04-012019-06-300001373715now:A2022ConvertibleSeniorNotesMember2019-01-012019-06-300001373715now:A2022NoteHedgeMember2020-01-012020-06-300001373715now:A2022NoteHedgeMember2020-06-300001373715now:A2022WarrantsMember2020-01-012020-06-300001373715now:A2022WarrantsMember2020-06-30now:trading_day0001373715now:A2018ConvertibleSeniorNotesMember2013-11-300001373715now:A2018WarrantsMember2019-04-012019-06-300001373715now:A2018WarrantsMember2019-01-012019-06-300001373715us-gaap:AccumulatedTranslationAdjustmentMember2020-06-300001373715us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001373715us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-06-300001373715us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310001373715us-gaap:EmployeeStockOptionMember2020-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2020-06-300001373715now:TwoThousandTwelveEquityIncentivePlanMember2020-06-300001373715now:TwoThousandTwelveEmployeeStockPurchasePlanMember2020-06-300001373715us-gaap:PerformanceSharesMember2020-01-012020-06-30now:incentive_plan0001373715now:TwoThousandTwelveEquityIncentivePlanMember2020-01-012020-06-300001373715now:TwoThousandTwelveEmployeeStockPurchasePlanMember2020-01-012020-06-300001373715now:TwoThousandFiveStockOptionPlanAndTwoThousandTwelveEquityIncentivePlanMember2020-01-012020-06-3000013737152020-01-012020-03-310001373715us-gaap:EmployeeStockOptionMember2020-01-012020-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2019-12-310001373715us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-03-310001373715us-gaap:RestrictedStockUnitsRSUMember2020-03-310001373715us-gaap:RestrictedStockUnitsRSUMember2020-04-012020-06-300001373715now:RestrictedStockUnitsWtihServiceConditionOnlyMember2020-06-300001373715now:RestrictedStockUnitsWithServiceAndPerformanceConditionsMember2020-06-300001373715us-gaap:RestrictedStockUnitsRSUMembernow:TwoThousandTwelveEquityIncentivePlanMember2020-01-012020-06-300001373715srt:MinimumMemberus-gaap:PerformanceSharesMember2020-01-012020-06-300001373715srt:MaximumMemberus-gaap:PerformanceSharesMember2020-01-012020-06-300001373715us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:PerformanceSharesMember2020-01-012020-06-300001373715us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:PerformanceSharesMember2020-01-012020-06-300001373715us-gaap:PerformanceSharesMember2019-01-012019-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001373715us-gaap:EmployeeStockOptionMember2020-04-012020-06-300001373715us-gaap:EmployeeStockOptionMember2019-04-012019-06-300001373715us-gaap:EmployeeStockOptionMember2019-01-012019-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2019-04-012019-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-06-300001373715now:EmployeeStockPurchasePlanMember2020-04-012020-06-300001373715now:EmployeeStockPurchasePlanMember2019-04-012019-06-300001373715now:EmployeeStockPurchasePlanMember2020-01-012020-06-300001373715now:EmployeeStockPurchasePlanMember2019-01-012019-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2020-04-012020-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2019-04-012019-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2020-01-012020-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2019-01-012019-06-300001373715us-gaap:WarrantMembernow:A2022WarrantsMember2020-04-012020-06-300001373715us-gaap:WarrantMembernow:A2022WarrantsMember2019-04-012019-06-300001373715us-gaap:WarrantMembernow:A2022WarrantsMember2020-01-012020-06-300001373715us-gaap:WarrantMembernow:A2022WarrantsMember2019-01-012019-06-300001373715us-gaap:EmployeeStockOptionMember2020-04-012020-06-300001373715us-gaap:EmployeeStockOptionMember2019-04-012019-06-300001373715us-gaap:EmployeeStockOptionMember2020-01-012020-06-300001373715us-gaap:EmployeeStockOptionMember2019-01-012019-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2020-04-012020-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2019-04-012019-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-300001373715us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-06-300001373715now:EmployeeStockPurchasePlanMember2020-04-012020-06-300001373715now:EmployeeStockPurchasePlanMember2019-04-012019-06-300001373715now:EmployeeStockPurchasePlanMember2020-01-012020-06-300001373715now:EmployeeStockPurchasePlanMember2019-01-012019-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2020-04-012020-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2019-04-012019-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2020-01-012020-06-300001373715us-gaap:ConvertibleNotesPayableMembernow:A2022ConvertibleSeniorNotesMember2019-01-012019-06-300001373715now:A2022WarrantsMemberus-gaap:WarrantMember2020-04-012020-06-300001373715now:A2022WarrantsMemberus-gaap:WarrantMember2019-04-012019-06-300001373715now:A2022WarrantsMemberus-gaap:WarrantMember2020-01-012020-06-300001373715now:A2022WarrantsMemberus-gaap:WarrantMember2019-01-012019-06-300001373715srt:MinimumMember2020-06-300001373715srt:MaximumMember2020-06-300001373715srt:NorthAmericaMember2020-04-012020-06-300001373715srt:NorthAmericaMember2019-04-012019-06-300001373715srt:NorthAmericaMember2020-01-012020-06-300001373715srt:NorthAmericaMember2019-01-012019-06-300001373715us-gaap:EMEAMember2020-04-012020-06-300001373715us-gaap:EMEAMember2019-04-012019-06-300001373715us-gaap:EMEAMember2020-01-012020-06-300001373715us-gaap:EMEAMember2019-01-012019-06-300001373715now:AsiaPacificAndOtherMember2020-04-012020-06-300001373715now:AsiaPacificAndOtherMember2019-04-012019-06-300001373715now:AsiaPacificAndOtherMember2020-01-012020-06-300001373715now:AsiaPacificAndOtherMember2019-01-012019-06-300001373715srt:NorthAmericaMember2020-06-300001373715srt:NorthAmericaMember2019-12-310001373715us-gaap:EMEAMember2020-06-300001373715us-gaap:EMEAMember2019-12-310001373715now:AsiaPacificAndOtherMember2020-06-300001373715now:AsiaPacificAndOtherMember2019-12-310001373715now:LicenseandServiceDigitalWorkflowProductsMember2020-04-012020-06-300001373715now:LicenseandServiceDigitalWorkflowProductsMember2019-04-012019-06-300001373715now:LicenseandServiceDigitalWorkflowProductsMember2020-01-012020-06-300001373715now:LicenseandServiceDigitalWorkflowProductsMember2019-01-012019-06-300001373715now:LicenseandServiceITOMProductsMember2020-04-012020-06-300001373715now:LicenseandServiceITOMProductsMember2019-04-012019-06-300001373715now:LicenseandServiceITOMProductsMember2020-01-012020-06-300001373715now:LicenseandServiceITOMProductsMember2019-01-012019-06-300001373715us-gaap:SubsequentEventMembernow:SweagleAcquisitionMember2020-07-012020-07-01
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 

FORM 10-Q
(Mark One)
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2020
OR
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number: 001-35580

now-20200630_g1.jpg
SERVICENOW, INC.
(Exact name of registrant as specified in its charter) 
Delaware20-2056195
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
2225 Lawson Lane
Santa Clara, California 95054
(Address, including zip code, of registrant’s principal executive offices)

(408) 501-8550
(Registrant’s telephone number, including area code) 

Not Applicable
(Former name, former address and formal fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $0.001 per shareNOWThe New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes No  
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No  
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Table of Contents
Large Accelerated Filer
Accelerated Filer
Non-Accelerated Filer
Smaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  No
As of June 30, 2020, there were approximately 191.8 million shares of the Registrant’s Common Stock outstanding.



TABLE OF CONTENTS

 
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
   
 
 
i

Table of Contents
PART I

ITEM 1.  FINANCIAL STATEMENTS

SERVICENOW, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
June 30, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$837,309  $775,778  
Short-term investments1,505,362  915,317  
Accounts receivable, net631,992  835,279  
Current portion of deferred commissions191,877  175,039  
Prepaid expenses and other current assets170,582  125,488  
Total current assets3,337,122  2,826,901  
Deferred commissions, less current portion355,684  333,448  
Long-term investments776,807  1,013,332  
Property and equipment, net547,253  468,085  
Operating lease right-of-use assets463,220  402,428  
Intangible assets, net163,857  143,850  
Goodwill211,416  156,756  
Deferred tax assets594,155  599,633  
Other assets71,795  77,997  
Total assets$6,521,309  $6,022,430  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$85,757  $52,960  
Accrued expenses and other current liabilities446,653  461,403  
Current portion of deferred revenue2,250,719  2,185,754  
Current portion of operating lease liabilities65,742  52,668  
Total current liabilities2,848,871  2,752,785  
Deferred revenue, less current portion31,399  40,038  
Operating lease liabilities, less current portion436,499  383,221  
Convertible senior notes, net696,123  694,981  
Other long-term liabilities29,611  23,464  
Total liabilities4,042,503  3,894,489  
Stockholders’ equity:
Common stock191  189  
Additional paid-in capital2,712,090  2,454,741  
Accumulated other comprehensive income29,772  25,255  
Accumulated deficit(263,247) (352,244) 
Total stockholders’ equity2,478,806  2,127,941  
Total liabilities and stockholders’ equity$6,521,309  $6,022,430  


See accompanying notes to condensed consolidated financial statements
1

Table of Contents
SERVICENOW, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
(unaudited) 
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenues:
Subscription$1,015,528  $780,989  $2,010,230  $1,520,975  
Professional services and other55,314  52,915  106,952  101,855  
Total revenues1,070,842  833,904  2,117,182  1,622,830  
Cost of revenues(1):
Subscription171,934  135,479  331,655  262,068  
Professional services and other61,005  62,668  124,650  122,331  
Total cost of revenues232,939  198,147  456,305  384,399  
Gross profit837,903  635,757  1,660,877  1,238,431  
Operating expenses(1):
Sales and marketing426,519  393,895  867,753  755,304  
Research and development245,081  183,420  471,738  355,942  
General and administrative104,037  85,442  209,785  169,898  
Total operating expenses775,637  662,757  1,549,276  1,281,144  
Income (loss) from operations62,266  (27,000) 111,601  (42,713) 
Interest expense(8,488) (8,269) (17,058) (16,437) 
Interest income and other income, net8,252  18,954  15,849  31,379  
Income (loss) before income taxes62,030  (16,315) 110,392  (27,771) 
Provision for (benefit from) income taxes21,264  (5,236) 21,395  (15,147) 
Net income (loss)$40,766  $(11,079) $88,997  $(12,624) 
Net income (loss) per share - basic$0.21  $(0.06) $0.47  $(0.07) 
Net income (loss) per share - diluted$0.20  $(0.06) $0.44  $(0.07) 
Weighted-average shares used to compute net income (loss) per share - basic191,319  186,678  190,731  184,419  
Weighted-average shares used to compute net income (loss) per share - diluted201,453  186,678  200,843  184,419  
Other comprehensive income (loss):
Foreign currency translation adjustments$17,577  $(410) $(2,816) $9,225  
Unrealized gains on investments, net of tax26,575  3,629  7,333  8,352  
Other comprehensive income, net of tax44,152  3,219  4,517  17,577  
Comprehensive income (loss)$84,918  $(7,860) $93,514  $4,953  

(1)Includes stock-based compensation as follows:
 Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Cost of revenues:
Subscription$24,960  $19,117  $46,484  $35,139  
Professional services and other12,791  10,951  24,803  20,882  
Operating expenses:
Sales and marketing78,967  69,229  149,127  131,359  
Research and development70,163  50,041  129,066  93,623  
General and administrative29,959  22,422  55,645  48,207  

See accompanying notes to condensed consolidated financial statements
2

Table of Contents
SERVICENOW, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended June 30, 2020Three Months Ended June 30, 2019
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive Income (Loss)
Total
Stockholders’
Equity
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive Income
Total
Stockholders’
Equity
 SharesAmountSharesAmount
Balance at beginning of period190,700  $190  $2,584,298  $(304,013) $(14,380) $2,266,095  184,739  $185  $2,164,930  $(980,487) $10,323  $1,194,951  
Common stock issued under employee stock plans1,101  1  24,178  —  —  24,179  1,120  1  10,206  —  —  10,207  
Taxes paid related to net share settlement of equity awards—  —  (112,845) —  —  (112,845) —  —  (108,150) —  —  (108,150) 
Stock-based compensation—  —  217,174  —  —  217,174  —  —  171,798  —  —  171,798  
Settlement of 2018 Warrants—  —  —  —  —    1,602  2  (2) —  —  —  
Settlement of 2022 Notes conversion feature—  —  (19,027) —  —  (19,027) —  —  —  —  —  —  
Benefit from exercise of 2022 Note Hedge—  —  18,312  —  —  18,312  —  —  —  —  —  —  
Other comprehensive income, net of tax—  —  —  —  44,152  44,152  —  —  —  —  3,219  3,219  
Net income (loss)—  —  —  40,766  —  40,766  —  —  —  (11,079) —  (11,079) 
Balance at end of period191,801  $191  $2,712,090  $(263,247) $29,772  $2,478,806  187,461  $188  $2,238,782  $(991,566) $13,542  $1,260,946  
Six Months Ended June 30, 2020Six Months Ended June 30, 2019
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive Income (Loss)
Total
Stockholders’
Equity
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive Income (Loss)
Total
Stockholders’
Equity
 SharesAmountSharesAmount
Balance at beginning of period189,461  $189  $2,454,741  $(352,244) $25,255  $2,127,941  180,175  $180  $2,093,834  $(978,780) $(4,035) $1,111,199  
Cumulative effect adjustment for Topic 842 adoption
—  —  —  —  —  —  —  —  —  (162) —  (162) 
Common stock issued under employee stock plans2,340  2  91,052  —  —  91,054  3,003  3  63,306  —  —  63,309  
Taxes paid related to net share settlement of equity awards—  —  (238,551) —  —  (238,551) —  —  (247,620) —  —  (247,620) 
Stock-based compensation —  —  405,739  —  —  405,739  —  —  329,267  —  —  329,267  
Settlement of 2018 Warrants—  —  —  —  —  —  4,283  5  (5) —  —  —  
Settlement of 2022 Notes conversion feature—  —  (22,755) —  —  (22,755) —  —  —  —  —  —  
Benefit from exercise of 2022 Note Hedge—  —  21,864  —  —  21,864  —  —  —  —  —  —  
Other comprehensive income, net of tax—  —  —  —  4,517  4,517  —  —  —  —  17,577  17,577  
Net income (loss)—  —  —  88,997  —  88,997  —  —  —  (12,624) —  (12,624) 
Balance at end of period191,801  $191  $2,712,090  $(263,247) $29,772  $2,478,806  187,461  $188  $2,238,782  $(991,566) $13,542  $1,260,946  


See accompanying notes to condensed consolidated financial statements
3

Table of Contents
SERVICENOW, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Six Months Ended June 30,
20202019
Cash flows from operating activities:
Net income (loss)$88,997  $(12,624) 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization158,628  115,777  
Amortization of deferred commissions101,215  79,531  
Amortization of debt discount and issuance costs17,058  16,437  
Stock-based compensation405,125  329,210  
Deferred income taxes(3,177) (3,073) 
Repayments of convertible senior notes attributable to debt discount(1,975)   
Unrealized gains on non-marketable securities(1,944) (2,932) 
Other1,302  (391) 
Changes in operating assets and liabilities, net of effect of business combinations:
Accounts receivable200,015  71,354  
Deferred commissions(143,981) (97,194) 
Prepaid expenses and other assets(32,429) (28,483) 
Accounts payable37,324  25,093  
Deferred revenue69,248  100,190  
Accrued expenses and other liabilities(35,784) 11,688  
Net cash provided by operating activities859,622  604,583  
Cash flows from investing activities:
Purchases of property and equipment(193,671) (97,020) 
Business combinations, net of cash acquired(82,948)   
Purchases of intangibles(6,500) (36,160) 
Purchases of investments(1,107,738) (800,641) 
Sales and maturities of investments765,384  508,318  
Realized gains (losses) on derivatives not designated as hedging instruments, net(2,636) 22,113  
Net cash used in investing activities(628,109) (403,390) 
Cash flows from financing activities:
Repayments of convertible senior notes attributable to principal(15,738)   
Proceeds from employee stock plans91,056  63,300  
Taxes paid related to net share settlement of equity awards(238,557) (247,619) 
Net cash used in financing activities(163,239) (184,319) 
Foreign currency effect on cash, cash equivalents and restricted cash(4,862) 1,286  
Net increase in cash, cash equivalents and restricted cash63,412  18,160  
Cash, cash equivalents and restricted cash at beginning of period777,991  568,538  
Cash, cash equivalents and restricted cash at end of period$841,403  $586,698  
Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents$837,309  $583,581  
Restricted cash included in prepaid expenses and other current assets4,094  3,117  
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows$841,403  $586,698  
Supplemental disclosures of other cash flow information:
Income taxes paid, net of refunds$9,867  $10,560  
Non-cash investing and financing activities:
Settlement of 2022 Notes conversion feature$22,755  $  
Benefit from exercise of 2022 Note Hedge21,864    
Property and equipment included in accounts payable and accrued expenses 94,839  31,940  

See accompanying notes to condensed consolidated financial statements
4

Table of Contents
SERVICENOW, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 
Unless the context requires otherwise, references in this report to “ServiceNow,” the “Company,” “we,” “us,” and “our” refer to ServiceNow, Inc. and its consolidated subsidiaries.

(1) Description of the Business

ServiceNow’s purpose is to make the world of work, work better for people. We believe that people should work the way they want to, so we build applications that help automate existing processes and create efficient, digitized workflows. Our products and services enable the steps of a job to flow naturally across disparate departments, systems and processes of a business. When work flows naturally, great experiences follow. We make work flow utilizing our leading enterprise cloud computing services that manage and deliver digital workflows, simplifying the complexity of work across systems, functions and departments on a single enterprise cloud platform, called the Now Platform. Our product portfolio is currently focused on delivering better Information Technology (“IT”), Employee and Customer workflows in pre-packaged product offerings. We also enable our customers to use the Now Platform App Engine to design and build workflow applications which are purpose built for their own business.

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements due to the permitted exclusion of certain disclosures for interim report