servicenow-cost-structure

ServiceNow Cost Structure

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Gross margins from subscription services were reported to be over 81%, thus making its subscription business critical to sustaining the ServiveNow business model. While gross margins from professional services are negative, the professional services segment is instrumental from a retention standpoint, as it is an enabler of the subscription business.

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Who Owns ServiceNow

who-owns-servicenow
ServiceNow is an American cloud-computing platform that manages digital workflows for enterprise operations. The company is primarily owned by institutional investors, like Vanguard Group (8.4% ownership), BlackRock (7.8% ownership), and T. Rowe Price Associates (7.4% ownership). The top individual investor is Fred Luddy, the company’s founder. He stepped down as CEO of ServiceNow in 2011 and now has an advisory role within the company. By 2023, he owned 164,777 company stocks.

ServiceNow Business Model

servicenow-business-model
ServiceNow is an American cloud-computing platform designed to manage digital workflows for enterprise operations. The company was founded as Glidesoft in 2003 by Fred Luddy. ServiceNow makes approximately 97% of its revenue through subscription fees, with the exact fee a client has to pay dependent upon the features they require and the level of customization. ServiceNow makes money from professional services, defined as any activity the company performs to help clients maximize platform value. ServiceNow also makes money by offering customer training.

ServiceNow Revenue

servicenow-revenue
ServiceNow generated $8.97 billion in revenue in 2023, $7.24 billion in 2022, and $5.89 billion in 2021.

ServiceNow Profits

servicenow-profits
ServiceNow generated over $1.7 billion in profits in 2023, compared to $325 million in 2022 and $230 million in 2021.

ServiceNow Subscription Revenue

servicenow-subscription-revenue
ServiceNow generates most of its revenue from subscriptions. In 2023 the company generated $8.68 billion in revenue in 2023, $6.89 in 2022, and $5.57 billion in 2021.

ServiceNow Subscription Revenue Breakdown

ServiceNow Subscription Revenue Breakdown
In 2023 ServiceNow generated $8.68 billion in subscription revenues, of which $7.68 billion in Digital workflow products and a billion dollars in ITOM products.

ServiceNow Professional Service Revenue

ServiceNow Professional Services Revenue
ServiceNow generated $291 million from the professional services segment in 2023, compared to $354 million in 2022 and $323 million in 2021.

ServiceNow Cost Structure

servicenow-cost-structure
Gross margins from subscription services were reported to be over 81%, thus making its subscription business critical to sustaining the ServiveNow business model. While gross margins from professional services are negative, the professional services segment is instrumental from a retention standpoint, as it is an enabler of the subscription business.

ServiceNow Employees

ServiceNow Employees
ServiceNow had 22,668 employees in 2023, 20,433 employees in 2022, and 16,881 employees in 2021.

ServiceNow Revenue per Employees

ServiceNow Revenue Per Employee
ServiceNow generated $395,756 per employee in 2023, $354,573 in 2022, and $349,268 in 2021.

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