ServiceNow Inc. (NYSE:NOW)

Goodwill

The goodwill value showed a significant increase from 241 million in 2020 to 777 million in 2021, followed by a moderate rise to 824 million in 2022. It then increased sharply to 1,231 million in 2023 and further to 1,273 million in 2024, indicating sustained investment or acquisitions contributing to intangible value buildup.

Developed technology

Developed technology assets demonstrated consistent growth over the five-year period, starting at 226 million in 2020 and nearly doubling to 415 million in 2021. Subsequent years saw continued but slower growth, reaching 434 million in 2022, 516 million in 2023, and 581 million in 2024, reflecting ongoing development or capitalization of technology-related assets.

Patents

Patent values increased modestly from 65 million in 2020 to 69 million in 2021, with a gradual rise to 72 million maintained from 2022 to 2023, and a notable jump to 83 million in 2024. This suggests steady investment in intellectual property with occasional acceleration in patent acquisition or valuation.

Other intangible assets

The "Other" category showed varying figures, starting low at 4 million in 2020, increasing significantly to 14 million in 2021 and 15 million in 2022, before declining slightly to 11 million in both 2023 and 2024. This indicates some fluctuation in miscellaneous intangible assets over time.

Intangible assets, gross

Gross intangible assets increased steadily from 295 million in 2020 to 498 million in 2021, followed by gradual growth to 521 million in 2022, 599 million in 2023, and 675 million in 2024. The trend depicts continuous accumulation or capitalization of intangible assets.

Accumulated amortization

Accumulated amortization consistently grew in magnitude over the period, starting at -141 million in 2020 and increasing negatively to -211 million in 2021, then to -289 million in 2022, -375 million in 2023, and -466 million in 2024. This reflects ongoing amortization expense associated with the intangible assets.

Intangible assets, net

The net intangible assets showed a rise from 153 million in 2020 to a peak of 287 million in 2021, but then declined steadily to 232 million in 2022, 224 million in 2023, and 209 million in 2024. Despite the growth in gross intangible assets, the increasing amortization expense led to a decline in net intangible asset value after 2021.

Goodwill and intangible assets combined

The total of goodwill and intangible assets rose sharply from 394 million in 2020 to 1,064 million in 2021, remaining almost stable at 1,056 million in 2022 before increasing significantly to 1,455 million in 2023 and 1,482 million in 2024. This indicates a strong overall increase in intangible asset base, primarily driven by goodwill growth, outweighing the decline in net intangible assets.

The data shows a consistent upward trend in both total assets and stockholders’ equity over the five-year period ending December 31, 2024. This growth is observable in both reported and goodwill adjusted figures, indicating an overall expansion in the company’s asset base and equity position.

Total Assets

Reported total assets rose steadily from US$8,715 million in 2020 to US$20,383 million in 2024, representing a compound increase of more than double in the five-year period. Goodwill adjusted total assets followed a similar trajectory, increasing from US$8,474 million to US$19,110 million. The adjustment for goodwill reduces the asset values slightly but maintains the same growth pattern, suggesting that goodwill forms a modest but consistent component of total assets.

Stockholders’ Equity

Stockholders’ equity showed strong growth over the period as well. Reported equity increased from US$2,834 million in 2020 to US$9,609 million in 2024, more than tripling in size. Adjusted stockholders’ equity, which accounts for reductions related to goodwill, also grew substantially—from US$2,594 million to US$8,336 million. The difference between reported and adjusted equity increased over time, reflecting the growing impact of goodwill on the equity balance sheet component.

Comparative Observations

The consistent gap between reported and adjusted figures for both assets and equity highlights the presence and increasing significance of goodwill in the company’s financial structure. This may imply acquisitions or intangible asset growth that is significant but does not inflate the tangible asset or shareholder equity base after adjustment.

Overall Insights

The data indicates robust growth in the company’s financial size and capital base, accompanied by increasing goodwill as a portion of total assets. The upward trends in equity demonstrate strengthening shareholder value, although the difference after goodwill adjustment suggests management should monitor the composition of intangible assets and assess their long-term value and risk implications.

Total Asset Turnover

The reported total asset turnover shows a relatively stable pattern over the years, with slight fluctuations ranging between 0.52 and 0.55. The adjusted total asset turnover, which accounts for goodwill, demonstrates a generally higher and more positive trajectory, increasing from 0.53 in 2020 to 0.57 in 2024, indicating a gradual improvement in asset efficiency when goodwill adjustments are considered.

Financial Leverage

Both reported and adjusted financial leverage ratios display a consistent declining trend over the five-year period. The reported financial leverage decreased steadily from 3.07 in 2020 to 2.12 in 2024, while the adjusted financial leverage initially rose slightly from 3.27 to 3.43 in 2021 but then declined markedly to 2.29 by 2024. This decline suggests a reduction in reliance on debt financing or a stronger equity base over time.

Return on Equity (ROE)

The reported ROE exhibits a rising trend with some volatility, escalating from 4.18% in 2020 to a peak of 22.69% in 2023, before decreasing to 14.83% in 2024. The adjusted ROE follows a similar pattern but at consistently higher levels, increasing from 4.57% in 2020 to a peak of 27.06% in 2023, and then declining to 17.09% in 2024. This pattern reflects significant improvements in profitability and equity returns, enhanced when goodwill is factored out, although there is a correction or normalization observed in the final year.

Return on Assets (ROA)

A similar upward trend is observed for both reported and adjusted ROA ratios. Reported ROA increases from 1.36% in 2020 to a peak of 9.96% in 2023, followed by a decrease to 6.99% in 2024. Adjusted ROA values are slightly higher but share the same trend of growth and subsequent moderation, moving from 1.4% in 2020 to 10.71% in 2023 and declining to 7.46% in 2024. These trends suggest improved asset profitability over the period, with the adjusted figures indicating enhanced performance when goodwill adjustments are applied.

The data reveals a consistent growth in both reported and adjusted total assets over the five-year period ending in 2024. Reported total assets increased from 8,715 million US dollars in 2020 to 20,383 million US dollars in 2024, demonstrating substantial asset base expansion. Similarly, adjusted total assets, which exclude goodwill, rose from 8,474 million to 19,110 million US dollars during the same timeframe. This upward trend indicates ongoing investments or acquisitions despite goodwill adjustments.

Total asset turnover ratios present a different dynamic. Reported total asset turnover ratios exhibit a slight fluctuation within a narrow range, initially increasing from 0.52 in 2020 to 0.55 in 2021, then gradually decreasing to 0.52 in 2023 before rebounding slightly to 0.54 in 2024. This pattern suggests a relatively stable efficiency in using assets to generate revenue, with minor variability.

Adjusted total asset turnover ratios, which consider the total assets excluding goodwill, show a generally stronger performance compared to reported turnover ratios. Starting at 0.53 in 2020, it rose to 0.59 in 2021 and maintained a relatively high level with slight declines through 2023 and a modest increase to 0.57 in 2024. The adjusted ratios consistently exceed the reported ones, implying that goodwill impacts the turnover measure by inflating total assets without a corresponding increase in revenue generation.

Overall, the data depict a company experiencing robust asset growth while maintaining relatively stable and moderately improving efficiency in asset utilization, especially when adjusted for goodwill. The stable turnover ratios despite asset growth may reflect effective management of asset investments relative to revenue expansion.

Key observations:

Steady increase in both reported and adjusted total assets over five years, with reported assets slightly higher due to goodwill inclusion.

Reported total asset turnover ratios remain stable around the low 0.5 range, showing consistent asset usage efficiency.

Adjusted total asset turnover ratios are higher than reported ratios, indicating a positive impact of excluding goodwill on efficiency metrics.

Minor fluctuations in turnover ratios suggest some variability in operational efficiency but no significant declines or improvements.

The overall trend points to balanced asset growth paired with sustained operational efficiency.

The analysis of the financial data over the five-year period reveals clear trends in asset growth, equity expansion, and changes in financial leverage, both on a reported basis and after goodwill adjustment.

Total Assets

There is a consistent increase in reported total assets each year, rising from US$8,715 million in 2020 to US$20,383 million in 2024, reflecting more than a twofold increase over the period. Adjusted total assets follow a similar trajectory, increasing from US$8,474 million to US$19,110 million. The adjustment for goodwill results in slightly lower asset values but does not significantly alter the overall growth trend.

Stockholders’ Equity

Reported stockholders' equity exhibits a strong upward trend, growing from US$2,834 million in 2020 to US$9,609 million in 2024. Adjusted stockholders’ equity also rises steadily but at a somewhat slower pace, from US$2,594 million to US$8,336 million across the same timeframe. The difference between reported and adjusted equity indicates that goodwill has a material impact on equity valuation, though equity growth remains robust in both measures.

Financial Leverage

Reported financial leverage ratios exhibit a decreasing trend, moving from 3.07 in 2020 down to 2.12 in 2024. This suggests a reduction in the use of debt relative to equity, indicating an improvement in the balance sheet risk profile. Adjusted financial leverage demonstrates a slightly different pattern: it initially increases from 3.27 in 2020 to 3.43 in 2021, then declines to 2.29 in 2024. The temporary increase in adjusted leverage in 2021 could be attributed to goodwill adjustments impacting equity levels more significantly during that year. Overall, both reported and adjusted ratios show deleveraging over the period.

In summary, the company shows strong asset and equity growth accompanied by a gradual reduction in financial leverage, reflecting an improving financial structure. Goodwill adjustments lower asset and equity values but do not materially alter the observed trends in growth and leverage reduction.

The analysis of the financial data reveals several notable trends in both reported and goodwill-adjusted figures over the five-year period.

Stockholders’ Equity

Reported stockholders’ equity shows a consistent upward trend, increasing from US$2,834 million in 2020 to US$9,609 million in 2024. This marks a substantial growth, more than tripling in size over the five years. Similarly, the adjusted stockholders’ equity, which accounts for goodwill adjustments, also rises steadily from US$2,594 million in 2020 to US$8,336 million in 2024. The adjusted figures are consistently lower than reported values, reflecting the impact of goodwill deductions, but the overall pattern of strong growth is maintained.

Return on Equity (ROE)

Both reported and adjusted ROE demonstrate an increasing trend with fluctuations. Reported ROE starts at a low 4.18% in 2020, improves moderately to around 6.22% and 6.46% in the following two years, before experiencing a sharp increase to 22.69% in 2023, followed by a decline to 14.83% in 2024. Adjusted ROE follows a similar pattern, beginning at 4.57% in 2020 and rising gradually to 7.88% and 7.72% in 2021 and 2022 respectively. It peaks at 27.06% in 2023 and then decreases to 17.09% in 2024. The adjusted ROE values are consistently higher than reported ROE, indicating that the exclusion of goodwill impacts yields a more favorable return measure.

Overall, the company exhibits robust growth in equity levels, with a significant acceleration in profitability as measured by ROE notably in 2023. Despite the subsequent decline in 2024, ROE remains considerably higher than initial years, suggesting improved capital efficiency. The difference between reported and adjusted figures highlights the influence of goodwill on financial metrics, with adjusted figures portraying a slightly more optimistic profitability outlook.

The analysis of the financial data over the five-year period reveals several notable trends in the reported and goodwill-adjusted figures related to ServiceNow Inc.’s total assets and return on assets (ROA).

Total Assets

Both reported and adjusted total assets show a consistent upward trajectory from 2020 to 2024. Reported total assets increased from US$8,715 million in 2020 to US$20,383 million in 2024, representing more than a twofold growth over the period. Adjusted total assets, which presumably exclude goodwill, followed a similar growth pattern, increasing from US$8,474 million to US$19,110 million. This steady increase indicates ongoing asset accumulation, possibly reflecting business expansion, capital investments, or acquisitions.

Return on Assets (ROA)

ROA, both reported and adjusted, exhibits an overall positive trend, with some fluctuation towards the later years. Reported ROA rose from 1.36% in 2020 to a peak of 9.96% in 2023 before declining to 6.99% in 2024. Adjusted ROA values, which exclude goodwill effects, followed a similar pattern but showed slightly higher percentages throughout, peaking at 10.71% in 2023 and then decreasing to 7.46% in 2024. The substantial increase in ROA until 2023 suggests improved asset efficiency and profitability, while the subsequent decline in 2024 could indicate a slowdown in profit generation relative to asset growth or changes in operational dynamics.

Comparison Between Reported and Adjusted Figures

The adjusted figures consistently show lower total asset values compared to reported figures, reflecting the exclusion of goodwill. Similarly, adjusted ROA percentages are slightly higher, which may indicate that the removal of goodwill assets provides a more conservative and arguably more accurate measure of asset profitability. The trends in both reported and adjusted metrics closely mirror each other, suggesting that goodwill has a consistent but limited impact on the overall asset base and return performance.