Stock Analysis on Net
Stock Analysis on Net

ServiceNow Inc. (NYSE:NOW)

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Common-Size Income Statement
Quarterly Data

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ServiceNow Inc., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Sep 30, 2025 Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Subscription
Professional services and other
Revenues
Subscription
Professional services and other
Cost of revenues
Gross profit
Sales and marketing
Research and development
General and administrative
Operating expenses
Income from operations
Interest income
Other income (expense), net
Income before income taxes
(Provision for) benefit from income taxes
Net income

Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).

Revenue Composition
The proportion of subscription revenue consistently represents the majority of total revenues, fluctuating slightly but showing a gradual upward trend from around 95.06% in early 2020 to approximately 96.83% by late 2025. Conversely, revenue from professional services and other categories has generally decreased over the period, dropping from about 4.94% to near 3.17% of total revenues, indicating a strategic emphasis on subscription-based offerings.
Cost of Revenues and Gross Profit
The cost of revenues as a percentage of total revenues has remained relatively stable, generally around the low 20% range with minor fluctuations. Gross profit margins correspondingly have been strong and somewhat stable, typically around 77% to 80%, reflecting efficient cost management relative to revenue generation over the period.
Operating Expenses
Operating expenses, comprising sales and marketing, research and development (R&D), and general and administrative expenses, demonstrate varied trends:
Sales and Marketing
This expense category shows a downward trend over time, decreasing from over 42% of revenues in early 2020 to approximately 31% by the end of 2025, suggesting increasing efficiency or cost control in customer acquisition and retention activities.
Research and Development
R&D expenses have remained relatively stable, generally fluctuating near the low-to-mid 20% range of revenues, indicating sustained investment in product development and innovation throughout the period.
General and Administrative
G&A expenses have declined moderately from around 10% to approximately 7.5% of revenues, reflecting possible efficiency gains in administrative operations.
Operating Income
Income from operations as a percentage of revenues exhibits an overall upward trend with some fluctuations, strengthening from a low of approximately 1.43% in late 2020 to around 16.79% by late 2025. This improvement signals enhanced operational profitability, driven by controlled operating expenses and stable gross profit margins.
Interest and Other Income (Expense)
Interest income as a percentage of revenues has progressively increased, shifting from a negative impact in early 2020 to a positive contribution near 3.4% to 3.9% in recent periods. Other income or expense, net, remains small relative to revenues with occasional minor negative values, suggesting these items are not significant drivers of overall profitability.
Income Before Income Taxes and Net Income
Pre-tax income displays a significant upward trajectory over the reviewed periods, rising from lows near 1% or 2% to peaks exceeding 20%, suggesting increasingly effective overall financial performance. Net income follows a similar pattern, improving markedly and reaching above 14% of revenues by the end of the period, aside from a notable spike around mid-2023 which may reflect an extraordinary income tax benefit. The tax provision typically consumes 2-3% of revenues but demonstrates volatility, including a major positive anomaly in mid-2023 which temporarily boosted net income.
Summary
Overall, the data reflects a company with a strong subscription revenue focus, improving profitability through controlled cost structures and rising operating margins. Sustained investments in research and development are maintained alongside improvements in sales, marketing, and administrative efficiencies. Financial income contributes positively over time, and despite fluctuations in tax provisions, net income shows a solid upward trend indicative of growing financial health and operational success.