Stock Analysis on Net

ServiceNow Inc. (NYSE:NOW)

Cash Flow Statement 
Quarterly Data

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

ServiceNow Inc., consolidated cash flow statement (quarterly data)

US$ in millions

Microsoft Excel
3 months ended: 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
Net income 460 384 432 262 347 295 242 1,044 150 150 80 20 75 26 63 59 82 17 13 41 48
Depreciation and amortization 160 154 144 136 130 154 146 136 126 118 109 105 101 126 125 115 106 93 85 82 76
Amortization of deferred commissions 145 147 140 132 131 126 115 112 106 97 92 86 83 83 75 70 66 60 56 52 49
Stock-based compensation 470 454 426 444 422 413 413 397 381 363 361 352 325 303 291 281 256 245 220 217 188
Deferred income taxes 32 51 (5) 24 28 17 30 (911) 7 18 (1) (2) (13) (5) (17) 1 (18) (3) (2) (2)
Other 4 (20) (6) (7) (18) 13 (11) (3) 1 8 (10) 4 15 18 13 (1) 10 (9) (19) 4 11
Accounts receivable 901 (981) 228 (216) 715 (852) (83) 16 619 (785) (66) (51) 562 (620) (5) (130) 354 (362) 10 (9) 209
Deferred commissions (155) (252) (155) (141) (165) (264) (173) (121) (159) (197) (132) (100) (137) (221) (127) (103) (114) (144) (77) (73) (71)
Prepaid expenses and other assets (139) (65) (15) (146) (106) (20) (47) (72) (64) 34 (1) (26) (46) (15) (21) (54) (3) (13) (9) (12) (20)
Accounts payable 234 (94) (130) 65 107 46 (98) (44) (46) 56 (24) 71 69 16 (36) (14) 89 (35) (36) 17 21
Deferred revenue (148) 1,534 (263) (82) (10) 1,302 (128) (129) 40 1,060 (112) (65) 21 913 (38) 10 75 644 (3) 9 60
Accrued expenses and other liabilities (287) 323 (125) 149 (240) 375 (95) 155 (259) 240 (32) 38 (203) 228 (15) 84 (195) 206 5 42 (78)
Changes in operating assets and liabilities, net of effect of business combinations 406 465 (460) (371) 301 587 (624) (195) 131 408 (367) (133) 266 301 (242) (207) 206 297 (110) (26) 120
Adjustments to reconcile net income to net cash provided by operating activities 1,217 1,251 239 358 994 1,310 69 (464) 752 1,012 185 413 788 818 257 241 645 669 229 327 443
Net cash provided by operating activities 1,677 1,635 671 620 1,341 1,605 311 580 902 1,162 265 433 863 844 320 300 727 686 241 368 492
Purchases of property and equipment (205) (253) (202) (262) (135) (261) (136) (132) (165) (144) (162) (151) (93) (100) (94) (91) (107) (134) (92) (110) (83)
Business combinations, net of cash acquired (18) (31) (41) (31) (10) (279) (34) (57) (7) (40) (513) (225) (25) (83)
Purchases of other intangibles (34) (10) (9) (21) (3)
Purchases of investments (1,140) (1,079) (1,292) (1,055) (1,605) (829) (984) (1,599) (1,222) (1,227) (1,037) (1,112) (662) (744) (609) (488) (644) (705) (1,121) (580) (528)
Purchases of non-marketable investments (4) (32) (61) (46) (42) (19) (10) (16) (30) (29) (2) (35) (101) (43) (21) (7)
Sales and maturities of investments 1,181 728 911 1,040 1,073 654 915 1,073 880 545 569 554 577 540 556 491 532 666 534 453 313
Other 3 (61) 27 (8) 6 11 (28) 13 15 3 1 (1) (5) 11 (6) 7 (5) 2 (6) (4)
Net cash used in investing activities (217) (738) (658) (371) (734) (444) (525) (674) (524) (874) (629) (800) (280) (359) (197) (614) (437) (177) (702) (243) (385)
Net proceeds from borrowings on 2030 Notes 1,482
Repayments of convertible senior notes attributable to principal (88) (6) (2) (6) (25) (28) (59) (1,553) (14) (2)
Net proceeds from unwind of 2022 Note Hedge 1,106
Proceeds from employee stock plans 153 106 131 1 76 117 71 1 105 2 70 95 3 51 24 67
Repurchases of common stock (298) (296) (225) (175) (256) (282)
Taxes paid related to net share settlement of equity awards (253) (175) (173) (137) (215) (126) (127) (94) (112) (75) (111) (91) (150) (155) (142) (124) (191) (148) (122) (113) (126)
Business combination (184)
Net cash provided by (used in) financing activities (398) (471) (292) (137) (443) (381) (333) (94) 5 (75) (40) (178) (51) (155) (78) (149) (124) (203) 963 (102) (61)
Foreign currency effect on cash, cash equivalents and restricted cash 5 (9) 5 (9) (4) 5 (4) (1) 1 8 (12) (44) (5) (4) (10) 7 (18) 22 8 6 (11)
Net change in cash, cash equivalents and restricted cash 1,067 417 (274) 103 160 785 (551) (189) 384 221 (416) (589) 527 326 35 (456) 148 328 510 29 35

Based on: 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).


Net Income
The net income displays significant volatility across the periods, starting at $48 million in March 2020, dipping through 2020 with some lows in December 2021 ($26 million) and June 2022 ($20 million), then rising sharply to a peak of $1044 million in June 2023. Thereafter, it fluctuates but remains elevated relative to earlier periods, ending at $460 million in March 2025.
Depreciation and Amortization
Depreciation and amortization steadily increase throughout the periods from $76 million in March 2020 to $160 million by December 2024, showing a consistent upward trend, suggesting growing capital expenditures or acquisitions.
Amortization of Deferred Commissions
This item shows a rising trend from $49 million at the start to $145 million by March 2025, indicating increased upfront sales costs being recognized as expenses over time, consistent with business growth.
Stock-Based Compensation
Stock-based compensation expenses increase persistently, from $188 million in early 2020 to $470 million by the first quarter of 2025. This steady rise suggests an increasing use of equity incentives, which could affect profitability and cash flow.
Deferred Income Taxes
Deferred income taxes fluctuate markedly, with some negative spikes such as -$911 million in March 2023, showing episodic significant tax effects which impact net income and cash flow calculations. Values vary between positive and negative, reflecting tax timing differences.
Accounts Receivable
Accounts receivable values are highly erratic, showing large positive and negative swings between quarters, with values ranging from -$981 million to $715 million. This reflects variations in revenue recognition or collection patterns, potentially impacting working capital management.
Deferred Commissions
Deferred commissions are generally negative, fluctuating between -$264 million and -$71 million, indicating the weighted recognition of commission expenses over periods consistent with revenue trends.
Prepaid Expenses and Other Assets
These assets show variable negative balances with no clear trend, ranging from -$146 million to positive $34 million, possibly indicating fluctuating prepayments or other asset adjustments.
Accounts Payable
Accounts payable values oscillate without a strong trend, with notable negative values observed in several quarters and a peak at $234 million in March 2025, which may indicate changes in payment timing or vendor credit.
Deferred Revenue
Deferred revenue shows pronounced fluctuations, peaking significantly at $1534 million in March 2025 and also notable high values in December quarters of 2021 and 2022. This pattern reflects seasonality in revenue recognition and customer billing cycles.
Accrued Expenses and Other Liabilities
This item shows alternating positive and negative values, ranging from -$287 million to $375 million, indicating variability in accrued liabilities and other short-term obligations, which affect operating cash flows and working capital.
Changes in Operating Assets and Liabilities
These changes are volatile, ranging between -$624 million to $587 million, showing substantial fluctuations impacting operating cash flows, suggestive of dynamic working capital adjustments aligned with business activities.
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Adjustments vary widely, peaking at $1310 million in December 2023, aligning with the notable net income increase, and demonstrating the non-cash components and other reconciliations impacting cash flow reporting.
Net Cash Provided by Operating Activities
Operating cash flow generally trends upwards, reaching a high of $1677 million in March 2025, despite intermittent declines, reflecting overall business growth and improving cash conversion despite income volatility.
Purchases of Property and Equipment
Capital expenditures fluctuate but generally increase from around $83 million in March 2020 to peaks above $260 million in multiple later quarters, indicating sustained investment in physical assets.
Business Combinations
Cash outflows for business combinations show sporadic large negative amounts, such as -$513 million in June 2021 and -$279 million in December 2023, reflecting continued acquisitions contributing to growth.
Purchases of Other Intangibles
These purchases are relatively small but increase in frequency in later periods, indicating investments in intangible assets possibly related to technology or intellectual property.
Purchases and Sales of Investments
Purchases of investments remain substantial and volatile, generally exceeding sales and maturities, reflecting aggressive investment activities. Sales and maturities show somewhat steadier positive inflows, but net investing cash flows remain negative.
Net Cash Used in Investing Activities
Investing cash flows are consistently negative, often in several hundred million dollars per quarter, illustrating significant ongoing investment and acquisition activity which absorbs considerable cash.
Net Cash Provided by (Used in) Financing Activities
Financing activities alternate between negative and some positive spikes, such as $963 million in September 2020, associated with debt issuance. Recent periods show consistent net cash outflows due to stock repurchases and other financing activities, indicative of capital return strategies.
Net Change in Cash, Cash Equivalents and Restricted Cash
Cash levels exhibit volatility influenced by the combination of operating, investing, and financing activities, with large positive changes in quarters such as September 2020 and March 2025, and significant negative dips indicating episodes of liquidity use and replenishment.