ServiceNow Inc. (NYSE:NOW)

The Return on Assets (ROA) exhibited significant fluctuations over the observed period. Initially, the ROA was negative, indicating that the company did not generate sufficient profit relative to its assets. A substantial improvement in profitability occurred in later years, culminating in consistently positive ROA values.

Initial Period (2012-2016)

From 2012 through 2016, the ROA remained negative, demonstrating a consistent inability to generate earnings from its asset base. The magnitude of the negative ROA increased substantially from -7.81% in 2012 to -22.22% in 2016, suggesting worsening profitability relative to asset investment during this timeframe. Net income was consistently negative during this period, contributing to the negative ROA.

Transition and Improvement (2017-2019)

A turning point occurred in 2017, with the ROA becoming less negative at -4.39%. This improvement continued into 2018, although the ROA remained slightly negative at -0.69%. By 2019, the ROA had become significantly positive, reaching 10.41%, driven by a substantial increase in net income. This period reflects a successful shift towards profitability.

Sustained Positive Performance (2020-2025)

From 2020 onwards, the ROA remained consistently positive, indicating effective asset utilization in generating profits. While the ROA experienced some moderation from its peak of 10.41% in 2019, it remained within a relatively stable range of 1.36% to 6.71% between 2020 and 2025. This suggests a sustained ability to generate earnings from its asset base. The ROA in 2024 and 2025 were relatively similar, at 6.99% and 6.71% respectively.

The trend in ROA closely mirrors the trend in net income. Periods of net loss corresponded with negative ROA, while positive net income resulted in positive ROA. The growth in total assets appears to have been managed effectively in conjunction with the improvement in net income, contributing to the positive ROA trend observed in the later years.