ServiceNow Inc. (NYSE:NOW)

The analyzed financial data reveals several noteworthy trends in profitability and capital structure indicators over the examined periods.

Return on Assets (ROA)

Starting from the first available measurement in March 2021 at 1.36%, ROA exhibited a general upward movement through to December 2021 with a peak of 2.33%. Following a slight decline in early 2022, ROA again rallied, reaching a prominent high of 10.99% by December 2023. After this peak, the metric experienced a substantial dip, falling to 6.29% by March 2025, although a mild recovery was noted by the end of the period, closing near 7.33%. This pattern indicates a phase of increasing efficiency in asset utilization, peaking sharply before settling at moderately elevated levels relative to earlier periods.

Financial Leverage

Financial leverage started relatively high, near 2.73 in early 2020, and underwent a gradual downward trend throughout the entire timeline. The leverage ratio declined steadily from around 2.9 in early 2021 to around 2.1 by the end of 2024 and early 2025, with a minor fluctuation observed in 2023. This reduction suggests a cautious deleveraging approach, possibly reflecting efforts to strengthen the equity base or reduce dependency on debt financing.

Return on Equity (ROE)

ROE followed a pattern similar to ROA, beginning at 4.18% in March 2021 and rising cautiously during 2021 to over 6.24% by the end of the year. The growth accelerated markedly from 2022 onward, culminating in a significant peak of 23.78% in December 2023. Post this peak, ROE decreased but maintained relatively strong levels averaging around 14% in early 2025. The pronounced increase and subsequent stabilization at elevated levels align with the improved asset returns and decreasing leverage, indicating enhanced returns generated on shareholder equity.

Overall, the company experienced significant improvements in profitability metrics during the covered period, especially highlighted by a sharp rise in ROE and ROA by late 2023. Concurrently, the decreasing financial leverage ratio suggests a strategic shift towards a more conservative capital structure. The trends point to an operational phase characterized by improved profitability and greater financial stability, albeit with some fluctuations in returns after reaching peak values.

The financial ratios over the analyzed quarters reveal distinct trends in profitability, efficiency, leverage, and return on equity for the company.

Net Profit Margin

The net profit margin shows a general upward trajectory beginning in early 2021, starting from approximately 2.62% and rising steadily through 2023 to peak around 20.34% by the end of 2023. Following this peak, the margin experiences a decline in 2024, stabilizing between roughly 11.51% and 13.41%. This indicates improved profitability over the initial periods with some normalization after a strong peak.

Asset Turnover

Asset turnover ratios exhibit moderate fluctuations but remain relatively stable within a range of 0.52 to 0.62 over the entire period. Early quarters in 2020 show values around 0.52 to 0.58, followed by slight increases and decreases, indicating consistent efficiency in using assets to generate revenue without significant long-term changes.

Financial Leverage

Financial leverage demonstrates a declining trend over time. Starting higher at ratios near 3.07 in late 2020, the leverage steadily decreases to values approximately between 2.07 and 2.28 in 2024 and 2025. This suggests a reduction in the use of debt relative to equity, possibly pointing to a more conservative capital structure or improved equity base.

Return on Equity (ROE)

ROE follows a pattern somewhat similar to net profit margin, with notable growth beginning in early 2021 from around 4.18%, increasing steadily to reach a peak exceeding 23% by the end of 2023. After this peak, a decline is observed in 2024, stabilizing between 13.22% and 15.17%. This trend mirrors profitability improvements and reflects enhanced performance generating shareholder returns, followed by a moderation phase.

In summary, the company exhibits strong growth in profitability metrics such as net profit margin and ROE through 2023, accompanied by a reduced reliance on financial leverage. Asset efficiency remains stable throughout, indicating consistent operational performance. The moderation in profitability ratios post-2023 suggests a potential normalization after a period of exceptional results.

The net profit margin demonstrates a generally positive trend over the periods analyzed, starting at a low point in early 2020 with no available data but showing a discernible increase beginning in March 2021. From that point, the margin climbed from approximately 2.62% to reach peaks above 19% in late 2023. After this significant rise, a moderate decline followed, stabilizing around the range of 11.5% to 13.4% towards early 2025, which still indicates improved profitability compared to the initial periods.

Asset turnover ratios reflect a stable yet slightly fluctuating pattern. Beginning at around 0.52 in March 2021, the ratio saw incremental increases up to roughly 0.62 in late 2021. The subsequent periods disclose minor oscillations, mostly staying between 0.54 and 0.57, suggesting consistent efficiency in asset utilization with no dramatic shifts in operational effectiveness over the entire timeline.

Return on assets (ROA) exhibits a similar trajectory to the net profit margin, signifying improvements in overall asset efficiency and profitability. Starting near 1.36% in early 2021, ROA rose steadily to exceed 10% by late 2023. This peak was followed by a reduction, with figures stabilizing around 6.3% to 7.3% in the most recent quarters. Despite the decrease from peak levels, this performance still represents a marked improvement relative to the earlier periods.

Net Profit Margin

Significant growth from early 2021 through late 2023, peaking near 20%, followed by a moderate decrease and stabilization above 11% into 2025.

Asset Turnover

Generally stable with slight fluctuations, maintaining a range between 0.52 and 0.62, denoting steady asset usage efficiency over time.

Return on Assets (ROA)

Consistent upward trend parallel to net profit margin, rising to nearly 10% by late 2023 before tapering to around 7% in 2025, indicating improved asset profitability.

Overall, the data depicts a phase of substantial improvement in profitability and asset return in the mid-term, followed by some normalization in more recent quarters. Asset utilization remained relatively constant throughout, implying that increased profitability was likely driven by factors beyond just asset efficiency, such as operational improvements or changes in cost structure.