ServiceNow Inc. (NYSE:NOW)

The financial leverage and various debt ratios of the company indicate a general trend of decreasing leverage and improving solvency over the observed periods.

Debt to equity ratio

This ratio shows a notable peak around September 30, 2020, reaching 0.64, followed by a gradual decline towards 0.14 by June 30, 2025. This indicates a steady reduction in reliance on debt financing relative to equity over time.

Debt to equity ratio including operating lease liability

Similarly, this broader measure also peaks near September 30, 2020, at 0.82, then consistently decreases to approximately 0.22 by June 30, 2025. This suggests the company is reducing both traditional debt and lease liabilities in relation to shareholder equity.

Debt to capital ratio

The ratio reaches its highest value, 0.39, in September 2020 and then declines progressively to 0.12 by mid-2025. This reflects a stronger capital structure with lower leverage.

Debt to capital ratio including operating lease liability

This ratio follows a comparable trajectory, peaking at 0.45 around September 2020 and descending to 0.18 by June 2025, indicating the same trend when lease liabilities are included.

Debt to assets ratio

The ratio increases to 0.22 in September 2020 and subsequently falls to 0.07 by June 2025. This decrease over time points to reduced debt in relation to total assets.

Debt to assets ratio including operating lease liability

After peaking at 0.29 in September 2020, the ratio steadily declines to 0.11 by June 2025, confirming the trend of de-leveraging when incorporating lease obligations.

Financial leverage

This metric climbs to a high of 3.07 at year-end 2020 but thereafter moves downward with some fluctuations, settling near 2.02 by mid-2025. The reduction in financial leverage suggests strengthening equity support relative to assets financed, though the ratio remains above 2, implying continued, although reduced, use of financial obligations to support assets.

Overall, the data indicates that the company experienced peak leverage and debt levels around the third quarter of 2020, after which a consistent deleveraging trend is observable across all metrics. This pattern suggests a strategic focus on reducing financial risk and improving the balance sheet structure over the subsequent years through mid-2025.

The total debt of the company shows a notable fluctuation starting from March 2020 through June 2021, with an initial value around 700 million US dollars increasing sharply to approximately 1.7 billion US dollars in September 2020 before stabilizing near 1.6 billion US dollars by the end of 2021. From 2022 onwards, the total debt remains relatively constant, fluctuating slightly between 1.48 billion and 1.49 billion US dollars through the projected period ending in June 2025.

Stockholders’ equity exhibits a consistent upward trend throughout the entire period. Starting from approximately 2.3 billion US dollars in March 2020, equity increases steadily quarter over quarter, reaching around 7.6 billion US dollars by December 2023 and projected to continue rising to approximately 10.9 billion US dollars by June 2025. This steady growth indicates an increasing net asset base and possibly reinvested earnings or capital raises over time.

The debt to equity ratio demonstrates a significant decline across the reporting timeline. Initially, the ratio fluctuates between 0.31 and 0.64 through 2020, indicating a relatively higher leverage during that period. Starting in 2021, the ratio steadily declines quarter over quarter from roughly 0.53 to a low of approximately 0.14 in mid-2025. This trend suggests a strengthening equity base relative to debt, reflecting improved financial leverage and potentially decreased risk from debt obligations.

Total Debt

Sharp increase in 2020 followed by stabilization around 1.5 billion US dollars.

Stockholders’ Equity

Consistent growth from 2.3 billion to over 10.9 billion US dollars by mid-2025.

Debt to Equity Ratio

Decrease from a peak of 0.64 in 2020 to a projected 0.14 in 2025, indicating reduced leverage.

Overall, the data reveals a capital structure that has evolved with a stable debt load accompanied by a strong increase in equity, reducing financial risk and enhancing the company’s balance sheet strength over the period analyzed.

The financial data reveals several notable trends in the company's capital structure over the analyzed periods.

Total Debt (including operating lease liability)

The total debt level showed an initial increase between March 2020 and September 2020, rising from approximately 1,203 million USD to 2,203 million USD. Following this peak, the debt level stabilized somewhat, fluctuating around the 2,100 to 2,200 million USD range through 2022 and 2023. Into 2024 and projections toward 2025 indicate a modest upward trend again, with total debt reaching approximately 2,409 million USD by June 2025. Despite some volatility, total debt has generally remained within a fairly narrow band over the latter periods.

Stockholders’ Equity

A steady and consistent increase is evident in stockholders' equity throughout the entire timeline. Starting at 2,266 million USD in March 2020, equity progressively grew each quarter, reaching 10,932 million USD by June 2025. This continuous growth suggests strong retained earnings, equity issuances, or other positive comprehensive income factors contributing to the balance sheet strength.

Debt to Equity Ratio

The debt to equity ratio has exhibited a clear downward trajectory, reflecting an improving leverage profile. From a high of 0.82 in September 2020, the ratio declined steadily to 0.22 by June 2025. This indicates that while total debt remained relatively stable or slightly increased, the growth in equity outpaced debt expansion, reducing reliance on debt financing and increasing financial stability.

Overall, the analysis highlights a strategic shift toward strengthening the equity base relative to debt obligations. The company's ability to maintain manageable debt levels while significantly increasing equity suggests improved financial flexibility and potentially lower risk from a capital structure standpoint over the forecasted periods.

The financial data reveals trends in total debt, total capital, and the debt-to-capital ratio over a series of quarterly periods.

Total Debt

Total debt started at 701 million US dollars and showed a substantial increase by the third quarter of 2020, reaching a peak of approximately 1706 million US dollars. From that point onward, total debt remained relatively stable, fluctuating slightly but staying close to the range of 1485 to 1490 million US dollars toward the later periods. This indicates a significant reduction after the mid-2020 peak and a subsequent stabilization in borrowing levels.

Total Capital

Total capital demonstrated continuous growth throughout the observed periods. Beginning at 2967 million US dollars, it increased steadily quarter over quarter, reaching 12,422 million US dollars by the latest period. This consistent upward trend signifies ongoing capital accumulation and possible reinvestment or equity financing activities contributing to the overall expansion of the company’s capital base.

Debt to Capital Ratio

The debt-to-capital ratio displayed a general downward trajectory. Initially at 0.24, the ratio declined sharply after mid-2020 from a high near 0.39 down to 0.12 by the last reported period. This decreasing ratio is indicative of a relative reduction in financial leverage, meaning debt constitutes a shrinking proportion of the overall capital structure over time. The trend suggests improved financial stability or possibly a strategic effort to reduce reliance on debt financing.

Overall, the data indicates a significant deleveraging phase following a spike in debt, coupled with sustained capital growth and a consequent lowering of debt reliance. This pattern reflects a strengthening capital position and a possible emphasis on long-term financial soundness.

The financial data reveals several notable trends regarding the company's debt and capital structure over the analyzed quarters from March 2020 to June 2025.

Total Debt (including operating lease liability)

The total debt exhibits an initial increase from approximately 1,200 million USD in the early quarters of 2020 to over 2,200 million USD by the end of 2020. Thereafter, the debt levels fluctuate within a range of roughly 2,100 to 2,400 million USD through the forecasted periods, showing slight increases toward the latter quarters ending in 2025. Overall, debt remains relatively stable with a modest upward trend in the later years.

Total Capital (including operating lease liability)

The total capital shows consistent and pronounced growth over the entire period. Starting from about 3,470 million USD in early 2020, there is a steady rise quarter over quarter, reaching approximately 13,340 million USD by mid-2025. The upward trajectory suggests ongoing capital expansion, possibly due to increased equity or retained earnings beyond debt increments.

Debt to Capital Ratio (including operating lease liability)

The ratio of debt to capital indicates a clear downward trend throughout the timeline. Initially, the ratio is at 0.35 in early 2020 and decreases steadily, falling below 0.20 around 2024 and continuing slightly downward to approximately 0.18 by mid-2025. This declining ratio reflects a reduction in leverage, meaning that while total debt remains fairly constant, the company is increasing its capital base significantly, thus reducing financial risk associated with debt.

In summary, the data suggests the company is pursuing a strategy of controlled debt levels alongside aggressive capital growth. This improved capital structure is evidenced by the decreasing debt-to-capital ratio, pointing to enhanced financial stability and potentially greater capacity for future investments or creditworthiness. The stability in debt combined with expanding capital may also indicate a focus on equity financing or accumulation of retained earnings to support growth initiatives.

The quarterly financial data demonstrates a discernible evolution in the company's capital structure and asset base over the observed periods. The total debt figures exhibit relative stability with a marginal increase over time, beginning at approximately 701 million US dollars in early 2020 and trending towards around 1,490 million US dollars by mid-2025. This suggests prudent debt management with no abrupt expansions in borrowings.

Meanwhile, total assets have shown consistent growth across the timeframe, increasing from roughly 6,197 million US dollars in the first quarter of 2020 to an estimated 22,051 million US dollars by mid-2025. The sustained upward trajectory in total assets indicates ongoing investments or asset acquisitions supporting business expansion or operational scaling efforts.

The ratio of debt to assets has progressively declined from 0.11 in early 2020 to about 0.07 by mid-2025. This downward trend reflects an improving financial leverage position, whereby the firm relies less on debt relative to its asset base. A decreasing debt-to-assets ratio signals enhanced solvency and potentially lower financial risk, contributing positively to the company's credit profile.

Overall, the data indicates a firm that is expanding its asset base at a faster pace than its debt, thereby strengthening its balance sheet and reducing leverage over time. This combination of stable debt levels alongside growing assets and improving leverage ratios typically aligns with a strategy focused on sustainable growth and financial stability.

Total Debt

Remained relatively steady, increasing modestly from about 701 million to around 1,490 million US dollars over the five-year span.

Total Assets

Exhibited continuous growth, more than tripling from approximately 6,197 million to 22,051 million US dollars, reflecting expansion and investment activities.

Debt to Assets Ratio

Declined consistently from 0.11 to 0.07, indicating reduced leverage and an enhanced capacity to cover debt with assets.

Total Debt (including operating lease liability)

The total debt showed an initial increase from 1,203 million US dollars in March 2020 to a peak of 2,232 million US dollars by December 2022. Afterward, the debt level fluctuated slightly, remaining generally stable around 2,200 to 2,400 million US dollars through mid-2025. This indicates an overall more than doubling of debt from early 2020 to 2025, with some periods of minor declines and recoveries.

Total Assets

Total assets exhibited a consistent upward trend throughout the period, growing substantially from 6,197 million US dollars in March 2020 to 22,051 million US dollars by mid-2025. The growth accelerated notably after 2021, with large incremental increases observed especially in late 2022 and continuing through 2024 and early 2025. This signifies substantial asset base expansion over these years.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio demonstrated a declining trend over the entire period. Starting at 0.19 in March 2020, the ratio peaked temporarily at 0.29 in September 2020 before progressively falling to approximately 0.11 by mid-2025. This decline suggests that asset growth outpaced increases in debt, reflecting a strengthening balance sheet position and reduced leverage relative to the asset base over time.

Overall Analysis

The financial data indicate that while absolute debt levels more than doubled over the five-year horizon, the company's asset growth significantly exceeded this increase. The reduction in the debt to asset ratio from 0.19 to 0.11 highlights a substantial improvement in leverage and capital structure. This pattern suggests an emphasis on building asset capacity while managing debt prudently, potentially enhancing financial stability and flexibility.

The analysis of the quarterly financial data reveals several noteworthy trends and changes related to the company's assets, equity, and financial leverage over the observed periods.

Total Assets

The total assets show an overall increasing trend from $6,197 million in March 2020 to $22,051 million by June 2025. This represents a substantial growth in the asset base. The increase is relatively steady with some periods of accelerated growth, notably between December 2022 and December 2023, where assets jumped from $13,299 million to $17,387 million. The progression indicates robust expansion and possibly significant investments or acquisitions.

Stockholders’ Equity

Stockholders’ equity also exhibits consistent growth, rising from $2,266 million in March 2020 to $10,932 million by June 2025. Similar to total assets, equity growth is steady with marked acceleration in the periods from March 2023 to June 2024, where equity increased from $5,600 million to $8,666 million. This steady increase in equity suggests ongoing profitability and potential retained earnings accumulation or equity increases via other financing means.

Financial Leverage

The financial leverage ratio, defined as the ratio of total assets to stockholders' equity, shows a declining trend over the periods. Starting at 2.73 in March 2020, it falls to 2.02 by June 2025. This decline indicates a reduction in relative indebtedness or reliance on liabilities compared to equity. Particularly from March 2023 onwards, the ratio decreases more markedly from 2.43 to values near or just above 2.0, suggesting a strengthening equity base relative to liabilities.

In summary, the company demonstrates strong asset growth accompanied by a rising equity base, which helps reduce financial leverage over time. This pattern reflects improved capitalization and potentially lower financial risk, consistent with strategic growth and enhanced financial stability throughout the observed quarters.