ServiceNow Inc. (NYSE:NOW)

Debt to Equity Ratio

The debt to equity ratio shows an overall declining trend from March 31, 2020, (0.31) through March 31, 2025, (0.15). Initially, there was a spike to 0.64 in September 30, 2020, before it began to steadily decrease over subsequent quarters. This indicates a reduction in the company's reliance on debt relative to equity over time.

Debt to Equity Ratio (Including Operating Lease Liability)

This ratio follows a similar decreasing pattern as the standard debt to equity ratio but starts from a higher base of 0.53 in March 31, 2020. It peaked at 0.82 in September 30, 2020, then consistently declined to 0.24 by March 31, 2025. The inclusion of operating lease liabilities highlights a higher initial leverage level, yet the improvement trend remains clear.

Debt to Capital Ratio

The debt to capital ratio decreased from 0.24 in March 31, 2020, to 0.13 by March 31, 2025, indicating reduced use of debt financing in the company’s capital structure. A notable rise occurred around the third quarter of 2020, reaching 0.39, before decreasing steadily thereafter.

Debt to Capital Ratio (Including Operating Lease Liability)

This ratio, which factors in operating lease liabilities, starts at 0.35 in March 31, 2020, and follows a downward trajectory to 0.19 by March 31, 2025. The temporary increase to 0.45 in September 2020 parallels the patterns seen in other debt ratios, and the subsequent decline suggests strengthening financial positioning concerning total capital.

Debt to Assets Ratio

The debt to assets ratio exhibits a decline from 0.11 in March 31, 2020, to 0.07 by March 31, 2025, with a sharp peak of 0.22 in September 2020. The progressively lower ratio implies that the company is reducing its debt relative to its asset base over time.

Debt to Assets Ratio (Including Operating Lease Liability)

When considering operating lease liabilities, this ratio starts at 0.19 and falls to 0.11 by March 31, 2025. The pattern of a peak around September 2020 followed by consistent improvement illustrates a significant reduction in overall leverage related to total assets.

Financial Leverage Ratio

Financial leverage shows fluctuations across the periods with an initial value of 2.73 in March 2020, rising to a peak of 3.07 at the end of 2020. It then generally declines to 2.07 by March 2025, with some moderate variations in between. This suggests a gradual decrease in the reliance on debt financing or increase in equity relative to assets, reflecting a moderately stronger equity base over time.

Total Debt

The total debt showed a significant increase from March 31, 2020, when it was 701 million USD, to a peak around September 30, 2020, reaching 1706 million USD. From that point onward, the total debt gradually decreased and stabilized in the range of approximately 1485 to 1490 million USD from mid-2022 through March 31, 2025.

Stockholders’ Equity

Stockholders’ equity demonstrated a consistent upward trend over the entire period. Starting at 2266 million USD in March 31, 2020, the equity increased steadily each quarter, reaching 10,139 million USD by March 31, 2025. Notably, the pace of increase accelerated after December 31, 2021, with substantial growth particularly observable from March 31, 2023 onward.

Debt to Equity Ratio

The debt to equity ratio followed a clear declining trend, indicating improving financial leverage. Beginning at 0.31 in March 31, 2020, the ratio spiked to 0.64 at September 30, 2020, concurrent with the surge in total debt. Thereafter, it steadily decreased quarter over quarter, reaching 0.15 by March 31, 2025. This trend reflects a reduction in debt relative to the rise in equity, suggesting a stronger equity position and lower reliance on debt financing over time.

Overall Insights

The data suggests an initial period of increased borrowing in 2020, with peak total debt recorded in the third quarter of that year. Following this, debt levels were managed effectively, resulting in a stabilized and lower absolute debt position. Simultaneously, the company maintained strong growth in stockholders’ equity throughout the period, contributing to a marked improvement in the debt to equity ratio. The continuous increase in equity coupled with relatively stable debt levels points to enhanced financial strength and potentially greater capacity for future investments without incurring additional leverage risk.

The analysis of the provided quarterly financial data reveals distinct trends in the company's leverage and equity growth over the examined periods.

Total Debt (including operating lease liability)

The total debt fluctuated between approximately 1.2 billion and 2.4 billion US dollars throughout the timeframe. Initially, the debt was around 1.2 billion in early 2020, followed by a notable increase to above 2.2 billion in late 2020. Thereafter, total debt showed a relatively stable pattern with minor fluctuations generally remaining slightly above 2.1 billion until early 2023. From 2023 onwards, there was a gradual upward trend, with debt rising to nearly 2.4 billion by the first quarter of 2025.

Stockholders’ Equity

Stockholders' equity displayed a consistent and significant upward trajectory. Starting from approximately 2.3 billion in the first quarter of 2020, equity increased steadily period over period. Noteworthy growth occurred particularly after early 2022, with equity surpassing 5 billion by the end of 2022 and continuing to accelerate, reaching over 10 billion by the first quarter of 2025. This reflects sustained capital accumulation and likely robust retained earnings or equity financing.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio demonstrated a clear declining trend across the timeframe. It started at 0.53 in the first quarter of 2020, spiked to 0.82 by September 2020, likely due to the temporary increase in debt, before steadily declining thereafter. The ratio consistently decreased from 0.75 at the end of 2020 to below 0.3 from 2023 onwards, stabilizing at 0.24 in early 2025. This indicates an improving capital structure with relatively less dependence on debt financing compared to equity.

In summary, the data shows that while total debt saw initial growth and then relative stability with a slight rise towards the end of the period, stockholders' equity expanded significantly and consistently. This resulted in a notably improved debt-to-equity ratio, signaling stronger financial leverage and an increasingly equity-driven capital structure over the analysis period.

The financial data reveals several important trends over the periods from March 31, 2020, through March 31, 2025, with a focus on total debt, total capital, and the debt-to-capital ratio.

Total debt

Total debt started at $701 million in March 2020 and experienced a significant increase to a peak of $1,706 million in September 2020. Following this spike, total debt stabilized around the range of $1,570 million to $1,490 million for the remainder of the periods. From March 2022 onward, total debt remained relatively flat, fluctuating marginally near $1,485 million to $1,490 million through March 2025.

Total capital

Total capital showed consistent growth throughout the entire period. It increased steadily from $2,967 million in March 2020 to $11,629 million by March 2025. This represents a nearly fourfold increase in total capital over five years, illustrating strong capital expansion during this timeframe. The growth accelerated particularly from mid-2022 onwards, with quarterly increments becoming larger, underscoring an expanding capital base.

Debt to capital ratio

The debt to capital ratio exhibits a clear downward trend throughout the periods reported. Starting at 0.24 in March 2020, it initially rose to a peak of 0.39 in September 2020, coinciding with the spike in total debt. After this peak, the ratio declined steadily, dropping to 0.13 by March 2025. This decrease reflects the proportionally faster increase in total capital relative to the relatively stable total debt levels, indicating an improving capital structure and reduced leverage.

In summary, despite a considerable rise in total debt in 2020, the company managed to maintain total debt at stable levels thereafter while significantly expanding its capital base. This has led to a continuous reduction in the debt-to-capital ratio, suggesting strengthening financial stability and a more conservative leverage profile over time.

Total Debt (including operating lease liability)

The total debt level experienced an initial increase from 1,203 million USD in March 2020 to a peak nearing 2,227 million USD by December 2021. Subsequently, debt remained relatively stable, fluctuating slightly around the 2,200 million USD level through mid-2023. Starting from early 2024, there is a moderate upward trend in total debt, reaching approximately 2,399 million USD by March 2025.

Total Capital (including operating lease liability)

Total capital exhibited a steady upward trend over the entire period. From 3,469 million USD in March 2020, it progressively rose with minor acceleration phases, notably from mid-2022 onward. The capital base grew significantly during 2023 and into early 2025, increasing from roughly 7,838 million USD in March 2023 to about 12,538 million USD in March 2025.

Debt to Capital Ratio (including operating lease liability)

This ratio indicates a declining trend throughout the period under review. Beginning at 0.35 in March 2020, it peaked around mid-2020 at 0.45 but then demonstrated a consistent decrease. By the end of 2021, the ratio had fallen to approximately 0.31, further dropping to 0.24 during early 2023. The decline continued steadily, reaching a low of about 0.19 from mid-2023 onward and maintaining this level through March 2025. This trend suggests an improving capital structure with relatively reduced leverage over time.

Summary of Trends

Overall, the data illustrates a significant expansion in the total capital base, supported by a relatively stable but slightly increasing debt level in the latter part of the period. The steady reduction in the debt-to-capital ratio signals an improvement in the company's financial leverage position, indicating a stronger equity base or capital structure relative to debt. The moderation in debt growth alongside substantial capital increases suggests a strategic focus on enhancing financial stability and potentially lowering risk exposure associated with debt financing.

The financial data reveals several noteworthy trends related to debt, assets, and leverage ratios over multiple quarters. Analyzing the movements in total debt, total assets, and the debt-to-assets ratio provides insight into the company's financial position and risk profile during this period.

Total Debt

Total debt remained relatively stable with minor fluctuations across the quarters. Initially, it hovered around 700 million USD, spiked sharply to approximately 1.7 billion USD by September 2020, and then stabilized near 1.5 billion USD throughout the subsequent periods. From mid-2022 through early 2025, debt levels remained nearly constant, fluctuating only slightly around 1.48 to 1.49 billion USD, suggesting a controlled approach to managing borrowings.

Total Assets

Total assets exhibited a consistent upward trajectory throughout the timeline. Starting from around 6.2 billion USD in early 2020, assets grew steadily each quarter, surpassing 20 billion USD by March 2025. This growth indicates substantial asset expansion, possibly from investments, acquisitions, or organic growth, reflecting strengthening resource base and capacity.

Debt-to-Assets Ratio

The debt-to-assets ratio demonstrated a declining trend, moving from approximately 0.11 at the beginning of 2020 to about 0.07 by early 2025. Notably, the ratio peaked briefly around 0.22 in September 2020, corresponding with the sharp increase in total debt, but then consistently decreased as total assets grew at a faster pace than total debt. This decreasing leverage ratio indicates improved financial stability, reduced financial risk, and potentially a stronger balance sheet position over time.

In summary, the company maintained a relatively stable debt level after an initial increase, while its total assets grew substantially, resulting in a decreasing debt-to-assets ratio. This pattern suggests enhanced financial strength and a conservative leverage approach throughout the reported periods.

The financial data indicates several notable trends concerning total debt, total assets, and the debt to assets ratio over the reported periods.

Total Debt (including operating lease liability)

Total debt demonstrated fluctuations across the periods with a general pattern of stability followed by slight increases. Between March 2020 and June 2020, the total debt held steady around 1,200 million USD before nearly doubling to approximately 2,200 million USD in the third quarter of 2020. Thereafter, debt levels remained relatively consistent, fluctuating marginally around the 2,200 million USD mark throughout 2021 and 2022.

In the period from early 2023 through the last reported quarter of 2025, total debt showed minor variability, gradually increasing to near 2,400 million USD by March 2025. While debt remained elevated compared to early 2020 levels, the changes suggest controlled borrowing and relatively stable leverage in the medium term.

Total Assets

Total assets exhibited a strong upward trend across the entire period. Starting from approximately 6,200 million USD in March 2020, assets showed steady growth quarter over quarter. Notable increments occurred particularly from late 2021 onwards, with assets rising from approximately 13,300 million USD at year-end 2022 to over 20,900 million USD by March 2025.

This consistent increase in total assets reflects ongoing expansion, investment, or acquisition activity, which suggests the company is enhancing its scale and resource base significantly over time.

Debt to Assets Ratio

The debt to assets ratio displayed a decreasing trend throughout the timeframe. Initially, it was relatively low around 0.19 in early 2020, then temporarily increased to a peak near 0.29 by September 2020, corresponding with the sharp increase in total debt at that time.

Following this peak, the ratio steadily declined without major interruptions, reaching approximately 0.11 by March 2025. This decline indicates that assets have grown at a faster pace compared to debt, thereby improving the overall leverage position and potentially reducing financial risk associated with debt relative to asset base.

In summary, the data reveals a period of increased borrowing in 2020, followed by consistent asset growth and stable debt levels. Consequently, the debt to asset ratio improved substantially, reflecting enhanced financial strength and a more conservative leverage profile over the reported periods.

The analysis of the quarterly financial data reveals several notable trends in the company's financial position over the reported periods.

Total Assets

Total assets have shown a consistent upward trajectory from March 31, 2020, through March 31, 2025. The assets increased from approximately $6.2 billion to nearly $21.0 billion by the end of the period. This growth was steady, with only minor decelerations in some quarters, indicating continuous investment or asset accumulation over time.

Stockholders’ Equity

Stockholders’ equity also exhibited a persistent increase throughout the quarters. Beginning at about $2.3 billion in early 2020, equity rose to over $10.1 billion by March 31, 2025. The equity growth appears more accelerated in the latter part of the timeline, particularly from 2022 onwards, suggesting either retained earnings growth or additional equity injections.

Financial Leverage

Financial leverage, defined as the ratio of total assets to stockholders' equity, displayed variability but a general trend toward decrease over the period. Starting above 2.7 in early 2020, the ratio fluctuated with some peaks around 3.07 in late 2020 and near 2.92 in late 2021, but subsequently declined to slightly above 2.0 by 2025. This decline indicates a relative strengthening of equity compared to assets, reflecting potentially lower reliance on debt or other liabilities to finance assets.

Overall, the company demonstrated growth in both asset base and equity capital across the five-year span. The declining financial leverage ratio suggests an improvement in the equity financing structure, potentially reducing financial risk. The upward trends in assets and equity accompanied by decreasing leverage may indicate a strategically sound financial management approach supporting sustainable growth.