Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
ServiceNow Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of long-term investment activity ratios reveals consistent trends across the five-year period. Generally, the ratios indicate a decreasing efficiency in asset utilization, though the rate of decline varies by metric. The analysis suggests a potential shift in the company’s asset base or operational strategies impacting turnover rates.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio demonstrates a consistent downward trend, decreasing from 7.70 in 2021 to 5.80 in 2025. This indicates a declining ability to generate revenue from fixed assets. The rate of decline appears to be accelerating in the later years of the period.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- The net fixed asset turnover ratio, inclusive of operating leases and right-of-use assets, exhibits relative stability compared to the standard net fixed asset turnover. While fluctuating slightly, it remains within a narrow range of 4.18 to 4.47. The 2025 value of 4.29 suggests a minor decrease, but the overall trend is less pronounced than that observed in the standard net fixed asset turnover.
- Total Asset Turnover
- Total asset turnover shows a slight decline over the period, moving from 0.55 in 2021 to 0.51 in 2025. There is a minor recovery to 0.54 in 2024, but the overall trend remains downward. This suggests a decreasing efficiency in utilizing all assets to generate revenue.
- Equity Turnover
- Equity turnover experiences the most significant decline among the analyzed ratios, decreasing from 1.60 in 2021 to 1.02 in 2025. This indicates a substantial decrease in revenue generated per dollar of equity. The rate of decline is consistent throughout the period, suggesting a fundamental shift in the relationship between revenue and equity.
The divergence between the two net fixed asset turnover ratios suggests that operating leases and right-of-use assets are playing an increasingly significant role in the company’s asset base. The consistent decline in equity turnover, coupled with the decreasing total asset turnover, warrants further investigation into the company’s capital structure and revenue generation strategies.
Net Fixed Asset Turnover
ServiceNow Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Software & Services | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover = Revenues ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a consistent decline in the net fixed asset turnover ratio over the five-year period. While revenues demonstrate substantial growth, the growth in net property, plant, and equipment (PP&E) outpaces revenue increases, resulting in decreasing efficiency in utilizing fixed assets to generate sales.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 7.70 in 2021 to 5.80 in 2025. This indicates a diminishing ability to generate revenue from each dollar invested in fixed assets. The ratio experienced its largest decrease between 2021 and 2022, falling to 6.88, and continued to decline, albeit at a slower rate, in subsequent years.
Revenues increased steadily throughout the period, growing from US$5,896 million in 2021 to US$13,278 million in 2025. This substantial revenue growth suggests strong market demand and effective sales strategies.
- Property, Plant, and Equipment (PP&E)
- Net PP&E increased consistently from US$766 million in 2021 to US$2,289 million in 2025. This growth in fixed assets suggests ongoing investment in infrastructure and capacity expansion. However, the rate of increase in PP&E exceeds the rate of revenue growth, contributing to the declining net fixed asset turnover ratio.
The observed trend suggests that while the company is successfully increasing sales, it is becoming less efficient in its use of fixed assets to generate those sales. This could be due to several factors, including increased investment in assets that have not yet reached full productive capacity, a shift in business strategy requiring more capital-intensive operations, or potentially, over-investment in fixed assets relative to revenue generation.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
ServiceNow Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property and equipment, net | ||||||
| Operating lease right-of-use assets | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Software & Services | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Revenues ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a generally stable, yet subtly shifting, pattern in the net fixed asset turnover ratio over the five-year period. Revenues demonstrate consistent growth annually, while the value of property and equipment, net of accumulated depreciation and including operating lease right-of-use assets, also increases each year. However, the net fixed asset turnover ratio, which reflects the efficiency with which a company uses its fixed assets to generate revenue, exhibits minor fluctuations.
- Revenue Trend
- Revenues increased from US$5,896 million in 2021 to US$13,278 million in 2025, representing substantial growth over the period. The growth rate appears to accelerate from 2023 to 2025.
- Fixed Asset Investment Trend
- Property and equipment, net, increased from US$1,357 million in 2021 to US$3,095 million in 2025. This indicates a consistent investment in fixed assets alongside revenue growth. The rate of increase in fixed assets appears to be relatively consistent year-over-year.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio began at 4.34 in 2021. It decreased slightly to 4.18 in 2022, then recovered to 4.33 in 2023. A further increase to 4.47 was observed in 2024, followed by a slight decrease to 4.29 in 2025. These fluctuations suggest a dynamic relationship between revenue generation and fixed asset investment. While the ratio remains relatively stable, the 2024 peak and 2025 decline warrant further investigation to determine if they represent a meaningful shift in asset utilization efficiency.
Overall, the company demonstrates an ability to generate revenue from its fixed asset base. The slight variations in the net fixed asset turnover ratio do not indicate a significant deterioration in efficiency, but continued monitoring is recommended to assess the sustainability of asset utilization as the company continues to grow.
Total Asset Turnover
ServiceNow Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Software & Services | ||||||
| Total Asset Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Total asset turnover = Revenues ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The analysis reveals a generally declining trend in total asset turnover over the five-year period. While fluctuations exist, the ratio demonstrates a consistent movement downwards, indicating a potential decrease in the efficiency with which assets are being utilized to generate revenue.
- Total Asset Turnover
- The total asset turnover ratio decreased from 0.55 in 2021 to 0.51 in 2025. This signifies that for every dollar of assets, the company generated progressively less revenue over time. A slight recovery to 0.54 was observed in 2024, but this was not sustained into the following year.
- Revenue Trend
- Revenues exhibited consistent growth throughout the period, increasing from US$5,896 million in 2021 to US$13,278 million in 2025. However, the rate of asset growth outpaced revenue growth, contributing to the declining asset turnover ratio.
- Asset Trend
- Total assets increased substantially, rising from US$10,798 million in 2021 to US$26,038 million in 2025. This significant asset accumulation, while supporting revenue expansion, did not translate into a proportional increase in revenue generation efficiency, as evidenced by the decreasing turnover ratio.
- Year-over-Year Changes
- The largest year-over-year decrease in the ratio occurred between 2022 and 2023, falling from 0.54 to 0.52. The smallest decrease was between 2021 and 2022, with a change of only 0.01. The decline from 2024 to 2025 was also notable, dropping from 0.54 to 0.51.
The observed trend suggests that the company is investing in assets at a rate that exceeds its ability to convert those assets into revenue. Further investigation may be warranted to understand the drivers behind the asset growth and to assess whether the investments are expected to yield higher returns in future periods, ultimately improving asset utilization efficiency.
Equity Turnover
ServiceNow Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Software & Services | ||||||
| Equity Turnover, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Equity turnover = Revenues ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The equity turnover ratio demonstrates a consistent downward trend over the five-year period. Revenues increased substantially throughout the period, while stockholders’ equity grew at a similar, though slightly slower, pace. This combination resulted in a declining equity turnover ratio.
- Equity Turnover
- The equity turnover ratio decreased from 1.60 in 2021 to 1.02 in 2025. This indicates that the company is generating less revenue for each dollar of stockholders’ equity. While revenue increased from US$5,896 million to US$13,278 million, stockholders’ equity increased from US$3,695 million to US$12,964 million, resulting in the observed decline.
- Trend Analysis
- The most significant decrease occurred between 2021 and 2022, dropping from 1.60 to 1.44. The rate of decline slowed between 2022 and 2023 (from 1.44 to 1.18) and continued to decelerate between 2023 and 2024 (from 1.18 to 1.14). The final year observed a decrease from 1.14 to 1.02. This suggests that the initial impact of equity growth on the ratio was more pronounced, with subsequent years experiencing diminishing effects.
- Implications
- A decreasing equity turnover ratio could suggest the company is becoming less efficient in utilizing its equity to generate revenue. However, given the substantial growth in both revenues and equity, the decline may also reflect strategic investments and retained earnings contributing to a larger equity base. Further investigation into the composition of equity and the nature of revenue generation would be necessary to determine the underlying causes and potential implications.