ServiceNow Inc. (NYSE:NOW)

Net Fixed Asset Turnover

The net fixed asset turnover ratio shows a moderate declining trend overall, starting from 6.97 in early 2021 and gradually decreasing to 5.96 by the third quarter of 2025. The ratio experienced some fluctuations, peaking at 7.84 in the first quarter of 2022 before exhibiting a general downward trajectory with minor recoveries. This pattern suggests a gradual decrease in the efficiency of utilizing fixed assets to generate revenue over the analyzed period.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

This metric also displays variability but is generally more stable compared to the traditional net fixed asset turnover. It ranged between approximately 4.11 and 4.63 over the period, with periodic increases and decreases. The ratio peaked in the third quarter of 2022 and showed a slight declining trend thereafter, with values stabilizing around the mid-4.3 range toward the end of the dataset. This indicates a relatively consistent efficiency in asset utilization when accounting for operating leases and right-of-use assets, with no significant deterioration.

Total Asset Turnover

The total asset turnover ratio fluctuates moderately between 0.52 and 0.62 throughout the timeline. Early periods show a slight improvement, peaking in the third quarter of 2021 and again in mid-2022. However, there is a decline toward the end of 2022 and early 2023, followed by fluctuations with values mostly stabilizing in the mid-0.5 range. Overall, the ratio suggests a steady but relatively low efficiency in generating revenue from total assets, with no clear upward or downward trend over the full period.

Equity Turnover

The equity turnover ratio exhibits a notable downward trend from 1.59 in the first quarter of 2021 to around 1.12 by late 2025. This steady decrease indicates a reduction in how effectively the company is generating revenue from its equity base. The decline appears consistent, with slight pauses in the reduction during some quarters, but the overall trend suggests diminishing equity utilization performance over time.

Revenues

The revenue figures demonstrate a consistent upward trajectory over the entire period analyzed. Starting at $1,360 million in the first quarter of 2021, revenues steadily increased each quarter, reaching $3,407 million by the first quarter of 2025. This growth reflects a strong positive trend with no observed periods of decline, indicating sustained business expansion and increasing market demand.

Property and Equipment, Net

The net value of property and equipment similarly shows a general increase from $693 million in the first quarter of 2021 to $2,127 million by the first quarter of 2025. Although the growth is generally steady, there is a notable acceleration in the latter part of 2022 through 2024, with more pronounced increases quarter over quarter. This trend suggests significant capital expenditure and investment in fixed assets to support expanding operations or capacity enhancements.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio begins at 6.97 in the first quarter of 2021, peaks slightly at 7.84 in the first quarter of 2022, and then exhibits a gradual declining trend through to the first quarter of 2025, reaching 5.96. This downward trend implies that revenues are growing at a slower pace relative to investments in fixed assets, possibly reflecting either increased asset base utilization or diminishing efficiency in generating revenue from fixed assets over time.

Overall Analysis

The company shows robust revenue growth accompanied by substantial investment in property and equipment. However, the declining net fixed asset turnover ratio highlights a potential area for management focus, suggesting that asset utilization efficiency could be waning despite rising revenues. Monitoring this ratio will be critical to ensure that capital investments translate effectively into revenue generation and that the company maintains operational efficiency as it expands.

Revenues

The revenues exhibit a consistent upward trend across the entire period analyzed. Starting at $1,360 million in the first quarter of 2021, revenues increase steadily each quarter, reaching $3,407 million by the first quarter of 2025. This indicates strong sales growth and an expanding market presence over the examined timeframe.

Property and Equipment, Net

Property and equipment, net of accumulated depreciation and including operating lease right-of-use assets, also show a generally increasing pattern over the quarters. Beginning at $1,148 million in March 2021, the balance generally rises each period and culminates at $2,934 million by March 2025. The increase suggests ongoing investments in fixed assets that support business growth and capacity expansion.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

The net fixed asset turnover ratio fluctuates moderately throughout the period but remains within a relatively stable range from 4.11 to 4.63. The ratio started at 4.21 in March 2021 and ends at around 4.32 in March 2025. This implies a generally consistent efficiency in utilizing fixed assets to generate revenue, with minor variations likely reflective of changes in asset base and revenue growth pace.

Summary of Trends and Insights

Overall, the data illustrate a strong growth trajectory in revenues, supported by increasing investments in fixed assets. The relatively stable net fixed asset turnover ratio indicates that asset utilization efficiency has not deteriorated despite asset base expansion. This balance suggests prudent capital investments contributing effectively to revenue generation without causing a decline in operational efficiency.

The financial data reveals consistent growth in revenues over the observed periods, indicating a steady increase in the company's sales performance. Revenues have generally trended upward from US$1,360 million in the first quarter of 2021 to a projected US$3,407 million by the first quarter of 2025, reflecting a progressive revenue expansion throughout the years.

Total assets have also grown significantly across the timeframe, rising from US$8,822 million in early 2021 to a forecasted peak of approximately US$22,051 million in the third quarter of 2025. This upward trend suggests ongoing asset accumulation potentially linked to investments, acquisitions, or organic growth supporting the company’s operations and expansion strategies.

The total asset turnover ratio, which measures how efficiently the company utilizes its assets to generate revenues, has demonstrated relatively stable fluctuations within a narrow range throughout the periods provided. The ratio oscillates mostly between 0.52 and 0.62, with no clear long-term upward or downward trend. The highest turnover observed is 0.62 in the third quarter of 2021, followed by a moderate decline and stabilization around mid-0.50s in subsequent periods.

Revenue Trends

Revenues have shown consistent growth each quarter, reflecting positive sales momentum. The increase is gradual and steady, with no significant volatility or decline observed. This aligns with steady expansion or strengthening market demand.

Asset Growth

Total assets experienced substantial growth, indicating increasing investment in resources or expansion activities. This steady rise underscores a strategy of asset accumulation, possibly to support scaling operations or entrance into new markets.

Asset Utilization Efficiency

The total asset turnover ratio remains relatively stable with minor fluctuations, suggesting the company maintains consistent effectiveness in using its assets to generate revenue. There is no evidence of deterioration in asset efficiency despite significant asset growth.

Overall, the company demonstrates solid revenue growth supported by expanding asset bases while maintaining consistent asset turnover efficiency. This pattern suggests a balanced approach to growth, where asset increases are effectively leveraged to continue enhancing revenue streams without sacrificing operational productivity.

The financial data reveals consistent growth in revenues over the observed periods, showing a steady increase from US$ 1,360 million in the first quarter of 2021 to US$ 3,407 million in the first quarter of 2025. This upward trend indicates strong sales performance and expanding market presence throughout the years.

Stockholders’ equity also exhibits a continuous increase, rising from US$ 3,037 million in the first quarter of 2021 to US$ 11,301 million in the first quarter of 2025. The growth in equity suggests ongoing capital accumulation, retained earnings, or additional equity financing over time, contributing to the company’s strengthened financial position.

The equity turnover ratio displays a declining trend during the period, starting at 1.59 in the first quarter of 2021 and falling to around 1.12 by the first quarter of 2025. This decline indicates that the company is generating fewer revenues per unit of equity over time. While revenues are increasing, the equity base is growing faster, which may reflect increased capital investment or retained profits outpacing revenue growth.

Revenues

Demonstrate a consistent upward trajectory over the quarters, more than doubling over the four-year span.

Stockholders’ Equity

Shows strong, sustained growth, more than tripling within the same timeframe, indicating enhanced company capitalization.

Equity Turnover Ratio

Declines steadily, suggesting a decreasing efficiency in using equity to generate revenues, largely driven by equity growth outpacing revenue growth.

Overall, the data portrays a company experiencing robust revenue growth and expanding equity base, albeit with a gradual decrease in equity efficiency. This could imply a strategic focus on strengthening the balance sheet or investments aimed at long-term growth, at the expense of short-term revenue efficiency.