Enterprise Value to EBITDA (EV/EBITDA)
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- Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Net Profit Margin since 2012
- Return on Assets (ROA) since 2012
- Current Ratio since 2012
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
ServiceNow Inc., EBITDA calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
- Net Income
- Net income shows a strong upward trend from 2020 to 2023, increasing significantly from 119 million US dollars in 2020 to 1731 million US dollars in 2023. However, in 2024, there is a noticeable decline to 1425 million US dollars, indicating a reduction in profitability compared to the previous year but still substantially higher than earlier years.
- Earnings Before Tax (EBT)
- EBT demonstrates a consistent and marked growth pattern over the five-year period. Beginning at 149 million US dollars in 2020, earnings before tax reached 1008 million US dollars in 2023 and further increased to 1738 million US dollars in 2024. This consistent increase suggests improved operational efficiency and reduced tax effects or increased pre-tax earnings in the most recent years.
- Earnings Before Interest and Tax (EBIT)
- EBIT also follows a similar upward trajectory, increasing steadily from 182 million US dollars in 2020 to 1032 million US dollars in 2023, and then to 1761 million US dollars in 2024. This indicates the company has enhanced its core operational profitability before accounting for interest and tax expenses, with 2024 showing the highest operational earnings in the provided data.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA exhibits significant growth over the period, rising from 518 million US dollars in 2020 to 1594 million US dollars in 2023, and then further to 2325 million US dollars in 2024. This strong increase reflects improved operational cash flow and profitability, signaling better earnings quality and operational leverage over the five years.
- Overall Analysis
- The financial data reveals robust and consistent improvements in earnings metrics from 2020 through 2023 followed by mixed results in 2024. While net income declines in 2024 compared to 2023, all other earnings measures (EBT, EBIT, and EBITDA) continue to increase, suggesting that the net income reduction may be due to factors such as higher taxes, interest, or non-operating items impacting the bottom line. The consistent rise in EBITDA and EBIT points to strong core operational performance and efficient cost management over the full period.
Enterprise Value to EBITDA Ratio, Current
ServiceNow Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Fair Isaac Corp. | |
| International Business Machines Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| EV/EBITDA, Sector | |
| Software & Services | |
| EV/EBITDA, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
ServiceNow Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Valuation Ratio | ||||||
| EV/EBITDA3 | ||||||
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| EV/EBITDA, Sector | ||||||
| Software & Services | ||||||
| EV/EBITDA, Industry | ||||||
| Information Technology | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
The financial data reveals several notable trends over the five-year period ending in 2024. Enterprise value (EV) initially declined from 114,500 million US dollars in 2020 to 89,597 million in 2022, followed by a substantial recovery and growth reaching 204,354 million in 2024. This suggests a period of contraction or market correction until 2022, succeeded by a strong expansion phase in the subsequent years.
Earnings before interest, tax, depreciation, and amortization (EBITDA) demonstrates consistent growth throughout the entire span. Starting at 518 million US dollars in 2020, EBITDA increased steadily each year, reaching 2,325 million by 2024. This upward trajectory suggests improving operational profitability and possibly enhanced efficiency or revenue growth.
The EV/EBITDA ratio shows a marked decline from an extremely high value of 220.91 in 2020 to a significantly lower 87.89 in 2024. This continuous decrease indicates that the enterprise value is growing at a slower rate relative to EBITDA, or EBITDA is expanding more rapidly compared to EV. Such a trend often reflects improved valuation metrics, potentially signaling reduced market risk perception, greater profitability, or more favorable investor sentiment.
- Enterprise Value (EV)
- Decreased from 2020 to 2022, then sharply increased in 2023 and 2024.
- EBITDA
- Consistently increased each year, showing strong operational growth.
- EV/EBITDA Ratio
- Declined steadily, indicating improvement in valuation relative to earnings.