Enterprise Value to EBITDA (EV/EBITDA)
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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. | |
| 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. | |
| 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. | ||||||
| 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. | ||||||
| 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.
- Enterprise Value (EV)
- The enterprise value exhibited a declining trend from 2020 through 2022, dropping from $114.5 billion to approximately $89.6 billion. However, this pattern reversed beginning in 2023, with a significant increase to around $153.8 billion, followed by further growth to $204.4 billion in 2024. This indicates a renewed investor confidence or market reassessment of the company's overall worth in the latter period.
- Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)
- EBITDA demonstrated consistent year-over-year growth during the period analyzed. It rose steadily from $518 million in 2020 to $749 million in 2021, then to $859 million in 2022. The increase became more pronounced in 2023 and 2024, reaching $1.59 billion and $2.33 billion respectively. This suggests strengthening operating performance and potentially improved profitability margins in the most recent years.
- EV/EBITDA Ratio
- The EV/EBITDA ratio showed a clear downward trajectory throughout the five-year period, starting from a very high multiple of 220.91 in 2020, decreasing to 147.45 in 2021, and further declining to 104.31 in 2022. This trend continued with ratios of 96.48 and 87.89 in 2023 and 2024 respectively. The consistent decrease in this valuation multiple might imply that the market is valuing the company more efficiently relative to its earnings, or that operating earnings are expanding faster than the enterprise value.
- Overall Insights
- The data reveals a company experiencing fluctuating market valuation in the earlier years followed by a robust recovery and growth phase. The steady and accelerating increase in EBITDA underscores improvements in operational efficiency or revenue growth. Meanwhile, the significant decline in EV/EBITDA ratio points to a compression of valuation multiples, which could indicate increasing market confidence in earnings sustainability or a shift toward more rational valuation after prior high multiples. This combination of financial metrics reflects strengthening fundamentals coupled with evolving market perceptions over the period analyzed.