ServiceNow Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	1,731)	325)	230)	119)	627)
Net noncash charges	1,768)	2,224)	1,903)	1,387)	531)
Changes in operating assets and liabilities, net of effect of business combinations	(101)	174)	58)	281)	78)
Net cash provided by operating activities	3,398)	2,723)	2,191)	1,787)	1,236)
Interest paid, net of tax¹	18)	20)	38)	—)	—)
Purchases of property and equipment	(694)	(550)	(392)	(419)	(265)
Free cash flow to the firm (FCFF)	2,722)	2,193)	1,837)	1,367)	971)

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ See details »

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the ServiceNow Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	ServiceNow Inc. FCFF increased from 2021 to 2022 and from 2022 to 2023.

ServiceNow Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR¹	21.00%	18.55%	7.63%	20.57%	21.00%
Interest Paid, Net of Tax
Interest paid, before tax	23)	24)	41)	—)	—)
Less: Interest paid, tax²	5)	4)	3)	—)	—)
Interest paid, net of tax	18)	20)	38)	—)	—)

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ See details »

² 2023 Calculation
Interest paid, tax = Interest paid × EITR
= 23 × 21.00% = 5

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ServiceNow Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	149,600)
Free cash flow to the firm (FCFF)	2,722)
Valuation Ratio
EV/FCFF	54.96
Benchmarks
EV/FCFF, Competitors¹
Accenture PLC	20.94
Adobe Inc.	29.82
International Business Machines Corp.	15.26
Intuit Inc.	36.06
Microsoft Corp.	51.84
Oracle Corp.	34.59
Palo Alto Networks Inc.	35.72
Salesforce Inc.	27.20
Synopsys Inc.	52.10
EV/FCFF, Sector
Software & Services	40.70
EV/FCFF, Industry
Information Technology	41.77

Based on: 10-K (reporting date: 2023-12-31).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

ServiceNow Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	153,782)	89,597)	110,442)	114,500)	65,992)
Free cash flow to the firm (FCFF)²	2,722)	2,193)	1,837)	1,367)	971)
Valuation Ratio
EV/FCFF³	56.49	40.86	60.13	83.74	67.96
Benchmarks
EV/FCFF, Competitors⁴
Accenture PLC	20.26	16.99	24.76	17.90	18.49
Adobe Inc.	37.75	20.82	33.61	40.43	40.48
International Business Machines Corp.	15.27	16.47	13.10	9.35	12.86
Intuit Inc.	31.28	32.85	48.64	37.90	33.30
Microsoft Corp.	41.75	32.31	38.37	33.99	26.37
Oracle Corp.	35.83	31.60	16.36	14.99	14.03
Palo Alto Networks Inc.	28.15	29.29	32.74	26.50	20.44
Salesforce Inc.	28.41	35.97	44.91	39.63	41.21
Synopsys Inc.	55.87	30.82	38.59	42.88	33.32
EV/FCFF, Sector
Software & Services	35.26	29.16	31.90	27.10	23.26
EV/FCFF, Industry
Information Technology	34.25	27.01	27.93	24.12	19.69

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ See details »

² See details »

³ 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 153,782 ÷ 2,722 = 56.49

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	ServiceNow Inc. EV/FCFF ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

ServiceNow Inc. (NYSE:NOW)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical