Stock Analysis on Net

ServiceNow Inc. (NYSE:NOW)

$24.99

Enterprise Value to FCFF (EV/FCFF)

Microsoft Excel

Paying user area

The data is hidden behind: . Unhide it.

This is a one-time payment. There is no automatic renewal.


We accept:

Visa Mastercard American Express Maestro Discover JCB PayPal Google Pay
Visa Secure Mastercard Identity Check American Express SafeKey

Free Cash Flow to The Firm (FCFF)

ServiceNow Inc., FCFF calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income
Net noncash charges
Changes in operating assets and liabilities, net of effect of business combinations
Net cash provided by operating activities
Interest paid, net of tax1
Purchases of property and equipment
Purchases of other intangibles
Free cash flow to the firm (FCFF)

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).


The annual financial data reveals a consistent upward trend in both operating cash flow and free cash flow to the firm over the five-year period.

Net Cash Provided by Operating Activities
This figure shows a strong and steady increase each year, starting at 1,787 million US dollars in 2020 and rising to 4,267 million US dollars by 2024. The growth appears to be accelerating, with the annual increase becoming larger over time, indicating improved efficiency and robust cash generation from core business operations.
Free Cash Flow to the Firm (FCFF)
Similarly, FCFF exhibits a consistent growth trajectory, escalating from 1,367 million US dollars in 2020 to 3,394 million US dollars in 2024. This rise parallels the increase in operating cash flow, although FCFF amounts are slightly lower each year, reflecting capital expenditures or other investments. The expanding free cash flow suggests healthy cash availability for debt servicing, reinvestment, or distribution to investors.

Interest Paid, Net of Tax

ServiceNow Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Effective Income Tax Rate (EITR)
EITR1
Interest Paid, Net of Tax
Interest paid, before tax
Less: Interest paid, tax2
Interest paid, net of tax

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).

1 See details »

2 2024 Calculation
Interest paid, tax = Interest paid × EITR
= × =


Effective Income Tax Rate (EITR)
The effective income tax rate experienced fluctuations over the analyzed period. It began at 20.57% in 2020, then significantly decreased to 7.63% in 2021. Following this dip, the rate increased again to 18.55% in 2022, reaching its highest point at 21% in 2023 before declining to 18.01% in 2024. This pattern indicates variability in the tax burden, with a notable low in 2021 potentially due to tax benefits or adjustments, followed by stabilization around an approximate 18-21% range in recent years.
Interest Paid, Net of Tax
Interest paid, net of tax, shows a clear decreasing trend from 2021 to 2023, starting at 38 million US dollars in 2021 and dropping to 20 million in 2022, then further declining to 18 million in 2023. In 2024, there is a minor increase to 19 million US dollars. The absence of data for 2020 precludes any trend analysis for the earlier period, but from the available figures, the overall interest expense after tax is on a downward trend before stabilizing slightly in the last year.

Enterprise Value to FCFF Ratio, Current

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

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Valuation Ratio
EV/FCFF
Benchmarks
EV/FCFF, 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/FCFF, Sector
Software & Services
EV/FCFF, Industry
Information Technology

Based on: 10-K (reporting date: 2024-12-31).

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.


Enterprise Value to FCFF Ratio, Historical

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

Microsoft Excel
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
Free cash flow to the firm (FCFF)2
Valuation Ratio
EV/FCFF3
Benchmarks
EV/FCFF, 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/FCFF, Sector
Software & Services
EV/FCFF, 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).

1 See details »

2 See details »

3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =

4 Click competitor name to see calculations.


Enterprise Value (EV)
The enterprise value exhibited a fluctuating trend over the reviewed periods. Initially, there was a slight decline from 114,500 million US$ at the end of 2020 to 110,442 million US$ by the end of 2021. This downward trend continued more sharply into 2022, with the value dropping to 89,597 million US$. However, a significant rebound occurred in the following years, with EV rising substantially to 153,782 million US$ in 2023 and further increasing to 204,354 million US$ by the end of 2024. Overall, this reflects an initial contraction phase followed by marked expansion in enterprise value.
Free Cash Flow to the Firm (FCFF)
The free cash flow to the firm demonstrated steady and consistent growth throughout the periods analyzed. Starting at 1,367 million US$ in 2020, FCFF rose each year without exception: to 1,837 million US$ in 2021, 2,193 million US$ in 2022, 2,719 million US$ in 2023, and reaching 3,394 million US$ in 2024. This pattern indicates improving operational efficiency and cash-generative capacity over time.
EV to FCFF Ratio
The EV/FCFF ratio, a measure of valuation relative to cash flow, displayed considerable variability. It started very high at 83.74 in 2020, suggesting a premium valuation relative to cash flow at that time. The ratio declined significantly over the next two years, dropping to 60.13 in 2021 and further to 40.86 in 2022, reflecting either a relative reduction in enterprise value or increased free cash flow. In the last two years, the ratio rose again to 56.55 in 2023 and 60.21 in 2024, paralleling the increase in enterprise value whilst free cash flow continued to grow. The movements in this ratio indicate periods of changing market perception concerning the company's valuation relative to its ability to generate cash.