ServiceNow, Inc.

Good day, ladies and gentlemen, and welcome to the fourth quarter 2018 ServiceNow earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touch-tone telephone. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Michael Scarkelly, Chief Financial Officer. Sir, you may begin.

Good afternoon. Thank you for joining us. On the call with me today is John Donahoe, our Chief Executive Officer. During today's call, we will review our fourth quarter financial results and discuss our financial guidance we will discuss today are non-GAAP, except for revenues over to John.

Thanks, Mike. Good afternoon, everyone, and thank you for joining us on today's call. We finished 2018 with our strongest fourth quarter ever, continuing our momentum as a leading digital workflow company shaping the future of work. Our role as a strategic partner to the world's largest enterprises continues to accelerate, enabling their digital transformation by making work work better for people. Our teams continue to execute well and our continued focus and commitment to customer success shows in our strong results. Expanding our existing customer relationships will drive much of our growth going forward and we have ample opportunity. We are now helping to enable the digital transformation of almost 5,400 enterprise customers, including almost 75% of the Fortune 500. We now have 678 customers doing more than a million dollars in business annually with us. And we have 74 customers who are doing greater than 5 million, up 54% year over year. And the number of customers doing greater than 10 million has more than tripled year over year to 18, including three above 20 million. Our renewal rate for the quarter was a strong 98%. Our formula is clear. When we land our platform and products with the new customer, we begin delivering great experiences and unlocking productivity. That, in turn, is what drives our expansion. And our focus is on building long-term strategic partnerships with our customers that enable their success. And I'll point out that we still represent a small percentage of IT spend for most of our customers. That gives us tremendous opportunity to grow and deliver the business outcomes that our customers want and need. Strong performance across our portfolio and across every geography drove our momentum, led by accelerating year-over-year growth in EMEA. Our teams exceeded their plans for the fourth quarter and for the full year. All of our products perform well. Both our HR and customer service products, for example, now have more than 20 customers doing more than a million dollars. And 19 of our top 20 deals in the quarter included three or more products. Even more important, net new business in our core IT workflow products reaccelerated in 2018. This underscores the strength of our flagship product, the strategic partners we're building with CIOs, and the continued market opportunity to expand the impact of our core IT workflow products. We are very well positioned. In the fourth quarter, I had an opportunity to meet with 50 of the world's most respected CIOs. They reiterated common themes I've shared with you before and that I continue to hear in my customer conversations worldwide. The business imperative for digital transformation, the need for trusted technology partners, and the challenges of driving cultural change. These leading CIOs understand the power of our now platform and products. They view ServiceNow as a strategic partner. But as one CIO put it, he doesn't view us as just another cloud partner. He sees ServiceNow as the platform that creates a multiplier effect in his cloud ecosystem. Our enterprise capabilities link together other systems and platforms, enabling seamless digital workflows that create great experiences and unlock productivity. And that's what every C-suite executive I speak with is looking for. Ongoing product innovation is essential to enabling these business outcomes and continues to be a top priority for us. I feel very good about the progress our product organization is making in improving our user experience and user interface. creating simple, intuitive mobile experiences, and making our platform and products easier to deploy and upgrade. We're getting great feedback from beta testers in our upcoming Madrid release, and we expect to be launching significant enhancements in our mobile capabilities and user experience later this year. I also feel very good about the progress driving customer success, another top priority. We're driving customer success to be a natural extension of our sales motion and are committed to landing new customers and expanding existing relationships in a healthy and sustainable manner. We're entering this year with strong alignment across our pre-sales and post-sales teams, and we're driving a consistent approach to creating value for our customers and delivering their desired business outcomes. Leading this effort is David Schneider, who was recently promoted to be our president, Global Customer Operations. He's an exceptional leader who's deeply committed to driving successful customer outcomes. So as we enter 2019, we're also investing in increased awareness of our company through the launch this month of our first ever brand campaign. While many decision makers already know us well, This campaign is designed to increase awareness of ServiceNow more broadly with C-suite executives. The campaign highlights our focus as a digital workflow company creating great experiences and unlocking productivity. That is what digital transformation is all about, and that is the future of work. The intelligent and intuitive capabilities of our NOW platform and our IT employee and customer workflows make work simpler, easier, and faster across the enterprise. Simply put, we make the world of work work better for people. That's our focus and our commitment. So in closing, I'm very pleased with the strong quarter and year and our continued momentum. We are making continued progress against our strategic priorities, led by our focus on product innovation and customer success. And now I'll turn the call back over to Mike. Thank you, John.