ServiceNow, Inc.

Good afternoon. My name is Jesse, and I'll be your conference operator today. At this time, I would like to welcome everyone to the ServiceNow Q1 2019 Earnings Conference Call. All lines stand placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. If you'd like to withdraw the question, press the pound key. Thank you. Michael Scarpelli, Chief Financial Officer, you may begin your conference.

Good afternoon. Thank you for joining us. see the reconciliation between these non-GAAP and GAAP results, please refer to our press release file earlier today and the prior quarter's previously filed press releases, all of which are posted at investors.servicenow.com. We may make forward-looking statements on this conference call, such as those using the words may, will, expects, believes, or similar phrases to convey that information I'd like to turn the call over to John.

Thanks, Mike. Good afternoon, everyone, and thank you for joining us on today's call. We delivered another strong quarter, continuing the momentum from our outstanding 2018 performance. We are focused on driving customer success, and we're expanding our footprint across almost 75% of the Fortune 500, enabling digital transformation as a strategic partner to the world's largest enterprises. And we're delivering digital workflows that create great experiences and unlock productivity. This is the future of work. Let's look at Key Q1 results. In the first quarter, we closed 25 deals with ATV greater than $1 million. We now have 717 customers doing more than $1 million in business with us, which represents a 33% increase year over year. Our renewal rate for the quarter continued to be strong at 98%. This quarter, we saw particular strength in the Americas region, led by strong performance with U.S. federal agencies. Three of our top 10 largest net new ACV deals were with federal agencies. And we now had six federal customers doing more than $10 million in ACV with us. These results show how the public sector is embracing cloud-based solutions. And it demonstrates our role as one of the core strategic partners to these government agencies, helping them digitally transform how they operate, serving their employees and citizens and delivering services. And our Q1 results also underscore our strong product portfolio. This quarter, our customer service management product saw significant growth. with 28 customers now spending more than a million dollars. Our customer workflow products enhance customer operations management. That means that our customers are able to deliver better experiences and outcomes for their customers. In fact, customer service management led to one of our largest deals during the quarter. This customer evaluated a number of competitors, including the legacy incumbent technology providers. and they chose ServiceNow because of our operations management capabilities. This is our sweet spot, managing inbound contacts to identify the root causes of customer issues, fixing those issues so that you can prevent future problems, and automating self-help solutions. And in other areas, our IT and HR products led a large expansion deal with Humana, a Fortune 100 company. Humana is now expanding their use of the ServiceNow platform across IT and HR to enable enterprise-wide focus on improving productivity and enhancing their employee experience. Across our customer base, we saw a positive response to the launch of our Madrid platform release in Q1. Early indications show that customers are adopting Madrid faster than previous releases. Madrid offers customers over 600 innovations, such as new mobile-first experiences and digital workflows that unlock productivity for IT, for employees, and for customers. This customer response shows our progress in making upgrades simple and easy, ensuring customers can quickly take advantage of our latest platform and product innovations. And I'm personally very excited about the mobile capabilities we're rolling out. We're delivering easy, intuitive, out-of-the-box mobile capabilities that enable consumer-like experiences across the enterprise. These are the kind of experiences that employees expect and demand today. We've also made significant strides in our product organization over the past year, led by Chief Product Officer, CJ Desai. We have a great global product team, and they're driving continuous quality enhancements and customer-focused innovation across our platform and product portfolio. This team is also focused on building a strong pipeline of product innovation as we look to meet a broader range of customer needs and leverage the power of our now platform across the entire enterprise. During the first quarter, I had an opportunity to visit Israel and spend time with our product teams there. As you recall, we acquired Sky Giraffe in late 2017 to enhance our mobile capabilities, and that Israeli-based team is fully integrated now. I met with this team and many other tech entrepreneurs throughout Israel. Israel has an incredible community of outstanding world-class technology talent, and we're building a strong product and tech hub there with more than 125 employees to date. I left Israel so impressed with the quality and caliber of our team and with the innovation happening there. I also traveled during the quarter to Amsterdam, Tokyo, and Sydney spending time with our teams and customers. My customer interactions worldwide continue to validate the business imperative of digital transformation. Customers continually tell me that the strength of our product portfolio and the capabilities of our now platform position us as one of their core strategic partners enabling digital transformation. Our focus on the now platform and three core workflows, IT, employee, and customer, are being well received by our customers. And it's empowering our product teams to focus on delivering even more integrated digital workflow solutions that drive great experiences and unlock productivity across the enterprise. A few weeks ago, we held our first CIO advisory board meeting. spending two days with roughly a dozen of the top CIOs in the world. We had a rich discussion, reaffirming that we are on the right path with our strategies, our product vision, and our focus on customer success. We've also been pleased with some of the positive feedback we've received throughout the quarter in response to our first ever company brand campaign, which launched in January and continues through early June. As I've said before, This campaign is designed to increase awareness of ServiceNow more broadly with C-suite executives. The campaign is also resonating very well with our employees and enhancing our recruiting efforts from a talent brand perspective. We'll continue to invest in company brand awareness to position ServiceNow as both a partner and employer of choice. In closing, I'm pleased with our strong start to 2019 and our continued progress against our priorities. We are committed to making the world of work work better for people, and we're focused on building deep, trust-based customer relationships to enable better digital transformation and create the future of work. Now, I know many of you are planning to join us in Las Vegas on the week of May 6th for our Financial Analyst Day and for Knowledge 19, our seminal customer event. We expect this year's conference to be our largest effort with 20,000 people registered to attend. Spending time with our customers is always my favorite activity, and Knowledge is one of the real highlights of the year. I'll look forward to seeing many of you there. With that, I'll turn the call back over to Mike.