ServiceNow, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2019 ServiceNow Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1 on your telephone. If you require any further assistance, please press star 0. Thank you. I would now like to hand the conference over to your speaker today, Lisa Banks, Vice President of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us for ServiceNow's fourth quarter and full year 2019 earnings conference call. On the call with me today are Bill McDermott, our President and Chief Executive Officer, and Gina Mastituno, our Chief Financial Officer. During today's call, we will review our fourth quarter and full year 2019 results and discuss our financial guidance for the first quarter of 2020 and guidance for the full year 2020. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP. All financial figures we will discuss today are non-GAAP except for revenues, net income, and remaining performance obligations. To see the reconciliation between these non-GAAP and GAAP results, please refer to our press release filed earlier today, our investor presentation, and for prior quarters previously filed press releases, all of which are posted at investors.servicenow.com. A replay of today's call will also be posted on the website. We may make forward-looking statements on this conference call which are subject to risks, uncertainties, and assumptions. Please refer to the press release and risk factors in our SEC filings, including our most recent Form 10-Q and our Form 10-K that will be filed for the year ended December 31, 2019, for information on risks and uncertainties that may cause actual results to differ materially from those set forth in such forward-looking statements. Before I pass it on to Bill, please note our Financial Analyst Day will be held on Monday, May 4th in Orlando in conjunction with our annual Users Conference Knowledge 2020. In-person attendance will be limited, so if interested, please send an email to ir at servicenow.com. For those who cannot join in person, we will hold the webcast of the event accessible on our IR website. ServiceNow is also pleased to announce that we will be participating in the upcoming Goldman Sachs Technology and Internet Conference and Morgan Stanley CMT Conference. With that, I would like now to turn the call over to Bill.

Thank you very much, Lisa, and good afternoon, everyone. Welcome to our Q4 earnings call. As you've already seen from our earnings release, we finished 2019 very strong beating the high end of our guidance for Q4. Allow me to share a few observations. We had 76 deals greater than $1 million in the quarter. Our performance underscores the strength of our core IT workflows. We had 16 ITSM deals topping $1 million. That's our biggest number ever. And we signed our largest ITAM deal ever with the US Department of Veteran Affairs. IT is where digital transformation begins, and we are a powerful strategic partner for CIOs all over the world. CIOs are struggling with fragmented legacy technology. Instead of delivering the experiences their employees and customers really need, our IT workflows provide a single platform from planning to operations to service management. We're modernizing IT, enabling high-performing services with modern experiences. That is enabling us to not only enhance the core of how IT works, but also extend the perimeter of IT itself. We're doing this across the entire enterprise, and that's driving momentum in our vast portfolio of products, including our fast-growing HR and CSM products. customers are realizing the strategic value of combining ServiceNow IT workflows with everything from HR, CSM, security, GRC, financial close, and DevOps to deliver greater value across the entire enterprise. And best of all, everything is powered by the Now platform. One platform, one data model, one architecture. There's a very deep sense of pride in engineering here at ServiceNow, and that distinguishes us in the enterprise software industry, and it shows in the results. We landed nine HR deals greater than a million, our largest number yet, within a quarter. And in CSM, we now have over 1,000 customers using our technology to deliver better experiences for their customers. In most companies, customer service systems are set up only to answer questions, not to solve problems. This is why customer service agents rarely get to the root cause of the problem. That really frustrates customers. With ServiceNow's CSM product, companies can drive end-to-end resolution. Instead of solving problems in an ad hoc way, they can now focus on delivering great experiences. And great experiences drive powerful employee engagement, fierce customer loyalty, and significant productivity gains. This is what every CEO and every company we talk to, this is what they want. Both HR and CSM are now over $200 million businesses for us. And we're just getting started. Let me share a few examples of how the power of our platform and products translated into strategic customer wins in the quarter. With a focus on CSM, we expanded our relationship with one of the largest global content companies in the telecommunications media and technology industry. You see, they needed one solution with one platform to serve their customers using our workflow and integration capabilities. They are now consolidating all customer related processes into streamlined workflows. In Latin America, we expanded our relationship with one of the region's largest banks. After seeing tremendous returns on their initial ServiceNow investment, the bank is implementing the Now platform and our IT workflow products across its entire employee base, replacing more than 10 siloed legacy systems. Earlier, I mentioned our largest ITAM deal ever. which was part of a bigger IT portfolio deal with the United States Department of Veteran Affairs. ServiceNow is the core of the VA's Enterprise Service Desk, which supports more than half a million full-time employees and contractors. With our IT portfolio and the cross-functional capabilities of the NOW platform, the VA is streamlining processes, saving time and money, improving productivity, and better managing technology assets, and, of course, delivering better experiences. Bristol-Myers Squibb purchased three IT products plus HR to enable a world-class onboarding experience for all employees. In a competitive sales process, Bristol-Myers Squibb recognized that our cross-functional enterprise capabilities are exactly what was needed to accelerate productivity, reduce new hire turnover, and win the war for talent. In a strategic C-suite win, Roche, the world's largest biotech company, has signed an agreement with ServiceNow to support its digital transformation strategy. ServiceNow will be the global solution to service project, and portfolio management across the entire Roche group. This strategic partnership will help Roche transform its internal business processes end-to-end, simplifying and improving the user experience. This will enable Roche scientists and researchers to work in a more agile way so they can redouble their focus on their business, which is creating innovative healthcare solutions. These customer examples demonstrate the enterprise value that ServiceNow delivers. Our customers know that behind every great experience is a great workflow. The power of the Now platform combined with the quality of our IT, employee, and customer workflow products are expanding our addressable market dramatically. Digital transformation is the biggest opportunity of our time. and ServiceNow is exceptionally well positioned to seize this opportunity to compete and to win. We are a game-changer company for our customers and shareholders. The opportunity to scale ServiceNow is right in front of us, and we have our sights set on achieving $10 billion in revenue and beyond. To continue driving our growth, we are focused on five clear priorities for 2020. They include, one, being the trusted innovator for the C-suite. This starts with our brand, making every C-suite leader aware of ServiceNow and what we can do for them. You may have noticed we launched our new brand campaign across all channels this week. We are receiving rave reviews. I personally love our brand. It's so human, personal, and inviting. We'll keep it going. Number two, we're engaging customers with a world class go to market machine. The company already has a strong go to market organization and we are now taking it to the next level. Number three, we will force multiply ServiceNow with a strong industry and partner ecosystem. The ecosystem is going to become more strategic and more powerful. Our partners tell me they see ServiceNow as the cross platform integration engine of the modern enterprise. Going after industry verticals and building strong partner relationships will force multiply ServiceNow's coverage by 10x. This will happen across geos, industries, and across buying centers. As you saw Monday, we announced our new industry solution strategy and our expanded partnerships with Deloitte in banking and Accenture in telecommunications. Number four, we're creating product experiences that people at work will love. The Now platform is ServiceNow's secret sauce. We are a platform company. In fact, we are the platform of platforms, and we are committed to excellence, delivering an innovative, scalable, secure, highly available platform and products that digitize workflows effectively. and deliver great experiences. Number five, teamwork. As you all know, teamwork does make the dream work, and it happens with trust, collaboration, and communication at mass scale. Our culture is our ultimate competitive advantage. All 10,371 and growing ServiceNow colleagues are committed to our purpose of making the world of work work better for people. ServiceNow is hungry and humble, and we have an unwavering focus on serving our customers. We are so honored to have been added to the S&P 500 and to be recognized this month by Fortune as one of the world's most admired companies. The strength of our team and our culture is a culmination of the great leadership ServiceNow has benefited from for the past 15 years. starting with our founder, Fred Luddy, an incredible man and product visionary, to Frank Slootman, who successfully scaled Fred's vision, and a big heartfelt thank you to my great personal friend, John Donahoe, who set a rock-solid foundation for the future. I'm truly fired up to lead the next phase of ServiceNow's journey as we scale to $10 billion in revenue and beyond. We will accomplish this by delivering exceptional business value to our customers. We'll do so across every geography, every industry, and of course, every buying center. We will continue to create workflows that deliver great employee and customer experiences. It is our dream to become the defining enterprise software company of the 21st century. This is the limitless opportunity I saw in ServiceNow. It is why I chose to come here. And in my first three months as CEO, my belief has only become deeper, my commitment stronger, and my passion greater. Before closing, I want to thank our outstanding global finance organization, supporting a CEO and CFO transition. This team demonstrated extraordinary commitment, which leads me to my final note. We now have a world-class CFO in Gina. Asking Gina to join our team was absolutely the best first decision I could have made as CEO. I'm thrilled that she is here. I'm excited about this team and this company, and I cannot wait to deliver on our dreams for all of you. Thank you, and now I'll turn the call over to Gina. Gina, over to you.