A solid example of presenting business performance...
I enjoy tracking companies to learn and understand best practices for reporting and positioning an enterprise. I appreciate how messaging and visuals can inspire a company and its stakeholders to create the future together.
I've been following ServiceNow for some time now. I find the company's market positioning and overall presentation of their business extremely interesting. As a leader in enterprise software, I believe this company is a good barometer for this market and they do a very nice job taking their message to market.
In this brief, I am sharing a few take aways from the most recent earnings call (1Q 2023), their associated Investor Presentation, and related public information.
I focused my notes on how the company presents Growth aspects of their business, separated into 3 areas: 1] Market Positioning, 2] Growth, and 3] Customers.
Note: I am not a financial advisor, and I am not making any recommendations in this brief.
Market Positioning.
I appreciate when companies distill their aspirations and purpose in simple and relatable terms. ServiceNow does this well. Here are 3 example statements they share in this area:
With these 3 statements, which are nicely presented on slide 4 of their Investor Presentation, I get a clear sense of what ServiceNow is about. I also walkway inspired by the way they come forward with confidence and clarity of vision.
Growth.
On Revenue.
ServiceNow posted solid growth in subscription revenues in both Q1 2023 and full year 2022 amidst a complex environment. In addition, they upped their guidance (slightly) for the full year 2023.
Something I appreciate about their investor deck is how clear ServiceNow is about the impact of currency fluctuations (FX) in their results and change in guidance. This type of clarity helps to manage expectations and provides transparency.
As an example, here is slide 8 of the deck, which uses a 'waterfall' chart to show a comparison to previous guidance and includes the currency (FX) impact. I find 'waterfall' charts to be a great way to visualize changes in key metrics, especially when the change can be attributed to 2 - 4 key drivers.
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On Headcount.
As of Q1 2023, ServiceNow's headcount grew on a year-over-year basis. In addition, headcount grew between Q4 2022 and Q1 2023.
During the Q&A section of the call, the company addressed their continued intentionality and discipline on hiring, focused on meeting demand and creating a people first culture. Given the current labor market and shifting technology company valuation dynamics, ServiceNow did a nice job of presenting their focus in this area for both investors and employees.
Customers.
Each quarter, the company does a solid job in presenting their customer profile and highlighting the scale of their operations. Here are some examples from the prepared remarks:
In addition, I love their 'Customer Cohort" growth chart in the investor deck (below). It clearly shows the strength of the company's expansion business overtime. By looking at this chart I can see clearly how each year, the annual customer cohorts continue to grow and expand.
Although I generally don't like having too many colors in one chart, I really appreciate the use of colors in this visual. It creates a sense of energy and depth which helps reinforce the message of growth and momentum.
Closing Remark.
In summary and as we all generally know, a message is only as powerful as the way it is delivered. The energy, clarity, and visuals behind a business message makes or breaks its intention. In my opinion, ServiceNow does a really great job presenting their business and associated performance.
I enjoyed doing this assessment and I hope you also got something out of it.
All the best -- Carlos
Reference Material
Solutions Architect at Appian Corporation
1 年This was a good summary! This also made me think that I like going through the 10-K reports for different companies. It's really interesting to see from their mouths what they perceive the biggest risks to their business is.