UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

__________________________

This Annual Report on Form 10-K, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are based on our current expectations, estimates, forecasts and projections about our business, our results of operations, the industry in which we operate and the beliefs and assumptions of our management. Words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “would,” “could,” “should,” “intend” and “expect,” as well as variations of these words and similar expressions, are intended to identify those forward-looking statements. These forward-lookingForward-looking statements are only predictions and are subject to risks, uncertainties, assumptions and other factors that are difficult to predict. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in this Report under the section entitled “Risk Factors” in Item 1A of Part I and elsewhere herein and in other reports we file with the Securities and Exchange Commission (“SEC”). While forward-looking statements are based on theour management’s reasonable expectations of our management at the time that they are made, you should not rely on them.those statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason, whether as a result of new information, future events or otherwise, except as may be required by law.

ServiceNow was founded on a simple premise: a better technology platform will helpto make work flow better. The company’sOur purpose is to make the world work better for everyone. We helpare the end-to-end intelligent workflow automation platform for digital businesses. Our intelligent platform, the Now Platform, is a cloud-based solution with embedded artificial intelligence (“AI”) and machine learning (“ML”) capabilities that helps global enterprises across industries, universities and governments tounify and digitize their workflows—the individual tasks that need to be executed to get a job done. Our technology platform, which we refer to asworkflows. By connecting workflows across siloed organizational functions and systems, the Now Platform enables us to connect systems, silos, departmentsdelivers business outcomes, including unlocking productivity, streamlining processes, and processes with digital workflows thatimproving experiences for both employees and customers.

Our workflow applications built on the Now Platform are simple and easy to use. We categorize the workflows we provide intoorganized in four primary areas: Technology, Customer and Industry, Employee, and Creator. Our Technology Workflows empower Information Technology (“IT”), Employee, Customer and Creator, as discussed in more detail below. Our IT workflows give IT departments the ability to plan, build, operate and service across the entire IT lifecycle. Our Employee workflows help customers simplify how their employees getneeds of the services they need, creating a familiar, consumer-like way to get work done from wherever an employee may be—at home, in the workplace or in the field.business enterprise. Our Customer workflowsand Industry Workflows help organizations reimagine the customer experience and increase customer loyalty. Our Employee Workflows help customers simplify how their employees access services they need, creating a consumer-like experience. Our Creator workflowsWorkflows enable our customers to quickly create, test, and deploy their own low-code applications on the Now Platform.

Traditionally, business processes have been automated and embedded acrossin separate enterprise technology systems, fromsuch as finance, to human resources (“HR”) to, sales and customer support, and beyond. Over time, these systemswhich have become disconnected, siloed and complex, often limitingoffering limited flexibility and adaptabilityadaptability. They also fail to provide the intuitive and lacking the intuition and empowerment of technologies created for the individual consumer. ServiceNow is changingempowering experience that users now expect from consumer-grade applications. The Now Platform offers a solution to these limitations. We offer the capability to quickly change how work is done to keeplimitations by enabling rapid business process automation across enterprise technology systems that keeps pace with a rapidly changing environment. The Now Platform delivers a simple, user-friendly experience, making work easier, faster and more fulfilling.

We believe a better service and end-user experience, isand organizational agility are the ultimate desired outcomeoutcomes of digital transformation.

The company’s success began with Information Technology Service Management (“ITSM”), a category in which ServiceNow has become a market leader. Over time, we expanded beyond our ITSM capabilities to meet the needs of our customer’s expanding digital requirements to modernize technology operations, employee experiences, customer experiences, industry-specific challenges and application development and integration. We are now recognized as a leader for multiple products across our IT, Employee, Customer and Creator Workflows.

Overas HR, IT, facilities and more. Similarly, the years, we have expanded ourNow Platform enables customer baseservice to be executed in a way that reduces customer effort, provides proactive service, empowers agents and streamlines communication and automation across departments.

Because of these advantages, our customers have expandedfrequently expand their use of the Now Platform. For example, many companies now have multi-year digital transformation plans many of which heavily involve introducing usesthat introduce the use of additional ServiceNow products and services. From a single, out-of-the-box solution, companies recognize the value of using additional products to strengthen the richness and quality of their data running through the Now Platform. As we help organizations realize more value from the Now Platform and better serve their stakeholders, we do so in a manner that also helps organizations accelerate their environmental, social and governance (“ESG”) ambitions. To serve the growing focus on ESG, ServiceNow also offers an integrated ESG solution on the Now Platform as part of our IT workflows.

For allBy prioritizing these reasons,values, we are able to gain our customerscustomers’ trust, us with their mission critical operations,execute on our overall business strategy and we feel immensely proud that “The World Works with ServiceNow.”

ServiceNow’s product portfolioportfolio—which spans four workflows—IT, Employee,our Technology, Customer and Creator—Industry, Employee, and areCreator & Other Workflows—is delivered on ServiceNow’s Platform—the Now Platform. The products under each of our workflows are helpinghelp customers connect, automate and empower work across systems and silos to enable great outcomes for businesses and great experiences for people. Each year, two major platform upgrades are released, each withdelivering new standard functionality and new standalone products to further simplify the way our customers work and enhance productivity.

The Now Platform is the intelligent platform for end-to-end digital transformation. It is a single-cloudsingle platform with one data model, one code base and one architecture, enabling speed, flexibilityproductivity and innovation that offersand offering a one-stop shop for automation and simplification of manual processes. It is highly flexible, scalable, and extensible. The Now Platform deliversautomates workflows across siloed organizations and systemsan entire enterprise by connecting them togetherdisparate departments, systems, and silos in a seamless way to unlock productivity and improve experiences for both employees and customers. As the foundation for how we deliver our enterprise-widecross-enterprise digital workflows, the Now Platform integrates withorchestrates work across our customers’ cloud platforms and systems of choice, allowing our customers to deliver workflows acrossget work done regardless of their current and future preferred systems of record and collaboration platforms.

The automation of workflows on our platform iscan be enhanced by additional services we offer, such as artificial intelligence (“AI”)functionality, including, depending on the product, AI (including generative AI), machine learning, robotic process automation, process mining, performance analytics, electronic service catalogs and portals, configuration management systems, data benchmarking, encryption and collaboration and low-code/no-code development tools. While every company has a different suite of user interfaces from web-based to mobile to conversation applications,Further, the Now Platform creates a common user experienceis uniquely positioned to bring the full potential of generative AI to the enterprise. With our recent software release, we have combined the power of the Now Platform with new generative AI features to provide AI-driven intelligence to every corner of the business. These features are offered through Now Assist, our generative AI solution available for certain products at an additional cost. We offer enterprise-ready, domain-specific large language models (“LLMs”) that power generative AI experiences on the Now Platform, and we support customer use of third-party LLMs. By infusing generative AI into the Now Platform and all ServiceNow workflows, we are enhancing every business-critical function to increase productivity, accelerate agility and deliver value for customers to manage workflows across all interfaces.industries.

The Now Platform also powers three nativecreates a common user experience to manage workflows across all interfaces so end users can get work done anywhere from web-based to mobile experiences for everyday work across the enterprise: Virtual Agent, Now Mobile and Mobile Onboarding.to conversation applications. Enterprises can take advantage ofleverage our platform’s consumer-like mobile experiences to help them deliver services such as getting help from human resourcesmobile HR information and tools or ordering a computer, from our platform.computer. Our goal is to make our customers’ work lives as simple easy and mobile-friendlyas easy as their personal lives.

Our ITTechnology Workflows help companies unite IT, technology, risk management and security operations on a single platform to deliver modern, resilient digital services aligned to our customers’ priorities. Our ITTechnology products assistenable IT departments to serve their customers, manage their networks,IT infrastructure, identify and remediate security vulnerabilities and threats, gain visibility across their IT resources and asset lifecycles, optimize IT costs and reduce time spent on administrative tasks. We enable IT workflows through ITSM, IT Business Management, IT Operations Management, IT Asset Management, Security Operations, and Governance, Risk and Compliance, among other products. Many of theseOur Technology products also enabledrive enterprise-wide outcomes, as well as power our Customer and Industry, and Employee and Customer workflows.Workflows.

Our IT BusinessAsset Management product suite includes IT Asset Management and Enterprise Asset Management. IT Asset Management inventories and automates customers’ software, hardware and cloud asset lifecycles with workflows and analytics to track the financial, contractual and inventory details of these IT assets from end-to-end. Enterprise Asset Management inventories and automates processes across the lifecycle of a customer's physical business assets from planning, deployment, inventory management and maintenance through retirement.

Our Integrated Risk Management (“IRM”) product suite helps customers manage theirrisk and resilience in real time. IRM’s capabilities include policy and compliance management, regulatory change management, compliance case management, IT priorities, including the scope and cost of IT projects, the development of software related to those projectsoperational risk management, audit management, business continuity management, privacy management, and the overall management of the customer’s IT project portfolio.third party and vendor risk management.

Our IT Operations Management product suite connectshelps identify, monitor and manage a customer’s physical and cloud-based IT infrastructure with our applications and platform.infrastructure. It identifies a customer’s IT infrastructure components (e.g., servers) and associated businessdigital services (e.g., email), which are dependent upon that infrastructure. It also maintains a single data record for all IT configurable items, which allows our customers to exercise control over their on-premises or cloud-based infrastructures and orchestrate key processes and tasks.

Now Assist for ITSM, a generative AI solution, can help improve agent productivity and the employee experience with workflowsfaster, more seamless resolutions. It provides summaries of Virtual Agent interactions and incident history so agents can efficiently resolve incidents. Upon incident closure, solution notes are generated to track the financial, contractualspeed wrap times and inventory details of these IT assets throughout their lifecycles.adhere to incident management best practices.

Our Security Operations product suite connects security operations product connects with the rest of the enterprise, integrating internal and third-party security alerts from a customer’s infrastructureand vulnerability data to prioritize andquickly respond to security incidents and vulnerabilities, prioritized according to their potential impact on a customer’s business.

Customer workflowsand Industry Workflows help drive customer loyaltyorganizations reduce costs while delivering seamless experiences with connected digital workflows that deliver modern customer experiences.experiences and industry-specific use cases. Customer workflowsand Industry Workflows help customers elevate their customer service with enhanced resolution efficiency and improved service quality made possible with workflows, automation, AI, and location-based work tasks management. Customer service departments no longer haveneed to rely on reactive agents searching multiple systems to find a single answerresolution to customer issues.requests. Integrating front-end customer service capabilities with operations, order fulfillment and field service resources, our Customer workflowand Industry Workflows products help create a seamless customer experience from issuerequest to resolution through connected digital workflows that deliver fast support on a customer’s channel of choice. We enable Customer workflows through Customer Service Management and Field Service Management, among other products.

Our Customer Service Management (“CSM”) product defines, structures, consolidates, manages and automates commonhelps teams deliver seamless customer service experiences by connecting front, middle and back offices, optimizing omnichannel self-service automated issue resolution, and enabling agents with real-time intelligence. Additionally, with CSM, companies can route work to the right agent based on priority and category, decreasing errors by surfacing recommended solutions based on prior cases and requests, such as password resets, to be automated with out-of-the-box self-service,interactions.

Now Assist for CSM, a generative AI solution, rapidly generates summaries for cases and for other cases it routeschats, reduces manual work, from the customer service agent to field service, engineering, operations, finance or legal personneland allows agents to resolve the underlying issues.customer issues faster. This solution helps accelerate time to resolution, reduce case volume, and personalize service, which leads to reduced customer effort and increased customer satisfaction.

Our Field Service Management product allowsautomates and streamlines field service processes to increase technician productivity, improve first time fix rates, and optimize field technician dispatching. With work order management, schedule optimization, dispatching, and preventative maintenance all in one, field service agents tocan be effectively assigned, deployed and managed on the same underlying customer service management platform that created and managed the customer incident. Organizations can streamline resource management and empower technicians with job details, customer information, and parts required to maximize effectiveness and deliver great customer experiences.

Creator Workflows

Our App Engine product empowers our customers’ employees to create enterprise-class low code application delivery withworkflows using low-code and no-code development tooling and does not require formal coding experience. App Engine delivers intuitive and intelligent development experiences, atdesigned for speed, security and scale. With App Engine, customers and third-party developers can extend workflow automation by creating, testing and deploying their own consumer-grade applications that can be scaled from a single department to the entire enterprise. Examples of applicationsthe types of workflows our customers have developed using App Engine include:

Our IntegrationHubAutomation Engine product enables anyone who creates an application on the Now Platform to extendhelps workflows into third-party products, eliminating the need for other integration tools to connect a ServiceNow workflowintegrate by connecting or automating systems, documents or tasks with other software platforms. Integration hub provides a frameworkminimal code. Manual work can be eliminated by leveraging robotic process automation and intelligent document processing capabilities. Automation Engine includes process mining capabilities that allows developers to createcan uncover trends and publish integrations for use by anyone. The Now Platform provides connectors to hundreds of productspatterns in business processes and integrations in the ServiceNow Store.help eliminate redundancies, drive process optimization, along with cost and productivity efficiencies.

We offer industry solutionsOur Platform Privacy and Security product provides premium security and privacy controls to better addresshelp ServiceNow customers protect and control their sensitive data in the unique needs of specific industries. We offer industry solutions for financial services; telecommunications, mediacloud.

Our Source-to-Pay Operations (formerly, Procurement Operations Management) suite connects to customers’ existing enterprise resource planning (“ERP”) systems and technology (“TMT”); healthcare and life sciences; and manufacturing. We intendprovides a source-to-pay workflow automation solution that enables procurement departments to offer other industry specific solutions in addition to our other workflow products. With Financial Services Operations, financial services customers can unite their front, middle and back offices to improve customer and employee experiences. With Telecommunications Service Management and Order Management, TMT customers can scale their order management process, launch services quickly, enhance customer care, automate service assurance and gain real-time data visibility. With Healthcare and Life Sciences Service Management, healthcare and life sciences customers can offer consumer-grade experiences, unlock productivity and streamline operations. With Manufacturing Connected Workforce and Operational Technology Management, manufacturing customers can empower their workforce with digital tools and knowledge to improve efficiency and create a single systemunified work experience across teams. It enables organizations to do more with their existing procurement teams and to further scale without dramatically increasing staff.

ServiceNow Impact helps our customers accelerate the value they realize with our products and solutions. It provides customers AI-based software tools that offer customers recommendations to proactively monitor platform health and allow customers to track metrics of action for their operational environment, improve uptimevalue to them. Impact customers also have access to a team of on-demand experts, training and drive outcomes across their operations.other services.

Our Professional Services are offered by ServiceNow alone and in a co-delivery model with our network of partners to help customers maximize the value of their ServiceNow investment. Our professional servicesProfessional Services include process design, implementation, configuration, architecture and optimization services. With our Now Valueprescriptive methodology as the foundation for customer success, our services bring together our experts and leading practices enabling our customers to create value and drive customer outcomes as they embark on enterprise digital transformations through the use of our platform. Our training services include programs for all of our products.

Customers receive standard and enhanced support around the globe, from technical resources located inaround the United States and internationally.globe. We will start offeringoffer customer support on a subscription-based model, and we offer self-service technical support through our support portal, which provides access to documentation, knowledge base articles, online training, online support forums and online case creation.

We operate a multi-instance architecture that provides each customer with its own dedicated application logic and database.databases. This architecture is designed to deliver high-availability, scalability, performance, security and ease of upgrading.control. Our cloud infrastructure primarily consists of industry-standard servers, networks and storage components. We host our full software-as-a-service (“SaaS”) experience on our own private cloud and use public cloud service providers for customers that are primarily in highly regulated markets.markets or at their request.

Our data centers operate in paired configurations to enable replication for high-availability and redundancy. We currently operate data centers in North America, South America, Europe, Asia and Australia Brazil, Canada, Germany, Ireland, Japan, South Korea, the Netherlands, Singapore, Switzerland, the United Kingdom, and the United States,, and we continuously evaluate our data center operations and capacity in existing and new geographies.

We offer customers the option to deploy our services on dedicated hardware in our data centers. We offer customers the option to have their EU-hosted data handled exclusively within the EU. Our architecture also gives us the added flexibility to allow customers the option of deploying our services internally in their own data centers or under contract with a third party to host the software in order to support unique regulatory or security requirements. While there are some limitations on agility and flexibility as compared to our cloud offering, a minority of our customers have elected the third-party alternative. The standard and enhanced customer support we provide for self-hosted customers is similar to the support we provide to customers deployed in our managed data centers.

In addition to our global direct sales organization, we also have a strong and growing ecosystem of partners that helps accelerate our customers’ digital transformation initiatives and deliver customer value at scale. Our partners play a critical role in helping companies digitally transform their business.businesses. Our industry and workflow capabilities paired with our partners’ industry and functional domain experience help customers of all sizes. Together with our partners, we offer industry and domain-focused solutions at scale and are accelerating digital transformation as we help companies drive new approaches in engaging their end users and employees.

 

We primarily sell our services to large enterprise customers, and we host and support large, enterprise-wide deployments for our customers. As of December 31, 2021,2023, we had approximately 7,400 enterpriseover 8,100 customers. Our customers operate in a wide variety of industries, including government, financial services, healthcare, manufacturing, IT services, technology, oil and gas, telco,telecommunications, education and consumer products. The portion of our revenues generated by sales to government customers has also increased over time. See “Risk Factors—Doing business with the public sector including U.S. governments and agencies, heavily-regulated organizations and governments globally,entities subjects us to risks related to the government procurement process, regulations, and contracting requirements” for additional information about our sales to government customers.

Our research and development organization is responsible for the design, development, testing and validation of our solutions. We focus on innovating and developing new services and core technologies and further enhancing the functionality, reliability and performance of our existing solutions. Using emerging technologies, we can anticipate customer demands and then bring new services and new versions of existing services to market quickly in order to remain competitive in the marketplace. We have made, and will continue to make, significant investments in research and development to broaden our platform capabilities, strengthen our existing applications, expand the number of applications on our platform, enhance our user experience and develop additional mobile, automation, AI and machine intelligence technologies.

In addition to our own research and development investments, we have made strategic acquisitions and investments and will continue to assess opportunities to complement our technology and skill sets and expand our product reach. Our focus is on building out our platform and products through both organic investments to support customer needs and acquisitions of talent and enhanced capabilities. For example, ourOur acquisitions and larger acquisitionsstrategic investments in 20212023 focused on

bringing development and operations observability and additional AI capabilities, process mining functionality and health and safety features to the Now Platform and across our suite of products.

As customers accelerate their digital transformation plans and digital operation initiatives, they are demandingdemand less complexity and lower total cost insolutions for the implementation, sourcing, integration and ongoing maintenance of their information technologyIT environments. The Now Platform is designed to meet customers’ demands by seamlessly connecting workflows across siloed organizations and systems in a way that unlocks productivity, improving experiences for both employees and customers and delivering real business outcomes. Our technology platform offers solutions that are complementary to the offerings of many enterprise software vendors; we believe that we do not need those vendors to lose for us to win.vendors. We work directly with product and service offerings from a broad range of companies, including some of the largest in the world, and continuously increase our strategic alliances with many of these companies as we expand our integrations for customers. However, asAs we grow and those vendors grow,the space where we mayoperate develops and matures, we increasingly find ourselves in competition with solutions and alternative approaches to solving customer needs, including:

 

We rely upon a combination of U.S. and international copyright, trade secret, patent and trademark laws and confidentiality procedures and contractual restrictions, such as confidentialityrights and license agreements,restrictions to establish, protect and grow our intellectual property (“IP”) rights. In addition, weWe enter into confidentiality and proprietary rights agreements with our employees, partners, vendors, consultants and other third parties and controllimit access to our IP and other proprietary information. We also purchase or license IP and technology that we incorporate into our products or services. In certain of our partnership arrangements, our partners may develop technology on the Now Platform that may be subject to copyright or other intellectual property rights that we agree to with the partner.

Initiatives to improve our inauguraldiversity, equity and inclusion (“DEI”) help build a more inclusive workforce. They also help us attract and retain talent and bring different perspectives that foster innovation. Initiatives to strengthen the governance of our business—leading with ethics and focusing on security and data privacy—improve the oversight of our business and help us maintain the trust of our customers. We release an annual Global Impact Report to provide insights into thethat details our ESG areas where we are focusing our efforts. For environmental, we are working towards sustaining our planet by championing a net-zero environment. For governance, we are acting with integrity by building trust through ethical, transparentstrategy, initiatives and secure business practices. For social, we are creating equitable opportunity to make work more equitable, accessible and rewarding for all people. Additional information about our “social” initiatives is discussed below in “—Human Capital Management”. In September 2021, we announced our goal to achieve net-zero greenhouse gas emissions by 2030. In October 2021, we announced our integrated ESG solution to help customers activate their ESG strategy. In November 2021, we became a member of the Dow Jones Sustainability Index (DJSI) for North America.performance.

ServiceNow’s culture is grounded in our values, first discussed above.values. We live our culture by regularly listening to our people and gathering feedback directly from our workforce to inform our programs and meet employee needs globally. We listen through ourOur Employee Voice SurveysSurvey (“EVS”), which measures and analyzes employee engagement, including on such topics as inclusion and belonging, learning and development, recognition, pay,compensation, and well-being.wellbeing. EVS insights are used to create action planplans at all levels of the organization and inform the assessment of our human capital management approach and its alignment with our company purpose and business strategy.

We support multiple Belonging Groups within our business and employee community, including for women, different racial and ethnic minorities,groups, families, military veterans, people with disabilities, people of different faiths, and people who identify as LGBTQI+. These groups are intended to giveserve the wellbeing of our employees a safe space and help supportcontribute to our culture and community-building efforts across the company.ServiceNow. We also publicly disclose our progress on a multituderange of DEI workforce metrics in the various reports we issue that include information on gender, race, and ethnic minority representation in our U.S. employee population.issue.

Our people have a deep desire to learn and grow. Our learning and development programs are designed to “grow self, grow team, grow business.” In addition to the extensive functional learning program run by individual business units that focus on technical skills and capabilities, our global Learning and Development program is focused on enabling all our people – from our early-in-career talent who have access to programs that help them plan for professional growth and financial success to our more tenured leaders who have access to programs like “Future Readiness,” led by Harvard Business Professor Frances Frei, focusing on the importance of inclusive leadership, strategy and trust in the new world of work–to grow and be the best individual contributors, managers and leaders they can be.trust.

Further, we announced our new Future of Work policy to support our people as they adapt to newembrace ways of working that shift paradigms, embracepromote flexibility, promote inclusion and drive innovation. Under this policy, beginning in 2022, the majorityA substantial portion of our employees are in a workplace three dayswork partially or fewer a week, whichfully remote. This provides themthose employees flexibility to organize their schedules. Our flexible working environment will enableschedules, which enables us to attract, recruit and retain the best talent and wetalent. We believe such an environment will only serve to strengthen our company. Our fully-remote workforce is also expected to continue to increase, allowing us to tap into different, more diverse talent, who are not geographically close to a ServiceNow workplace.

As of December 31, 2021,2023, we employed 16,88122,668 people on a full-time basis, 9,34111,797 in the United States and 7,54010,871 internationally. None of our U.S. employees are represented by a labor union. Employees in certain European countries are represented by workers’ councils andor employee representatives or have the benefits of collective bargaining arrangements at the national and/or sector level. We have not experienced interruptions of operations or work stoppages due to labor disagreements.

You can obtain copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings with the SEC, and all amendments to these filings, free of charge from our website at www.servicenow.com/company/investor-relations/sec-filings.html as soon as reasonably practicable following our filing of any of these reportsafter we file or furnish them with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of, or accessible through, these websites are not incorporated into this filing and ourfiling. Our references to the URLs for these websites are intended to be inactive textual references only.

Investors and others should note that we announce material financial information to our investors using our investor relations website (https://www.servicenow.com/company/investor-relations.html), SEC filings, press releases, public conference calls and webcasts. We use these channels, including our website and social media, to communicate with our investors and the public about our company, our servicesproducts and solutions and other issues. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we make available on our website and the social media channels listed on our website.

Investing in our securities involves risks. You should carefully consider the risks and uncertainties under “Risk Factors Summary” and the more detailed descriptions immediately following the summary,described below, together with all of the other information in this Annual Report on Form 10-K, including our consolidated financial statements and related notes, before making an investment decision. The risks and uncertainties described below are not the only ones we face. The occurrence of any of the following risks, or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial, could materially and adversely affect our business, financial condition or results of operations. Manyoperations or cause our stock price to decline. The following risks affect more than one category,have been grouped by categories and the risks are not in order of significance or probability of occurrence because they have been grouped by categories. Our stock price could decline due to any of these risks.occurrence.

This summary of risks below is intended to provideprovides an overview of the risks we face. Important information is included inface and should not be considered a substitute for the body of eachmore fulsome risk factor that cannot be substituted for by reviewing only the summaryfactors discussed immediately following this summary.

National and local governments or agenciesGovernments have adopted, and maylikely will continue to adopt, laws and regulations affecting the use, storage and movement of data, including laws related to data privacy and security, the use of the Internet as a commercial mediummachine learning and artificial intelligence (“AI”), and data sovereignty or residency requirements concerning the location of data centers and support services. As a cloud-based service provider, we optimize performance of our products and services by utilizing data centers located in, and support provided from, different jurisdictions.requirements. Changing laws, regulations and standards applying to the collection, storage, use, sharing, portability, transfer or other control or processing of data, including personal data, could affect our ability to efficiently and cost-effectively offer our services and to develop our products and services to maximize theirfor maximum utility, as well as our customers’ ability to use data or share data with service providers.data. Such changes may restrict our ability to use, store or otherwise process customer data of our customers in connection with providing services and supportingcould alter or increase our services.compliance requirements. In some cases, this could impact our ability to offer our services in certain locations or our customers’ ability to deploy our services globally. For example, the EU Data Act is a proposed law with potential significant requirements regarding data portability, interoperability and accessibility and unclear data transfer restrictions, any of which could impact our operations. In addition, although the new Trans-Atlantic Data Privacy Framework (which replaced the prior Privacy Shield) has been approved, which could facilitate the transfer of data between the United States (“U.S.”) and European Union (“EU”), there remains a possibility that this framework could be challenged in court.

We offer region-specific services, delivery model, by which customer data is hosted locally and customers may elect to receive support from EU‑locally based ServiceNow teams, with an EU, cloud‑hosted digital workflow solution. This offering required ateams. Setting up and maintaining these region-specific services require significant investment, in financialincluding to comply with applicable laws and human resources, and we may see similar requests for local solutions in other territories. In addition, actualregulations. Actual or perceived non-compliance with those laws and regulations could result in proceedings or investigations against us by regulatory authorities or others, lead to significant fines, damages, orders, litigation or reputational harm and may otherwise adversely impact our business, financial condition and operating results.

Changes inThe markets for our developed or acquiredenterprise cloud solutions are rapidly evolving and highly competitive, with relatively low barriers to entry. As the market for digital workflow products and how suchofferings matures and new technologies, in-house solutions and competitors enter the market, we increasingly compete with alternative solutions and approaches to solve customer needs or experience customer reluctance or unwillingness to migrate away from their current solutions. Further, we expect additional competition as we shift our products and services to compete with providers in adjacent markets.

Some of our existing competitors and potential competitors are larger and have greater name recognition, the ability to more efficiently scale their business, more established operations and customer relationships, and greater financial and technical resources than we do. Competitors, regardless of their size, may be able to respond more quickly and effectively to new or changing opportunities, technologies, standards, customer requirements and buying practices. They may introduce new technology, solve similar problems in different ways or more effectively utilize data could also alter or increase our compliance requirements. As a result, our innovation and business drivers in developing or acquiring new and emerging technologies and theexisting technology that reduces demand for our services. They may utilize acquisitions, integrations or consolidations to offer integrated or bundled products, enhanced functionality or other advantages. “Systems of record” operators may attempt to create technology solutions or other mechanisms that would prevent our systems from integrating with theirs. They may create pricing pressures by reducing the price of competing products, services or subscriptions or bundling their offerings causing our offerings to appear relatively more expensive. In addition, competition from cloud-based vendors may increase as they partner with on-premises hardware providers to deliver their cloud platform as an on-premises or data localized solution. If we are not able to compete successfully, we could experience reduced sales and margins, losses or failure of our products to achieve or maintain market acceptance, any of which could harm our business.

Further, in response to evolving customer needs, we may make significant investments in changing how we offer our products or services, such as bundling offerings or shifting to a subscription-based model for support services or how our services are delivered or priced. If customers are dissatisfied with these changes, our business could be materially adversely impacted.

We provide products and services to the U.S. federal, state and local governmentsgovernmental and heavily-regulated organizationsentities directly and through our partners. We have made, and may continue to make, significant investments to support future sales opportunities in various government sectors. This includes obtaining and maintaining additional cloud security authorizations in the US for the ServiceNow Government Community Cloud, such as the U.S. Federal Risk and Authorization Management Program (“FedRAMP”) High Provisional Authorityour efforts to Operate (“P-ATO”) from the Joint Authorization Board, and the U.S. Department of Defense Security Requirements Guide Impact Level 4 P-ATO for cloud computing by the Defense Information Systems Agency. We have also made significant investmentssell to those entities. Processes to obtain security authorizations and certifications outside the US. However, government certification requirements may change, orrequired for us to provide our products and services to those entities often are lengthy and encounter delays, and we may not be unableable to achievesatisfy, or sustain one or more government certification or authorization, including those mentioned above. As a result, if such requirements change, our ability to sell intomaintain compliance with, the government sector could be restricted until we meet any revisedassociated requirements.

A substantial majority of our sales to date to government entities in the USU.S. have been made indirectly through our distributors, resellers or service provider partners. Doing business with government entities presents a variety of risks. The procurement process for governments and their agencies is highly competitive and time-consuming, and may be subject to political influence and may involve different rules and conditions on the offering or pricing of products and services. We incur significant up-front time and expense which subjects us to additional compliance risks and costs, without any assurance that we (or a third-party distributor, reseller or service provider) will win a contract. Beyond this, demand for our products and services may be adversely impacted by public sector budgetary cycles and funding availability that in any given fiscal cycle may be reduced or delayed, including in connection with an extended federal government shutdown, partisan gridlock or changes to government policy. Further, if we or our partners are successful in receiving a contract award, that award could be challenged during a bid protest process.

Bid protests may result in an increase in expenses related to obtaining contract awards or an unfavorable modification or loss of an award. Even if a bid protest were unsuccessful, the delay in the startup and funding of the work under these contracts may cause our actual results to differ materially and adversely from those anticipated.

Our customers also include non-U.S. governments, to which government procurement risks similar to those present in U.S. government contracting and regulatory compliance also apply, particularly in certain emerging markets where our customer base is less established. We have seen challenges to successful awards through bid protest procedures in jurisdictions outside the US.U.S. As our non-USnon-U.S. government business grows, we may see an increase in bid protests as part of the standard government procurement legal procedures that exist in many jurisdictions. In addition, compliance with complex regulations and contracting provisions in a variety of jurisdictions can be expensive and consume significant management resources. In certain jurisdictions, our ability to win business may be constrained by political and other factors unrelated to our competitive position in the market. Each of these difficulties could materially adversely affecthave a material adverse effect on our business and results of operations.

In addition, public sector customers may have contractual, statutory or regulatory rights to terminate current contracts with us or our third-party distributors or resellers for convenience or due to a default, though such risk may be assumed by such third-party distributor or reseller. If a contract is terminated for convenience, we may only be able to collect fees for products or services delivered prior to termination and settlement expenses. If a contract is terminated due to a default, we may be liable for excess costs incurred by the customer for procuring alternative products or services or be precluded from doing further business with governmentgovernmental entities. Further, we are required to comply with a variety of complex laws, regulations, and contractual provisions relating to the formation, administration, or performance of government contracts that give public sector customers substantial rights and remedies, many of which are not typically found in commercial contracts. These may also include rights with respect to price protection, refund and setoff, performance of services in languages other than English, the accuracy of information provided to the government, contractor compliance with supplier diversity policies, constraints on sales practices and other obligations that are particular to government contracts. These obligations may apply to us and/or our third-party resellers or distributors whose practices we may not control. Such parties’ non-compliance could impose repercussions with respect tocreate contractual and customer satisfaction issues.

In addition, governments routinely investigate and audit contractors for compliance with thesecontractual and regulatory requirements. If from an audit, it is determined that we have failed to comply with these requirements, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, cost associated with the triggering of price

Further, we are increasingly doing business in heavily regulated industries, such as the financial services, telecommunication, media and television, and health care industries.care. Current and prospective customers in suchthose industries may be required to comply with more stringent regulations in connection with subscribing to and implementingsubscribe to and/or implement our services or particular regulations regarding third-party vendors that may be interpreted differently by different customers.services. In addition, regulatory agencies may impose requirements towardon third-party vendors that we may not be able to, or may not choose to, meet. In addition,Further, customers in these heavily-regulated industries often have a right to conduct audits of our systems, products and practices. If one or more customer determinescustomers determine that some aspect of our business does not meet regulatory requirements, we may be limited in our ability to continue or expand our business.business with those customers may be restricted.

As we continue to expand our business internationally, we will inevitably do more business with large private enterprises and the public sector in countries that are perceived to have heightened levelsoutside of public sector corruption.the U.S. Increased business in countries perceived to havewith heightened levels of corruption could subjectsubjects us and our officers and directors to increased scrutiny and increasedpotential liability from our business operations. We have implemented and continue to update ouran established compliance program, but there is a risk that our employees, partners, customers and agents, as well as those companies to which we outsource certain of our business operations, could take actions in violation ofviolate our policies and applicable law, for which weexposing us to additional scrutiny and potential liability. We have experienced this in the past and may be ultimately held responsible.experience it again in the future. In addition, we are subject to global trade laws that apply to our worldwide operations, including prohibitions or restrictions on conducting business in certain restrictedgeographies or involving certain counterparties or end-users. As a result of the Russia-Ukraine conflict, for example, the U.S. and other countries have imposed economic and trade sanctions and export control restrictions against Russia and Belarus. If this conflict continues or with certain entities or individuals.if conflict arises in other jurisdictions, the U.S. and other jurisdictions could impose wider economic and trade sanctions as well as export restrictions, which could impact our business opportunities and operations. Any violation of the U.S. Foreign Corrupt Practices Act of 1977, as amended, (the “FCPA”), the UK Bribery Act, other applicable anti-corruption and anti-bribery laws, or applicable export control or globaleconomic and trade sanctions laws by our employees or third-party intermediaries could result in regulatory investigations and whistleblower complaints, which could

subject us to significant risks such as adverse media coverage and/or severe criminal or civil sanctions, which could materially adversely affect our reputation, business, operating results, and prospects.

We participatehave acquired and invested in intensely competitive markets,companies and iftechnologies as part of our business strategy and will continue to evaluate and enter into potential strategic transactions, including acquisitions of or investments in businesses, technologies, services, products and other assets, to expand or improve our service offerings and functionality, go-to-market and sales efforts, our operations or our ability to source necessary expertise and provide services in international locations. Although we doconduct reasonably extensive due diligence regarding these businesses and assets, our efforts may not compete effectively,reveal every material issue. Strategic transactions involve numerous risks, including:

SomeIn addition, the amount or form of consideration we pay for acquisitions could adversely affect our financial condition or stock price. For example, if we finance an acquisition by issuing equity or convertible debt securities or loans, our existing competitors and potential competitors are larger and have greater name recognition and scale, longer operating histories, more established customer relationships, larger marketing budgets and greater financial, technical and resources than we do. Competitors and new entrantsshareholders may be ablediluted, or we could face constraints related to respond more quicklythe terms of those securities or indebtedness. The occurrence of any of these risks could harm our business, operating results and effectively to new or changing opportunities, technologies, standards, customer requirements and buying practices. They may introduce new technology, solve similar problems in different ways or more effectively utilize existing technology that reduces demand for our services. They may utilize acquisitions, integrations or consolidations to offer integrated or bundled products, enhanced functionality or other advantages. “Systems of record” operators may attempt to create technology solutions that would prevent our systems from integrating with theirs. Enterprise software application vendors may reduce the price of or offer free-of-charge competing products, services or subscriptions creating pricing pressures, or bundle them with their other offerings causing our offerings to appear relatively more expensive. Smaller competitors, new technology vendors and new entrants may also accelerate pricing pressures in the various markets in which we compete.financial condition.

customers increasingly adoptprocedures, including malicious code, ransomware, social engineering, business email compromises, supply chain attacks, denial of service attacks and similar internet-enabled, fraudulent activity. Further, during times of war and other major conflicts, we and our third-party providers may be vulnerable to a hybrid (on-premiseheightened risk of geopolitically motivated attacks, including cyberattacks, that could materially disrupt our systems and off-premise) approach for their IT workloads,operations, supply chain and ability to provide our services.

While we have identified vulnerabilities in our products and services in the marketspast and will continue to do so in the future, we operate or usher a new wave of innovation, increasing competition from new entrants and technologies and existing competitors. For these reasons,cannot be certain that we may notwill be able to compete successfully. Competition could result in reduced sales and margins, lossesidentify all vulnerabilities or failure of our products to achieve or maintain market acceptance, anyaddress the vulnerabilities of which could harmwe become aware. Further, there have been delays and may continue to be delays in developing patches that can be effectively deployed to address vulnerabilities. Third parties have, in the past, actively searched for and exploited actual and potential vulnerabilities in our business.software and will do so in the future. Moreover, the incorporation of third-party or open-source software code into our or our customers’ systems increases the risk of exploitation of vulnerabilities, such as the vulnerability in the Java logging library known as “log4j” that affected our industry. We also have inherited and may in the future inherit additional security risks from acquiring or partnering with other companies.

If we failIn most instances, our customers are responsible for administering access to innovatethe data held in response to rapidly evolving technological and market developments and customer needs, our competitive position and business prospects may be harmed.

IfWhile we failhave security measures and a data governance framework in place designed to meet any ofprotect our and our customers’ information and prevent data loss, these requirements, our competitive position, strategic relevancemeasures may not be effective at preventing material breaches caused by intentional or unintentional actions or inactions by employees, contractors or third parties. Techniques used to sabotage or to obtain unauthorized access to systems are constantly evolving and business prospects may be harmed. Further,go undetected until a successful attack occurs. Moreover, we have experienced security incidents, which may make significant investments in changing the way we offer our products or services, such as starting the shift to a subscription-based model for support services, in response to evolving customer needs. Customers may be dissatisfied with the changereoccur in the mannerfuture, that resulted in unauthorized access to, loss, or inadvertent disclosure of confidential, proprietary and scope of how the services are delivered and the resulting changesensitive information. We have observed attempts by third parties to induce or deceive our employees, contractors or users to fraudulently obtain access to our or our customers’ data or assets. Further, our employees have fallen victim to phishing attacks in the pricing modelpast and may resist or be slow to adopt changes to our offerings, all of which may adversely impact our ability to compete.again in the future.

If we are unsuccessful in increasingAn actual or perceived security breach can have a material effect on ServiceNow’s operations, finances and reputation. The adverse consequences can include accidental or unlawful destruction, loss, alteration, unauthorized disclosure of or access to data; disruptions to our penetrationservices; diversion of international marketsfunds; litigation; indemnification and other contractual obligations; regulatory investigations; government fines and penalties; reputational damage; negative publicity; loss of sales, customers, and partners; mitigation and remediation expenses; and other material costs and liabilities. In addition, the assessment and response to security incidents, as well as implementation of appropriate safeguards to protect against future incidents, can lead to material economic and operational consequences. These consequences can result regardless of whether the incident is suffered by us, affects our third-party service providers or managing the risks associated with foreign markets,stems from customers action or inaction. Moreover, even if a breach is unrelated to our businesssecurity programs or practices, it could still cause us reputational harm and operating results will be adversely affected.

In the highly competitive technology industry, we face ongoing challenges in attracting and retaining top talent across various roles, such as product development and engineering (particularly with AI and machine learning backgrounds), sales, operations and cybersecurity. These key individual contributors are critical to our success and can command very significant compensation in the market. Our ability to achieve significant revenue growth may depend on our networksuccess in recruiting, training and retaining sufficient qualified personnel to support our growth. We have faced and may continue to face difficulties attracting, hiring and retaining highly-skilled, qualified personnel and may not be able to fill positions in desired geographic areas or at all. Further, as we continue to grow and expand our workforce globally, we may face operational and workplace culture challenges that could negatively impact our ability to maintain the effectiveness of partners for an increasingour business execution and the beneficial aspects of our corporate culture. While our work model, where a substantial portion of our revenues, and if these partners failemployees work partially or fully remote, increased our access to perform, our ability to sell and distribute our products may be limited, and our operating results and growth rate may be harmed.

We must successfully continue to release new products and updates to existing products. The success of any release depends on a number of factors, including our ability to manage the risks associated with actual or perceived quality or other defects or deficiencies, delays in the timing of releases or the adoption of releases by customers, and other complications that may arise during the early stages of introducing our products. If releases are delayed or if customers perceive that our releases contain bugs or other defects or are difficult to implement, customer adoption of our new products or updates may be adversely impacted, customer satisfaction may decrease, our ability to efficiently provide our services may be reduced, and our growth prospects may be harmed.

Our business depends on our platform to be available without disruption. From time to time, we experience defects, disruptions, outages and other performance and quality problems with our platform, and newplatform. New defects may be detected in the future and may arise from our increasing use of the public cloud. For example, we provide regular updates to our services, which can contain undetected defects when first released.defects. Defects may also be introduced by our use of third-party software, including open-source software. Disruptions may result from errors we make in developing, delivering, configuring or hosting our services, or designing, installing, expanding or maintaining our cloud infrastructure. Disruptions in service can also result from incidents that are outside of our control, including denial of service or ransomware attacks. We currently serve our customers primarily using equipment managed by us and co-located in third-party data centers operated by several different providers located around the world, and we serve certain of our customers that are primarily in highly regulated markets, using data center facilities operated by public cloud service providers. These data centers are vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, energy grid constraints resulting in power loss and similar events. They may also be subject to break-ins, sabotage, intentional acts of vandalism and similar misconduct, equipment failure and adverse events caused by operator error or negligence. In addition, an increased use of the public cloud increases our vulnerability to cyberattacks. Despite precautions taken at these centers, problems at these centers have occurred, resulting

in interruptions in our services. Such problems could occur again and result in similar or lengthier service interruptions and the loss of customer data. In addition, our customers may use our services in ways that cause disruptions in service for other customers. In addition to data center providers, we also have a large ecosystem of vendors and service providers that we use in our delivery offor our products. If there is a compromise to data, supply chain issue or other incident with our critical service providers, it may impact our ability to provide our services.services and reduce our productivity. Our customers use our services to manage important aspects of their businesses, and our reputation and business will be adversely affected if our customers and potential customers believe our services are unreliable. Disruptions or defects in our services may reduce our revenues, cause us to issue credits or pay penalties, subject us to claims and litigation, cause our customers to delay payment or terminate or fail to renew their subscriptions, and adversely affect our ability to attract new customers. Similarly, customers may have unique requirements for system resiliency and performance depending on their business models and customers in highly regulated markets may have more demanding requirements that we may not be able to, or may not choose to, meet. The occurrence of payment delays, service credit, warranty or termination for material breach or other claims against us could result in an increase in our bad debt expense, an increase in collection cycles, an increase to our service level credit accruals, other increased expenses or risks of litigation. We may not have insurance sufficient to compensate us for potentially significant losses that may result from claims arising from disruptions to our services.

Our success depends to a significant degree on our ability to protect our proprietary technology and our brand under patent, copyright, trademark, trade secret and other IP protections in the USU.S. and other jurisdictions. ThoughThe IP protection we seek patent protectionhave for our technology we may not be successful in obtaining patentprovide sufficient protection, and any patentsIP acquired in the future may not provide

competitive advantages or other value. In addition, any patents that have been or may be issued or acquiredour IP may be contested, circumvented, found unenforceable or invalidated, and we may not be able to prevent third parties from infringing upon them. Further, legal standards relating to the validity, enforceability and scope of protection of IP rights vary.

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or obtain and use, or may have copied or obtained and used, our technology to develop products and services that provide features and functionality similar to ours. Policing unauthorized use of our IP and technology is difficult. Our competitors could also independently develop services equivalent to ours, and our IP rights may not be broad enough for us to prevent competitors from utilizing their developments to compete with us. Reverse engineering, unauthorized copying or other misappropriation of our proprietary technology could enable third parties to benefit from our technology without paying us for it, which would significantly harm our business.

Our IP rights may be challenged by others or invalidated through administrative processesproceedings or litigation. Effective patent, trademark, copyright and trade secret protection may not be available in every country in which we offer services. The laws of some foreign countries may not offer effective protection for, or be as protective of, IP rights as those in the US,U.S., and mechanisms for enforcement of IP rights or available remedies may be inadequate, ineffective or scarce. Additionally, the IP ownership and license rights of new technologies such as AI have not been fully addressed by U.S. courts interpreting current and new laws or regulations, and the use or adoption of such technologies in our products and services may expose us to potential intellectual property claims; breach of a data license, software license, or website terms of service allegations; claimed violations of privacy rights; and other tort claims. If such laws or regulations require increased transparency, it may impair protection of our trade secrets or other IP. We may be required to spend significant resources to monitor and protect our IP rights. We have initiated and, in the future, may initiate claims or litigation against third parties for infringement or misappropriation of our proprietary rights or to establish the validity of our proprietary rights. Any litigation, whether or not resolved in our favor, could result in significant expense to us, divert the efforts of our technical and management personnel and may result in counter-claimscounterclaims with respect to infringement or misappropriation of IP rights by us. If we are unable to prevent third parties from infringing upon or misappropriating our IP rights or are required to incur substantial expenses defending our IP rights, our business and operating results may be adversely affected.

Our products incorporate software licensed to us by third-party authors under open sourceopen-source licenses, and we expect to continue to incorporate open sourceopen-source software into our products and services in the future. We monitor our use of open sourceopen-source software in an effort to avoid subjecting our products and services to adverse licensing conditions. However, there can be no assurance that our efforts have been or will be successful. There is little or no legal precedent governing the interpretation of the terms of open sourceopen-source licenses, and therefore the potential impact of these terms on our business is uncertain and enforcement of these terms may result in unanticipated obligations regarding our products and services. For example, depending on which open sourceopen-source license governs certain open sourceopen-source software included within our products and services, we may be subjected to conditions requiring us to offer our products and services to users at no cost; make available the source code for modifications and derivative works based upon, incorporating or using such open sourceopen-source software; and license such modifications or derivative works under the terms of the particular open sourceopen-source license. Moreover, if an author or other third party that distributes such open sourceopen-source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal costs defending ourselves against such allegations, be subject to significant damages or be enjoined from distributing our products and services.

result in claims from customers, reputational harm, and opportunities for competitors to displace our products, each of which could have an adverse effect on our business and operating results.

We generally recognize revenues from customers ratably over the terms of their subscriptions. Net new annual contract value from new subscriptions and expansion contracts entered into during a period can generally be expected to generate revenues for the duration of the subscription term. As a result, a significant portion of the revenues we report in each period are derived from the recognition of deferred revenues relating to subscriptions entered into during previous periods. Consequently, a decrease in new or renewed subscriptions, expansion contracts in any single reporting period will have a limited impact on our revenues for that period. Also, our ability to adjust our cost structure in the event of a decrease in new or renewed subscriptions may be limited.

WeYou should not rely on our prior revenue growth as an indication of our future revenue growth. While we have experienced significant revenue growth in prior periods; however, our longer-term revenue growth rate is declining, andperiods, we expect that it will continue to decline intoover the foreseeable futurelong term due to a number of reasons, which may include maturation of our business, increasing competition, ora decrease in the growth rate of our overall market.market or other reasons. We also expect our costs to increase in

future periods as we continue to invest in our strategic priorities, which may not result in increased revenues or growth in our business. You should not rely on our revenue from any prior period as an indication of our future revenue growth. If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile.

We are subject to income taxes in the USU.S. and various foreign jurisdictions. We believe that our provision for income taxes is reasonable, but the ultimate tax outcome may differ from the amounts recorded in our consolidated financial statements and may materially affect our financial results in the period or periods in which such outcome is determined. Our effective tax rate could be adversely affected by changes in statutory tax rates, changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses, the valuation of deferred tax assets and liabilities and the effects of acquisitions. Increases in our effective tax rate would reduce our profitability or in some cases increase our losses.

Additionally, our future effective tax rate could be impacted by changes in accounting principles or changes in federal, state or international tax laws or tax rulings. The Biden Administration has proposed increases to the U.S. corporate income tax rate, minimum tax on book income, and increased taxation of international business operations. The U.S. Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how we will applycomply with the law, which could affect our results of operations in the period issued. Many countries and organizations such asare actively considering or have proposed or enacted changes to their tax laws based on the model rules adopted by The Organization for Economic Cooperation and Development are actively considering changesdefining a 15% global minimum tax (commonly referred to existing tax laws or have proposed or enacted new lawsas Pillar 2) that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business. Recent globalGlobal tax developments applicable to multinational businesses and increased scrutiny under tax examinations could have a material impact on our business and negatively affect our financial results. Any changes in federal, state or international tax laws or tax rulings may increase our worldwide effective tax rate and harm our financial position and results of operations.

In addition, we may be subject to income tax audits by tax jurisdictions throughout the world, many of which have not established clear guidance on the tax treatment of cloud computing companies. Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or

As of December 31, 2021, we have $1.5 billion aggregate principal amount of the 2030 Notes payable outstanding due on September 1, 2030, as described in Note 11 in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Our ability to make payments on, repay or refinance the 2030 Notes in the future will depend on our future performance which is subject to a variety of risks and uncertainties, many of which are beyond our control. If we decide to refinance the 2030 Notes, we may be required to do so on different or less favorable terms or we may be unable to refinance the 2030 Notes at all, both of which may adversely affect our financial condition. Maintenance of our indebtedness, contractual restrictions, and additional issuances of indebtedness could:

We are required to comply with the covenants set forth in the indentures governing the 2030 Notes. Our ability to comply with these covenants may be affected by events beyond our control. If we breach any of the covenants and do not obtain a waiver from the note holders or lenders, then, subject to applicable cure periods, any outstanding indebtedness may be declared immediately due and payable. In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of our securities. Downgrades in our credit ratings could restrict our ability to obtain additional financing in the future and could affect the terms of any such financing.

We operate globally and as a result, our business, revenues and profitability are subjectimpacted by global macroeconomic conditions. The success of our activities is affected by general economic and market conditions, including, among others, inflation, interest rates, tax rates, foreign exchange rates, economic downturns, recession, economic uncertainty, political instability, warfare, changes in laws, trade barriers, supply chain disruptions and economic and trade sanctions. The U.S. capital markets experienced and continue to counterparty riskexperience extreme volatility and disruption. Furthermore, inflation rates in the U.S. and other key markets have recently increased to levels not seen in decades resulting in federal action to increase interest rates, affecting capital markets. Such economic volatility could adversely affect our business, financial condition, results of operations and cash flows, and future market disruptions could negatively impact us. These unfavorable economic conditions could increase our operating costs and, because our typical contracts with respectcustomers lock in our price for a few years, our profitability could be negatively affected. Geopolitical destabilization and warfare have impacted and may continue to impact global currency exchange rates, commodity prices, energy markets, trade and movement of resources, which may adversely affect the 2022 Note Hedge.buying power of our customers, our access to and cost of resources from our suppliers, and ability to operate or grow our business. In addition, from time to time, the U.S. and other key international economies have been impacted and may continue to be impacted by geopolitical and economic instability, high levels of credit defaults, international trade disputes, changes in demand for various goods and services, high levels of persistent unemployment, wage and income stagnation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, inflation, bankruptcies, international trade agreements, export controls, economic and trade sanctions, health crisis such as the COVID-19 pandemic and overall economic uncertainty. These conditions can arise suddenly and affect the rate of digital transformation spending and could adversely affect our customers’ or prospective customers’ ability or willingness to purchase our services, delay purchasing decisions, reduce the value or duration of their subscriptions, or affect renewal rates, all of which could harm our operating results.

We conduct significant transactions, including revenue transactions and intercompany transactions, in currencies other than the U.S. Dollar or the functional operating currency of the transactional entities. In addition, our international subsidiaries maintain significant net assets that are financial institutions, and we will be subjectdenominated in the functional operating currencies of these entities. Accordingly, changes in the value of currencies relative to the riskU.S. Dollar have impacted and may continue to impact our consolidated revenues and operating results due to transactional and translational remeasurement that is reflected in our earnings. It is particularly difficult to forecast any impact from exchange rate movements, unanticipated currency fluctuations have adversely affected and could continue to adversely affect our financial results or allcause our results to differ from investor expectations or our own guidance in any future periods. Volatility in exchange rates and global financial markets is expected to continue due to political and economic uncertainty globally.

We use derivative instruments, such as foreign currency forwards, to hedge exposures that certain of themour balance sheet items have to changes in foreign currency rates. These hedging contracts have reduced and may default undercontinue to reduce, but they have not and cannot entirely eliminate, the 2022 Note Hedge. Our exposure to the credit riskimpact of the option counterparties willadverse currency exchange rate movements. Further, unanticipated changes in currency exchange rates may result in poorer overall financial performance than if we had not engaged in any such hedging transactions as we may not be secured by any collateral. If an option counterparty becomes subjectable to insolvency proceedings, we will become an unsecured creditor in those proceedings, withestablish a claim equal to our exposure at that time under our transactions with that option counterparty. Our exposure will depend on many factors but, generally, an increase in our exposure will be correlated to an increase inperfect correlation between such hedging instruments and the stock price and in the volatility of our common stock. In addition, upon a default by an option counterparty, we may suffer adverse tax consequences. We can provide no assurances as to the financial stability or viability of the option counterparties.exposures being hedged.

Our stock price is likely to continue to be volatile and could be subject to wide fluctuations. In addition, technology companies in general have highly volatile stock prices, and the volatility in stock price and trading volume of securities is often unrelated or disproportionate to the financial performance of the companies issuing the securities. Factors affecting our stock price, some of which are beyond our control, include:include, among other factors:

Following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. Securities litigation could result in substantial costs and divert management’s attention and resources from our business. This could materially adversely affect our business, operating results, and financial condition.

Our restated certificate of incorporation as amended (“Charter”), and restated bylaws contain provisions that could depress our stock price by acting to discourage, delay or prevent a change in control or changes in our management that theour shareholders of our company may deem advantageous. These provisions, among other things:

Further, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on merger, business combinations and other transactions between us and certain shareholders. The fundamental change provisions of our 2022 Notes or change in control repurchase event provisionsIn addition, the terms of our 2030 Notes may cause a delay or prevent a change in control of our company, because those provisionsas they allow note holdersnoteholders to require us to repurchase suchtheir notes upon the occurrence of a fundamental change or change in control repurchase event.

Market Information for Common Stock

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Securities Authorized for Issuance under Equity Compensation Plans

Stock Performance Graph

Unregistered Sales of Equity Securities

Issuer Purchases of Equity Securities

Key Business Metrics

Critical Accounting Policies and Significant Judgments and Estimates

Revenue Recognition

Deferred Commissions

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Comparison of the years ended December 31, 20212023 and 20202022