ServiceNow delivered a solid QQ3 2024 performance with notable top-line growth and healthy profitability, supported by strong cash generation and a robust balance sheet. Revenue reached $2.797 billion, up 22.25% year over year and 6.47% quarter over quarter, as the company continues to scale its Now platform and expand adoption across IT service management, IT operations, HR, and customer service workloads. Gross margin remained high at 79.12%, and operating margin approached 14.95%, underscoring effective operating leverage as revenue grows. Net income of $432 million and GAAP EPS of $2.10 (diluted $2.07) reflect a constructive mix of growth investments and margin expansion. Free cash flow totaled $469 million, with operating cash flow of $671 million and capital expenditures of $202 million, resulting in a strong FCF conversion that supports a solid balance sheet and substantial liquidity.
The company's liquidity position is notably robust: cash and cash equivalents of $1.885 billion, plus total cash and short-term investments of $5.295 billion, against reported total debt of $2.245 billion and a neutral or modest net debt position depending on the accounting lens. This creates a substantial net cash stance and ample headroom to fund R&D, strategic acquisitions, and potential capital allocation opportunities. Management continues to emphasize the Now platform as the engine of growth, with ongoing emphasis on automation, AI capabilities, and enterprise-scale deployments across multiple lines of business.
Valuation remains demanding relative to broad SaaS benchmarks, with a through-the-cycle price-to-earnings around 106x and price-to-sales around 65x, reflecting investor confidence in durable growth and significant cash generation. The outlook hinges on sustained enterprise cloud spend, continued product expansion (including AI-enabled workflow automation), and successful cross-sell across ITSM, ITOM, ITBM, customer service, HR, and business apps. Investors should monitor demand environment, customer retention in large enterprise deals, and the pace of AI-driven product adoption that could influence future growth and profitability trajectories.