ServiceNow Inc (NOW)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 78.59% | 78.29% | 77.05% | 78.16% | 76.99% |
| Operating profit margin | 8.49% | 4.90% | 4.36% | 4.40% | 1.21% |
| Pretax margin | 11.24% | 5.51% | 4.22% | 3.32% | 1.94% |
| Net profit margin | 19.30% | 4.49% | 3.90% | 2.63% | 18.12% |
ServiceNow Inc has shown consistent improvement in its profitability ratios over the past five years. The gross profit margin has steadily increased from 76.98% in 2019 to 78.59% in 2023, indicating efficient cost management and higher revenue generation. The operating profit margin has also seen significant growth, reaching 8.49% in 2023 from 1.22% in 2019, showcasing improved operational efficiency and stronger control over expenses.
The pretax margin has similarly experienced a positive trend, surging to 11.24% in 2023 from 1.94% in 2019. This demonstrates enhanced profitability before accounting for taxes and reflects the company's ability to generate higher income from its operations. Moreover, the net profit margin has exhibited exceptional improvement, reaching 19.30% in 2023 compared to 18.11% in 2019, illustrating ServiceNow's proficiency in managing its bottom line and translating revenue into net income.
Overall, these ratios signal a sustained upward trajectory in profitability for ServiceNow Inc, indicating sound financial management and a strong position within its industry.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.38% | 2.67% | 2.38% | 2.28% | 0.70% |
| Return on assets (ROA) | 9.96% | 2.44% | 2.13% | 1.37% | 10.41% |
| Return on total capital | 8.36% | 6.54% | 5.35% | 4.09% | 3.54% |
| Return on equity (ROE) | 22.69% | 6.46% | 6.22% | 4.20% | 29.48% |
ServiceNow Inc's profitability ratios indicate improving operational efficiency and return on investment over the last five years. The operating return on assets (Operating ROA) has shown a positive trend, increasing from 2.38% in 2021 to 4.38% in 2023, reflecting the company's ability to generate operating income from its assets. Similarly, the return on assets (ROA) has exhibited a notable increase, reaching 9.96% in 2023 compared to 1.36% in 2020, indicating enhanced profitability relative to the total assets employed.
Moreover, Return on total capital has demonstrated a steady upward trajectory, from 4.44% in 2020 to 8.36% in 2023, suggesting effective use of the company's total capital to generate returns for both equity and debt holders. The return on equity (ROE) has also displayed positive growth, climbing from 4.18% in 2020 to 22.69% in 2023, reflecting improved profitability in relation to shareholders' equity.
In summary, ServiceNow Inc's profitability ratios reflect an upward trend, indicating improved operational efficiency and increasing returns on capital and equity over the last five years. These trends signify the company's ability to generate profits and deliver value to its stakeholders.