ICTO14 - Karel van der Poel, Producteigenaar BI & Analytics ServiceNow

3. © 2014 ServiceNow All Rights Reserved 3Confidential 2,200+ Enterprise Customers 2,100+ Employees Major Sites San Diego, Silicon Valley, Seattle, Amsterdam, London, Sydney ServiceNow – The Enterprise IT Cloud Company *Expected 2014 Revenues $13M $28M $64M $128M $244M FY12FY11FY10FY09FY08 $424M FY13 *$652M to $657M FY14 $139M Strong Revenue & Growth Platform Designed to Manage Service Relationships in the Enterprise Highly Secure and Available Enterprise Cloud SaaS Business Model Enterprise IT CloudNYSE: NOW $478M Trailing 12-Month Revenue

5. © 2014 ServiceNow All Rights Reserved 5Confidential The new world: Measure everything! • Tweets, likes, referrals • Ad Impressions, Clicks, Visitors • Landing pages, Conversion • Trials – leads – customers • Usage of trials • Usage Statistics of customers • Upsell – Cross sell • Recurring revenue, ACV, Margin • Renewals - NPS

6. © 2014 ServiceNow All Rights Reserved 6Confidential Fast Growth Saas companies: Measuring what matters Special thanks to David Skok of Matrix partners: http://www.forentrepreneurs.com • CAC = Customer Acquisition Cost • LTV = Life Time Customer Value • MRR = Monthly Recurring Revenue • ARR = Annual Recurring Revenue • ACV = Annual Contract Value • ARPU = Average Revenue per user/customer (AVG ACV/ARR/MRR) • Churn = the % of customers or dollars that are not renewed • Retention = the % of customers or dollars that are renewed. (100%-Churn) • % Renewal rate = % of customers that are up for renewal that actually renew • % ARR expansion = Expansion revenue from existing customers as % of total revenue • Conversion = the % of prospects / trials that are converted into PAYING customers

12. © 2014 ServiceNow All Rights Reserved 12Confidential Impact of success • Finally cash flow positive? • Time to accelerate! • Negative cash flow again… • Pattern keep repeating when you are able to keep accelerating

14. © 2014 ServiceNow All Rights Reserved 14Confidential Your churn determines your revenue potential. One oft-overlooked aspect of churn is that the churn rate, combined with the rate of new ARR adds, not only defines how fast you can grow the business, it also defines the maximum size the business can reach Zero Growth: New ARR = Churned ARR

15. © 2014 ServiceNow All Rights Reserved 15Confidential • “97% of all our customers are retained each month!” – Does that include free customers? – What % of revenue is retained? – What percentage of customers was actually up for renewal? – 3% churn per month? You mean 31%! of your customer base churns in 12 months! – What does your cohort analysis look like? Why are customer churn and revenue churn so different?

ICTO14 - Karel van der Poel, Producteigenaar BI & Analytics ServiceNow

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