NOWServiceNow
Is the business good?
The checks split: earnings fully cash-backed (4.4×) and margins widening, but 3 of 9 health tests passed.
Weak, deteriorating fundamentals. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Negative operating leverage, costs are rising faster than sales, squeezing margins as it grows.
A balanced mix of margins, efficiency, and leverage. ROE 14% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is NOW?
ServiceNow earns 8.6% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 0.36 points below what the capital costs: growth destroys value
- Operating margin
- 11%
Operating margin · Software - Application median 6.4% · 12 months to Q2 2026
- Cash conversion
- 4.44×
Cash conversion · 3.54× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −1.2%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | 4.4% |
| FY2021 | 4.4% |
| FY2022 | 4.9% |
| FY2023 | 8.5% |
| FY2024 | 12% |
| FY2025 | 14% |
Details›
- Gross margin12 months to Q2 2026
- 75%
- Operating margin12 months to Q2 2026
- 11%
- Net margin12 months to Q2 2026
- 11%
- Free cash flow margin
- 31%
- R&D as % of revenue
- 22%
- Revenue, trailing twelve months
- $14.7B
- Free cash flow, trailing twelve months
- $4.58B
- Net income, trailing twelve months
- $1.67B
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 8.6%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Software, Application
The closest names by size in the same industry