Notes from the ServiceNow S1 IPO Filing

Yesterday ServiceNow, Inc. filed their Form S-1 with the SEC to go public. ServiceNow provides Software-as-a-Service (SaaS) technologies for managing and deploying IT infrastructures — think software that keeps track of what software and hardware is being used as well as facilitating adding and removing of IT systems. SaaS is well suited for this type of product since it’s a combination of inventory management and project management that’s readily repeatable from company to company.

Here are a few notes from the ServiceNow S-1 IPO filing:

  • Customers (pg 1)
    2010 – 602
    2011 – 974
  • Revenues (pg 1)
    2010 – $43.3 million
    2011 – $92.6 million
  • Loss / Profits (pg 1)
    2010 Net Loss – $29.7 million
    2011 Net Income – $9.8 million
  • Grew sales and marketing team from 140 people as of June 30, 2011 to 242 as of December 31, 2011 (pg 4) — impressive they added over 100 people to sales and marketing in six months
  • Growth strategy (pg 4)
    Expand customer base
    Up-sell existing customer base
    Expand internationally
    Add new products
    Increase customer renewal rates
    Develop partner ecosystem
    Promote platform as a service
  • Accumulated deficit of $68.1 million (pg 9)
  • 603 employees as of December 31, 2011 and plan on adding 500 more in 2012 (pg 9)
  • Average customer subscription length is 30 months but some deals are for 10 year terms (pg 16) — I’ve never heard of 10 year SaaS contracts
  • As of December 31, 2011 had $68.1 million in cash (pg 52) — seems high and makes me wonder why they took on that additional dilution
  • 242 out of 603 employees are in sales and marketing (pg 70)
  • In 2H 2011 the majority of the management team was replaced (pg 99)
  • In December 2009 the founding CEO took $35.5 million off the table (pg 112 and TechCrunch article)
  • In February 2012 the founding CEO took $7 million off the table (pg 113)
  • VCs own 78% of the business, the hired CEO owns 5.5%, and the founding CEO owns 13.5% (pg 114)

Overall, ServiceNow represents another impressive SaaS growth story that’s likely to do well in the public markets.

What else? What are your thoughts on the ServiceNow S-1 IPO filing?

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