00:00Even though subscription growth is still 22 percent you beat on revenue. What more can you tell a market right
00:07now, Bill?
00:08I think it's very important to deal with facts. We're a 15 billion dollar enterprise software company, the fastest to
00:16ever get.
00:16They're growing at more than 20 percent. We had a beat and raise quarter and we reiterated our full year
00:23guidance.
00:23So that's the baseline for the conversation. And we are a growth company and I'll take the interview any way
00:31you want it to go.
00:33Let's talk about geopolitical headwinds. Let's talk about acquisition, integration expenses.
00:38Maybe there's some of the areas that investors and the analysts have said, look, it made for a bit more
00:43of a messy quarter than perhaps would have been easier for you to tell the story on.
00:47What is the underlying growth rate of AI at the moment of adoption of the ServiceNow products?
00:51Yeah. What you have to realize is AI is the product. It's the whole platform.
00:57So the platform is fully autonomous. So when a customer buys our AI platform, it is enabling every function of
01:04their company to be a native AI company.
01:08So it's all AI now. And that's another thing.
01:11We said we would do 20 in 2026, a billion of net new annual contract value on pure AI additive
01:21to the platform.
01:22Yesterday, we upped it to a billion and a half. And I think we'll run through that.
01:26So if there's anything that the investors wanted, they probably wanted a bigger beat.
01:31So we're beating every quarter. Maybe they wanted a bigger beat.
01:35And then the second thing is, and it is true, we acquired a couple of companies.
01:39So let's talk about that. One was MoveWorks, where in one quarter, we only had a one quarter.
01:45We did in one quarter what they never did in a whole year before they became part of ServiceNow.
01:51So the go-to-market machine knows how to take great innovation and monetize.
01:55Secondly, we took VESA and Armis. VESA just joined us. Armis just joined us on Monday.
02:02So the market might have said, are they doing M&A to cover up for any lack of growth in
02:08the core?
02:08How could that be true when it wasn't even in the number?
02:11And so these companies are fantastic because now you're going to manage the identity of humans and agents,
02:17which is really important when you are the rails and rules of every major corporation in the world.
02:23You want AI that works with humans and does so in a highly controlled manner.
02:28That's VESA. And then Armis is operating technology, where now you're managing all of the IoT of everything,
02:36networks, devices, and so forth, to keep these companies highly secure.
02:40As you know better than anybody, Caroline, cybercrime is the third largest economy in the world.
02:46It's a trillion-dollar-a-month problem. And now we've opened up our TAM to 600 billion TAM.
02:52So we're going after the biggest ocean of opportunity we've ever looked at.
02:56We're growing strong, and we're very confident in our full-year guide.
03:00So I think the market is the best entry point that I could ever imagine for this stock.
03:06You've actually bought stock. And actually, a lot of those in the C-suite are stopping automatically selling it.
03:12How much more do you think you have to buy to really shrug off, push off this bear case that's
03:18got into the investor mindset?
03:20I think the bear case is really just the terminal value of software-as-a-service companies.
03:25It has nothing to do with just service now.
03:29It's like anything that represents, maybe it wasn't as big a guide beat as we are used to and so
03:35forth,
03:36is just a reality of, you know, where do the language models, and these are excellent companies.
03:41The hyperscalers are great companies. The language models are excellent companies.
03:45We did a deal yesterday with Gemini. We've done a deal with OpenAI and Anthropic.
03:49We infuse them into our innovation cycle, and they integrate with us to make sure that AI is done properly
03:56in enterprise.
03:57And the 95 billion workflows and 7 trillion transactions we have reside over data that it took us 22 years
04:04to build.
04:05So it's that context engine that we have that brings those language models to life.
04:10And they know that. But the market might think, hey, maybe I can do everything with a language model and
04:16build it myself,
04:17which is not going to happen. Every CIO and CEO will tell you service now for a fraction of my
04:23overall IT spend does enormous work for me.
04:26Why would I rebuild it with a language model and pay 10 times more?
04:31So that's not even a viable comparison. But yet comparisons like that exist until proven different.
04:38What will prove it different, Bill? You're such an optimistic guy, and I can sort of sense it today,
04:43that energy is being hit by the fact that the stock is having the worst pummeling on record.
04:47And you've got RBC saying software sentiment is some of the lowest level in memory.
04:51What changes, what shifts sentiment, do you think?
04:56Leadership. You know, the most powerful thing a leader can do is change minds.
05:00And the best thing that can change people's minds is performance.
05:05And that's why I reiterated with great confidence our full year guidance.
05:09I'll be in front of 30,000 people in a few minutes, firing them up on the game plan that
05:15we have well in order.
05:16The M&A that we did will be additive to a great corporation.
05:21This is the fastest growing enterprise software company of all time.
05:24First to get to 15 billion. It'll be the first to get to 32 billion.
05:29And we're excited to have our shareholders join us in Nevada, Las Vegas in a couple of weeks
05:36to explain the midterm and long term plan of service now, which is to double the company in the next
05:43few years.
05:43So we're excited. We're ready to go. And I would really underplay the narrative that's out there on enterprise software,
05:50not just ours, but these large scale systems are not going to be replaced by language models.
05:56They'll be very complementary to the large scale systems, but they're not going to replace them.
06:00So we have been at this now for quite a while in the enterprise.
06:04I know how the enterprise works. People just need to keep their chin up
06:07and get really serious about making money at a down moment like this.
06:12It's never been like this before. So take advantage of it.
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