That's a pledge bell. So how are you going to keep it?
Well, we are the platform for end to end digital transformation.
Customers today have two things on their mind.
On one hand, they have to automate and improve their productivity and do a lot
more with less. They're really trying to take cost out
of the business. On the other hand, they recognize ISE
that digital business is something they have to have to do well at.
So they are investing thing and they're investing for the long term.
So if you're investing for growth or you're taking cost out of the equation
with service now, you could do it on one platform.
You can do everything on service. Now as platform.
And that's what makes it so compelling. Bell All told, just dark rose 3 percent
were investors cheering the pledge to not do layoffs.
Or were they cheering the financial results?
I think that you're in the financial results, you know, we are growing at the
rule of fifty eight and a half. Meaning if you combine our revenue
growth and our free cash flow margin, we are growing at fifty eight and a half.
They say you're a world class that is at 40 percent.
So we are doing something that no other enterprise software company in the world
is doing. We're growing faster than all the
others, but we're doing it in a profitable way.
And Wall Street likes that. But more importantly, it's a reflection
of what we're doing for great customers like the Schwartz Group in Germany.
They're going for next generation retail or the United States Army.
They're serving their 1 million connected joints and they're doing this
end to end on one platform to run all of their business operations.
Yeah. You, of course, actually hired I did net
people to your business in 2022. Quite a lot of them.
Would you make the most of some of the talent that's becoming available and
high more in this environment? Caroline Hyde.
We hired 5000 last year, as you know, and it's fantastic because on the
service now platform, you can literally run all your business operations as a
company or an individual on one platform.
So this argument that young people or new hires are unproductive is not the
case here. It's service now because they do all
their work on the service platform, which is the total sensation.
So our productivity is fantastic with early and career folks or senior
executives that just want to work for the best, best best company in the
business. We'll continue to hire.
We're especially hiring in engineering and go to market professionals to take
care of our customers. And I saw that saying, well, now you're
saying you're hiring this thing, executing well in a tough environment.
You're a man who understands activist investors.
Dealt with them in previous times. You understand how to navigate that.
Talk to us as other businesses face this environment right now.
How are you looking to talk to our investor base, particularly when you
have a stock that's still pretty high multiples?
Yeah. Caroline, you're right.
I mean, it is high multiples, but that's because the growth rate is so high.
What I'm super proud of is that understanding and this was also
reinforced today by other media professionals that the activist
investors that are working with these other technology companies start the
meeting off with. We need you to look at the benchmark and
the benchmark is service now. And then they say their growth rate is
28 percent and then they look at their margin profile and it's the highest in
the cloud business. And then they show more free cash flow
margin and they like we need you to be that.
And that's how the meeting starts. So I take that with a hungry and humble
attitude. Well, humble, because we know it's all
about taking care of the customers and doing it super well with great
employees. And we're hungry because we want to grow
even more and even faster. So I don't have an issue with activist
investors and I have worked with them in the past.
I actually have a great relationship with Elliott Management and with Jesse
Cohen. I think they're terrific.
And at the time when I was with another company, they offered very good
suggestions. And we build trust.
And we did a lot of cool stuff together. But here, I don't think this is the
first place they'll stop because it's so successful.
Hey, Bill, does your company thrive in difficult times?
Because I think you are talking about customers moving away from different
individual vendors and basically coming to you for a one stop shop solution.
But when customers do that, it's often because they're having to look and make
changes reactionary. You see what I mean?
Yes, I do it. I mean, here's a switch situation.
If you believe the independent research companies like IDC, they will tell you
that I.T. spend for software will grow in double
digits this year. So that's a fact.
An independent research fact. But let's assume that didn't happen.
And let's just assume there was no increase in I.T.
spend. What's happening now with customers when
they have three or four technologies to do something similar?
They're saying let's cancel three and go with the one.
That's the best alternative. We don't want all four.
Enduring the hype cycle of the whole pandemic where people were trying to
figure things out, they just bought every point solution they can get their
hands on. And now they want to really go for forms
that matter. So what service now is enabling
companies to do is really consolidate, to spend, move away from platforms that
don't matter and increase your productivity quite dramatically.
On one that does so, take cost out, go for service now.
Put growth in, go for service. Now all on one platform, four and 10.
Digital transformation. It's interesting, you are such a
positive person, it sounds like, and in many ways rightly so.
I'm looking at analyst recommendations, basically 36 of that.
I say buy your stop. There's only one holdout out, one
underperform and thinks are stocks going to drop?
And that is Stephane over IBM. How about what one thing would you say
to stuff on? What's he getting wrong?
What is that one thing that does keep you up at night that you're trying to
tackle the weak, convince us that so. Well, I got to go speak with them.
I think he has to have a meeting with me or come talk to our people or see our
technology requirements and enough time with them.
But I guess one out of 36 isn't too bad. I would just tell him, like, if you look
at where the new economy is going, this is a platform economy.
And in this economy, you have the hyperscale, the clouds, which are all
very relevant, outstanding companies. And they're going to do very well.
And then you have a couple of SAS companies
and among those couple of SAS companies that matter, we are one of them.
What's unique about us is whether you're doing workloads in a public cloud,
private cloud or in a multi cloud formation service now serves as the
control tower to end end digital transformation.
If anyone understands the implications of that and the network effect that that
creates and the fact that we have the stickiest, most loyal customers in the
business with retention rates near 100 percent and we grow the same account,
revenue growth nearly 30 percent per customer plus we're getting lots of new
business. We have a new business surge in Q4.
I find it hard to understand why anyone wouldn't have a buy rating on that star.
The other thing from an individual investor perspective, yeah.
They look the whole thing, Caroline, is, you know, the tightening monetary policy
is what compressed the multiples, especially in high tech.
But as debt now gets more normalized, you want to be in the companies that
have the ability to give you tremendous leverage, because once that tightening
of the monetary policy less than ISE loosens gets more normalized.
Everybody in 24 hours of 48 hours is going to jump on the bandwagon again to
get in high leverage growth stocks like service now and you want to be there
before that 24 or 48 hour rush or you get a miss out.