SEC Comment Letter for ServiceNow, Inc. (NOW) (CIK 0001373715) (NOW) — Apr 23, 2015
ServiceNow, Inc. (NOW) (CIK 0001373715)
Date: April 23, 2015 · CIK: 0001373715 · Accession: 0000000000-15-022741
AI Filing Summary & Sentiment
Letter
April 23, 2015 Frank Slootman Chief Executive Officer ServiceNow, Inc. 3260 Jay Street Santa Clara, CA 95054
Re: ServiceNow, Inc. Form 10 -K for Fiscal Year Ended December 31, 2014 Filed February 27, 2015 File No. 001 -35580
Dear Mr. Slootman :
We have reviewed your filing and have the following comments. Comments, if any, related to disclosure in Part III of your Form 10 -K, will be provided under separate cover after it has been fi led. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.
After reviewing your response to these comments, we may have additional comments.
Form 10 -K for Fiscal Year Ended December 31, 2014
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Key Factors Affecting Our Performance
Total customers, page 30
1. We note your disclosure that in situations where the re is a single contract that applies to entities with multiple subsidiaries or divisions, universities or governmental organizations, each entity that has contracted for a separate production instance of your services are counted as a separate customer. W e further note your disclosure on page 5 that no single customer accounted for more than 10% of your revenue. Please tell us whether any single contract that applies to entities with multiple subsidiaries or divisions, universities or governmental organiz ations, accounts for more than 10% of your revenue. If so, describe the material terms of the contract in your response letter and confirm that
Frank Slootman ServiceNow, Inc. April 23, 2015 Page 2
you will include similar disclosure in future filings. Additionally, please advise what consideration you gave to filing any such agreement as an exhibit. Refer to Item 601(b)(10) of Regulation S -K.
Earnings Call held on April 16, 2015
2. In your first quarter 2015 earnings call, you discuss ed that you have changed your organization to implement a product line mo del with product line leaders. Further, you stated that you wanted to “increase the focus on markets that otherwise would not get the quality of attention and focus and resources.” These product line units appear to have been developed with the intent th at they each be responsible for “the go -to-market motions and all the marketing programs, all the partner strategies, etc., that are associated with these individual product lines.” We also note you hired two Vice Presidents of Sales related to your main product lines who both report to the Vice President of Worldwide Sales. In light of the foregoing, please tell us whether you plan to present more than one reportable segment in your March 31, 2015 Form 10 -Q. If so, please tell us what these segments wil l be, including how they were determined, and if not, please tell us why you do not believe separate reportable segments exist. As part of your response, please also tell us whether there has been a change in the chief operating decision maker (CODM) as a result of this reorganization and provide us with your analysis in determining the CODM. Refer to ASC 280 -10-50.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includ es the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequac y of the disclosures they have made.
In responding to our comments, please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person u nder the federal securities laws of the United States.
You may contact Rebekah Lindsey, S taff Accountant at (202) 551 -3303 if you have questions regarding comments on the financial statements and related matters. If you have any other questions, please contact Matthew Crispino, Senior Staff Attorney , at (202) 551 -3456 or
Frank Slootman ServiceNow, Inc. April 23, 2015 Page 3
Barbara Jacobs, Assistant Director, at (202) 551 -3735 . If you require further assistance, do not hesitate to contact me at (202) 551 -3406 .
Sincerely,
/s/ Patrick Gilmore
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April 23, 2015 Frank Slootman Chief Executive Officer ServiceNow, Inc. 3260 Jay Street Santa Clara, CA 95054 Re: ServiceNow, Inc. Form 10 -K for Fiscal Year Ended December 31, 2014 Filed February 27, 2015 File No. 001 -35580 Dear Mr. Slootman : We have reviewed your filing and have the following comments. Comments, if any, related to disclosure in Part III of your Form 10 -K, will be provided under separate cover after it has been fi led. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response. After reviewing your response to these comments, we may have additional comments. Form 10 -K for Fiscal Year Ended December 31, 2014 Management’s Discussion and Analysis of Financial Condition and Results of Operations Key Factors Affecting Our Performance Total customers, page 30 1. We note your disclosure that in situations where the re is a single contract that applies to entities with multiple subsidiaries or divisions, universities or governmental organizations, each entity that has contracted for a separate production instance of your services are counted as a separate customer. W e further note your disclosure on page 5 that no single customer accounted for more than 10% of your revenue. Please tell us whether any single contract that applies to entities with multiple subsidiaries or divisions, universities or governmental organiz ations, accounts for more than 10% of your revenue. If so, describe the material terms of the contract in your response letter and confirm that Frank Slootman ServiceNow, Inc. April 23, 2015 Page 2 you will include similar disclosure in future filings. Additionally, please advise what consideration you gave to filing any such agreement as an exhibit. Refer to Item 601(b)(10) of Regulation S -K. Earnings Call held on April 16, 2015 2. In your first quarter 2015 earnings call, you discuss ed that you have changed your organization to implement a product line mo del with product line leaders. Further, you stated that you wanted to “increase the focus on markets that otherwise would not get the quality of attention and focus and resources.” These product line units appear to have been developed with the intent th at they each be responsible for “the go -to-market motions and all the marketing programs, all the partner strategies, etc., that are associated with these individual product lines.” We also note you hired two Vice Presidents of Sales related to your main product lines who both report to the Vice President of Worldwide Sales. In light of the foregoing, please tell us whether you plan to present more than one reportable segment in your March 31, 2015 Form 10 -Q. If so, please tell us what these segments wil l be, including how they were determined, and if not, please tell us why you do not believe separate reportable segments exist. As part of your response, please also tell us whether there has been a change in the chief operating decision maker (CODM) as a result of this reorganization and provide us with your analysis in determining the CODM. Refer to ASC 280 -10-50. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includ es the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequac y of the disclosures they have made. In responding to our comments, please provide a written statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person u nder the federal securities laws of the United States. You may contact Rebekah Lindsey, S taff Accountant at (202) 551 -3303 if you have questions regarding comments on the financial statements and related matters. If you have any other questions, please contact Matthew Crispino, Senior Staff Attorney , at (202) 551 -3456 or Frank Slootman ServiceNow, Inc. April 23, 2015 Page 3 Barbara Jacobs, Assistant Director, at (202) 551 -3735 . If you require further assistance, do not hesitate to contact me at (202) 551 -3406 . Sincerely, /s/ Patrick Gilmore Patrick Gilmore Accounting Branch Chief