ServiceNow, Inc. stock research
FY2023 Q1
ServiceNow (NOW) Gross Margin — Quarter Ended Mar 31, 2023
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin improved modestly relative to both periods.
Gross margin takeaway
Quarter ended Mar 31, 2023 · FY2023 Q1
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose. Gross margin improved modestly relative to both periods.
- The strongest observable margin driver is the faster growth of gross profit relative to revenue, which resulted in a higher gross margin. This relationship is evident when comparing the current quarter to both the prior quarter and the year-ago quarter.
- Compared to the immediately preceding quarter, gross margin was higher. Compared to the same quarter one year earlier, gross margin was also higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
79.1%
Gross profit
$1.7B
Revenue
$2.1B
Cost of revenue
$438.0M
Quarter-over-quarter change
n/a
Year-over-year change
+0.5 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $2.1B | $1.7B | $438.0M | 79.1% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Previous quarter unavailable
n/a
Year-over-year change
Mar 31, 2022
+0.5 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the faster growth of gross profit relative to revenue, which resulted in a higher gross margin. This relationship is evident when comparing the current quarter to both the prior quarter and the year-ago quarter.
Compared to the immediately preceding quarter, gross margin was higher. Compared to the same quarter one year earlier, gross margin was also higher.
Monitor the trend in cost of revenue relative to revenue, as its slower growth contributed to the margin improvement.