Good afternoon, and welcome to the ServiceNow Third Quarter 2024 Earnings Conference Call. Please note, that this call is being recorded. [Operator Instructions] I will now turn the call over to Darren Yip, Group Vice President, Investor Relations. Please go ahead, sir.

Good afternoon and thank you for joining ServiceNow's third quarter 2024 earnings conference call. Joining me are Bill McDermott, our Chairman and Chief Executive Officer; and Gina Mastantuono, our Chief Financial Officer. During today's call, we will review our third quarter 2024 results and discuss our guidance for the fourth quarter and full-year 2024. Before we get started, we want to emphasize that the information discussed on this call, including our guidance, is based on information as of today and contains forward-looking statements that involve risks, uncertainties and assumptions. We undertake no duty or obligation to update such statements as a result of new information or future events. Please refer to today's earnings press release and our SEC filings, including our most recent 10-Q and 2023 10-K, for factors that may cause actual results to differ materially from our forward-looking statements. We'd also like to point out that we present non-GAAP measures in addition to, and not as a substitute for, financial measures calculated in accordance with GAAP. Unless otherwise noted, all financial measures and related growth rates we discuss today are non-GAAP, except for revenues, Remaining Performance Obligations or RPO, current RPO, and cash and investments. To see the reconciliation between these non-GAAP and GAAP measures, please refer to today's earnings press release and investor presentation, which are both posted on our website at investors.servicenow.com. A replay of today's call will also be posted on our website. With that, I'll turn the call over to Bill.

Thank you very much, Darren. Good afternoon everyone. I really appreciate you joining today. There's a lot to cover in this latest beat and raise report. I'll focus on five powerful tailwinds that underscore our strong confidence in ServiceNow's growth trajectory. The first is elite level execution. With our Q3 results, we have demonstrated once again ServiceNow's strong execution. We outperformed all top line and profitability metrics. Subscription revenue growth was 22.5% at constant currency, 200 basis points above the high end of our guidance. cRPO was 23.5% at constant currency, 150 basis points above our guidance. Operating margin was over 31%, more than 150 basis points above our guidance. We had 96 deals greater than $1 million in net new ACV. We landed our second largest new logo deal ever and our second customer crossed the $100 million mark in total ACV. Customer adoption of ServiceNow's platform continues to move across the enterprise end to end. For CIOs and their tech teams, ITSM and ITOM were each in at least 15 of our top 20 deals with double-digit deals over $1 million. It's also worth noting that IT asset management was in all of our top 20 deals. Q3 was another strong performance for Security and Risk as they combined for 14 of the top 20 deals with 11 deals that were over $1 million. As we see more opportunity to disrupt the front office, customer workflows had a great Q3 with 15 of the top 20 deals and 17 deals over $1 million. Employee workflows were in 13 of the top 20 with nine deals over $1 million and creative workflow was strong again in 17 of the top 20 with 13 deals over $1 million. Here's the headline. Many companies have struggled to execute in what has…

Thank you, Bill. Q3 was another stellar quarter for ServiceNow with substantial outperformance across all of our growth and profitability metrics as digital transformation and Gen AI remain top priorities for C-suites, the Now Platform and Now Assist continue to see robust demand. ServiceNow stands out as the strategic partner to deliver intelligent solutions driving incredible business in every corner of the enterprise. Q3 subscription revenues were $2.715 billion, growing 22.5% year-over-year in constant currency, exceeding the high-end of our guidance range by 200 basis points. RPO ended the quarter at approximately $19.5 billion, representing 33% year-over-year constant currency growth, accelerating both quarter-over-quarter and year-over-year. Current RPO was $9.36 billion, representing 23.5% year-over-year constant currency growth, a 150 basis point beat versus our guidance and a 100 basis point acceleration from Q2. From an industry perspective, technology, media and telecom was very strong, growing net new ACV over 100% year-over-year. Retail and Hospitality also had a fantastic quarter, growing over 80% year-over-year. Health care and life sciences and manufacturing also saw strength. Year-to-date, U.S. Federal has demonstrated outstanding execution, further growing net new ACV on top of a phenomenal 2023. In Q3, we landed five deals over $5 million and two over $20 million. Overall, we once again achieved a robust renewal rate in the quarter reflecting the value ServiceNow consistently provides to customers. The importance of the Now platform has driven the number of customers paying us over $1 million in ACV to 2020. What's more, the number of customers paying us $20 million or more grew nearly 40% year-over-year, powered by large deal momentum. We closed 96 deals greater than $1 million in net new ACV in the quarter, including six with new logos. Among them, 15 deals were over $5 million and six deals were over $10…

[Operator Instructions] Our first question comes from the line of Alex Zukin with Wolfe Research. Please go ahead.

Hi, guys. Thanks for taking the question. I want to maybe ask just a market environment demand question first and then a quick follow-up on product. Bill, I mean - or Gina, you called out some unbelievable growth rates from the TMT vertical, from the retail vertical, appreciate that this is a much better year seemingly in those areas versus last year. But maybe are we back to kind of some sort of a steady medium? How do you think about it for the next 12 months, given all the tailwinds that you're seeing? Just maybe a quick tangent on how you're viewing the buying and demand environment if AI is helping you in that or not?

Well, Alex, thank you very much for the question. I think the overall macro is not dissimilar. It's still a value-based market out there, but it's been a value-based market for some time. And so the question then becomes who's really got the innovation, who's really got the platform and who's really got real GenAI to tell a real use case story that delivers for the customer. And obviously, I think we answered that definitively with yet another beat and raise. So I feel like the market is really excited about AI. It's going from experimentation to actually choosing the platforms that matter and companies, especially at the C-suite, are building their future plans with real partnerships. So I'm super excited. Our pipelines are great. The global events that we're holding are double subscribed compared to last year. Our team is fired up and we're really ready to win. And we work for the customer. And the customer feels that and I think culture is something that gets underreported in earnings calls and ours is on fire.

Well, by our calculations just under $90 million and Now Assist ACV, definitely is a real number. So congratulations on that. Maybe just a follow-up. Again, we haven't heard you talk about a product that doubles your TAM in quite a long time. So maybe just help us understand what the incremental opportunity is within your existing customers with this new data platform product and how you expect - how long do you expect it to take to kind of start seeing some meaningful traction there and in the P&L?

Well, I think first and foremost, just dealing with RaptorDB alone, rolling that out to the customer base with the RaptorDB Pro version is an upsell opportunity across the entire installed base of ServiceNow. So it's kind of a simple sale. It's like you want to go 25% faster, put RaptorDB in. And by the way, with the greatest engineers in the industry, it's a seamless process and it happens in hours. So it's pretty fascinating to see the executional excellence of this engineering leadership team. They know I love and admire them. But as I see the world, Alex, we have this idea of the workflow automation platform that's evolved into the AI platform for business transformation. But the data part of this is super exciting because we can now access data from any source and then align that perfectly with the workflow that we are automating. And by doing that and making everything go faster, the customer is getting all of that structured and unstructured data under control in an automated workflow or an automated process. And this has magnificent benefits. You saw the announcement that we made with Databricks and Snowflake. But clearly, we've always been able to access the data and all the systems of record, and we've been doing this for some time now. So I think the data fabric element should be thought of a lot like workflow was to applications. The data workflow fabric is to data. And so if you talk to the analysts that I've been talking to in independent research firms, they said, Bill, ServiceNow pulls us off, you just doubled your TAM. So that's exactly where the numbers come from two independent sources that are really psyched up by what we're building here. And I am too.

Excellent. Congratulations guys.

Thanks a lot Alex.

Our next question comes from the line of Brad Zelnick with Deutsche Bank. Please go ahead.

Great. Thank you so much for taking my question. I wanted to ask about the meaningful up-tick in headcount additions and OpEx growth in the back half of the year. How much of this should we think of as catch-up for what had been more modest sub-20% growth in OpEx over the past year versus a reflection of the opportunity you see ahead and anything else you can share on the expected pace of investment beyond Q4 would be really helpful. Thank you.

Great question, Brad. So we've told you in the past that we were going to up-tick our headcount growth in the back half, right? The vast majority of the sales and marketing hiring is quota-bearing reps. And so absolutely, you can think about that as our confidence in the opportunity that we see in front of us. We are planning to continue to accelerate our headcount growth. But remember, we do it prudently. We do it a quarter at a time, so that we're able to pivot if we see something different. And so you can expect similar levels of headcount growth in the next few quarters, as we lean into the opportunity we see in front of us with everything Now Assist, with the Agentic AI, with the workflow data fabric, all innovation that the team is driving. Not only is sales and marketing headcount up, but our R&D head count has been consistently up and will continue to be at similar pace.

Thanks for that Gina. And if I could just slip in one more for Bill because I'm dying to ask them, Bill, you've mentioned multiple times now, something that I think for some go in one year and not the other, but that's elite-level execution. You're clearly out-executing others, can you shed light on how you do it, how durable it is and what you might say to skeptics concerned that we're going to begin to lap the strong execution or that there may be some pay-to-piper moment were you risk reverting to the mean of the more average execution levels of so many other companies. Thank you so much and congrats.

Well, thank you very much, Brad. Well, the first thing you've got to do in business is make sure you hire great people and great leaders. And I have the best leadership team in the industry, a hard stop, and we just made that even stronger with Amit. And I do want to give a shout out back to Google and Sundar and Thomas, they were total class and this was done in a highly transparent wonderful way, and that would only strengthen the relationship between Google Cloud Platform and ServiceNow. I feel like that's a necessary thing. And I just want to virtually shake hands on a really class set of people there at Google, really wonderful people. And if enough people care, we have a very clear plan here. It's highly thought of by people. We actually participate in building our plans together and then we overcommunicate everything. And then ultimately, the execution really comes down to wanting it more. And if you get 26,000 people that want to win more than anything and their professional careers, you can build a defining enterprise software company in the 21st century. Now we're not even close to hitting our peak. We're not going near it. So as you think about lapping ourselves and getting caught up in the hype of our own elite level execution, there's plenty of things we can do better. There's plenty of people that still have to get on the board and get more results, but all those things are in flight, and that gives me such optimism about what we've yet to do as we look into the future and now to build this unbelievable platform with this net new innovation on top, it's just going to unleash the will of this company in a way that is just super stunning to watch. And I do want to thank my partners out there. They know our word is good, and they want to be part of ServiceNow. And I think Jensen says it best. He says we're the AI operating system for the enterprise. And by being that, we integrate with everybody. We're open to all the LLMs that are out there. You can even bring your own model. And at the same time, we've integrated with all the systems of record, and it's an opportunity for customers to think about using AI across our magic platform that does amazing things to improve business results not just on productivity, take cost out, but also on a growth level. And I think when I look at our great customer service management leadership and how we're going to help companies grow again, it gets people internally excited because they know the world needs to grow again and with our CSM leadership and solutions we're going to keep going. So it's constant innovation, it's constant planning, overcommunicating and getting everybody involved in the pitch.

Awesome, Bill. Thank you so much.

Thank you very much, Brad.

[Operator Instructions] Our next question comes from the line of Mark Murphy with JPMorgan. Please go ahead.

Thank you very much. I'll give you just one long question. Bill, congrats on everything. Our fieldwork was showing a big ramp-up in your AI bookings in Q3. There were some comments that it could exclude heading into next year. And by the way, I can't believe the Now Assist numbers that you gave, they're just so big. And I happen to see a mention in the media about ServiceNow and CoreWeave, we've investing billions into the U.K. and it included for AI data center. So I'm curious if we should connect the dots to think that this AI inflection point is just getting so material that it's going to drive that kind of investment in specific countries or maybe leads you to work with the GPU as a service providers just to be able to power all your AI agents.

Yes. Well, first of all, thank you so much for your kind words, Mark, I really appreciate it. And then it means a lot to everybody hearing you representing such a great firm speaking well of our company, thank you very much. I do believe that the best days of growth are far in front of us. I see that in the pipeline. I see that at the C-suite, both in the public and the private sector. And now once we have so many referenceable customers that are doing real things. And it was great. Mark, you're going to kick on this. We just did a Board meeting, and Fred Luddy was at the labor cup, which we sponsored and he said there were a few people that didn't know what we do. And he said to him, Well, let's just assume somebody is going out on maternity leave and having to fill out all those crazy forms and go through all these internal processes and corporations that sole crush people just know that Now Assist is automatically updating your health care, your compensation and all the benefits that you rely on most. And you didn't have to touch a single thing. You just can have a nice experience as a worker in any company. And everybody there said, oh, man, you guys do that. It's like whatever you can imagine that's wearing people out, we could fix it. And that's the beauty of this. So I think that what you're looking for is also what we are looking for, which is that inflection point where the AI gear kicks into higher demand for everything, and I certainly believe we're well positioned for that.

Thank you so much.

Thank you.

Our next question comes from the line of Kash Rangan with Goldman Sachs. Please go ahead.

I got couple of - [technical difficulty]

Kash, can you hear me?

Oh, can you hear me okay?

Oh there you are. We missed you, but now we can hear you.

Okay. Great. Thank you so much. I'll fire off two questions very quickly, the one - congrats on Bill, first of all. Secondly - that was not a question. Secondly, the data platform, what does that allow ServiceNow to do for its customers that you could make money and generate revenue that you could not do previously. Gina, the strength in RPO 35% besides long-term contracts, what's driving that and finally, congratulations on hiring Amit, I think it's going to be great.

So Kash, I'll start first on the strength of RPO. It repeats itself. So it's better than last quarter, but remains consistently strong. And that's really a testament to the fact that our customers are leaning in much more strategically with us and not only our portfolio of products getting larger and deal size is getting larger, but the contract terms are getting longer and longer. And that's really what's driving that incredible RPO growth. We have really strong cRPO, but that RPO growth when our average contract terms continue to move up is why you see that continuing to strengthen quarter-after-quarter and that's testament to the incremental strategic relevance that we have with our customers. And so really proud of all the results that execution elite level across the board and that's showing not only in our revenues and our cRPO, but our RPO number, which is a really strong long-term measure of the health of our business.

And I will talk about this amazing workflow data fabric. So think of it this way in terms of the monetization of it. RaptorDB, the Pro version delivers enormous value for our customers. So think about improving transaction times by up to 53% and running reports and analytics 27 times faster think about bringing next-generation performance and scale to ServiceNow customers. So the performance, the speed, the scale, as we get bigger, the customer installs get bigger. Gina talked about all the cohorts, platform buying. This is quite a fascinating thing to see. Then think about enabling enterprises to unify disparate data and then apply the power of the Now AI platform for business transformation to drive productivity, improve operations and speed of execution. So all of this is driving performance for the customer and the migrations take hours, not days or weeks, and we have truly perfected that. So this is going to be an upsell opportunity for every existing installation across the world for ServiceNow. And to get that enhanced benefit, there will be pieces of it that it that people will invest in, but will be well worth it for the benefits they're going to get from it. And this will be an ongoing story as we continue to build it out. But remember one thing, it's pretty unique to be able to access any data regardless of the source, whether it's structured or unstructured and to compose that a data platform that perfectly coincides with the work, how it flows and what you're trying to automate on one common pane of glass. No other company in the world could do that. And we believe that, that will give us a very exciting position for future growth, and we're super excited. And we're rolling it out now in Q4, and we already have great companies like Amadeus that have adopted RaptorDB and we're counting on hundreds more.

Thank you so much.

Thank you very much, Kash.

Our next question comes from the line of Keith Weiss with Morgan Stanley. Please go ahead.

Thank you guys for taking the question and congratulation on a great quarter. One question for Gina and one question for Bill. Gina, last quarter, you talked to us about 200 basis points of duration headwind that came from the strong federal business last year. Given that you had such a strong federal quarter this year. I'm assuming those duration - or headwinds don't exist in Q3. So is that correct that you don't have that duration headwind in Q3? And then the question for Bill. Agents kind of came on to the scene in a really big way over the last couple of months. You guys have your new agent solution as well. A lot of people are talking about agents. Does that change like the sales cycle at all about if we're like Now Assist in the Pro Plus SKU now that there's this new sort of technology people are talking about in terms of the agents? Or does it just kind of flow naturally into the conversation?

Thank you very much, Keith. It flows naturally. It's yet another advancement in the ServiceNow innovation story. And I think it does, if you're not yet a ServiceNow customer or you're thinking about Now Assist, it further cements your resolve that ServiceNow is one of maybe a handful of platforms that companies are going to bet on for the future. So not disruptive, totally complementary and yet another upsell opportunity, and we intend to do very well with it. And I think a lot of people will benefit from ServiceNow agents working together with each other and with humans to proactively and predictively resolve almost any task you can possibly think of. And these partnerships that we've established with great companies like NVIDIA and building market-making solutions, for example, taking on some of the enterprise security challenges that have existed out there for years and years on an out-of-the-box type solution, I think, it is really pretty breathtaking. And at an architectural level, we don't have to try to translate between our GenAI models and some third-party system, which most people have to since everything is on one platform with one architecture and one data model, so this has given us an opportunity to innovate faster, but also integrate better. As I said many times, 85% of digital transformation ROI never came to for our customers because they couldn't integrate those old systems. Now everything integrates into one platform, and you turbocharge it with Now Assist in a Agentic AI and you're off to the races.

And then, Keith, on your question on duration for cRPO from Fed. The mix we had another great quarter beat expectations from our perspective, but the mix hasn't changed significantly. So Q3, that duration definitely goes away as Fed kind of re-ups, but then you will see continued headwind quarter-over-quarter in Q1, Q2 until we get back to Q3 of next year. Does that make sense?

Yes. So like on the duration-adjusted basis, Q2 was stronger than what was reported in Q3 didn't really have a duration headwind, but that duration headwind is going to come back into the numbers as we go through the year and get further away from the federal quarter.

That's exactly correct.

Okay. Perfect.

Thanks, Keith.

Our next question comes from the line of Brad Sills with Bank of America. Please go ahead.

Oh great. Thank you so much. A question on headcount here as well, it's pretty remarkable really since the beginning of last year that you're starting to see R&D headcount outpace sales and marketing, historically, that was the opposite, and it looked pretty significant here by almost 2:1 ratio there. So I guess the question is, what does that say about the business? Is the gating factor to growth here really just about your ability to get out more product in categories like AI and some of these newer application categories that you're going after with the platform and less so about hiring the next rep to go win new business and go find that bigger expansion deal. Thank you.

Yes. I'd say it's a couple of things, right? So sales and marketing, there's a lot of stuff in there, right? So it's not only quota bearing sales. So just because you saw total sales and marketing not growing as fast as R&D, it doesn't mean that we weren't growing our feet on the street quarter-bearing sales at a really strong way. There's lots of marketing and sales operations headcount that we were we were building up as scaling that now we're not increasing at the same level. So I want to be clear. And I've said this each quarter just because it looked like sales and marketing headcount was a little bit lighter. That's the leverage as we're scaling, especially on the operational side of things. With respect to R&D headcount, it's been pretty consistent. It's always been an area of huge focus for us. And certainly, in the age of AI and all of the innovation that our incredible engineering team has been focused on that consistently been a place where we have invested and we'll continue to invest. And so from our perspective, headcount growth is always, first and foremost, allocated to incredible engineering R&D talent as well as feed on the street quota-bearing sales hitting road, hitting the streets, working with our customers to solve their biggest problems and you'll continue to see us do just that.

Wonderful. Thanks Gena.

Thanks, Brad,.

Our next question comes from the line of Michael Turrin with Wells Fargo Securities. Please go ahead.

Hi. Great. Good afternoon. Thanks for taking the question. I know the numbers can bounce a bit, but we've seen - heard the focus on customer workflows and now see the customer and employee workflow segment hit a high at 31% of net new ACV, Bill, you mentioned the opportunity to disrupt the front office there in the prepared remarks. I was hoping you could maybe frame what you're hearing from a demand perspective there for us. And maybe couple that with what the Xanadu release and agent solutions could do to help further that opportunity. Thanks.

Absolutely. Thank you very much, Michael. As I said, customer workflows were in 15 of the top 20 deals and it was very, very strong. And we grew net new ACV over 50%, 5-0 percent, and it's fantastic performance by our industry SKUs and the continued tracking in the front office has been going on for some time now, but we're getting known for it, and we're winning. We're winning a lot. So it's a healthy adoption of our Pro Plus offering. The industry SKUs are driving things, financial services was out in front for sure, technology and media, absolutely public sector. Technology and Media was over 300% public sector grew over 60% and the front office, our sales and order management product has demonstrated significant traction, significant traction. And I'm serious, it's like every industry you look at, it's really amazing from managed services providers to manufacturing, semiconductors, medical devices, chemicals, public sector agencies. It's extremely, extremely exciting. And I think the idea of our value proposition comes down to sales productivity. Just think about reduced time to quote higher deal sizes, lower fulfillment time, a zero-touch provisioning, optimizing for customer lifetime value. All this is resonating with the market in a big, big way. And I have a feeling that this will end up being the biggest business in ServiceNow.

That’s all very clear. Thanks very much.

Thank you.

Our next question comes from the line of Karl Keirstead with UBS. Please go ahead.

Okay. Great. Maybe I'll direct this to Bill. Bill, I think a lot of your shareholders are pretty confident about how ServiceNow is doing in your enterprise commercial segments. But I'm sure you're aware, there's been a debate over the last two to three months about the federal business, partly because of the issues that you Gina raised with us three months ago that led to the leadership changes, but also in the interim where there's been issues with one of your partners at Carahsoft. I'm wondering if you could hit that - hit those issues head on, maybe give us an update and talk about how confident you are in continued good Fed bookings over the next couple of quarters? Thank you.

Sure, Karl. We didn't see any impact in Q3, and we're currently not involved in any issues regarding Carahsoft with the U.S. federal business. So you should just take that one off of any concern list that you might have. And as I look at the business in Fed, it could not possibly be stronger. The net new ACV growth is fantastic. We had five deals greater than $5 a couple of deals over $20 million, and ServiceNow has become the standard platform for federal agencies as they're looking to consolidate contracts and standardize on a single vendor to drive digital transformation. That's the bandwidth that's built into this platform. So as I think about where we're going now, GenAI is top of mind. I know because I've been there with the U.S. federal government agencies, they're looking for efficiency gains, and they know our software platform does it. They also know the implementations are stellar and the referenceability is fantastic. And so I think getting things done quickly, which is one of our cooling cards, giving people great experiences that really make them happy and more productive, it's all working for us. And I'm very, very excited about our Gen AI SKUs for our government Community Cloud. As you know, that went generally available recently, it was actually in June, and we saw great traction on it with federal, and we partnered Accenture as a matter of fact, to kick off a 60-day pilot with 1 agency and they ended it early to get into the Gen AI race because it works so well. So everything is thumbs up here, Karl, and I'm very grateful for the question. Thank you.

Okay. Good. Nice to hear. Thanks Bill.

Thank you so much.

Our next question comes from the line of Gregg Moskowitz with Mizuho. Please go ahead.

All right. Thank you very much for taking my question. So the growth for Now Assist and Pro Plus has obviously been highly impressive. But we've also been hearing about a real up-tick in customers choosing to upgrade from Standard to Pro as an intermediate step towards Gen AI adoption and obviously, that driving ARPU - uplift as well. So Bill, when you look across your installed base, is that something you're seeing quite a bit more of today as compared with three, six, nine months ago to the point where you would expect a second wave with these set of customers going forward?

Absolutely. I do, Gregg, I expect a nice second wave, Pro is still doing extremely well. When you now add the Now Assist and the premium on top of that, customers don't even blink, because the returns to them are so much greater than any pricing. And we're a very fair company in the way we do things, and it's highly transparent. I see a plus up with that. I see a plus up with RaptorDB globally, because it's such a sensation. People see the clock speed of how the system runs on it, they all want it. And Paul is now rolling that out globally in Q4. We'll see how it goes, but we're highly optimistic great engineering built into it amazing. We really hit it with our database and our, I would say, first round draft choice team that built this, it's really, really something to behold. So I am feeling extremely good. And the customer relationship, the focus and intensity around those relationships, if you come to our building in Santa Clara, it's a revolving door CEOs are flying in from all over the world. So I'm not suggesting that they don't stop other places too, but they definitely don't miss stopping in ServiceNow, and they kind of tell me that at the end of it, what they see from our team and our product is not PowerPoint, its real products doing real things with a real value proposition. So I'm really excited, Gregg.

Fantastic. Thank you, Bill.

Thank you so much.

Our next question comes from the line of Derek Wood with TD Cowen. Please go ahead.

Thanks. Bill, really exciting to see this next new chapter of AI with autonomous agents, just wanted to kind of touch on like what technology is coming to market to power these Agentic networks. It sounds like it's from RaptorDB, Data Fabric, zero-copy integration, maybe NVIDIA's NIM advancements with various LOMs. But could you just kind of share the highlights on what is key to unlocking these new autonomous capabilities on the ServiceNow platform and when some of these capabilities are going to be coming GA.

Yes. Sure. Well, first of all, I think there's really three areas that that I would highlight for you are my top three, if that helps, just put this into some context. The Gen AI race is one that we're winning, first mover, and we intend to run the table. So Now Assist is the sensation and GenAI on the Now Platform because of the uniqueness of this platform, and its perfection in the way it was engineered and the fact that we never took any shortcuts, and we always protected the single platform with the single architecture, the single CMDB it really is magnificent. Now you put RaptorDB. So Now Assist is priority one, you put RaptorDB and you build out the workflow data platform, again, if that workflow data platform, which is already in flight connects to the workflow automation platform, what customer wouldn't want to connect to any data source in their enterprise, structured or unstructured data, to drive their workflow performance to get a business outcome. I literally couldn't pick one out of a lineup. And then you say, what else are you going to do? And it's really the front office, everything else is still going full pace, but the front office is getting a step function increase in terms of its focus and the innovation and the execution because it's the biggest TAM and because we're winning everywhere we go, we think that, that can be like a major catalyst. And in terms of when the product is coming, they're out. So you got Now Assist in full flight, you've got RaptorDB in full flight, Q4 will be a big quarter for that. You got the workflow data platform, which I explained, which works now, and it will continue to evolve and be a big part of our future and you have the front office where wins are happening every day, and we're beautifully led there, and we've got amazing dreams and then take all the core stuff with the upsells and the and the cross-sells cohorts that Gina talked about, and it's just so much in front of us, we feel like a scale company with the heart of a start-up. And that's kind of motion that's running through ServiceNow, now. And tomorrow, when we get to ServiceNow Live, which is an iconic cultural event that we do every quarter, I could just imagine the seats are going to be rumbling all over the world.

Fantastic. Thanks.

Thank you very much. Appreciate the question, Derek. Thank you.

Our next question comes from the line of Raimo Lenschow with Barclays. Please go ahead.

Thanks for squeezing me in and congrats from me as well. Bill, you talked about a lot of like C-level executives, how do they think about like AI as we go into next year in terms of - is that like coming out of the IT budget? Did you do a second budget? And how do you make sure that you kind of continue to gain share in that one? Just kind of talk us through the dynamic you're seeing in your conversations. Thank you.

Yes. I think the good news - the really good news here, Raimo, is IT budgets continue to grow. So the digital strategy has been and will continue to be the business strategy. And we really work hard on studying the world around us. And Gartner expects global IT spending to grow almost 10.5% next year. And that's double what it was in 2023. And it expects software to grow at 15%. And the secular tailwinds GenAI and workflow automation are clear C-suite priorities, and we're the best positioned to take advantage of the opportunity. So I think it's clear to me that customers focused on digital transformation within the IT budget. It's growing. We're getting more share because clearly, we're gaining share because we're growing faster than markets, especially the customer service management market, which I talked about. And we're gaining share. But I also think there is new share to be gained from more investment, and really believe when I talk to the CEOs, IT is clearly their business focus within IT. Gen AI is their number one focus. And they are going to get the money from somewhere. And if they have to take it out of another line item to fuel this, they will. So on top of IT, I think there will be money coming from other departments, especially back office functions that will be put to the front of the line around Gen AI. And I also see a consolidation effect taking place. People say to me, where is the new money coming from? We had one company recently that basically took ServiceNow by consolidating 250-point solutions that the light was so dim on, it really gave you a headache, but there's hundreds and hundreds of accounts like that all over the world that just need to really think about what they want for their future. And the future is Now – N-O-W, no pun intended. But I think that all of that is goodness for ServiceNow. IT, other line item budgets coming in, and of course, the consolidation to a premier platform like this. Incidentally, the partner ecosystem is grabbing on to ServiceNow in a way that I have never seen before and it's accelerating quickly. And we just got done with a Board meeting where our team presented some of these dynamics and the expansion of the channels and how the channels are now leaning in and building on top of and around ServiceNow in ways they never did before. And I just think all that says growth.

Okay. Perfect. That’s very clear. Thank you. Congrats.

Thank you very much. Appreciate it.

We have time for one more question. Our final question comes from the line of Samad Samana with Jefferies. Please go ahead.

Great. Thank you. I will talk fast. Bill, I couldn't help but have my ears perk up a little when you said that Amit has expertise in packaging and pricing. And I was wondering if there's a reason why you called that out specifically, just especially as we think about this big AI boom period for ServiceNow. And related, just how his responsibilities as the President when he comes over and join how will they differ from maybe kind of prior iterations of that role?

That's a really great question, Samad. How I learned about that was actually in a live interview with Amit. And we talked about his past and everything that he's done, and he called that out as a unique professional, I guess, strength, but it was also he went into scenario planning and different things that he's done and I see that as a skill that will help us tremendously. Really, it's a net new add on to what I think we're good at. And that's what you always try to do. You always try to hire great human beings, first of all, and he and he is one with a hungry humble heart, has one but also has domain expertise in areas that expand the bandwidth of what ServiceNow is all about. And so in terms of his focus, and I did call it out deliberately, by the way. In terms of his focus, he's an engineer's engineer. We need an absolute thought leader that loves product, loves working with great engineers, build comradery with the best engineering team in the business, which we have and invent new growth shoots and new opportunities by seeing things through a broad lens, which he has from all of his experiences. So I just think that it was a wonderful opportunity to bring Amit on. And we always are very respectful of this because he's had great careers in other places, including Oracle and obviously, Google with the Google Cloud platform. And as I said earlier, I do really respect that when you get a great individual, it's also good for the company he came from and all the relationships that he brought with him and that was part of the ethos of Amit and a conversation that we had. It was a deeply thoughtful person and a person that wants to do good. And we want to do good because we believe good wins.

Exciting times and congrats on all the success to the whole team.

Thank you so much, Samad.

This concludes our question-and-answer session. And with that, we will conclude today's conference call. Good bye. Thank you all for your participation. You may now disconnect.