Operator: We’ll take our next question now from Keith Bachman of BMO.
Keith Bachman: Gina, I hope you feel better. Question and a clarification. First, a clarification. It was an impressive metric you provided on the net new customer ACV growth of 30%. Can you just for context, can you give us what that same number would have been last year in the December quarter or an average over the last 2 years in the December quarter? I’m just trying to see what the calibration point is. And then my question, it relates to the upsell. And in particular, on ITOMs and ITSM, in the past, you provided updates on kind of the SKU mix, in other words, going to Pro to Enterprise. If you could just give us an update on — is that slowing up at all given the economy or are customers kind of forging ahead and just where are — if you could give us an update on the transition. That’s it for me.
Gina Mastantuono: Yes, Keith, I’ll tell you that 30% net new ACV — net new customer ACV growth, we’re really proud of in the quarter. We haven’t given those metrics in prior quarters. Suffice it to say that we continue to see those net new customer ACVs growing as we are landing larger deals with new customers. And those new customers are able to expand with us more. So really strong growth in the quarter, but we’ve not consistently given that, but to say that we are continuing to see that grow. With respect to ITSM Pro, we’ve talked about penetration being at about 35%, and that continues to do well.
Keith Bachman: And so does that continue to move higher Gina for the year? Or is that kind of — is there any pressure on that stalling out at all in terms of customers willing to mix up?
Gina Mastantuono: It has continued to grow. We don’t give that percentage every single quarter. We’ll give it every time it hits the next five if that makes sense. But we absolutely are seeing Pro penetration continuing. CJ, I don’t know if you want to add any
CJ Desai: Absolutely, Keith. Here is what I can say. So the number continues to increase since we launched this — and what was super encouraging in Q4 was that some of the new logos that we got with ITSM also landed with ITSM grow besides our existing cohort upgrading to ITSM Pro. So 35%, we are currently very, very optimistic. And at Financial Analyst Day, we will provide bigger updates on what’s happening with ITSM Enterprise.
Operator: We will go to Tyler Radke at Citi.
Tyler Radke: Maybe for Bill or CJ, just given the widespread conversations around cloud optimizations as we heard from Microsoft last night, can you just talk about how you’re approaching these conversations with your customers? Are there specific products that you’re leading with? And then CJ, just I would love to get an update on your view on the ServiceNow observability strategy heading into 2023? Kind of what are your key milestones from a product perspective? And how is just the progress gone since the most recent acquisition?
CJ Desai: Absolutely. So let’s first start with the cloud optimization question. Listen, our product line since day 1, whether you look at ITSM, ITOM or asset management, our ability to discover assets whether they are an on-prem cloud, private cloud, public cloud or multi-cloud has continued to be best-in-class. So we help our customers line to optimize their power spend. That’s great. If they’re trying to move to public cloud and they want to accelerate that journey, that’s great too. So our portfolio is best suited for meeting our customers where they are on that cloud journey and where they want to go. So I feel actually pretty good in terms of just our portfolio’s relevance in this multi-cloud and how our different product lines can help them with their acceleration and optimization.
And on observability, what was really encouraging for me in Q4 is that we had 3 of Fortune 100 companies decided to buy ServiceNow Observability solution and Lightstep at a meaningful scale. And these are real workloads that are really being monitored by our Lightstep solution. And as I think about 2023 milestones, as you know, that Tyler we bought company called Era, which provides large management solution. We will fully integrate that in our Observability platform. So we have not only primary observability solution, but also unified observability solutions that work across multi-states. So very optimistic going into ’23.
Operator: We do have time for one more question this afternoon. We’ll take that now from Sarah Bowler at Macquarie Capital.
Sarah Bowler: Congrats to CJ, wonderful to see. Really, I think just given that you’re operating in this, what feels like rarefied air, let me sort of flip things over a little bit and ask if there were any verticals that you haven’t called out or regions in particular where you saw any softness or perhaps extra layers of scrutiny on overall spending?
CJ Desai: So I will say, I’m going to take this, Sarah. Thank you very much. But overall, we feel very balanced performance. Gina called out certain verticals super proud of what we did in public sector. Typically, in Q3, we are expected to do well in public sector. But even in Q4, we did really well and as Gina called out 50% growth. So whether it’s public sector, whether it’s retail, whether it’s health care and others, very balanced performance and strong growth, an amazing quarter. I would say, as Bill just touched on, we are really excited about our growth potential in Japan and India. And with new appointment in Japan and Japan being the 4 geographies reporting to us, Paul Smith, Chief Commercial Officer, is somewhere we really want to pay attention to, and we are very optimistic on the market side there.
Operator: And again, ladies and gentlemen, I would like to thank you all for joining today’s ServiceNow Q4 2022 earnings conference call. Again, that will bring us to end today’s call. Thank you for joining us. Have a great afternoon. Goodbye.
