Enterprise Value to EBITDA (EV/EBITDA)
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
ServiceNow Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
EBITDA demonstrates a consistent upward trend over the five-year period. Net income, EBT, and EBIT also exhibit growth, though with some variation in the rate of increase. The analysis below details these observations.
- Overall EBITDA Trend
- EBITDA increased from US$749 million in 2021 to US$3,022 million in 2025. This represents a substantial increase, indicating improved operational profitability. The growth rate appears to accelerate over time, with larger absolute increases observed in later years.
- EBITDA Growth Rates
- The increase from 2021 to 2022 was US$110 million. From 2022 to 2023, EBITDA grew by US$735 million. The growth continued from 2023 to 2024 with an increase of US$731 million, and finally from 2024 to 2025 with an increase of US$697 million. While growth remains positive, the rate of increase shows a slight deceleration from 2023 to 2025.
- Relationship between EBITDA and Other Profitability Metrics
- EBITDA consistently exceeds EBIT, EBT, and Net Income in absolute value, as expected, due to the exclusion of non-cash expenses like depreciation and amortization, as well as interest and taxes. The difference between EBITDA and EBIT widens over time, suggesting increasing depreciation and amortization expenses. The gap between EBIT and EBT also expands, indicating increasing interest expense. The difference between EBT and Net Income reflects the impact of income taxes.
- Net Income Growth in Relation to EBITDA
- While both EBITDA and Net Income increase, Net Income’s growth is less consistent. Net Income experienced a significant jump from 2022 to 2023, but decreased from 2023 to 2024 before recovering in 2025. This suggests factors beyond operational profitability, such as changes in tax rates or non-operating items, significantly influence net earnings.
In summary, the financial information indicates a strong and growing operational performance as measured by EBITDA. However, fluctuations in net income suggest that other financial factors play a significant role in overall profitability.
Enterprise Value to EBITDA Ratio, Current
ServiceNow Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| AppLovin Corp. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Datadog Inc. | |
| International Business Machines Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| EV/EBITDA, Sector | |
| Software & Services | |
| EV/EBITDA, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2025-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
ServiceNow Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Valuation Ratio | ||||||
| EV/EBITDA3 | ||||||
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| EV/EBITDA, Sector | ||||||
| Software & Services | ||||||
| EV/EBITDA, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
The Enterprise Value to EBITDA ratio demonstrates a significant declining trend over the observed five-year period. Initially high, the ratio decreased consistently, indicating a relative improvement in the company’s valuation compared to its earnings generation.
- Enterprise Value
- Enterprise Value fluctuated considerably. It decreased from US$110,442 million in 2021 to US$89,601 million in 2022, then increased substantially to US$153,785 million in 2023 and further to US$204,354 million in 2024. A notable decrease is observed in 2025, falling to US$117,307 million.
- EBITDA
- Earnings Before Interest, Tax, Depreciation, and Amortization exhibited a consistent upward trend throughout the period. Starting at US$749 million in 2021, EBITDA increased to US$859 million in 2022, US$1,594 million in 2023, US$2,325 million in 2024, and reached US$3,022 million in 2025.
- EV/EBITDA Ratio – Overall Trend
- The EV/EBITDA ratio began at 147.45 in 2021 and decreased to 104.31 in 2022. This downward trend continued, reaching 96.48 in 2023 and 87.89 in 2024. The most substantial decrease occurred between 2024 and 2025, with the ratio falling to 38.82. This suggests that the company’s enterprise value grew at a slower rate than its EBITDA, or that the enterprise value decreased while EBITDA increased, resulting in a more favorable valuation multiple.
- EV/EBITDA Ratio – Implications
- The declining ratio could indicate increasing investor confidence in the company’s ability to generate earnings, or a reassessment of the company’s growth prospects. The significant drop in 2025 warrants further investigation to determine the underlying factors contributing to this change, such as shifts in market conditions or company-specific events impacting enterprise value.
In summary, the observed trend suggests a strengthening relationship between enterprise value and earnings generation, culminating in a substantially lower EV/EBITDA ratio by the end of the period. The volatility in Enterprise Value, coupled with consistent EBITDA growth, is the primary driver of this trend.