Companies /Technology

ServiceNow Inc

NYSE: NOW Software - Application
$141.27
▼ $4.32 (−2.97%) today
Markets closed · 5:27pm ET

Q1 2025 Earnings

Reported Apr 23, 2025, 4:11pm ET · SEC source
$4.04
Beat +5.36%
EPS · est. $3.83
$3.1B
Beat +0.06%
Revenue · est. $3.1B
+1.3%
Beating market
NOW vs S&P since report
6 quarters
Consecutive EPS beats

Market Reaction

% change · around the report
−5%0+5%Apr 23Apr 24report 4:11pm ETearnings+2.4%+8.1%
−5%0+5%Apr 23Apr 24earnings+2.4%+8.1%
NOW +8.1%S&P 500 +2.4%
−5%0+5%Apr 23Apr 24report 4:11pm ETearnings+3.3%+8.1%
−5%0+5%Apr 23Apr 24earnings+3.3%+8.1%
NOW +8.1%NASDAQ +3.3%
−14%−7%0+7%Apr 22May 1report 4:11pm ETearnings+4.0%+7.5%
−14%−7%0+7%Apr 22May 1earnings+4.0%+7.5%
NOW +7.5%S&P 500 +4.0%
−14%−7%0+7%Apr 22May 1report 4:11pm ETearnings+5.6%+7.5%
−14%−7%0+7%Apr 22May 1earnings+5.6%+7.5%
NOW +7.5%NASDAQ +5.6%
+15.49%
Day of report
+0.71%
Next session
+2.06%
One week
+9.46%
30 days

S&P 500 over the same 30 days: +8.13%.

Did NOW Beat Earnings? Q1 2025 Results

ServiceNow posted a convincing first-quarter 2025 beat that sent shares up roughly 7% in after-hours trading, as investor concerns about government spending cuts gave way to results that exceeded expectations on both the top and bottom lines. The enterprise software company reported earnings per share of $4.04, clearing the $3.8346 consensus by 5.36%, while revenue of $3.09 billion grew 18.6% year-over-year and edged just ahead of estimates. The outperformance was anchored by the company's enterprise AI platform strategy — subscription revenues climbed 19% year-over-year, and current remaining performance obligations reached $10.31 billion, representing 22% growth that beat the company's own guidance by 250 basis points. Non-GAAP operating margin expanded to 31%, with management crediting internal AI-driven efficiencies for keeping expenses in check. For those <a href="https://247wallst.com/investing/2026/01/28/servicenow-earnings-preview-what-to-watch-when-now-reports-after-the-bell/">watching ServiceNow's forward outlook</a>, the company guided full-year 2025 subscription revenues of $12.64 billion to $12.68 billion, reflecting 18.5% to 19% growth, though management held back some of the Q1 upside to buffer against lingering geopolitical uncertainty.

Key Takeaways
  • Enterprise AI platform positioning driving strong demand
  • Now Assist and broader net new ACV outperformance vs. internal goals
  • Internal use of AI driving meaningful opex efficiencies
  • 508 customers with more than $5M in ACV, up approximately 20% YoY
  • 72 transactions over $1M in net new ACV in Q1
  • cRPO exceeded guidance by 250 bps

“ServiceNow's position as the platinum standard for enterprise-grade AI drove these outstanding first quarter results. Our platform is delivering real business transformation to empower CEOs with speed and agility to lead through this fast-changing environment. ServiceNow is meeting the moment, driving immediate value creation for customers and shareholders.”

ServiceNow CEO, on the earnings call

Forward Guidance & Outlook

For Q2 2025, ServiceNow guides subscription revenues of $3,030-$3,035 million (19%-19.5% YoY growth), cRPO growth of 19.5%, non-GAAP operating margin of 27%, and 209 million diluted weighted-average shares. For full-year 2025, subscription revenues are guided at $12,640-$12,680 million (18.5%-19% YoY growth, 19.5% constant currency), non-GAAP subscription gross margin of 83.5%, non-GAAP operating margin of 30.5%, and non-GAAP free cash flow margin of 32%. Management noted a weakening U.S. dollar provides a currency tailwind but is only flowing through part of Q1 outperformance and FX benefits into the full-year outlook to account for potential geopolitical risks.

NOW YoY Financials

Q1 2025 vs Q1 2024 · SEC filings Q1 2024 Q1 2025
$0$900.0M$1.8B$2.7B$2.6B$3.1BRevenue$2.1B$2.4BGross Profit$332.0M$451.0MOperating Income$347.0M$460.0MNet Income
$0$900.0M$1.8B$2.7BRevenueGross ProfitOperating IncomeNet Income

NOW Revenue by Segment

Subscription$3.0B+19.0%
Professional services and other$83.0M+4.5%

Figures from SEC filings and company reports. Not investment advice.