ServiceNow Inc
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.27%.
Did NOW Beat Earnings? Q2 2025 Results
ServiceNow delivered a convincing beat-and-raise second quarter, with the enterprise software giant posting non-GAAP diluted EPS of $4.09 — well ahead of the $3.57 consensus estimate by 14.63% — while revenue climbed 22.4% year-over-year to $3.21 billion, topping the $3.12 billion Street expectation by 2.92%. The outperformance was driven largely by accelerating AI adoption, as the company's Now Assist product exceeded net new ACV expectations and kept ServiceNow firmly on track for its $1.00 billion ACV target by 2026, cementing what CEO Bill McDermott called a "full stack agentic operating system for the enterprise." Subscription revenues, which account for 97% of total revenues, reached $3.11 billion with a 98% customer renewal rate underscoring the durability of demand. Current remaining performance obligations grew 24.5% year-over-year to $10.92 billion, signaling healthy forward momentum despite a flagged two-point cRPO headwind in Q3. <a href="https://247wallst.com/investing/2026/01/28/servicenow-earnings-preview-what-to-watch-when-now-reports-after-the-bell/">Heading into the print</a>, analysts were watching AI monetization closely — and ServiceNow delivered, raising full-year subscription revenue guidance to approximately $12.79 billion.
- Now Assist surpassed net new ACV expectations with increasing deal volume and size quarter-over-quarter
- 89 transactions over $1 million in net new ACV in Q2
- 528 customers with more than $5 million in ACV, approximately 19.5% YoY growth
- Customers with more than $20 million in ACV grew over 30% year-over-year
- cRPO of $10.92 billion representing 24.5% YoY growth
- RPO of $23.9 billion representing 29% YoY growth
- Strong momentum in CRM expansion
“ServiceNow's outstanding second quarter results continue our long track record of elite level execution. Our beat-and-raise quarter showcases the mission-critical nature of the ServiceNow AI Platform. Every business process in every industry is being refactored for agentic AI. ServiceNow has never been more differentiated as a full stack agentic operating system for the enterprise.”
ServiceNow CEO, on the earnings call
Forward Guidance & Outlook
For Q3 2025, ServiceNow guides subscription revenues of $3,260-$3,265 million (20%-20.5% YoY growth), cRPO growth of 18.5% (18% constant currency), non-GAAP operating margin of 30.5%, and 210 million diluted weighted-average shares. Q3 will experience approximately 2 points of cRPO growth headwinds from a larger-than-average Q4 renewal cohort. U.S. Federal agencies continue to navigate tightening budgets and evolving mission demands into Q3. For full-year 2025, the company raised subscription revenue guidance to $12,775-$12,795 million (~20% growth, 19.5%-20% constant currency), with non-GAAP subscription gross margin of 83.5%, non-GAAP operating margin of 30.5%, and non-GAAP free cash flow margin of 32%. Now Assist is firmly on track to hit the $1 billion ACV target by 2026.
NOW YoY Financials
NOW Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.