ServiceNow (NOW) Announces First Quarter 2025 Financial Earnings Results

ServiceNow, Inc. (NOW) today announced financial results for its latest quarter. The company reported quarterly revenue of $3.088 billion, surpassing the revenue estimate of $3.083 billion and marking a slight beat. However, ServiceNow’s quarterly diluted earnings per share came in at $2.20, falling short of the estimated $3.83, resulting in a miss. Despite the earnings miss, the revenue beat highlights the company’s continued growth in its market.

Key Highlights:

• ServiceNow reported Q1 2025 subscription revenues of $3,005 million, marking a 19% year-over-year growth.
• Total revenues reached $3,088 million, representing an 18.5% year-over-year growth.
• Current remaining performance obligations (cRPO) were $10.31 billion, a 22% increase year-over-year.
• ServiceNow crossed 500 customers with more than $5 million in annual contract value (ACV).
• The company announced plans to acquire Moveworks and Logik.ai to enhance its AI and CRM capabilities.
• ServiceNow formed partnerships with companies like Aptiv, Vodafone Business, and NVIDIA to accelerate AI transformation.
• The company repurchased approximately 316,000 shares of its common stock for $298 million.
• ServiceNow was recognized as a leader in various industry assessments and received accolades for innovation and ethical practices.

Summary:

ServiceNow’s Q1 2025 financial results exceeded expectations, with subscription revenues reaching $3,005 million, a 19% increase from the previous year. Total revenues were $3,088 million, reflecting an 18.5% growth. The company’s current remaining performance obligations (cRPO) stood at $10.31 billion, a 22% year-over-year increase. ServiceNow’s CEO, Bill McDermott, attributed the strong performance to the company’s position as a leader in enterprise-grade AI, which is driving business transformation and value creation for customers and shareholders. The company also reported significant growth in its customer base, with over 500 customers having more than $5 million in ACV.

ServiceNow continued to expand its AI capabilities and market reach through strategic acquisitions and partnerships. The company announced plans to acquire Moveworks and Logik.ai to bolster its AI and CRM offerings. Additionally, partnerships with Aptiv, Vodafone Business, and NVIDIA aim to enhance AI transformation across various industries. ServiceNow also repurchased shares worth $298 million as part of its share repurchase program. The company received recognition for its innovation and ethical practices, being named a leader in several industry assessments. Looking ahead, ServiceNow provided a positive financial outlook, with expectations of continued growth in subscription revenues and performance obligations.

ServiceNow, Inc. (NOW) has experienced a turbulent period in the stock market, with its price declining by 6.08% over the past week and a more significant drop of 31.85% over the last three months. Despite these recent setbacks, the stock has managed to achieve a modest gain of 6.22% over the past year. This volatility comes amidst strong fundamental metrics, as evidenced by a robust earnings per share (EPS) two-year compound annual growth rate (CAGR) of 35.47% and a revenue CAGR of 23.13%. The company’s free cash flow has also grown impressively at a CAGR of 24.81%, indicating solid financial health and operational efficiency. With a high price-to-earnings ratio of 119.44, the market seems to have high expectations for ServiceNow’s future growth, although this could also suggest that the stock is overvalued. The return on invested capital stands at 13.38%, and a net profit margin of 12.93% further underscores the company’s profitability. While the recent price declines may concern investors, the strong underlying fundamentals suggest that ServiceNow is well-positioned for long-term growth.

ServiceNow, Inc. provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide. It operates the Now platform for workflow automation, artificial intelligence, machine learning, robotic process automation, performance analytics, electronic service catalogs and portals, configuration management systems, data benchmarking, encryption, and collaboration and development tools. The company also provides information technology (IT) service management applications; IT service management product suite for enterprise’s employees, customers, and partners; IT business management product suite; IT operations management product that connects a customer’s physical and cloud-based IT infrastructure; IT Asset Management to automate IT asset lifecycles; and security operations that connects with internal and third party. In addition, it offers governance, risk, and compliance product to manage risk and resilience; human resources, legal, and workplace service delivery products; safe workplace applications; customer service management product; and field service management applications. Further, it provides App Engine product; IntegrationHub enables application to extend workflows; and professional, industry solutions, and customer support services. It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through direct sales team and resale partners. It has a strategic partnership with Celonis to help customers identify and prioritize processes that are suitable for automation. The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc. in May 2012. The company was founded in 2004 and is headquartered in Santa Clara, California.