ServiceNow (NOW.US) Exceeds Q3 2025 Revenue and Profit Estimates, Announces Stock Split

ServiceNow (NOW.US) reported strong financial results for Q3 2025, with non-GAAP net income reaching $1,010 million, a significant increase of 30.3% year-over-year. Non-GAAP diluted earnings per share (EPS) stood at $4.82, surpassing the analyst estimate of $4.21. Total non-GAAP revenue for the quarter was $3,374 million, exceeding analyst expectations of $3,357.069 million and marking a 20.5% rise compared to Q3 2024.

Key Business Drivers

The company's subscription revenues were a primary driver of growth, reaching $3,267 million in Q3 2025, up 20.5% year-over-year in constant currency. This performance was bolstered by 103 transactions exceeding $1 million in net new annual contract value (ACV), reflecting strong demand for ServiceNow's AI platform and innovative products.

Key product and initiative successes included Now Assist, U.S. Federal, Workflow Data Fabric, and RaptorDB, all of which performed ahead of plan. The company's current remaining performance obligations (cRPO) also showed robust growth, increasing 20.5% in constant currency to $11.27 billion as of September 30, 2025.

Strategic Developments and Innovation

ServiceNow unveiled AI Experience, a new user interface for enterprise AI, which integrates people, data, and workflows with built-in governance and security. Additionally, the Zurich platform release introduced innovations to accelerate multi-agentic development and deploy secure, scalable AI systems.

Strategic partnerships and investments further underscore the company's growth strategy, including collaborations with the U.S. General Services Administration (GSA) for AI-first modernization, NVIDIA for next-generation AI models, and FedEx Dataworks for AI-powered supply chain workflows. The company also announced an investment in Zaelab to enhance CRM and AI-driven modernization for manufacturing and technology customers.

Management Outlook

ServiceNow raised its full-year 2025 guidance for subscription revenue, operating margin, and free cash flow, anticipating 250 basis points of free cash flow margin expansion year-over-year. The company now expects full-year 2025 non-GAAP subscription revenues to be between $12,835 million and $12,845 million, representing a 20% year-over-year constant currency growth. Additionally, the Board of Directors approved a five-for-one stock split, subject to shareholder approval at a special meeting scheduled for December 5, 2025.