ServiceNow (NYSE: NOW), the digital workflow leader, delivered a standout performance in the second quarter of 2025, beating Wall Street’s expectations on both earnings and revenue.
Driven by strong enterprise demand for AI-enabled solutions and a robust subscription base, the company reported what CFO Gina Mastantuono described as a “spectacular quarter” — and the numbers back it up.
Strong Earnings and Revenue Growth
In Q2 2025, ServiceNow reported non-GAAP earnings per share (EPS) of $4.09, handily beating the consensus estimate of $3.57. Total revenue reached $3.22 billion, surpassing analyst forecasts of approximately $3.12 billion.
The company’s subscription revenue — a key performance metric — grew by 22.5% year-over-year, reaching $3.11 billion.
This demonstrates continued strength in the company’s recurring revenue model and validates its position as a mission-critical platform across industries.
“We had a spectacular quarter,” said Mastantuono. “Our consistent beat-and-raise performance is a testament to the trust customers place in ServiceNow as the platform of platforms for digital transformation.”
Robust Customer Metrics and Deal Momentum
ServiceNow also saw strong expansion in large customer accounts. The company closed 89 deals with over $1 million in net new annual contract value and now counts 528 customers spending more than $5 million annually.
Current remaining performance obligations (cRPO), which reflect near-term revenue visibility, increased 24.5% year-over-year to $10.92 billion, while total RPO rose 29% to $23.9 billion.
These figures underscore the company’s strong pipeline and its ability to deliver on long-term customer commitments, even in a cautious IT spending environment.
AI-Powered Growth: A Strategic Differentiator
A key driver of ServiceNow’s growth is its investment in artificial intelligence. The company’s AI capabilities — particularly its “Now Assist” platform — have seen rapid adoption, with AI-related deal volumes up 50% sequentially.
CEO Bill McDermott emphasized that AI is not only fueling new customer wins but also expanding the value delivered to existing customers. “We are executing with speed and purpose to lead the AI revolution in enterprise software,” he noted.
Upbeat Outlook and Guidance Raise
On the back of this strong performance, ServiceNow raised its full-year 2025 subscription revenue guidance to a range of $12.775 billion to $12.795 billion, up from the previous range of $12.64 billion to $12.68 billion.
Third-quarter guidance also came in above analyst expectations, signaling continued momentum.
Free cash flow in the quarter reached $535 million, and non-GAAP operating margin stood at an impressive 29.5%, reflecting efficient scaling and disciplined cost management.
Market Reaction and Analyst Sentiment
Investors responded positively, with ServiceNow’s stock rising nearly 7% in after-hours trading following the earnings release.
Analysts praised the company’s consistent execution, AI leadership, and strong visibility into future revenues.
Canaccord Genuity and other firms raised their price targets on the stock, citing ServiceNow’s unmatched positioning in the digital transformation space.
Conclusion
ServiceNow’s Q2 2025 earnings report was nothing short of spectacular. With accelerating AI adoption, strong subscription growth, and a clear roadmap for continued success, the company has once again solidified its role as a leader in the enterprise software landscape.
As organizations worldwide continue to digitize operations and embrace intelligent automation, ServiceNow appears well-positioned to capitalize on this shift — and Wall Street is taking notice.
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