ServiceNow (NOW) Q3 2025 Earnings

ServiceNow (NOW) delivered a robust third-quarter performance that significantly surpassed Wall Street’s expectations, fueled by the accelerating adoption of its AI-powered platform. The company also announced a five-for-one stock split, signaling confidence in its future growth prospects.

The market reacted positively to the news, with shares rising 4% in after-hours trading.

Here’s a breakdown of the key results versus LSEG estimates:

• Earnings per share: $4.82 adjusted vs. $4.27 expected
• Revenue: $3.41 billion vs. $3.35 billion expected

Subscription revenues, the core driver of ServiceNow’s business, reached $3.3 billion, exceeding the StreetAccount estimate of $3.26 billion. Overall revenue growth stood at an impressive 22% year-over-year, highlighting the company’s sustained momentum in the enterprise software market.

Bolstered by its strong Q3 results, ServiceNow revised its full-year guidance upwards, now projecting subscription revenue between $12.84 billion and $12.85 billion. This represents an increase from the previous guidance range of $12.78 billion to $12.80 billion.

ServiceNow, like many of its peers in the tech industry, is capitalizing on the transformative power of artificial intelligence. The demand for its AI-driven solutions is surging as businesses seek to enhance operational efficiency, automate workflows, and gain competitive advantages.

“Every enterprise in every industry is focused on AI as the innovation opportunity of our generation,” stated CEO Bill McDermott, emphasizing the pivotal role ServiceNow plays in enabling businesses to leverage these advanced technologies. He hailed the results as clear evidence of ServiceNow’s growing importance to organizations seeking to harness the power of AI.

CFO Gina Mastantuono revealed that ServiceNow’s AI business is on track to generate over $500 million in annual contract value this year and is well positioned to achieve its ambitious goal of reaching $1 billion by 2026. This rapid growth underscores the increasing demand for AI-powered solutions in the enterprise sector.

“The value AI is going to create in enterprise is like nothing that we’ve seen in a very, very long time,” Mastantuono stated, underscoring the profound impact of AI on enterprise operations. “We have real customers, it’s not just hype, and we have real values and we’re driving real outcomes for those customers.”

Net income saw a significant increase, reaching $502 million, or $2.40 per share, compared to $432 million, or $2.07 per share, in the same quarter last year. Current remaining performance obligations reached a substantial $11.35 billion, suggesting strong future revenue visibility.

Looking ahead, ServiceNow’s fourth-quarter guidance takes into account the uncertainties surrounding the U.S. government, including the potential impact of future shutdowns. The company projects subscription revenues to be in the range of $3.42 billion to $3.43 billion.

Mastantuono emphasized the alignment between ServiceNow’s strengths and the government’s focus on cost efficiency and modernization. She noted that ServiceNow’s U.S. federal business grew by over 30% in the third quarter, highlighting its strong position in this important market segment.

In a move to broaden its investor base, ServiceNow’s board approved a five-for-one stock split, scheduled to take effect at the beginning of December. This split is intended to make the company’s shares more accessible to retail investors and potentially increase trading liquidity.

Despite the positive news, ServiceNow’s stock is down approximately 13% year-to-date, reflecting broader market volatility and investor concerns regarding growth prospects in the current economic environment. However, the company’s strong Q3 performance and positive outlook suggest that it is well-positioned to navigate these challenges and deliver sustainable growth in the long term.

ServiceNow year-to-date stock chart.