01—Abstract
Summary
Summary of the 10-Q filed July 24, 2025. Cited figures are marked; the original filing is the authoritative source.
ServiceNow, Inc. (NOW) reported robust financial results for the second quarter and first half of 2025, demonstrating continued strong growth and operational efficiency.
Total revenues grew by 22% year-over-year to $3.215 billiona for the quarter, with subscription revenues, the primary driver, increasing by 22%. This growth was fueled by new and existing customer acquisitions. The company also saw a healthy increase in its customer base, with the number of customers with an Annual Contract Value (ACV) over $5 million growing significantly year-over-year.
Profitability metrics remained strong, with income from operations increasing by 49% for the quarter to $358 millionb. The company's commitment to innovation and expansion was evident in its strategic acquisitions, including Logik.io Inc. and the announced acquisition of data.world, Inc., further solidifying its AI capabilities and market position.
ServiceNow also continued its capital return program through share repurchases, indicating confidence in its financial health and future prospects. The company's strong free cash flow generation further underscores its operational strength and ability to invest in growth while returning value to shareholders.
02—Key points
Key Highlights
- Total revenues increased by 22% to $3.215 billion in Q2 2025, driven by a 22% rise in subscription revenues.
- Income from operations grew by 49% year-over-year to $358 million in Q2 2025.
- Remaining Performance Obligations (RPO) reached $23.9 billion as of June 30, 2025, a 29% increase year-over-year, indicating strong future revenue visibility.
- The number of customers with ACV greater than $5 million increased to 528 as of June 30, 2025, up from 442 in the prior year.
- Free cash flow grew by 27% to $2.012 billion for the first six months of 2025.
- ServiceNow completed the acquisition of Logik.io Inc. for $506 million, enhancing its AI-powered CPQ capabilities, and announced the acquisition of data.world, Inc. to bolster its AI platform.
- The company repurchased $361 million of its common stock during the second quarter of 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, ServiceNow kept $0.12.
- Revenue$3.21B100.0%
- Cost of revenue−$724.0M22.5%
- Gross profit$2.49B77.5%
- Operating costs−$2.13B66.3%
- Operating income$358.0M11.1%
- Interest, other & tax$27.0M0.8%
- Net income$385.0M12.0%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed July 24, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $3.21B$2.63B | +22.4% |
| Cost of Revenue | $724.00M$552.00M | +31.2% |
| Gross Profit | $2.49B$2.08B | +20.0% |
| R&D Expenses | $734.00M$643.00M | +14.2% |
| Operating Expenses | $2.13B$1.83B | +16.2% |
| Operating Income | $358.00M$240.00M | +49.2% |
| Interest Expense | $6.00M— | — |
| Net Income | $385.00M$262.00M | +46.9% |
| EPS (Basic) | $0.37$0.25 | +45.7% |
| EPS (Diluted) | $0.37$0.25 | +46.8% |
| Shares Outstanding (Basic) | 1.04B1.03B | +0.7% |
| Shares Outstanding (Diluted) | 1.05B1.04B | +0.7% |
05—Questions
Frequently Asked Questions
What is ServiceNow's revenue growth for the second quarter of 2025?
ServiceNow reported a 22% increase in total revenues for the second quarter of 2025, reaching $3.215 billion. Subscription revenues, which form the largest portion of total revenue, also grew by 22% year-over-year.
How is ServiceNow managing its future revenue commitments?
ServiceNow's Remaining Performance Obligations (RPO) stood at $23.9 billion as of June 30, 2025, representing a 29% increase from the previous year. Approximately 46% of this RPO is expected to be recognized as revenue in the next 12 months, providing strong visibility into future revenue streams.
What significant strategic acquisitions did ServiceNow make or announce during the period?
ServiceNow acquired Logik.io Inc. for $506 million to enhance its AI-powered CPQ solutions. Additionally, the company announced its agreement to acquire data.world, Inc., a leader in enterprise data cataloging and governance, to further strengthen its AI platform capabilities.
How is ServiceNow returning capital to shareholders?
ServiceNow continues to execute its share repurchase program. During the second quarter of 2025, the company repurchased $361 million of its common stock. As of June 30, 2025, approximately $2.6 billion remained authorized for future repurchases.
06—Continue