01—Abstract
Summary
Summary of the 10-Q filed October 30, 2025. Cited figures are marked; the original filing is the authoritative source.
ServiceNow, Inc. (NOW) reported solid financial results for the third quarter and first nine months of fiscal year 2025, demonstrating continued revenue growth and operational efficiency.
Total revenues increased by 22%a year-over-year for the third quarter and 21% for the first nine months, primarily driven by strong performance in subscription revenues. The company also showed significant improvements in profitability, with income from operations growing by 37% and 39% for the respective periods, and an increase in net income.
Free cash flow saw a robust 27%b increase year-over-year for the nine-month period, highlighting strong cash generation capabilities. The company also made strategic acquisitions and continued its share repurchase program, indicating confidence in its growth prospects and commitment to shareholder returns.
02—Key points
Key Highlights
- Total revenues grew by 22% year-over-year to $3.41 billion in Q3 2025 and 21% year-over-year to $9.71 billion for the first nine months of 2025.
- Subscription revenues, the primary revenue driver, increased by 22% in Q3 and 21% in the first nine months, showcasing consistent demand for ServiceNow's core offerings.
- Income from operations saw a substantial increase of 37% in Q3 and 39% for the first nine months, indicating improved operational leverage and cost management.
- Net income rose to $502 million for Q3 and $1.35 billion for the first nine months, demonstrating enhanced profitability.
- Free cash flow increased by 27% to $2.60 billion for the first nine months of 2025, reflecting strong cash generation from operations.
- The company acquired Logik.io Inc. for $506 million to enhance its CPQ solutions and is pursuing the acquisition of Moveworks, Inc. for approximately $2.9 billion.
- ServiceNow repurchased $1.24 billion of its common stock in the first nine months of 2025, demonstrating a commitment to returning capital to shareholders.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2025, ServiceNow kept $0.15.
- Revenue$3.41B100.0%
- Cost of revenue−$774.0M22.7%
- Gross profit$2.63B77.3%
- Operating costs−$2.06B60.5%
- Operating income$572.0M16.8%
- Interest, other & tax−$70.0M2.1%
- Net income$502.0M14.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed October 30, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $3.41B$2.80B | +21.8% |
| Cost of Revenue | $774.00M$584.00M | +32.5% |
| Gross Profit | $2.63B$2.21B | +19.0% |
| R&D Expenses | $750.00M$626.00M | +19.8% |
| Operating Expenses | $2.06B$1.79B | +14.8% |
| Operating Income | $572.00M$418.00M | +36.8% |
| Net Income | $502.00M$432.00M | +16.2% |
| EPS (Basic) | $0.48$0.42 | +14.8% |
| EPS (Diluted) | $0.48$0.41 | +15.9% |
| Shares Outstanding (Basic) | 1.04B1.03B | +0.7% |
| Shares Outstanding (Diluted) | 1.05B1.04B | +0.5% |
05—Questions
Frequently Asked Questions
What was ServiceNow's revenue growth in the third quarter of 2025?
ServiceNow reported total revenues of $3.41 billion for the third quarter ended September 30, 2025, representing a 22% increase compared to the same period in 2024. Subscription revenues, which form the majority of the company's revenue, also grew by 22%.
How did ServiceNow's profitability fare in the recent quarter?
The company demonstrated strong profitability improvements. Income from operations increased by 37% year-over-year to $572 million in the third quarter of 2025. Net income also rose to $502 million for the quarter.
What is the company's outlook on future performance, particularly regarding revenue and expenses?
ServiceNow expects subscription revenues to continue growing in absolute dollars and remain relatively flat as a percentage of total revenue for the full year 2025. While sales and marketing expenses are expected to increase in absolute dollars, they are projected to decrease as a percentage of revenue due to increased sales productivity and marketing efficiencies. Research and development expenses are expected to increase in absolute dollars but remain relatively flat as a percentage of revenue, while general and administrative expenses are also expected to increase in absolute dollars but remain relatively flat as a percentage of revenue.
What are the key strategic initiatives or investments made by ServiceNow during this period?
ServiceNow completed the acquisition of Logik.io Inc. for $506 million to enhance its CPQ capabilities and accelerate sales and order management. Additionally, the company has a pending acquisition of Moveworks, Inc. for approximately $2.9 billion, aimed at strengthening its AI platform. The company also made a strategic investment of $750 million in Genesys.
06—Continue