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ServiceNow 8-K Report, Financial Results (Jul 23, 2025)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 23, 2025
Period End
July 23, 2025
Security
NOW
In the record · 2016–202610-K1110-Q338-K97

NOW filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 97 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jun ’17Jun ’17
  2. Deal closed8-K · Jan ’21Jan ’21
  3. Leadership change8-K · Aug ’22Aug ’22
  4. Leadership change8-K · May ’26May ’26

01—Abstract

Summary

Summary of the 8-K filed July 23, 2025. Cited figures are marked; the original filing is the authoritative source.

ServiceNow reported second-quarter 2025 results that beat the high end of its guidance across topline and profitability metrics.

Total revenues were $3,215 milliona, up 22.5% year-over-year (21.5% in constant currency), and subscription revenues were $3,113 million, up 22.5% (21.5% constant currency). Current remaining performance obligations (cRPO) reached $10.92 billion, up 24.5% (21.5% constant currency), and total RPO reached $23.9 billion, up 29% (25.5% constant currency). GAAP operating margin was 11% ($358 million income from operations), while non-GAAP operating margin was 29.5% ($955 million).

GAAP diluted EPS was $1.84b versus non-GAAP diluted EPS of $4.09. Free cash flow was $535 million, a 16.5% margin, and operating cash flow was $716 million. Management raised full-year 2025 guidance to subscription revenues of $12,775-$12,795 million (about 20% GAAP growth; 19.5%-20% constant currency), a non-GAAP subscription gross margin of 83.5%, a non-GAAP operating margin of 30.5%, and a free cash flow margin of 32%.

For Q3 2025, guidance calls for subscription revenues of $3,260c-$3,265 million (20%-20.5% growth), with cRPO growth expected to absorb roughly 2 points of headwind from a larger-than-average customer cohort renewing in Q4 2025. Management also flagged continued U.S. Federal agency budget pressure into Q3. For investors, the quarter shows durable growth with improving profitability, and the company is advancing its AI product strategy, including Now Assist net new ACV momentum and a stated goal of $1 billion in Now Assist ACV by 2026.

The GAAP-to-non-GAAP gap remains large, driven mainly by stock-based compensation of $499 milliond in the quarter, and the company repurchased $361 million of stock during the quarter with $2.6 billion remaining under its $4.5 billion authorization. This 8-K furnishes the earnings press release under Item 2.02, so the information is not deemed filed under Section 18 of the Exchange Act.

02—Key points

Key Highlights

  1. Total revenues of $3,215M, up 22.5% YoY (21.5% constant currency), with subscription revenues of $3,113M, and results exceeded the high end of guidance across topline and profitability metrics.
  2. cRPO of $10.92B grew 24.5% YoY (21.5% constant currency); total RPO of $23.9B grew 29% (25.5% constant currency), signaling strong forward visibility.
  3. GAAP operating margin of 11% (income from operations $358M) versus non-GAAP operating margin of 29.5% ($955M); stock-based compensation of $499M is the primary reconciling item.
  4. Free cash flow of $535M (16.5% margin) in Q2, with six-month FCF of $2,012M (32% margin on a non-GAAP basis).
  5. Full-year 2025 subscription revenue guidance raised to $12,775M-$12,795M (about 20% growth), with a 30.5% non-GAAP operating margin and 32% FCF margin targets.
  6. Q3 2025 cRPO growth expected to face roughly 2 points of headwind from a large customer renewal cohort that management expects to renew in Q4 2025; U.S. Federal budget pressures persist into Q3.
  7. Repurchased about 381,000 shares for $361M; roughly $2.6B remains under the $4.5B authorization. Number of customers with more than $20M in ACV grew over 30% YoY.

03—Questions

Frequently Asked Questions

  1. Did ServiceNow beat its own guidance in Q2 2025?

    Yes. Management stated that Q2 2025 exceeded the high end of its guidance across all topline and profitability metrics, and the company characterized the quarter as a 'beat-and-raise.' Full-year guidance was raised accordingly.

  2. What is the difference between cRPO and RPO, and why does it matter?

    cRPO is contracted revenue expected to be recognized in the next 12 months, while RPO is total contracted revenue not yet recognized. Q2 cRPO was $10.92B (up 24.5%) and RPO was $23.9B (up 29%). Growth in both suggests healthy future revenue visibility, though cRPO growth will face a near-term headwind in Q3 2025 from a large renewal cohort.

  3. Why is there such a large gap between GAAP and non-GAAP profitability?

    The gap is driven primarily by non-cash stock-based compensation, which was $499M in Q2 2025, plus amortization of purchased intangibles, business combination costs, impairment of assets ($30M), and severance costs ($29M). GAAP operating margin was 11% versus a 29.5% non-GAAP operating margin. Investors should weigh stock-based compensation as a real cost to shareholders when evaluating the company.

  4. What is the outlook for Q3 2025 and the full year?

    For Q3 2025, GAAP subscription revenues are guided to $3,260M-$3,265M (roughly 20%-20.5% growth), with a non-GAAP operating margin of 30.5%. Full-year 2025 subscription revenues are guided to $12,775M-$12,795M (about 20% growth), with a 32% non-GAAP free cash flow margin. Management expects U.S. Federal budget pressures to continue into Q3.

  5. How is the company returning capital to shareholders and managing dilution?

    ServiceNow repurchased about 381,000 shares for $361M in Q2 2025, with the stated primary objective of managing dilution. About $2.6B remains of the $4.5B authorization. The program has no fixed expiration and may be suspended at any time. Year-to-date, the company has repurchased $659M in stock.

04—Continue

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