01—Abstract
Summary
Summary of the 8-K filed January 28, 2026. Cited figures are marked; the original filing is the authoritative source.
ServiceNow reported fourth-quarter and full-year 2025 results that beat its own Q4 guidance on every topline and profitability metric.
Q4 subscription revenue was $3,466 milliona, up 21% year over year (19.5% in constant currency), and total revenue was $3,568 million, up 20.5%. Current remaining performance obligations (cRPO) reached $12.85 billion, up 25% (21% constant currency), and total RPO was $28.2 billion. Full-year 2025 total revenue was $13,278 million, up 21%, with GAAP operating margin of 13.5% and non-GAAP operating margin of 31%.
Full-year GAAP net income was $1,748 millionb ($1.67 diluted EPS), and free cash flow was $4,636 million, a 35% margin. Management's 2026 guidance calls for subscription revenue of $15,530-$15,570 million (20.5%-21% growth, 19.5%-20% in constant currency) and a 36% non-GAAP free cash flow margin. Capital allocation was a major focus.
The board authorized an additional $5.0 billionc in share repurchases, on top of roughly $1.4 billion of remaining capacity at year-end, and management plans an imminent $2 billion accelerated share repurchase. The company states the primary objective is to manage dilution. Q4 repurchases were about $597 million for roughly 3.6 million shares.
The 5-for-1 stock split became effective December 17, 2025, so per-share figures are retroactively adjusted. M&A activity was significant. Moveworks closed on December 15, 2025, and contributed about 100bps to growth.
Armis (expected to close in 2H 2026) and Veza (expected to close in 1H 2026) are pending. Goodwill rose to $3,578 milliond from $1,273 million, and intangibles rose to $1,121 million from $209 million.
Investors should weigh the growth benefit against integration risk and the potential for further acquisition-related charges. Q1 2026 guidance points to subscription revenue of $3,650-$3,655 million (21.5% reported growth), with roughly 150bps of headwind from the shift of self-hosted revenue to hosted revenue.
02—Key points
Key Highlights
- Q4 2025 subscription revenue of $3,466M grew 21% YoY (19.5% constant currency); total revenue of $3,568M grew 20.5%, and management said results exceeded guidance across topline and profitability metrics.
- cRPO reached $12.85B (+25% reported, +21% constant currency) and total RPO reached $28.2B (+26.5%), signaling strong forward visibility; 244 deals exceeded $1M in net new ACV in Q4, up nearly 40%.
- Board authorized an additional $5.0B in share repurchases on top of ~$1.4B remaining, and the company plans an imminent $2B accelerated share repurchase, primarily to offset dilution.
- FY2025 free cash flow was $4,636M (35% margin); Q4 non-GAAP operating margin was 31% and FY non-GAAP operating margin was 31%.
- 2026 guidance: subscription revenue of $15.53B-$15.57B (20.5%-21% growth; 19.5%-20% constant currency), 32% non-GAAP operating margin, and 36% non-GAAP free cash flow margin.
- Acquisition pipeline is active: Moveworks closed in December 2025, while Armis (2H 2026) and Veza (1H 2026) are pending, with goodwill up to $3.58B from $1.27B.
- Q1 2026 guidance includes about 150bps of growth headwind from the shift of self-hosted revenue to hosted revenue, which partly reflects strong adoption of hyperscaler offerings.
03—Questions
Frequently Asked Questions
How strong was ServiceNow's Q4 2025 and full-year 2025 performance?
Q4 2025 total revenue was $3,568M, up 20.5% (19.5% constant currency), and subscription revenue was $3,466M, up 21%. For full-year 2025, total revenue was $13,278M, up 21%. GAAP net income was $401M in Q4 and $1,748M for the year. The company said it exceeded its Q4 guidance on all topline and profitability metrics.
What does the $5 billion share repurchase authorization mean for shareholders?
The board added $5.0B to the repurchase program, on top of roughly $1.4B remaining at year-end. Management said the primary objective is to manage dilution from stock-based compensation rather than to return capital in a traditional sense. The company also plans an imminent $2B accelerated share repurchase. The program has no fixed expiration and can be suspended at any time, and the company is not obligated to buy any specific amount.
What is the outlook for 2026?
Full-year 2026 subscription revenue guidance is $15.53B-$15.57B, implying 20.5%-21% reported growth and 19.5%-20% constant-currency growth. Guidance includes about 100bps from Moveworks. Non-GAAP operating margin is guided to 32% and non-GAAP free cash flow margin to 36%. Q1 2026 subscription revenue is guided to $3.65B-$3.655B, with a roughly 150bps headwind from the hosted-versus-self-hosted revenue mix shift.
What are the risks investors should consider from the recent acquisitions?
Moveworks closed in December 2025, and Armis (expected 2H 2026) and Veza (expected 1H 2026) are pending. Acquisitions add goodwill ($3.58B, up from $1.27B) and intangibles ($1.12B, up from $209M), which raises impairment risk if returns fall short. Business combination costs were $109M for the year and $65M in Q4, and integration could pressure margins. Management says the strategy is unchanged and remains focused on margin expansion, but the filing does not quantify expected acquisition contributions beyond Moveworks.
Are there any GAAP versus non-GAAP profitability concerns?
There is a large gap. FY2025 GAAP operating margin was 13.5%, while non-GAAP was 31%. The difference is mainly stock-based compensation ($1,955M for the year, about 14.5% of revenue), plus amortization, business combination costs, severance, and contract termination costs. Q4 GAAP net income was $401M ($0.38 diluted EPS), versus $959M non-GAAP ($0.92). Investors should weigh GAAP results heavily, since stock-based compensation is a real economic cost.
04—Continue