Live: Will ServiceNow Soar After Q2 Earnings?
Key Points
-
ServiceNow reports tonight after the bell. Wall Street is expecting the company to deliver sales of $3.12 billion and earnings of $3.57.
-
In the current environment where many stocks have been selling off after beating last quarter’s earnings and raising guidance for the next quarter, it’s likely ServiceNow will have to top targets for last quarter and deliver healthy guidance for shares to rise tomorrow.
-
This live blog will be providing analysis and news the moment earnings hit. Simply stay on this page and new updates will load as they’re posted.
Live Updates
Detailed Earnings Summary
NOW | ServiceNow Q2’25 Earnings Highlights:
- Adj. EPS: $4.13
- Revenue: $3.215B [✅]; UP +22.5% YoY
- Adj. Gross Margin: 77.5% [✅]; UP +50 bps YoY
- Net Income: $0.385B [✅]; UP +30% YoY
Q2’25 Outlook:
- Revenue: $3.260B – $3.265B [✅]
- ServiceNow expects a year-over-year growth of 20% – 20.5% for subscription revenues in Q3 2025, with a constant currency growth of approximately 19.5%.
- Management anticipates headwinds in cRPO growth due to a larger-than-average customer cohort scheduled to renew in Q4 2025.
Q2 Segment Performance:
- Subscription Revenues: $3.113B [✅]; UP +22.5% YoY
- Professional Services and Other Revenues: $0.102B [✅]; UP +19.5% YoY
Other Key Q2 Metrics:
- Adj. Operating Income: $0.358B [✅]; UP +11% YoY
- Free Cash Flow: $0.535B; UP +16.5% YoY
- Current Remaining Performance Obligations (cRPO): $10.92B; UP +24.5% YoY
- Remaining Performance Obligations (RPO): $23.9B; UP +29% YoY
- Net Cash Provided by Operating Activities: $0.716B; UP +22.5% YoY
CEO Commentary:
- Bill McDermott: “ServiceNow’s outstanding second quarter results continue our long track record of elite level execution. Our beat-and-raise quarter showcases the mission-critical nature of the ServiceNow AI Platform. Every business process in every industry is being refactored for agentic AI. ServiceNow has never been more differentiated as a full stack agentic operating system for the enterprise.”
CFO Commentary:
- Gina Mastantuono: “Q2 was a spectacular quarter across the board, as we significantly beat the high end of our guidance across all topline and profitability metrics. Now Assist continued to surpass net new ACV expectations, fueled by an increase in both deal volume and size quarter-over-quarter, putting us firmly on track to hit our $1 billion ACV target by 2026. With a robust pipeline and expanding market opportunities, including strong momentum in CRM, we are well-positioned for the second half of the year.”
Strategic Updates:
- ServiceNow introduced several innovative solutions including AI Control Tower and AI Agent Fabric, enhancing AI governance and orchestration capabilities.
- The company announced partnerships with AWS and NVIDIA to strengthen its AI capabilities and launched the ServiceNow Protected Platform Singapore to accelerate AI innovation.
- ServiceNow’s acquisition of data.world aims to enhance AI agent understanding and deepen enterprise data intelligence.
Raised Guidance Is Key
It’s a beat and raise for ServiceNow.
Subscription revenue is now forecast at $12.78 billion to $12.80 billion for the year. That’s above prior guidance of $12.64 billion to $12.68 billion.
Wall Street is looking for signs that ServiceNow’s AI products will accelerate revenue in the coming year,s so raised guidance is a welcome development for investors in the stock.
ServiceNow the Big After-Hours Winner
It looks like ServiceNow is the big after-hours winner in technology tonight.
Shares have come off their highs slightly, but are still up 6.4%.
That’s much stronger gains after-hours than other companies like Alphabet, Tesla, and IBM which are all flat or down.
Executive Quotes and Financials
“ServiceNow’s outstanding second quarter results continue our long track record of elite level execution.”
“Our beat-and-raise quarter showcases the mission-critical nature of the ServiceNow AI Platform.”
– Bill McDermott
And here’s a look at how growth rates compare across various financial metrics:
| Metric | Q2 25 | Q2 24 | YoY Change |
|---|---|---|---|
| Revenue | $3.21B | $2.63B | 22.38% |
| Gross Profit | $2.49B | $2.08B | 20.05% |
| Operating Income | $358.00M | $240.00M | 49.17% |
| Net Income | $385.00M | $262.00M | 46.95% |
| Cash And Equivalents | $3.12B | $2.16B | 44.70% |
| Total Assets | $22.05B | $18.21B | 21.11% |
| Total Liabilities | $10.93B | $9.54B | 14.58% |
| Shareholders Equity | $11.09B | $8.67B | 28.01% |
| Operating Cash Flow | $716.00M | $620.00M | 15.48% |
More On Earnings...
ServiceNow reported strong financial results for Q2 2025, with total revenues reaching $3.215 billion, a 22.5% year-over-year increase.
Subscription revenues were $3.113 billion, also up 22.5% from the previous year.
The company exceeded its guidance across all topline growth and profitability metrics. Non-GAAP earnings per share were $4.13, significantly surpassing the estimated EPS of $1.70.
The company highlighted substantial growth in its customer base, with a 30% increase in customers with more than $20 million in annual contract value.
ServiceNow’s CEO, Bill McDermott, emphasized the company’s differentiation as a full-stack agentic operating system for enterprises. The company also announced several strategic partnerships and innovations in AI, data, and CRM, positioning itself for continued growth in the second half of the year.
Earnings Highlights
- ServiceNow Surpasses Q2 2025 Earnings Expectations with Strong Revenue Growth
- ServiceNow’s AI Platform Drives 22.5% Revenue Increase in Q2 2025
- ServiceNow CEO Highlights Company’s Differentiation in Enterprise AI Solutions
- ServiceNow’s Strategic Partnerships Fuel Q2 2025 Success
- ServiceNow Reports Robust Customer Growth in Q2 2025
- ServiceNow’s Q2 2025 Results Showcase Mission-Critical AI Platform
BOOM Goes the Dynamite!
ServiceNow earnings are out and share have immediately jumped 8%.
We will continue posting analysis.
Still no ServiceNow Earnings
Alphabet just reported standout earnings but we’re still waiting for ServiceNow. Once their earnings hit the wires we’ll begin posting analysis.
It's 4 p.m....
The closing bell has rung and we’re watching for earnings. We’ll be continuing to update across the next 45 minutes with earnings analysis.
A Little More Than 30 Minutes from Earnings
We are a little more than 30 minutes from the bell closes trading for the day. Shares of ServiceNow are down slightly, about .18% as of 3:27 p.m. ET.
The company is underperofrming the broader market today with the Nasdaq up .51% in late trading. The downgrade we highlighted earlier is likely the leading cause for ServiceNow’s underperformance today.
As a reminder, we’ll be posting live analysis right after earnings are released. Simply stay on this page and new updates will load. We expect earnings to release shortly after 4 p.m. ET.
Enterprise AI "Bellwether"
Plenty of analysts will be watching ServiceNow’s earnings as the company is one of the “bellwethers” for AI demand from enterprise clients. Here’s some of the figures the company announced last quarter in the AI space. Wall Street will be closely analyzing the commentary from William McDermott on demand for AI products.
Highlights from last quarter:
- Pro Plus
- Deal Count grew more than fourfold year-over-year.
- Featured in 15 of the 20 largest Q1 deals.
- ITSM Plus
- Included in 15 of the top 20 deals
- ITOM Plus
- Net-new ACV increased 70% quarter-over-quarter
- SecOps Plus
- Net-new ACV grew 4X quarter-over-quarter
- Creator Plus
- Average deal size grew 3X quarter-over-quarter
We’ll see if there are updates on any of these numbers when the company hosts its conference call.
ServiceNow Receives a Downgrade Today
Prior to earnings, ServiceNow received a downgrade from Erste Group, cutting the company from a ‘Buy’ to a ‘Hold.’
The main reason for the downgrade is ServiceNow trading at a premium valuation relative to peers.
Wall Street projects ServiceNow will deliver $16.58 in adjusted earnings in 2025. That leaves the company trading for about 58X 2025 adjusted earnings.
That’s certainly a steep price considering ServiceNow is guiding to subscription revenue growth of 19.5% (Non-GAAP). Of course, ServiceNow also has a unique position in many AI growth areas that create the premium the stock trades for relative to many of its peers.
ServiceNow (NYSE:NOW | NOW Price Prediction) reports earnings after the bell tonight.
While ServiceNow has been one of the market’s most successful stocks across the past decade, it has been an underperformer so far in 2025. Shares are down 9% year-to-date, with most the underperformance coming recently.
Since May 12th, ServiceNow shares have dropped 5.5% while the Nasdaq has gained 12%.
We’ll be updating this earnings live blog with news and analysis the moment ServiceNow’s earnings hit the wires. All you need to do is simply leave this page open and new updates will appear as they go live.
Before earnings hit, let’s look at some of the most important storylines headed into the second quarter.
The Numbers to Watch
The first numbers Wall Street analyzes after earnings are released is a company’s EPS and revenue for the prior quarter. Let’s look at what Wall Street expects from ServiceNow:
Second Quarter Expectations
- Revenue: $3.12 billion
- EPS (Normalized): $3.57
- EPS (GAAP): $1.60
- Cash Flow from Operations: $450.1 million
- Free Cash Flow: $450 million
ServiceNow will also provide guidance for the third quarter. If the company misses on any of these numbers, we’d expect its share price to drop tomorrow.
Third Quarter Guidance Expectations
- Revenue: $3.30 billion
- EPS (Normalized): $4.26
ServiceNow guides to subscription revenue, CRPO, and income from operations. Given this information, Wall Street will quickly be able to see how guidance next quarter compares to their revenue and EPS expectations.
Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.
© Canva
Top Gaining Stocks
Top Losing Stocks