Live Earnings: Can ServiceNow (NOW) Push Toward $1,000 After Earnings?
Key Points
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ServiceNow estimates for Q3 EPS of 4.27 on revenue of 3.36 billion, with FY 2025 EPS 16.89.
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Management touts accelerating AI adoption, led by AI Control Tower and Now Assist momentum.
Live Updates
ServiceNow Shares Still Moving Higher, Here Is Why
ServiceNow continues to validate its evolution from workflow automation to full-scale AI orchestration. Q3 proves the AI transition is accretive to both growth and profitability, and the stock split underscores management’s confidence in broadening investor participation. Big changes from last quarter:
- Five-for-one stock split authorized, pending December 5 shareholder vote — the first in company history.
- Raised FY 2025 guidance for subscription revenue, margins, and FCF.
- AI Control Tower, Now Assist, and RaptorDB cited as ahead of plan.
- Federal business strong despite macro caution; new OneGov agreement with the GSA.
- Deepened partnerships with NVIDIA and FedEx Dataworks to expand multi-agentic workflows.
- Announced AI Institute and hub in West Palm Beach, creating 850 jobs.
With accelerating AI adoption, margin expansion, and the upcoming stock split, ServiceNow delivered a “textbook beat-and-raise.” The +4.75% after-hours gain reflects renewed enthusiasm that NOW is executing as the enterprise AI platform to own heading into 2026.
| Metric | Pre-Earnings Consensus | Post-Earnings View | Change | Sentiment |
|---|---|---|---|---|
| FY 2025 Revenue | $13.18 B | $13.30 B + | 📈 Raised | Bullish |
| FY 2025 EPS | $16.89 | ~$17.40 + | 📈 Raised | Bullish |
| FY 2026 Revenue | $15.66 B | $15.8 B + | ⚖️ Flat-to-Up | Positive |
Key Operating Highlights
| KPI | Q3 2025 | Q3 2024 | YoY Change | Commentary |
|---|---|---|---|---|
| Subscription Revenue | $3.299 B | $2.715 B | +21.5 % | Broad-based strength across ITSM, CSM, and AI modules. |
| Total Revenue | $3.407 B | $2.792 B | +22 % | Above internal and Street targets. |
| cRPO | $11.35 B | $9.38 B | +21 % | Supported by record renewals and $1 M+ deals. |
| RPO | $24.3 B | $19.6 B | +24 % | Healthy long-term visibility. |
| Operating Margin (Non-GAAP) | 33.5 % | 31.0 % | +250 bps | AI efficiency and disciplined OpEx management. |
| Free Cash Flow Margin | 17.5 % (quarter) | 16.0 % | +150 bps | Accelerating conversion of AI-driven sales. |
ServiceNow isn’t just showing growth, it’s showing operational leverage from AI deployment, proving that generative and agentic features can scale profitably.
ServiceNow Up Big After Earnings And Stock Split Announcement
ServiceNow shares are up 4.75% after hours after the company delivered a clean beat across every major metric and announced a five-for-one stock split, its first in company history.”
Q3 revenue came in at $3.41 billion (+22% YoY), ahead of the $3.36 B consensus, while non-GAAP EPS reached $4.82, well above the $4.27 estimate. Subscription revenue rose 21.5% YoY to $3.30 B, and current remaining performance obligations (cRPO) grew 21% to $11.35 B.
| Metric | Actual | Consensus | YoY Change | Beat / Miss |
|---|---|---|---|---|
| Revenue | $3.41 B | $3.36 B | +22% | Beat |
| EPS (Non-GAAP) | $4.82 | $4.27 E | +19% | Beat |
| Operating Income (GAAP) | $572 M | — | +22% | — |
| Operating Income (Non-GAAP) | $1.14 B | — | +33.5% | — |
| Free Cash Flow | $592 M | — | +17.5% | — |
The post-market rally reflects both the beat and the optics of a high-confidence quarter — broad-based growth, raised guidance, and a shareholder-friendly stock split signal management conviction in sustained AI-driven momentum.
Management Commentary
“This outstanding Q3 performance is the clearest demonstration yet that ServiceNow is the AI platform for business transformation,” said CEO Bill McDermott. “Every enterprise in every industry is focused on AI as the innovation opportunity of our generation.”
CFO Gina Mastantuono added: “Now Assist, U.S. Federal, Workflow Data Fabric, and RaptorDB were all ahead of plan. These results underscore the power of the ServiceNow AI Platform and our multiple growth vectors.”
McDermott’s tone was emphatically bullish — positioning ServiceNow as the core orchestration layer for enterprise AI adoption. Mastantuono’s remarks reinforced that growth was broad and efficiency-driven, with AI products outperforming plan and margins expanding faster than expected.
Guidance Update
| Metric | New FY 2025 Guidance | Prior Guidance | Direction | Commentary |
|---|---|---|---|---|
| Subscription Revenue | $12.84 B ( +20.5% YoY ) | $12.67 B E | Raised | Reflects stronger Now Assist adoption. |
| Operating Margin | 31% | 30% | Raised | Improved AI efficiency and scale leverage. |
| Free Cash Flow Margin | 34% | 32% | Raised | +250 bps YoY improvement. |
| FY 2025 cRPO Growth | 21% | 20% | Raised | Robust federal and enterprise renewal strength. |
The raised top-line and margin guidance — plus a five-for-one split — signals a company confident in sustainable, double-digit AI-led expansion into FY 2026.
ServiceNow reports Q3 results after the close today with the call slated for 5 p.m. ET. The stock’s near-term reaction will hinge on whether AI-driven expansion continues to translate into large multi-product deals, resilient federal activity, and sustained margin discipline.
Estimates Snapshot
- Q3 2025: Revenue $3.36B, EPS $4.27
- FY 2025: Revenue $13.18B, EPS $16.89
- FY 2026: Revenue $15.66B, EPS $20.04
Key Areas to Watch Tonight
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AI Control Tower and agentic platform adoption
Management framed ServiceNow as the control plane for enterprises to govern their own and third-party AI agents, highlighting early outperformance of AI Control Tower targets. Proof of broad agent orchestration and reference customers will matter for durability. -
Now Assist and Pro Plus monetization cadence
Leadership reiterated a path to $1B in Now Assist ACV by 2026 and called out rising deal sizes and attach rates across ITSM, CSM, HR, SecOps, and Risk. Investors will look for usage ramp and assist-pack conversion evidence. -
Front-office push, CPQ and order management
With Logik.ai, sales and order management are now in focus. Any pipeline color, large wins, or vertical proof points can re-rate the long-term CRM opportunity on the platform. -
Federal demand and cRPO trajectory
Management has embedded prudence for U.S. federal budgets. Commentary around public-sector logos, renewal quality, and cRPO growth will shape H2 expectations. -
Margins and AI efficiency
Q2 showcased margin upside from AI-driven productivity. The company is still investing for growth while targeting about 30.5% operating margin and 32% full-year FCF margin. How Q3 tracks against that plan is pivotal
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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