ServiceNow Reports Strong Q3 2025 Financial Results and Announces Stock Split
1. Robust Subscription Revenue Growth
ServiceNow (NYSE: NOW), a leader in AI-driven business transformation, released its financial results for the third quarter of 2025, showcasing impressive growth across key metrics. For the quarter ended September 30, 2025, the company reported subscription revenues of $3,299 million, marking a 21.5% year-over-year increase, or 20.5% growth in constant currency. This performance reinforces ServiceNow’s position as an essential player in the AI platform landscape.
Chairman and CEO Bill McDermott expressed his enthusiasm for the results, stating, “This outstanding Q3 performance is the clearest demonstration yet that ServiceNow is the AI platform for business transformation.” He emphasized that businesses across various industries recognize AI as a critical innovation opportunity, leading them to trust ServiceNow as a cornerstone of their technological infrastructure.
2. Current Remaining Performance Obligations Surge
The company's current remaining performance obligations (cRPO) stood at $11.35 billion, reflecting a 21% increase year-over-year, or 20.5% in constant currency. This figure represents the contract revenue expected to be recognized within the next twelve months. Additionally, ServiceNow achieved 103 transactions exceeding $1 million in net new annual contract value (ACV) during Q3, increasing its total customer base to 553 clients with over $5 million in ACV—an 18% rise year-over-year.
3. Exceptional Performance Across Product Lines
ServiceNow’s President and CFO, Gina Mastantuono, noted the exceptional nature of the quarter, highlighting significant strides in various product lines such as Now Assist, the U.S. Federal sector, Workflow Data Fabric, and RaptorDB. She remarked, “These results underscore the power of the ServiceNow AI Platform and our multiple growth vectors, from core workflow expansion to the accelerating adoption of our innovative new products.”
4. Board Authorizes Five-for-One Stock Split
In a notable corporate decision, ServiceNow's Board of Directors approved a five-for-one stock split, aimed at making shares more accessible to a broader range of investors. This decision is contingent on shareholder approval, which will be sought at a Special Meeting scheduled for December 5, 2025.
5. Recent Business Highlights
Innovation and Expansion
During Q3, ServiceNow unveiled its AI Experience, a new user interface designed to enhance enterprise AI interactions. This context-aware, multimodal environment integrates people, data, and workflows while maintaining robust governance and security measures.
The company also launched a regional innovation hub and AI Institute in West Palm Beach, Florida, projected to create over 850 new jobs and deliver an economic impact of $1.8 billion over five years. Furthermore, ServiceNow partnered with SENAI-SP in Brazil to initiate a statewide AI skills program aimed at preparing the workforce for the demands of AI and automation.
Strategic Partnerships
ServiceNow solidified its standing in the public sector by announcing a OneGov agreement with the U.S. General Services Administration (GSA), which simplifies the licensing model for government agencies to adopt AI-driven solutions. Additionally, the company deepened its collaboration with NVIDIA, introducing Apriel 2.0, a next-generation AI model designed to enhance workflow solutions across various sectors.
In another strategic move, ServiceNow partnered with FedEx Dataworks to create AI-powered supply chain workflows, effectively merging logistics intelligence with automation capabilities.
6. Financial Performance Overview
The third quarter financial results included:
- Total Revenues: $3,407 million, a 22% increase year-over-year.
- Net Income: $502 million, translating to earnings per share of $2.42 (basic) and $2.40 (diluted).
- Free Cash Flow: $592 million, representing a 17.5% growth year-over-year.
GAAP vs. Non-GAAP Results
ServiceNow reported the following GAAP and Non-GAAP results for Q3 2025:
| Metric | GAAP Amount ($ millions) | Non-GAAP Amount ($ millions) |
|---|---|---|
| Subscription Revenues | $3,299 | $3,267 |
| Total Revenues | $3,407 | $3,374 |
| Net Income | $502 | $1,010 |
| Earnings per Share (Diluted) | $2.40 | $4.82 |
7. Recognition and Awards
In recognition of its outstanding contributions to the tech industry, ServiceNow was named a leader in multiple Gartner Magic Quadrant reports and received accolades such as placements on Forbes America’s Best Employers for Company Culture and Fortune Best Workplaces in Technology lists.
8. Conclusion
With its strong Q3 performance, strategic innovations, and significant growth initiatives, ServiceNow continues to position itself as a pivotal player in the AI-driven business transformation sector. The upcoming stock split, subject to shareholder approval, may further enhance investor accessibility and confidence in the company’s future trajectory.
