ServiceNow (NOW) Q3 2025 Beats Estimates

Published: October 29, 2025

ServiceNow, Inc.

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Total revenue: $3,407M in Q3 2025; subscription revenue: $3,299M.
Net income: $502M for the quarter; gross profit: $2,633M.
Subscription mix: 97% of revenues; subscription gross margin: ~80%.
Remaining performance obligations (RPO): $24.3B (47% cRPO, +24% YoY).
Free cash flow (9M 2025): $2,604M (+27% YoY).
Management raised 2025 guidance following the quarter.

Historical Context

ServiceNow entered Q3 2025 with sustained subscription growth: subscription revenue for the first nine months of 2025 was $9,417M, up about 21% year-over-year. Total revenue for FY 2024 was $10,984M; FY 2025 figures in the latest filings show continued expansion to $13,278M (year-to-date trends reflected in the company’s 10-Q/10-K disclosures). There were no disclosed material events or M&A activity reported on 2025-09-26 in the company’s filings. The Q3 2025 beat and the subsequent raise to 2025 guidance should be viewed against that backdrop of steady subscription-led expansion, increasing RPO, and an ongoing strategy focused on AI platform monetization and cross-industry workflow adoption.

Quarter highlights and financial detail

ServiceNow reported Q3 2025 revenue of $3.407 billion and subscription revenue of $3.299 billion, with net income of $502 million and gross profit of $2.633 billion. The business remains overwhelmingly subscription-led (97% of revenues) and delivered a subscription gross margin of roughly 80% for the period. Operationally, the company showed durable contract strength: remaining performance obligations stood at $24.3 billion (47% cRPO) and grew about 24% year-over-year. Free cash flow through the first nine months was strong at $2.604 billion (+27% YoY), underscoring cash generation alongside top-line growth.

Drivers of the beat and management stance

ServiceNow's results reflect continued momentum in digital workflow products and IT operations management: subscription categories together drove the majority of revenue and sustained double-digit growth year to date. Management cited robust contract activity and product adoption and raised full-year 2025 guidance after the quarter, signaling confidence in execution and bookings quality. Strategic advantages feeding this performance include the Now Platform’s embedded AI capabilities (Now Assist and the broader workflow data fabric), the company’s biannual platform cadence, and a high proportion of multi-year, sticky contracts that create switching costs. These factors, combined with direct sales (78% of revenue) and an expanding partner ecosystem, support continued expansion into CRM/industry and core business workflows.

Risks and margin dynamics investors should watch

Key risks highlighted in filings remain relevant post-quarter: macroeconomic volatility, foreign exchange exposure as more contracts are denominated in non-USD currencies, regulatory and data-residency requirements, and seasonality concentrated in Q4. Operationally, headcount growth has increased subscription-related costs (noted as a 34% YoY increase in headcount cost drivers for the quarter), and professional services continues to be a smaller, lower-margin contribution (3% of revenues). Investors should monitor retention and ACV expansion trends embedded in renewal rates and RPO converts, execution on AI monetization (Now Assist/agent capabilities), and any shifts in margin profile as ServiceNow balances product investment, sales coverage, and partner-led growth.

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Dec 23, 2025

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Historical Context

Quarter highlights and financial detail

Drivers of the beat and management stance

Risks and margin dynamics investors should watch

Investor FAQ

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