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Globe and Mail
25-07-2025
- Business
- Globe and Mail
ServiceNow Reports Strong Q2 2025 Financial Results
ServiceNow Inc ( (NOW)) has released its Q2 earnings. Here is a breakdown of the information ServiceNow Inc presented to its investors. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. ServiceNow Inc., a leader in AI-driven business transformation, operates in the technology sector, providing innovative solutions to enhance productivity and business outcomes across various industries. In its latest earnings report for the second quarter of 2025, ServiceNow exceeded its financial guidance, showcasing strong growth in subscription revenues and total revenues, both increasing by 22.5% year-over-year. The company reported substantial growth in its remaining performance obligations, indicating a robust pipeline and future revenue potential. Key financial highlights include subscription revenues of $3,113 million and total revenues of $3,215 million for Q2 2025. The company also reported a significant increase in the number of customers with more than $20 million in annual contract value, growing over 30% year-over-year. ServiceNow's strategic initiatives, such as the launch of AI Control Tower and AI Agent Fabric, have positioned it as a leader in AI-powered enterprise solutions, driving efficiency and business impact at scale. ServiceNow's strategic partnerships and acquisitions, including collaborations with AWS, NVIDIA, and the acquisition of have strengthened its AI capabilities and expanded its market reach. The company also announced its partnership with Ferrari and the launch of a secure cloud platform in Singapore, further demonstrating its commitment to global and industry expansion. Looking ahead, ServiceNow remains optimistic about its growth prospects, with a strong pipeline and expanding market opportunities. The company expects to achieve its $1 billion annual contract value target by 2026 and is well-positioned for continued success in the second half of the year, despite anticipated headwinds in Q3 2025 due to contractual obligations winding down.
Business Wire
23-07-2025
- Business
- Business Wire
ServiceNow Reports Second Quarter 2025 Financial Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--ServiceNow (NYSE: NOW), the AI platform for business transformation, today announced financial results for its second quarter ended June 30, 2025, with subscription revenues of $3,113 million in Q2 2025, representing 22.5% year-over-year growth and 21.5% in constant currency. 'ServiceNow's outstanding second quarter results continue our long track record of elite level execution,' said ServiceNow Chairman and CEO Bill McDermott. '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.' As of June 30, 2025, current remaining performance obligations ('cRPO'), contract revenue that will be recognized as revenue in the next 12 months, was $10.92 billion, representing 24.5% year-over-year growth and 21.5% in constant currency. The company had 89 transactions over $1 million in net new annual contract value ('ACV') in Q2, and ended the quarter with 528 customers with more than $5 million in ACV, representing approximately 19.5% year-over-year growth. 'Q2 was a spectacular quarter across the board, as we significantly beat the high end of our guidance across all topline and profitability metrics,' said ServiceNow President and CFO Gina Mastantuono. '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.' Recent Business Highlights Innovation ServiceNow's annual Knowledge event in May more than doubled its combined in-person and online attendance year-over-year, showcasing 800+ sessions and introducing major innovations across AI, data, CRM, and enterprise operations to drive efficiency and business impact at scale. ServiceNow introduced AI Control Tower and AI Agent Fabric, providing organizations with a centralized system to govern, orchestrate, and scale AI agents across functions, along with new AI Agents for security and risk to help customers proactively resolve issues and maintain compliance. The company expanded its data capabilities with the launch of Workflow Data Network, a new partner ecosystem to unify data, improve governance, and fuel AI-powered decision-making with real-time intelligence. ServiceNow reimagined CRM for the AI era, launching new CRM AI Agents and expanded CPQ capabilities that enable businesses to sell, fulfill, and service customers from a single AI-powered platform to increase productivity and strengthen loyalty. To drive digital transformation across key functions at scale, ServiceNow introduced Core Business Suite, an AI-powered solution that integrates HR, procurement, finance, legal, and facilities operations into one unified experience for improved efficiency and faster time to value. ServiceNow introduced its Autonomous IT vision, powered by agentic AI. This marks a turning point in enterprise technology, where AI-powered autonomy becomes foundational – aimed at delivering zero downtime, zero outages, and greater operational resilience across the enterprise. The company launched ServiceNow University, a dynamic learner experience offering hundreds of courses and assessments to help individuals and teams build essential digital skills for an AI-driven world. ServiceNow today announced agentic workforce management, a new, innovative extension of end-to-end AI agent orchestration that will enable employees and AI agents to seamlessly and securely work together to deliver real business outcomes. Partnerships and Acquisitions Throughout the quarter, ServiceNow announced several partnerships to further strengthen its AI capabilities: ServiceNow and AWS launched a new solution to unify enterprise data through bi-directional data integration and automated workflow orchestration, eliminating silos and providing real-time insights for AI-driven action. ServiceNow and NVIDIA introduced a new class of intelligent AI agents, powered by the high-performance Apriel Nemotron 15B reasoning model which delivers lower latency, lower inference costs, and faster agentic AI. ServiceNow and UKG announced an integration between UKG's AI solutions and ServiceNow's AI Agent Fabric to modernize employee experiences and streamline tasks across HR, payroll, and workforce management. ServiceNow and Cisco deepened their partnership, including the integration of Cisco's AI Defense into ServiceNow's AI Control Tower, to help customers securely and efficiently adopt and scale AI by delivering unified solutions that enhance governance, bolster security and scalability, and reduce risk and complexity. In May 2025, ServiceNow announced its plans to acquire the deal closed in July 2025. powerful data catalog and data governance platform will be brought into the ServiceNow AI Platform to enhance AI agent understanding and deepen enterprise data intelligence and governance. Global and Industry Expansion Today, ServiceNow announced that it is partnering with CapZone Impact Investments to create a national network of next-gen digital solutions to modernize mission-critical manufacturing facilities. The first phase will transform legacy shipbuilding and bolster U.S. naval operations, powered by the ServiceNow AI Platform, in Mobile, Alabama. Earlier this month, ServiceNow announced it had teamed up with Ferrari as the Official Partner of the Ferrari Hypercar team. In addition to powering real-time race operations for Hypercar, Ferrari's One Digital Portal, built on ServiceNow, is connecting over 25,000 employees, dealers, suppliers, and platforms to support Ferrari's global operations. The company also launched the ServiceNow Protected Platform Singapore (SPP-SG), a new secure, regulatory-compliant cloud platform that will accelerate AI innovation and bolster data security for the Singapore government and regulated sectors. In addition, ServiceNow is collaborating with Nanyang Polytechnic (NYP) to fast-track AI skills development, allowing students to build AI solutions on the SPP-SG and contribute to Singapore's digital economy. Investment ServiceNow repurchased approximately 381,000 shares of its common stock for $361 million as part of its share repurchase program 1, with the primary objective of managing the impact of dilution. Of the authorized amount of $4.5 billion, approximately $2.6 billion remains available for future share repurchases. Recognition ServiceNow was named a Leader in The Forrester Wave™: Low-Code Platforms for Professional Developers, Q2 2025 2, achieving the highest scores possible in 12 criteria. For the first time, ServiceNow was recognized as a Leader in the IDC MarketScape: Worldwide Business Automation Platforms 2025 Vendor Assessment 3 and the inaugural IDC MarketScape: Worldwide FinOps Cloud Costs Optimization Multicloud 2025 Vendor Assessment 4, which we believe demonstrates our expansion into new markets. Additionally, ServiceNow was named a Leader in the IDC MarketScape: Worldwide Governance, Risk, and Compliance Software Vendor Assessment, 2025 5. As a testament to ServiceNow's market outperformance, ServiceNow earned a spot on the Fortune 500® list 6 for the third consecutive year. The company was also named to the Forbes Most Trusted and LinkedIn Top Companies lists, and recognized on Ethisphere's 2025 World's Most Ethical Companies. (1) The program does not have a fixed expiration date, may be suspended, or discontinued at any time, and does not obligate ServiceNow to acquire any amount of its common stock. The timing, manner, price, and amount of any repurchases will be determined by ServiceNow at its discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. (2) Source: The Forrester Wave™: Low-Code Platforms for Professional Developers, Q2 2025, Forrester Research, Inc., May 22, 2025 Forrester Disclaimer Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester's objectivity at (4) Source: IDC MarketScape: Worldwide FinOps Cloud Costs Optimization Multicloud 2025 Vendor Assessment (doc #US52991225, June 2025) (5) Source: IDC MarketScape: Worldwide Governance, Risk, and Compliance Software Vendor Assessment, 2025 (doc #US53615325, June 2025) (6) From Fortune ©2025 Fortune Media IP Limited. All rights reserved. Fortune and Fortune 500® are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse the products or services of, ServiceNow. Expand Second Quarter 2025 GAAP and Non-GAAP Results: The following table summarizes our financial results for the second quarter 2025: (1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled 'Statement Regarding Use of Non-GAAP Financial Measures' for an explanation of non-GAAP measures. (2) Refer to the table entitled 'GAAP to Non-GAAP Reconciliation' for a reconciliation of GAAP to non-GAAP measures. (3) Non-GAAP subscription revenues and total revenues are adjusted for constant currency by excluding effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts. Professional services and other revenues, cRPO, and RPO are adjusted only for constant currency. See the section entitled 'Statement Regarding Use of Non-GAAP Financial Measures' for an explanation of non-GAAP measures. Note: Numbers rounded for presentation purposes and may not foot. Expand Financial Outlook Our guidance includes GAAP and non‑GAAP financial measures. The non‑GAAP growth rates for subscription revenues are adjusted for constant currency by excluding the effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts, and the non-GAAP growth rates for cRPO are adjusted only for constant currency to provide better visibility into the underlying business trends. ServiceNow has a larger‑than‑average customer cohort scheduled to renew in Q4 2025. As a result, Q3 2025 will experience approximately 2 points of headwinds to cRPO growth as the contractual obligations wind down. We expect that cohort to renew in Q4 2025, at which time those headwinds will subside. As noted last quarter, U.S. Federal agencies are navigating changes, from tightening budgets to evolving mission demands. We expect those dynamics to continue into Q3 2025. We remain confident that our revised guidance appropriately reflects these trends and continues to set us up for success for the remainder of the year. The following table summarizes our guidance for the third quarter 2025: (1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled 'Statement Regarding Use of Non-GAAP Financial Measures' for an explanation of non-GAAP measures. (2) Refer to the table entitled 'Reconciliation of Non-GAAP Financial Guidance' for a reconciliation of GAAP to non-GAAP measures. (3) Guidance for GAAP subscription revenues and GAAP subscription revenues and cRPO growth rates are based on the 30-day average of foreign exchange rates for June 2025 for entities reporting in currencies other than U.S. Dollars. Expand The following table summarizes our guidance for the full-year 2025: (1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled 'Statement Regarding Use of Non-GAAP Financial Measures' for an explanation of non-GAAP measures. (2) Refer to the table entitled 'Reconciliation of Non-GAAP Financial Guidance' for a reconciliation of GAAP to non-GAAP measures. (3) GAAP subscription revenues and related growth rate for the future quarter included in our full-year 2025 guidance are based on the 30-day average of foreign exchange rates for June 2025 for entities reporting in currencies other than U.S. Dollars. Note: Numbers are rounded for presentation purposes and may not foot. Expand Conference Call Details The conference call will begin at 2 p.m. Pacific Daylight Time (21:00 GMT) on July 23, 2025. Interested parties may listen to the call by dialing (888) 330‑2455 (Passcode: 8135305), or if outside North America, by dialing (240) 789‑2717 (Passcode: 8135305). Individuals may access the live teleconference from this webcast. An audio replay of the conference call and webcast will be available two hours after its completion and will be accessible for 30 days. To hear the replay, interested parties may go to the investor relations section of the ServiceNow website or dial (800) 770‑2030 (Passcode: 8135305), or if outside North America, by dialing (647) 362‑9199 (Passcode: 8135305). Investor Presentation Details An investor presentation providing additional information, including forward-looking guidance, and analysis can be found at Upcoming Investor Conferences ServiceNow today announced that it will attend and have executives present at four upcoming investor conferences. These include: ServiceNow President and Chief Financial Officer Gina Mastantuono will participate in a fireside chat at the Stifel Tech Executive Summit on Tuesday, August 26, 2025, at 9:30 a.m. PDT. ServiceNow President, Chief Product Officer, and Chief Operating Officer Amit Zavery will participate in a fireside chat at the Deutsche Bank Technology Conference on Wednesday, August 27, 2025, at 1:15 p.m. PDT. ServiceNow President and Chief Financial Officer Gina Mastantuono will participate in a fireside chat at the Citi Global TMT Conference on Wednesday, September 3, 2025, at 9:50 a.m. PDT. ServiceNow Chairman and Chief Executive Officer Bill McDermott will participate in a keynote at the Goldman Sachs Communacopia + Technology Conference on Wednesday, September 10, 2025, at 11:30 a.m. PDT. The live webcast for each will be accessible on the investor relations section of the ServiceNow website at and archived on the ServiceNow site for a period of 30 days. Statement Regarding Use of Non-GAAP Financial Measures We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Revenues. We adjust revenues and related growth rates for constant currency to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts that are reported in the current and comparative period. To exclude the effect of foreign currency rate fluctuations, current period results for entities reporting in currencies other than U.S. Dollars ('USD') are converted into USD at the average exchange rates in effect during the comparison period (for Q2 2024, the average exchange rates in effect for our major currencies were 1 USD to 0.93 Euros and 1 USD to 0.79 British Pound Sterling ('GBP')), rather than the actual average exchange rates in effect during the current period (for Q2 2025, the average exchange rates in effect for our major currencies were 1 USD to 0.88 Euros and 1 USD to 0.75 GBP). Guidance for related growth rates is derived by applying the average exchange rates in effect during the comparison period, rather than the exchange rates for the guidance period, adjusted for any foreign currency hedging effects. We believe the presentation of revenues and related growth rates adjusted for constant currency facilitates the comparison of revenues year-over-year. Remaining performance obligations and current remaining performance obligations. We adjust cRPO and remaining performance obligations ('RPO') and related growth rates for constant currency to provide a framework for assessing how our business performed. To present this information, current period results for entities reporting in currencies other than USD are converted into USD at the exchange rates in effect at the end of the comparison period (for Q2 2024, the end of the period exchange rates in effect for our major currencies were 1 USD to 0.93 Euros and 1 USD to 0.79 GBP), rather than the actual end of the period exchange rates in effect during the current period (for Q2 2025, the end of the period exchange rates in effect for our major currencies were 1 USD to 0.85 Euros and 1 USD to 0.73 GBP). Guidance for the related growth rate is derived by applying the end of period exchange rates in effect during the comparison period rather than the exchange rates in effect during the guidance period. We believe the presentation of cRPO and RPO and related growth rates adjusted for constant currency facilitates the comparison of cRPO and RPO year-over-year, respectively. Gross profit, Income from operations, Net income and Net income per share - diluted. Our non-GAAP presentation of gross profit, income from operations, and net income measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of purchased intangibles, legal settlements, business combination and other related costs including compensation expense, impairment of assets, severance costs, and income tax effects and adjustments. We believe these adjustments provide useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods. Free cash flow. Free cash flow is defined as net cash provided by operating activities plus cash outflows for legal settlements and business combination and other related costs including compensation expense, reduced by purchases of property and equipment. Free cash flow margin is calculated as free cash flow as a percentage of total revenues. We believe information regarding free cash flow and free cash flow margin provides useful information to investors because it is an indicator of the strength and performance of our business operations. Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP and non-GAAP results for gross profit, income from operations, net income, net income per share, and free cash flow. Use of Forward-Looking Statements This release contains 'forward-looking statements' regarding our performance, including but not limited to statements in the section entitled 'Financial Outlook' and statements regarding the expected benefits of our announced partnerships. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. Factors that may cause actual results to differ materially from those in any forward-looking statements include, among others, experiencing an actual or perceived cyber-security event or weakness; our ability to comply with evolving privacy laws, data transfer restrictions, and other foreign and domestic standards related to data and the Internet; errors, interruptions, delays or security breaches in or of our service or data centers; our ability to maintain and attract key employees and manage workplace culture; alleged violations of laws and regulations, including those relating to anti-bribery and anti-corruption and those relating to public sector contracting requirements; our ability to compete successfully against existing and new competitors; our ability to predict, prepare for and respond promptly to rapidly evolving technological, market and customer developments; our ability to grow our business, including converting remaining performance obligations into revenue, adding and retaining customers, selling additional subscriptions to existing customers, selling to larger enterprises, government and regulated organizations with complex sales cycles and certification processes, and entering new geographies and markets; our ability to develop and gain customer demand for and acceptance of existing, new and improved products and services, including products that incorporate AI technology; our ability to expand and maintain our partnerships and partner programs, including expected market opportunity from such relationships, and realize the anticipated benefits thereof; global macroeconomic and political conditions including tariffs, inflation and armed conflicts; fluctuations in the value of foreign currencies relative to the U.S. Dollar; fluctuations in interest rates; our ability to consummate and realize the benefits of any strategic transactions or acquisitions; our ability to execute share repurchases, including the timing, manner, price, and amount of any repurchase; and fluctuations and volatility in our stock price. Further information on these and other factors that could affect our financial results are included in our Form 10-K for the year ended December 31, 2024, and in other filings we make with the Securities and Exchange Commission from time to time. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts' expectations, or to provide interim reports or updates on the progress of the current financial quarter. About ServiceNow ServiceNow (NYSE: NOW) is putting AI to work for people. We move with the pace of innovation to help customers transform organizations across every industry while upholding a trustworthy, human centered approach to deploying our products and services at scale. Our AI platform for business transformation connects people, processes, data, and devices to increase productivity and maximize business outcomes. For more information, visit: © 2025 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo, Now, and other ServiceNow marks are trademarks and/or registered trademarks of ServiceNow, Inc. in the United States and/or other countries. Other company names, product names, and logos may be trademarks of the respective companies with which they are associated. ServiceNow, Inc. Condensed Consolidated Balance Sheets (in millions) December 31, 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 3,124 $ 2,304 Short-term investments 3,008 3,458 Accounts receivable, net 1,696 2,240 Current portion of deferred commissions 551 517 Prepaid expenses and other current assets 896 668 Total current assets 9,275 9,187 Deferred commissions, less current portion 1,017 999 Long-term investments 4,655 4,111 Property and equipment, net 1,985 1,763 Operating lease right-of-use assets 818 693 Intangible assets, net 319 209 Goodwill 1,778 1,273 Deferred tax assets 1,340 1,385 Other assets 864 763 Total assets $ 22,051 $ 20,383 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 211 $ 68 Accrued expenses and other current liabilities 1,378 1,369 Current portion of deferred revenue 6,802 6,819 Current portion of operating lease liabilities 104 102 Total current liabilities 8,495 8,358 Deferred revenue, less current portion 110 95 Operating lease liabilities, less current portion 815 687 Long-term debt, net 1,490 1,489 Other long-term liabilities 209 145 Stockholders' equity 10,932 9,609 Total liabilities and stockholders' equity $ 22,051 $ 20,383 Expand ServiceNow, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Cash flows from operating activities: Net income $ 385 $ 262 $ 845 $ 609 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 172 136 332 266 Amortization of deferred commissions 148 132 293 263 Stock-based compensation 499 444 969 866 Deferred income taxes 16 24 48 52 Other 58 (7 ) 62 (25 ) Changes in operating assets and liabilities, net of effect of business combinations: Accounts receivable (302 ) (216 ) 599 499 Deferred commissions (136 ) (141 ) (291 ) (306 ) Prepaid expenses and other assets (83 ) (146 ) (222 ) (252 ) Accounts payable (101 ) 65 133 172 Deferred revenue (116 ) (82 ) (264 ) (92 ) Accrued expenses and other liabilities 176 149 (111 ) (91 ) Net cash provided by operating activities $ 716 $ 620 $ 2,393 $ 1,961 Cash flows from investing activities: Purchases of property and equipment (190 ) (262 ) (395 ) (397 ) Business combinations, net of cash acquired (58 ) (31 ) (76 ) (41 ) Purchases of other intangibles — (9 ) (34 ) (30 ) Purchases of investments (1,182 ) (1,055 ) (2,322 ) (2,660 ) Purchases of non-marketable investments (134 ) (46 ) (138 ) (88 ) Sales and maturities of investments 1,100 1,040 2,281 2,113 Other 41 (8 ) 44 (2 ) Net cash used in investing activities $ (423 ) $ (371 ) $ (640 ) $ (1,105 ) Cash flows from financing activities: Proceeds from employee stock plans — — 153 131 Repurchases of common stock (361 ) — (659 ) (175 ) Taxes paid related to net share settlement of equity awards (185 ) (137 ) (438 ) (352 ) Business combination — — — (184 ) Net cash used in financing activities $ (546 ) $ (137 ) $ (944 ) $ (580 ) Foreign currency effect on cash, cash equivalents and restricted cash 9 (9 ) 14 (13 ) Net change in cash, cash equivalents and restricted cash (244 ) 103 823 263 Cash, cash equivalents and restricted cash at beginning of period 3,377 2,064 2,310 1,904 Cash, cash equivalents and restricted cash at end of period $ 3,133 $ 2,167 $ 3,133 $ 2,167 Expand ServiceNow, Inc. GAAP to Non-GAAP Reconciliation (in millions, except per share data) (unaudited) Three Months Ended Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Gross profit: GAAP subscription gross profit $ 2,488 $ 2,073 $ 4,932 $ 4,155 Stock-based compensation 76 62 144 120 Amortization of purchased intangibles 23 21 43 42 Severance costs 3 — 3 — Non-GAAP subscription gross profit $ 2,590 $ 2,156 $ 5,122 $ 4,317 GAAP professional services and other gross (loss) profit $ 3 $ 2 $ (4 ) $ 3 Stock-based compensation 11 12 22 24 Severance costs — — — — Non-GAAP professional services and other gross profit $ 14 $ 14 $ 18 $ 27 GAAP gross profit $ 2,491 $ 2,075 $ 4,928 $ 4,158 Stock-based compensation 87 74 166 144 Amortization of purchased intangibles 23 21 43 42 Severance costs 3 — 3 — Non-GAAP gross profit $ 2,604 $ 2,170 $ 5,140 $ 4,344 Gross margin: GAAP subscription gross margin 80 % 81.5 % 80.5 % 82 % Stock-based compensation as % of subscription revenues 2.5 % 2.5 % 2.5 % 2.5 % Amortization of purchased intangibles as % of subscription revenues 0.5 % 1 % 0.5 % 1 % Severance costs as % of subscription revenues — % — % — % — % Non-GAAP subscription gross margin 83 % 85 % 83.5 % 85 % GAAP professional services and other gross margin 3 % 2 % (2.5 %) 1.5 % Stock-based compensation as % of professional services and other revenues 11 % 13.5 % 12 % 14 % Severance costs as % of professional services and other revenues — % — % — % — % Non-GAAP professional services and other gross margin 14 % 15.5 % 9.5 % 15.5 % GAAP gross margin 77.5 % 79 % 78 % 79.5 % Stock-based compensation as % of total revenues 2.5 % 3 % 2.5 % 2.5 % Amortization of purchased intangibles as % of total revenues 0.5 % 1 % 0.5 % 1 % Severance costs as % of total revenues — % — % — % — % Non-GAAP gross margin 81 % 82.5 % 81.5 % 83 % Income from operations: GAAP income from operations $ 358 $ 240 $ 809 $ 572 Stock-based compensation 499 444 969 866 Amortization of purchased intangibles 25 24 46 48 Business combination and other related costs 14 12 25 25 Impairment of assets 30 — 30 — Severance costs 29 — 29 — Non-GAAP income from operations $ 955 $ 720 $ 1,908 $ 1,511 Operating margin: GAAP operating margin 11 % 9 % 13 % 11 % Stock-based compensation as % of total revenues 15.5 % 17 % 15.5 % 16.5 % Amortization of purchased intangibles as % of total revenues 1 % 1 % 0.5 % 1 % Business combination and other related costs as % of total revenues 0.5 % 0.5 % 0.5 % 0.5 % Impairment of assets as % of total revenues 1 % — % 0.5 % — % Severance costs as % of total revenues 1 % — % 0.5 % — % Non-GAAP operating margin 29.5 % 27.5 % 30.5 % 29 % Net income: GAAP net income $ 385 $ 262 $ 845 $ 609 Stock-based compensation 499 444 969 866 Amortization of purchased intangibles 25 24 46 48 Business combination and other related costs 14 12 25 25 Impairment of assets 30 — 30 — Severance costs 29 — 29 — Income tax effects and adjustments (1) (128 ) (91 ) (244 ) (190 ) Non-GAAP net income $ 854 $ 651 $ 1,700 $ 1,358 Net income per share - basic and diluted: GAAP net income per share - basic $ 1.86 $ 1.27 $ 4.08 $ 2.97 GAAP net income per share - diluted $ 1.84 $ 1.26 $ 4.04 $ 2.93 Non-GAAP net income per share - basic $ 4.13 $ 3.16 $ 8.22 $ 6.61 Non-GAAP net income per share - diluted $ 4.09 $ 3.13 $ 8.12 $ 6.54 Weighted-average shares used to compute net income per share - basic 207 206 207 205 Weighted-average shares used to compute net income per share - diluted 209 208 209 208 Free cash flow: GAAP net cash provided by operating activities $ 716 $ 620 $ 2,393 $ 1,961 Purchases of property and equipment (190 ) (262 ) (395 ) (397 ) Business combination and other related costs 9 1 14 20 Non-GAAP free cash flow $ 535 $ 359 $ 2,012 $ 1,584 Free cash flow margin: GAAP net cash provided by operating activities as % of total revenues 22.5 % 23.5 % 38 % 37.5 % Purchases of property and equipment as % of total revenues (6 %) (10 %) (6.5 %) (7.5 %) Business combination and other related costs as % of total revenues 0.5 % — % — % 0.5 % Non-GAAP free cash flow margin 16.5 % 13.5 % 32 % 30.5 % Expand (1) We use a non-GAAP effective tax rate for evaluating our operating results to provide consistency across reporting periods. Based on our long-term projections, we are using a non-GAAP tax rate of 20% for each of the three and six months ended June 30, 2025 and 2024. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate. Note: Numbers are rounded for presentation purposes and may not foot. Expand
Forbes
16-05-2025
- Business
- Forbes
Why Data Has Never Mattered More For ServiceNow's AI-Driven Strategy
At Knowledge 2025, ServiceNow launched its AI platform, built to use any AI, agent or model across ... More the enterprise — driven by unified, real-time data. At its Knowledge 2025 event last week, ServiceNow made it clear that it is not simply adding AI to existing workflows, but rethinking how enterprise systems operate. Central to this strategy is the new ServiceNow AI Platform, which sits above traditional systems like ERP, SCM and CRM to unify intelligence, data and orchestration across the business. The company has gone even further in CRM specifically. Fully integrated with ServiceNow's Core Business Suite, which covers finance, procurement, HR and customer service, the company's new AI-powered CRM is not a standalone tool but part of a broader system that connects front- and back-office operations in real time. By linking CRM to critical enterprise systems, the platform is designed to break down silos and reduce friction between customer engagement and operational execution. Meanwhile, ServiceNow offerings such as Workflow Data Fabric and AI Agent Fabric, along with features like the AI Control Tower and a conversational AI engagement layer, enable AI agents to coordinate work across tools, teams and vendors. With these innovations, ServiceNow is aiming to fundamentally change how work flows across the enterprise, moving from fragmented AI pilot projects to full-scale, orchestrated AI execution. Let's take a closer look at some of ServiceNow's recent innovations and the impact they could have on its customers. (Note: ServiceNow is an advisory client of my firm, Moor Insights & Strategy.) For years, ServiceNow's strategy has been to provide cloud-based solutions that connect processes, systems and data across the enterprise. With the introduction of the ServiceNow AI Platform, organizations can now embed AI directly into workflows that cut across institutional silos — deploying and managing AI agents and other tools to make AI practical and accessible across business functions. The platform integrates with technology from partners such as Nvidia, Microsoft, Google and Oracle to ensure compatibility with a broad range of AI ecosystems and use cases. This flexibility aims to allow real-time orchestration of thousands of AI agents without vendor lock-in. There are countless operational scenarios for how this could play out, but one example would be a manufacturer integrating ServiceNow AI agents with Microsoft Azure-based forecasting models. Without any human intervention, these agents can automatically flag inventory risks, trigger procurement workflows and open supplier service requests in the SCM system. Meanwhile, a customer support team can deploy autonomous agents trained on Salesforce and ServiceNow data to classify support tickets and generate AI-driven resolutions —working across systems without needing to leave the ServiceNow environment. If it works as planned, this approach could have a major impact on the ways that enterprises create and manage cross-functional workflows — and ServiceNow believes that this kind of orchestration can ultimately unlock trillions of dollars' worth of productivity gains. As businesses use more and more AI tools and agents, ServiceNow has introduced two products to help them manage all this — the AI Control Tower and the AI Agent Fabric. These tools work together to create a secure and structured approach to using AI throughout the organization. The AI Control Tower is a centralized command center that enables companies to oversee all AI models, agents and workflows, regardless of whether they originate from ServiceNow or third parties. This visibility helps ensure that AI deployments are secure, compliant and aligned with business objectives. Enterprises can use AI Control Tower to govern how agents work, what data they use and how well they perform. The AI Control Tower should also help prevent AI from spreading out uncontrollably — and, in the bigger picture, give stakeholders confidence in the decisions made using AI. The AI Agent Fabric enables communication and orchestration among multiple AI agents and models across different vendors and corporate departments. It supports interoperability across ecosystems, allowing agents from ServiceNow to collaborate with agents and systems from partners such as Accenture, Adobe, Cisco, IBM, Microsoft and UKG. Its design supports distributed AI environments, enabling workflows to span CRM, IT, HR, legal and supply chain without silos or duplicated logic. At the Knowledge 2025 conference, ServiceNow announced two other key updates to strengthen how organizations manage and use data. First, it launched the Workflow Data Network, which builds on the existing Workflow Data Fabric by connecting data from more than 100 partners, including AWS, Microsoft, Oracle and Boomi. It enables real-time, two-way data exchange and lets workflows respond to live business events — helping systems across departments stay in sync without manual coordination. Second, ServiceNow shared plans to acquire a cloud-native platform for data cataloging and governance. By adding this to its own platform, ServiceNow will offer stronger tools for tracking data lineage, managing access and ensuring compliance, all of which is especially useful in regulated industries like healthcare, finance and government. Another example of how this could be used would be a global logistics company that uses Oracle for ERP, AWS for SCM and ServiceNow for IT operations. Using the Workflow Data Fabric and Workflow Data Network, the company could unify shipping and billing data in real time. Suppose an order is delayed due to a supplier issue detected in AWS. In that case, a ServiceNow AI agent could immediately flag the disruption, notify the customer via CRM, trigger a supplier service ticket and alert finance to adjust payment timelines — based on live, federated data and executed without duplicating records. ServiceNow also introduced its Core Business Suite, an AI-enabled solution that brings key business functions — such as finance, procurement, HR, legal and facilities management — onto one platform. It is designed to help organizations automate back-office processes and improve coordination across teams without needing a complete ERP replacement. The Core Business Suite, powered by AI agents and real-time data, supports tasks like finance case management, service requests and purchase and expense approvals. It replaces e-mail threads and manual ERP workarounds with AI-driven workflows that automatically create, route and manage cases such as invoice discrepancies or payment delays to the appropriate teams. For instance, if a supplier invoice doesn't match the purchase order, the system flags the issue, opens a case and uses AI to analyze procurement records, contract terms and payment history to suggest a resolution. Suppliers are kept informed through real-time updates, helping reduce delays and miscommunication. The solution brings structure, automation and visibility to unstructured finance tasks without needing to replace the ERP system, providing a single place for teams to monitor and act on finance-related work with AI support. ServiceNow is also expanding its portfolio of industry-specific AI agents and workflow solutions to address the needs of complex vertical industries. These purpose-built capabilities are designed for sectors where process depth, compliance and ecosystem coordination are essential, such as manufacturing, supply chain, banking, telecom and the public sector. A primary focus is on SCM and manufacturing. ServiceNow's Manufacturing Commercial Operations product (as I previously wrote about) helps manufacturers automate core sales, service and support workflows, reducing administrative load and improving response times. Meanwhile, the new Channel Operations module manages and automates warranty claims, resolves product defect complaints, service delays and return authorization issues and fosters collaboration between OEMs and their dealer or distributor networks. In tandem, the platform's Supply Chain Optimization features use real-time data and AI to spot problems, suggest fixes and make logistics smoother. This is especially helpful in fast-paced settings where global delays or mistakes can spread. ServiceNow also launched Industry AI Agents tailored for banking, telecom and public sector use cases. These agents automate specialized workflows such as dispute resolution in financial services (co-developed with Visa), service management for technology providers and case handling in public sector agencies. The company says that these tools allow organizations to handle high volumes of complex cases while improving resolution time, transparency and regulatory compliance. ServiceNow's updates at Knowledge 2025 show a clear push to make AI and data more usable across the enterprise, not just in isolated projects but as an essential part of everyday operations. And by offering tools such as the AI Control Tower, Workflow Data Network and Core Business Suite, ServiceNow is giving organizations a way to modernize without needing to rip out what already works. The real business impact will be measured in how these tools help teams work smarter, with faster issue resolution, better data visibility and less time spent on manual tasks. That said, challenges remain. Integrating AI across departments isn't just a technology issue — it requires strong data governance, change management and accountability. And while ServiceNow definitely makes this easier, companies still need to put in the effort to align systems, people and workflows. Although ServiceNow has achieved impressive growth and customer loyalty in recent years, the jury is still out on whether its new offerings will be as disruptive as it claims. Ultimately, though, the message I take from the new offerings discussed here is simple: if data is the foundation of AI, then making that data usable, governed and connected is the real path to transformation. ServiceNow is moving in that direction — and so should its customers.
TECHx
14-05-2025
- Business
- TECHx
ServiceNow Debuts AI Control Tower for Enterprises
Home » Tech Value Chain » Global Brands » ServiceNow Debuts AI Control Tower for Enterprises ServiceNow (NYSE: NOW), the AI platform for business transformation, has announced the launch of its new AI Control Tower. The centralized solution is designed to govern, manage, secure, and derive value from ServiceNow and third-party AI agents, models, and workflows, all from a single unified platform. The company stated that AI Control Tower helps businesses optimize their AI investments and ensures seamless, responsible integration into enterprise strategies. Alongside this launch, ServiceNow also revealed AI Agent Fabric, a new system that enables advanced communication and collaboration between AI agents and models. This move, according to the company, marks a significant step forward in orchestrating agentic AI across the enterprise. The company confirmed that partners including Accenture, Adobe, Box, Cisco, Google Cloud, IBM, Jit, Microsoft, Moonhub, RADCOM, UKG, and Zoom will be among the first to offer integrations with AI Agent Fabric. These integrations are intended to support seamless enterprise workflows across third-party agents. Citing Gartner® research, ServiceNow noted that by 2028, enterprises using AI governance platforms could achieve 30% higher customer trust and 25% better regulatory compliance scores than competitors. ServiceNow said its AI Control Tower provides AI management at scale, allowing customers to track all AI agents, understand their roles, assign human oversight, and maintain security. Amit Zavery, President, Chief Product Officer, and COO at ServiceNow, commented that as AI agents continue to expand across organizations, coordinating their activities becomes critical. He emphasized that AI Control Tower helps businesses manage AI workforces similar to human teams—aligned, coordinated, and optimized to deliver measurable impact. The company outlined several core capabilities of AI Control Tower: Centralized visibility of all AI agents, models, and workflows, whether native or third-party. Built-in compliance tools to manage risk, privacy, and security across the AI lifecycle. Real-time dashboards for reporting performance and measuring outcomes like productivity and revenue. ServiceNow added that AI Control Tower supports lifecycle management for AI operations, from ideation and deployment to optimization, while helping enforce governance policies. Ritu Jyoti, Group VP and GM for AI and Data Market Research at IDC, stated that with AI solutions expected to generate $22.3 trillion in cumulative global impact by 2030, organizations will need tools to manage their growing AI assets. She said that centralized governance platforms will drive trust and performance. Meanwhile, the newly introduced AI Agent Fabric enables native collaboration across AI systems. ServiceNow explained that it supports communication between agents and tools using protocols such as Model Context Protocol (MCP) and Agent2Agent (A2A), allowing real-time coordination of tasks. Through AI Agent Fabric, thousands of ServiceNow AI agents can now work alongside third-party systems, dynamically sharing context and driving outcomes. This capability is further expanded by domain-specific agents created in ServiceNow AI Agent Studio and additional integrations from ecosystem partners. These integrations will be available via the ServiceNow Marketplace. ServiceNow also mentioned that AI Agent Fabric complements its Workflow Data Fabric, which connects and analyzes structured and unstructured data across systems. Together, these solutions aim to unify data, workflows, and AI, supporting large-scale enterprise transformation.
Channel Post MEA
14-05-2025
- Business
- Channel Post MEA
ServiceNow Launches AI Control Tower
ServiceNow has launched the new AI Control Tower, a centralized command center to govern, manage, secure, and realize value from any ServiceNow and third‑party AI agent, model, and workflow on a single unified platform. AI Control Tower optimizes AI investments and ensures seamless, responsible integration into customers' enterprise strategies. In addition to AI Control Tower, ServiceNow also introduced AI Agent Fabric, a solution that delivers new levels of agent‑to‑agent and multi‑model communication and collaboration. ServiceNow partners, including Accenture, Adobe, Box, Cisco, Google Cloud, IBM, Jit, Microsoft, Moonhub, RADCOM, UKG, and Zoom are among those to be offering the first AI Agent Fabric integrations for seamless, wall to wall enterprise workflows across third‑party agents. According to Gartner, 'By 2028, enterprises using AI governance platforms will achieve 30% higher customer trust ratings and 25% better regulatory compliance scores than their competitors,'[1] signaling an increased benefit to AI orchestration at the enterprise level. ServiceNow AI Control Tower is AI management at unprecedented scale – allowing customers to see all their AI agents in action, understand what they're working on, govern and track their impact, mitigate risk, keep them secure, and assign human managers to oversee their work. With the addition of AI Agent Fabric, organizations can seamlessly connect AI agents, orchestrators, and enterprise applications – built by ServiceNow or third‑parties. 'As AI agents proliferate across enterprises, coordinating their work becomes as critical and complex as leading human employees, and companies need new tools to direct this new digital workforce,' said Amit Zavery, president, chief product officer, and chief operating officer at ServiceNow. 'With AI Control Tower, businesses can oversee AI workforces in the same way the human workforce is managed, ensuring each agent is aligned, coordinated, optimized, and delivering impact at scale. Only ServiceNow unites powerful workflows, industry‑leading governance, and seamless orchestration with agentic AI excellence, enabling customers to scale AI and drive real, measurable outcomes.' AI Control Tower maximizes ROI on AI investments Embedded across all workflows in the ServiceNow AI Platform, and building on the recently announced AI Agent Orchestrator, the AI Control Tower centralizes strategy, governance, performance, and management across the entire AI ecosystem while driving enterprise‑grade compliance and accountability. With the AI Control Tower customers achieve: Enterprise‑wide AI visibility: Monitor and manage every AI agent, model, and workflow—native or third‑party—in one place, applying consistent policies across the enterprise. Monitor and manage every AI agent, model, and workflow—native or third‑party—in one place, applying consistent policies across the enterprise. Embedded compliance and AI governance: Proactively manage risk, including security and privacy, and monitor compliance across the AI lifecycle with comprehensive, integrated governance, risk, and compliance (GRC) capabilities. Proactively manage risk, including security and privacy, and monitor compliance across the AI lifecycle with comprehensive, integrated governance, risk, and compliance (GRC) capabilities. End‑to‑end lifecycle management of agentic operations: From ideation to deployment to optimization, AI Control Tower enables contextual decision‑making and helps enforce guardrails across the enterprise. From ideation to deployment to optimization, AI Control Tower enables contextual decision‑making and helps enforce guardrails across the enterprise. Real‑time reporting : Dynamic dashboards provide operational insight and validate AI performance against key business outcomes like productivity and revenue impact so AI agents can then take action on it. : Dynamic dashboards provide operational insight and validate AI performance against key business outcomes like productivity and revenue impact so AI agents can then take action on it. Improved alignment between AI and business strategy: AI Control Tower helps customers better match their AI initiatives with overall enterprise business and tech goals, making sure they deliver real value. 'With AI solutions and services expected to generate a global cumulative impact of $22.3 trillion by 2030, the volume of AI assets organizations must manage will be unprecedented,' said Ritu Jyoti, group vice president/general manager for Worldwide AI and Data Market Research and Advisory Services at IDC. 'The organizations that will see the greatest return on their AI investments will be those that utilize a centralized solution to govern, manage, and track their evolving agentic AI landscape, fostering trust and reinforcing the reliability and dependability of AI systems.' Expanding orchestration with AI Agent Fabric ServiceNow also debuted AI Agent Fabric, which acts as the communication backbone for entire AI ecosystems — enabling native collaboration between agentic systems. Unlike traditional AI solutions, AI Agent Fabric supports AI agent‑to‑AI agent, AI agent‑to‑tool, or even agentic system‑to‑agentic system, all using common protocols like Model Context Protocol (MCP) and Agent2Agent protocol (A2A). This allows both ServiceNow and third‑party AI agents, tools, and systems to dynamically exchange information, coordinate tasks, and take action in real time. With AI Agent Fabric, ServiceNow's thousands of AI agents can work side‑by‑side with third‑party agents to share context, coordinate actions, and drive outcomes, operating as part of a coordinated, intelligent system. Together with customers' own domain‑specific agents created through ServiceNow AI Agent Studio, plus current and future AI Agent Fabric integrations from Accenture, Adobe, Box, Cisco, Google Cloud, IBM, Jit, Microsoft, Moonhub, RADCOM, UKG, and Zoom, organizations can unlock new levels of collaboration and enable AI systems to work together for AI‑powered workflow optimization across a broad range of platforms and services. These new integrations expand on the ServiceNow Marketplace, where ServiceNow's industry‑leading partner ecosystem can contribute to the thousands of AI agents already available from ServiceNow by building their own on the ServiceNow AI Platform. AI Agent Fabric complements the recently announced ServiceNow Workflow Data Fabric, a breakthrough integrated data layer that allows customers to connect, understand, and act on structured, semi‑structured, unstructured, and streaming data across the enterprise, inside and outside of ServiceNow. By offering both Workflow Data Fabric and AI Agent Fabric, ServiceNow further completes its vision of bringing AI, data, and workflows together for customers to help them supercharge their entire business with intelligently orchestrated agentic AI. The ServiceNow AI Control Tower is now generally available. AI Agent Fabric is now available to early adopters and will be generally available in Q3 2025. 0 0
