ServiceNow Beats Q1 Estimates with 19% Subscription Revenue Growth and Expanding AI Offerings

SANTA CLARA, Calif. – ServiceNow (NYSE: NOW), the enterprise AI platform company, reported first-quarter financial results that exceeded expectations across all revenue and profitability metrics, fueled by strong demand for its AI-driven automation solutions.

The company posted subscription revenues of $3.01 billion, marking a 19% year-over-year increase (20% in constant currency). Total revenue reached $3.09 billion, up 18.5% year-over-year. Net income under GAAP totaled $460 million, or $2.20 per diluted share, while non-GAAP net income came in at $846 million, or $4.04 per diluted share.

“ServiceNow’s position as the platinum standard for enterprise-grade AI drove these outstanding first quarter results,” said Bill McDermott, ServiceNow Chairman and CEO. “Our platform is delivering real business transformation to empower CEOs with speed and agility.”

Financial Summary – Q1 2025

Metric GAAP YoY Growth Non-GAAP YoY Growth
Subscription Revenue $3.01B 19% $3.03B 20%
Total Revenue $3.09B 18.5% $3.12B 19.5%
Net Income $460M +32.6% $846M +19.6%
Diluted EPS $2.20 – $4.04 –
Operating Margin 14.5% – 31% –
Free Cash Flow – – $1.48B +48%
Contract Metrics and Guidance Beats
ServiceNow reported a current remaining performance obligation (cRPO) of $10.31 billion, up 22%, and total RPO of $22.1 billion, up 25% year-over-year. The company added 72 net new ACV deals above $1 million and now serves 508 customers with more than $5 million in ACV, a 20% increase.

Product and AI Innovation
During the quarter, ServiceNow launched several AI initiatives:

Agentic AI platform upgrades, including preconfigured agents for IT, HR, and CRM tasks.

AI Agent Studio and Orchestrator, enabling coordinated autonomous workflows.

Industry-specific AI tools, such as telecom lifecycle automation and public sector tools.

The Yokohama platform release, which enhanced data fabric and performance management.

Strategic Acquisitions and Partnerships
Acquired Moveworks for AI assistant and enterprise search integration.

Acquired Logik.ai to expand its Configure, Price, Quote (CPQ) CRM capabilities.

New AI-driven partnerships announced with Vodafone Business, Aptiv, NVIDIA, Google Cloud, DXC Technology, and Devoteam.

Capital Allocation
ServiceNow repurchased 316,000 shares for $298 million under its $4.5 billion repurchase plan, with $3 billion remaining. The company ended the quarter with $3.38 billion in cash and equivalents, up from $2.31 billion in the previous quarter.

Leadership Update
Paul Smith, President of Global Customer and Field Operations, has stepped down and will serve in an advisory role through September. He is succeeded by Paul Fipps, a U.S. Army veteran and experienced technology executive.

Outlook
Q2 2025 (Non-GAAP):

Subscription Revenue: $3.03–$3.04 billion (+19.5%)

cRPO Growth: 19.5%

Operating Margin: 27%

Full-Year 2025 (Non-GAAP):

Subscription Revenue: $12.64–$12.68 billion (+19.5%)

Operating Margin: 30.5%

Free Cash Flow Margin: 32%