ServiceNow (NOW) Q3 2025 earnings summary

Executive summary

• Q3 2025 delivered record results, with total revenues of $3.41 billion, up 22% year-over-year, and subscription revenues of $3.299 billion, up 21.5%–22% year-over-year, exceeding guidance and driven by strong AI platform demand.

• Operating margin reached 33.5% (non-GAAP), three points above guidance, and free cash flow margin was 17.5%.

• Net income for Q3 2025 was $502 million, with diluted EPS of $2.40 (GAAP) and $4.82 (non-GAAP).

• AI products, especially Now Assist, drove significant growth, with ACV on pace to exceed $500 million this year.

• A five-for-one stock split was approved by the board, pending shareholder approval.

Financial highlights

• Q3 subscription revenues were $3.299 billion, up 21.5% year-over-year (20.5% in constant currency).

• Remaining performance obligations (RPO) ended at $24.3 billion, up 24% year-over-year; current RPO at $11.35 billion, up 21%.

• Non-GAAP operating margin was 33.5%, and free cash flow margin was 17.5%.

• Gross profit for Q3 2025 was $2.63 billion, with a gross margin of 77% (GAAP) and 80% (subscription).

• Ended Q3 with $9.7 billion in cash and investments.

Outlook and guidance

• Full-year 2025 subscription revenue guidance raised to $12.835–$12.845 billion, up 20.5% year-over-year.

• Full-year non-GAAP operating margin target raised to 31%, and free cash flow margin to 34%.

• Q4 2025 subscription revenue expected between $3.42–$3.43 billion, up 19.5% year-over-year.

• Guidance reflects potential impacts from U.S. Federal budget tightening, government shutdown, and procurement timing.

• The company anticipates continued positive operating cash flows and sufficient liquidity for at least the next 12 months.