ServiceNow Delivers Outstanding Q2 2025 Results, Driven by AI Innovation and Strong Customer Adoption

ServiceNow's second-quarter 2025 earnings call revealed a company firing on all cylinders, with CEO Bill McDermott declaring the results "outstanding" as the enterprise software giant continues to solidify its position as the leading AI platform for business transformation.

Stellar Financial Performance Across All Metrics

The numbers tell a compelling story of consistent execution and growth. ServiceNow reported subscription revenue of $3.113 billion, representing 21.5% growth in constant currency, a full 200 basis points above guidance. This beat-and-raise performance has become a hallmark of the company's elite-level execution.

Current Remaining Performance Obligations (cRPO) reached $10.92 billion, representing 21.5% constant currency growth, and exceeding expectations by 200 basis points. The company's total RPO reached $23.9 billion, representing a 25.5% increase in constant currency. Operating margins came in at 29.5%, significantly outperforming guidance by over 250 basis points, while the free cash flow margin of 16.5% showed a healthy 300-basis-point improvement year-over-year.

AI Revolution Driving Business Transformation

The standout theme of the quarter was ServiceNow's dominance in enterprise AI. CEO McDermott emphasized that "AI is what changed" the competitive landscape, with the company's Now Assist products continuing to exceed expectations. The platform secured 21 deals featuring five or more Now Assist products, and the AI Pro Plus deal count increased by over 50% quarter-over-quarter.

Perhaps most impressively, ServiceNow closed its largest Now Assist deal to date at over $20 million, demonstrating the substantial value enterprises place on the company's AI capabilities. The AI Control Tower product has already surpassed full-year net new ACV expectations, and ServiceNow is well on track to reach its ambitious $1 billion Now Assist ACV target by 2026.

Platform Strength Across All Workflows

ServiceNow's success extends beyond AI, with all workflow categories performing strongly. Technology workflows secured 40 deals exceeding $1 million, including four deals valued at over $5 million. The company's expansion into CRM and front-office workflows gained momentum, with 17 of the top 20 deals including these capabilities. The recent acquisition of Logik.ai is already paying dividends, with nine CPQ deals closed in June alone.

Core business workflows also delivered solid performance with 16 of the top 20 deals, while Creator workflows maintained their steady contribution. This diversified strength across the platform validates ServiceNow's "any cloud, any data source, any LLM, any agent" strategy.

Customer Success and Market Expansion

The quarter showcased ServiceNow's growing strategic importance to global enterprises. The company maintained its exceptional 98% renewal rate while expanding relationships with existing customers. ServiceNow now has 528 customers generating over $5 million in ACV, with the number of customers contributing $20 million or more increasing by over 30% year-over-year.

Notable customer wins included ExxonMobil's implementation of ServiceNow AI and agents for enhanced employee experiences, Standard Chartered's use of the AI Control Tower with RaptorDB, and Merck & Co.'s adoption of the platform to transform security operations. These enterprises recognize, as McDermott puts it, that "AI work is cross-functional work," necessitating a unified platform approach.

Strong Guidance Reflects Confidence

For the full year 2025, ServiceNow raised its subscription revenue guidance by $125 million to $12.775 billion to $ 12.795 billion, representing 19.5% to 20% constant currency growth. The company maintained its operating margin guidance at 30.5% and free cash flow margin at 32%, demonstrating disciplined growth that balances investment with profitability.

CFO Gina Mastantuono noted that the company is exercising prudence in its approach to U.S. federal spending while remaining confident in the overall market opportunity. The guidance reflects ServiceNow's commitment to sustainable growth while continuing to invest in the massive AI transformation opportunity.

Looking Ahead: The Agentic Enterprise

ServiceNow's vision extends far beyond traditional software as a service. McDermott positioned the company as building "the extensible AI operating system for the agentic enterprise," where AI agents will work collaboratively across business processes. The company's NowNext AI program focuses on strategic customer deployments, helping enterprises rapidly adopt AI at scale.

With 450,000 agents already in workflow across ServiceNow's own operations and delivering over 80% automation in supporting functions, the company serves as a powerful proof point for its own technology. As enterprises worldwide prioritize AI transformation, ServiceNow appears uniquely positioned to capture this generational opportunity.

The Q2 results demonstrate that ServiceNow isn't just participating in the AI revolution—it's leading it, combining technological innovation with operational excellence to deliver exceptional value for both customers and shareholders.

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