ServiceNow, Inc. SEC 10-Q Report

ServiceNow, Inc., a leading provider of enterprise cloud computing solutions, has released its Form 10-Q report for the second quarter of 2025. The report highlights significant growth in both financial and operational metrics, driven by increased customer adoption and enhanced operational efficiency.

Financial Highlights

• Total Revenues: $3,215 million, increased by 22% compared to the same period last year, driven by increased purchases by new and existing customers.
• Gross Profit: $2,491 million, representing a gross profit percentage of 77%, slightly down from 79% in the previous year due to increased costs to support subscription offerings.
• Income from Operations: $358 million, a 49% increase from the previous year, reflecting improved operational efficiency.
• Net Income: $385 million, up from $262 million in the previous year, indicating strong financial performance.
• Net Income Per Share - Basic: $1.86, compared to $1.27 in the previous year, showing significant growth in earnings per share.
• Net Income Per Share - Diluted: $1.84, compared to $1.26 in the previous year, reflecting improved profitability.

Business Highlights

• Revenue Segments: Subscription revenues accounted for 97% of total revenues, with professional services and other revenues making up the remaining 3%. The increase in subscription revenues was primarily driven by increased purchases by new and existing customers.
• Geographical Performance: North America contributed $2,006 million in revenues for the three months ended June 30, 2025, representing a significant portion of total revenues. EMEA and Asia Pacific regions also showed strong performance with revenues of $834 million and $375 million, respectively.
• Customer Segments: The number of customers with annual contract value greater than $5 million increased to 528 as of June 30, 2025, up from 442 in the previous year, indicating a growing customer base and increased value derived from the Now Platform.
• Future Outlook: The company expects subscription revenues to increase in absolute dollars for the year ending December 31, 2025, driven by new customer additions and increased usage by existing customers. Professional services and other revenues are also expected to grow in absolute terms.
• Operational Efficiency: The company anticipates a slight decrease in sales and marketing expenses as a percentage of revenue for the year ending December 31, 2025, due to increased sales productivity and marketing efficiencies.
• Seasonality: The company experiences seasonality with a higher percentage of agreements signed in the fourth quarter, driven by enterprise buying patterns and commission plan incentives. This seasonality affects the timing of revenue recognition.
• Renewal Rate: The renewal rate remained strong at 98% for both the three and six months ended June 30, 2025, indicating high customer retention and satisfaction with the company's offerings.

SEC Filing: ServiceNow, Inc. [ NOW ] - 10-Q - Jul. 23, 2025