Q2 2025 ServiceNow Inc Earnings Call Transcript
Key Points
- ServiceNow Inc (NOW) reported a 21.5% growth in subscription revenue in constant currency, exceeding guidance by 2 percentage points.
- The company achieved an operating margin of 29.5%, which is over 2.5 percentage points above their guidance.
- Free cash flow margin increased by 3% year over year, reaching 16.5%.
- ServiceNow Inc (NOW) closed 89 deals greater than $1 million in net new ACV, with 11 deals exceeding $5 million.
- The company is experiencing strong momentum in AI, with key AI Pro Plus deal count up over 50% quarter on quarter.
- There is ongoing uncertainty in the US federal sector due to tightening budgets and evolving mission demands.
- Despite strong performance, the company is maintaining prudence in its guidance due to potential margin headwinds from the Moveworks acquisition.
- The demand environment remains challenging with geopolitical and economic uncertainties persisting.
- The company is facing increased competition in the AI space, requiring continuous innovation and investment.
- There are concerns about the cost of sales for AI, which may require more technical engineers to support customer adoption.
Thank you for standing by. My name is Kathleen and I will be your conference operator today. At this time I would like to welcome everyone to the ServiceNow second quarter 2025 earnings conference call.
(Operator Instructions)
I would now like to turn the call over to Darren Yip, Senior Vice President, Head of Investor Relations and Market Insights. Please go ahead.
Good afternoon and thank you for joining ServiceNow's second quarter 2025 earnings conference call. Joining me are Bill McDermott, our Chairman and Chief Executive Officer; Gina Mastantuono, our President and Chief Financial Officer; and Amit Zavery , President, Chief Product Officer and Chief Operating Officer.
During today's call, we will review our second quarter 2025 results and discuss our guidance for the third quarter and full year 2025. Before we get started, we want to emphasize that the information discussed on this call, including our guidance, is based on
| Access to All Earning Calls and Stock Analysis | |
| 30-Year Financial on one screen | |
| All-in-one Stock Screener with unlimited filters | |
| Customizable Stock Dashboard | |
| Real Time Insider Trading Transactions | |
| 8,000+ Institutional investors’ 13F holdings | |
| Powerful Excel Add-in and Google sheets Add-on | |
| All data downloadable | |
| Quick customer support | |
| And much more... |
Trustpilot
We'd love to learn more about your experiences on GuruFocus.com and how we can improve!
Take Survey
