Servicenow, Inc. · NYSE:NOW
Servicenow — Q2 2025 Earnings Presentation
25 slides from Servicenow's earnings presentation, Jul 23, 2025
Slide 1: Investor Presentation Second Quarter 2025
Investor Presentation Second Quarter 2025
Slide 2: Safe Harbor and other information
Safe Harbor and other information This presentation contains “forward‐looking” statements that are based on our management’s beliefs and assumptions and on information currently available to management. Forward‐looking statements include information concerning our possible or assumed strategy, futur
Slide 3: Statement Regarding Use of Non-GAAP Financial Measures
Statement Regarding Use of Non-GAAP Financial Measures We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. We adjust revenues and related growth rates (“revenues”), and current remaining performance
Slide 4: ServiceNow AI Platform
Technology Core Business CRM and Industry Creator Workflows Workflows Workflows Workflows Provide easy-to-follow Build connected cross- Accelerate digital processes across HR, Intelligently orchestrate enterprise workflow apps transformation with Procurement, Facilities, customer experiences to fast
Slide 5: We are the AI Platform for Business Transformation
We are the AI Platform for Business Transformation We move with the pace of Our approximately 8,400 global innovation to help customers customers(1) include over 85% of transform organizations across the Fortune 500. They all rely on Our aspiration is to be the every industry while upholding a Servi
Slide 6: Q2-25 Financial Highlights
Q2-25 Financial Highlights Increase Non-GAAP Constant Q2 2025 Results Quarterly Results Currency Impact(1) (Decrease) Y/Y Currency Y/Y(2) Subscription Revenues $3,113M 22.5% ~100bps tailwind 21.5% Current RPO (cRPO) $10.92B 24.5% ~300bps tailwind 21.5% Remaining Performance Obligations (RPO) $23.9B
Slide 7: 2025 Guidance Assumptions
2025 Guidance Assumptions ServiceNow has a larger-than-average customer cohort scheduled to renew in Q4 2025. As a result, Q3 2025 will experience approximately 2 points of headwinds to cRPO growth as the contractual obligations wind down. We expect that cohort to renew in Q4 2025, at which time tho
Slide 8: Guidance Summary
Guidance Summary Currency Impact Increase Non-GAAP Constant Q3 2025 Guidance Quarterly Guidance Included in (Decrease) Y/Y Currency Y/Y(2) Guidance(1) Subscription Revenues $3,260M - $3,265M 20% - 20.5% ~50bps tailwind 19.5% Non-GAAP Operating Margin(3) 30.5% ~(50bps) NA NA Current RPO (cRPO) Growth
Slide 9: Comparison to Previously Issued Guidance
Comparison to Previously Issued Guidance $27 $54 $3,113 $100 $25 $12,785 $3,033 $12,660 ($M) Subscription Revenues Y/Y Growth 19% 22.5% 19% 20% Q2-25A FY25E Prev. Guidance Midpoint(1) Currency Impact(2) Q2 Performance Actual Results Guidance Change Current Guidance Midpoint (1) Refers to previously
Slide 10: Year-Over-Year Subscription Revenues Growth
Year-Over-Year Subscription Revenues Growth Subscription Revenues (%) 27% 27% 26% 25% 25% 23% 23% 23% 22% 23% 22% 22% 23% 23% 21% 21% 19% 20% Q2-24A Q3-24A Q4-24A Q1-25A Q2-25A FY24A Previous Year Growth Actual Growth Non-GAAP Constant Currency Sub Revenue Growth (1) (1) Non-GAAP subscription revenu
Slide 11: Currency Impact to Year-Over-Year Sub. Revenues
Currency Impact to Year-Over-Year Sub. Revenues Subscription Revenues ($M) $3,005 $3,031 $3,113 $3,086 $2,542 $2,552 $2,715 $2,711 $2,866 $2,859 $10,646 $10,639 … $(7) $26 $(27) $10 $(4) $(7) Q2-24A Q3-24A Q4-24A Q1-25A Q2-25A FY24A Y/Y 23% 23% 23% 22% 21% 21% 19% 20% 22% 22% 23% 23% Growth Actuals
Slide 12: Remaining Performance Obligations (RPO)
Remaining Performance Obligations (RPO) ($B) Current RPO Noncurrent RPO Q2-25 $23.9 Y/Y Growth $22.3 $22.1 $18.6 $19.5 +29% / +25.5% cc(1) $13.0 $12.0 $11.8 Total RPO $9.8 $10.2 $8.78 $9.36 $10.27 $10.31 $10.92 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 cRPO Y/Y Growth 22% 26% 19.5% 22% 24.5% cRPO cc(1) Y/Y Grow
Slide 13: Customer Cohort Growth
Customer Cohort Growth Annual Growth of Initial ACV 2025 45% 55% 2024 53% 52% 2023 70% 2022 84% 2021 81% 2020 78% 2019 104% 2018 2017 122% 2016 116% 2015 2014 167% 2013 2012 170% 2011 2010 222% 280% (1) (1) As an illustrative example, 2010 customer cohort started with a contract of initial ACV (annu
Slide 14: Expansion of Customer Relationships
Expansion of Customer Relationships ($M) $14.3 $14.5 $13.8 $14.0 $13.3 $13.5 $13.1 $12.4 $12.7 528 499 509 462 442 414 426 384 364 Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Number of Customers with $5M+ ACV Avg ACV of Customers with $5M+ ACV Note: Previously disclosed number of customers
Slide 15: Renewal Rate
Renewal Rate 98% 98% 98% 98% 98% Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 Note: We adjust our Renewal Rate for acquisitions, consolidations and other customer events that cause the merging of two or more accounts occurring at the time of renewal. © 2025 ServiceNow, Inc. All Rights Reserved. 15 © 2025 ServiceNo
Slide 16: Net New ACV Contribution Across Workflows and Products
Net New ACV Contribution Across Workflows and Products (1) Technology Workflows CRM and Industry & Core Business Workflows Creator Workflows & Others 17% 15% 18% 18% 18% 29% 31% 30% 26% 34% 54% 54% 52% 56% 48% Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 (1) Historical presentations disclosed net new ACV contribut
Slide 17: GAAP Revenues by Geography
GAAP Revenues by Geography North America EMEA APAC & Other 12% 11% 11% 11% 12% 25% 25% 27% 25% 26% 63% 64% 62% 64% 62% Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 © 2025 ServiceNow, Inc. All Rights Reserved. 17 © 2025 ServiceNow, Inc. All Rights Reserved. 17
Slide 18: Headcount by Department
Headcount by Department PS & Other Cost of Sales Sub. Cost of Sales S&M R&D G&A 26,698 27,294 25,743 26,293 24,469 3,268 3,133 3,231 3,086 2,992 8,583 8,640 8,874 8,393 7,912 9,008 9,083 9,219 9,271 8,585 4,063 4,351 4,583 4,749 5,003 917 905 911 859 878 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 © 2025 ServiceN
Slide 19: Non-GAAP Gross Margins
Non-GAAP Gross Margins Non-GAAP Subscription Gross Margin 85.0% 85.0% 84.5% 85.0% 84.5% 84.5% 83.0% Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 FY23 FY24 Non-GAAP PS & Other Gross Margin 15.5% 14.0% 7.5% 8.5% 9.5% 11.5% 4.0% Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 FY23 FY24 Non-GAAP Total Gross Margin 82.5% 82.5% 82.0% 82.
Slide 20: Non-GAAP Operating and Free Cash Flow Margins
Non-GAAP Operating and Free Cash Flow Margins Non-GAAP Operating Margin 31.0% 29.5% 31.0% 29.5% 29.5% 27.5% 27.5% Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 FY23 FY24 Non-GAAP Free Cash Flow Margin 47.5% 48.0% 30.5% 31.5% 17.0% 16.5% 13.5% Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 FY23 FY24 Note: All figures are calculated
Slide 21: Non-GAAP Net Income and Diluted EPS
Non-GAAP Net Income and Diluted EPS Non-GAAP Net Income ($M) $2,902 $2,215 $775 $769 $846 $854 $651 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 FY23 FY24 Non-GAAP Diluted EPS $13.92 $10.78 $3.72 $3.67 $4.04 $4.09 $3.13 Q2-24 Q3-24 Q4-24 Q1-25 Q2-25 FY23 FY24 Note: All figures are calculated on a non-GAAP basis. S
Slide 22: GAAP to Non-GAAP Reconciliation and Supplemental Information
GAAP to Non-GAAP Reconciliation and Supplemental Information © 2025 ServiceNow, Inc. All Rights Reserved. 22 © 2025 ServiceNow, Inc. All Rights Reserved. 22
Slide 23: GAAP to Non-GAAP Reconciliation – Other
GAAP to Non-GAAP Reconciliation – Other GAAP Subscription Gross Profit in millions (except %'s and per share data) 2023 $ 7,074 Margin Q1'24 81.5% $ 2,082 Margin Q2'24 82.5% $ 2,073 Margin Q3'24 81.5% $ 2,219 Margin Q4'24 81.5% $ 2,330 Margin 2024 81.5% $ 8,704 Margin Q1'25 82% $ 2,444 Margin Q2'25
Slide 24: Supplemental Information
Supplemental Information in millions Q1'24 Q2'24 Q3'24 Q4'24 2024 Q1'25 Q2'25 Stock-based compensation Cost of revenues: Subscription $ 58 $ 62 $ 64 $ 66 $ 250 $ 68 $ 76 Professional services and other $ 12 $ 12 $ 11 $ 11 $ 46 $ 11 $ 11 Operating expenses: Sales and marketing $ 134 $ 141 $ 144 $ 146
Slide 25: servicenow.
servicenow.