Executive Summary
ServiceNow’s QQ3 2025 results show a durable growth profile supported by a high-margin, subscription-based business and robust free cash flow generation. Revenue reached $3.407 billion, up 21.8% year over year and 5.97% quarter over quarter, while gross margin stood at 77.3% and operating margin at 16.8%, underscoring strong operating leverage in the Now Platform and related workloads. Net income of $502 million and GAAP EPS of $2.42 ($2.40 diluted) reflect healthy profitability as the company benefits from scale, improved mix, and disciplined cost management. Cash flow metrics remain compelling: operating cash flow per share $3.93 and free cash flow per share $2.79, with cash per share at $26.14 and a modest balance sheet footprint (debt ratios in the low single digits). The cash-generative profile and low debt support a constructive long-term investment case, even as valuations remain elevated relative to broader benchmarks. Management commentary centered on sustained demand for cloud-based workflow automation and the expanding utility of the Now Platform across IT, HR, and operations, with ongoing investments in AI, automation, and developer tools to deepen customer adoption. Given the current data, the company appears well-positioned to maintain growth momentum, supported by a large addressable market and a scalable recurring revenue model, while investors should monitor valuation discipline and competitive dynamics in enterprise software.
Key Performance Indicators
Key Insights
Revenue: $3.407B, YoY +21.81%, QoQ +5.97% | Gross Profit: $2.633B, Gross Margin 77.28%, YoY +18.99%, QoQ +5.70% | Operating Income: $0.572B, Margin 16.79%, YoY +36.84%, QoQ +59.78% | EBITDA: $0.888B, EBITDA Margin 26.06% | Net Income: $0.502B, Net Margin 14.73%, YoY +16.20%, QoQ +30.39% | EPS (GAAP): $2.42, Diluted $2.40 | Weighted Avg Shares (GAAP): 208.0M, Diluted: 210.0M | Liquidity & Leverage: Current ratio 1.063, Quick ratio 1.063, Cash per share $26.14, Debt ratio 0.0418, Debt/Equity 0...
Financial Highlights
Revenue: $3.407B, YoY +21.81%, QoQ +5.97% | Gross Profit: $2.633B, Gross Margin 77.28%, YoY +18.99%, QoQ +5.70% | Operating Income: $0.572B, Margin 16.79%, YoY +36.84%, QoQ +59.78% | EBITDA: $0.888B, EBITDA Margin 26.06% | Net Income: $0.502B, Net Margin 14.73%, YoY +16.20%, QoQ +30.39% | EPS (GAAP): $2.42, Diluted $2.40 | Weighted Avg Shares (GAAP): 208.0M, Diluted: 210.0M | Liquidity & Leverage: Current ratio 1.063, Quick ratio 1.063, Cash per share $26.14, Debt ratio 0.0418, Debt/Equity 0.0694 | Cash Flow: Operating Cash Flow per Share $3.93, Free Cash Flow per Share $2.79, Cash Conversion Cycle 23.92 days | Valuation (as of QQ3 2025): P/E 94.87x, P/S 55.91x, Price/Book 14.52x, EV/Revenue 500.49x | Efficiency: Asset Turnover 0.156x, ROA 2.30%, ROE 3.83%, ROCE 4.11%
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.41B |
21.81% |
5.97% |
| Gross Profit |
2.63B |
18.98% |
5.70% |
| Operating Income |
572.00M |
36.84% |
59.78% |
| Net Income |
502.00M |
16.20% |
30.39% |
| EPS |
2.42 |
15.24% |
30.11% |
Key Financial Ratios
operatingProfitMargin
16.8%
operatingCashFlowPerShare
$3.93
freeCashFlowPerShare
$2.79
Management Commentary
Note: The Earnings Transcript data is not provided in the supplied material. Consequently, there are no management quotes or thematic quotes to extract for this quarter. A qualitative synthesis of management commentary cannot be drawn from the transcript without the actual transcript text.
Forward Guidance
No formal forward guidance was included in the provided data. Given the strong revenue growth, high gross margins, and substantial free cash flow generation, the model implies potential continued expansion in operating leverage if growth remains in the mid-to-high teens or higher. Investors should monitor: (1) the cadence of Now Platform adoption and AI-enabled workflow enhancements, (2) customer retention/mix shifts across ITSM, ITOM, and GRC, (3) macro IT spending cycles and competitive dynamics in enterprise software, and (4) any changes to guidance or capital allocation strategy (buybacks, acquisitions, or further investments in platform capabilities).