Executive Summary
ServiceNow delivered a solid QQ1 2025 with revenue of $3.089B, up 18.63% year over year and 4.43% quarter over quarter. The company posted a gross margin of approximately 78.9% and an operating margin near 14.6%, supported by disciplined cost management and continued investment in R&D and go-to-market activities. Net income of $460M and diluted EPS of $2.20, alongside free cash flow (FCF) of about $1.472B, underscores the company’s standout cash generation in a subscription-driven model. The balance sheet remains highly liquid, with net cash positioning and a substantial deferred revenue base, signaling durable customer commitments and visibility. Absent explicit forward guidance in the provided materials, the QQ1 print suggests ServiceNow remains well-positioned to leverage its Now platform for continued automation across enterprises, albeit at a premium valuation relative to some peers.
Key Performance Indicators
Key Insights
Revenue: $3.0888B; YoY growth: 18.63%; QoQ growth: 4.43%; Gross Profit: $2.437B; Gross Margin: 78.92%; Operating Income: $451M; Operating Margin: 14.60%; Net Income: $460M; Net Margin: 14.90%; EBITDA: $721M; EBITDA Margin: 23.35%; EPS (diluted): $2.20; Shares (diluted): 209.371M; Free Cash Flow: $1.472B; FCF Margin: 47.6%; Operating Cash Flow: $1.678B; Capex: $-205M; Cash at End of Period: $3.378B; Cash & Short-Term Investments: $6.597B; Total Debt: $2.399B; Net Debt: -$0.97B (net cash); Def...
Financial Highlights
Revenue: $3.0888B; YoY growth: 18.63%; QoQ growth: 4.43%; Gross Profit: $2.437B; Gross Margin: 78.92%; Operating Income: $451M; Operating Margin: 14.60%; Net Income: $460M; Net Margin: 14.90%; EBITDA: $721M; EBITDA Margin: 23.35%; EPS (diluted): $2.20; Shares (diluted): 209.371M; Free Cash Flow: $1.472B; FCF Margin: 47.6%; Operating Cash Flow: $1.678B; Capex: $-205M; Cash at End of Period: $3.378B; Cash & Short-Term Investments: $6.597B; Total Debt: $2.399B; Net Debt: -$0.97B (net cash); Deferred Revenue (Current): $6.737B; Deferred Revenue (Non-Current): $117M; Current Ratio: 1.123; Quick Ratio: 1.123; Cash Ratio: 0.408; ROA: 2.19%; ROE: 4.54%; ROCE: 3.55%; P/E: 89.49x; P/S: 53.32x; P/BV: 16.24x; EV/Revenue: 227.03x; Free Cash Flow per Share: $7.12; Operating Cash Flow per Share: $8.11; Cash per Share: $31.90.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.09B |
18.63% |
4.43% |
| Gross Profit |
2.44B |
16.99% |
4.77% |
| Operating Income |
451.00M |
35.84% |
20.59% |
| Net Income |
460.00M |
32.56% |
19.79% |
| EPS |
2.22 |
31.36% |
19.35% |
Key Financial Ratios
operatingProfitMargin
14.6%
operatingCashFlowPerShare
$8.11
freeCashFlowPerShare
$7.12
Management Commentary
Note: The earnings transcript was not provided in the data supplied. As a result, no direct management quotes can be cited here. When the transcript becomes available, this section should group quotes by themes (strategy, operations, market conditions) with context and significance.
Forward Guidance
No explicit forward guidance was included in the supplied materials for QQ1 2025. Given the strong cash generation, high deferred revenue, and continued investments in R&D and go-to-market initiatives, a cautious view would anticipate continued cloud-based ARR growth and operating margin stability, barring macro headwinds or competitive pricing pressures. Investors should monitor: (1) cadence of ARR growth and net-new bookings, (2) any revisions to mix between on-premise legacy workloads and cloud-native subscriptions, (3) churn or expansion metrics, and (4) the evolution of gross and operating margins as AI-enabled automation scales.