Here is our preliminary tackle ServiceNow‘s (NOW -0.50%) monetary report.
Key Metrics
Metric
Q2 2024
Q2 2025
Change
vs. Expectations
Income
$2.63 billion
$3.22 billion
22.5%
Beat
Adjusted earnings per share (EPS)
$3.13
$4.09
31%
Beat
Subscription income
$2.54 billion
$3.11 billion
22.5%
n/a
Remaining efficiency obligations
$18.6 billion
$23.9 billion
29%
n/a
Agentic AI Is Main the Method
ServiceNow handily beat analyst expectations within the second quarter, with income development of twenty-two.5% and adjusted EPS development of 31%. Remaining efficiency obligations, which measures the long run income of current contracts with prospects, soared 29% to $23.9 billion.
Synthetic intelligence was a key development driver throughout the quarter. “Our beat‑and‑elevate quarter showcases the mission‑essential nature of the ServiceNow AI Platform. Each enterprise course of in each business is being refactored for agentic AI,” mentioned ServiceNow CEO Invoice McDermott.
ServiceNow signed 89 offers with not less than $1 million in internet new annual contract worth within the second quarter, and it ended the quarter with 528 prospects spending not less than $5 million yearly. The corporate’s Now Help AI product carried out nicely and stays on observe to succeed in $1 billion in annual contract worth by 2026.
Together with its earnings report, ServiceNow introduced agentic workforce administration, an extension to its end-to-end AI agent orchestration capabilities. This new function allows individuals to supervise and train an agentic workforce instantly from ServiceNow’s platform.
Instant Market Response
Shares of ServiceNow have been up about 7% in after-hours buying and selling Wednesday following the corporate’s sturdy second-quarter outcomes. Each income and earnings have been nicely forward of analyst estimates, and the corporate supplied sturdy steerage for the third quarter. Going into the second-quarter report, ServiceNow inventory was down 9% 12 months to this point.
What to Watch
ServiceNow expects to generate subscription income between $3.26 billion and $3.265 billion within the third quarter, which represents year-over-year development between 20% and 20.5%. Present remaining efficiency obligations, which is the quantity of contracted future income set to be realized over the following 12 months, is anticipated to rise by 18.5%. For the complete 12 months, the corporate expects 20% subscription income development.
ServiceNow is producing sturdy development due to its investments in AI, and the corporate sees agentic AI particularly as a key long-term development driver. ServiceNow did observe that there could possibly be a headwind from price range adjustments at U.S. federal authorities prospects, however that the corporate’s steerage displays that development.
Timothy Inexperienced has no place in any of the shares talked about. The Motley Idiot has positions in and recommends ServiceNow. The Motley Idiot has a disclosure coverage.
