ServiceNow Q2 Profit Exceeds Estimates, Revenue Rises 22.4%

ServiceNow reported Q2 earnings of $385 million, or $1.84 per share, up from $262 million, or $1.26 per share last year. Revenue rose 22.4% to $3.215 billion. Excluding items, adjusted earnings were $854 million or $4.09 per share, beating analysts' estimates of $3.57 per share.

ServiceNow (NOW) reported its second-quarter (Q2) 2025 earnings on July 23, with a significant increase in revenue and earnings per share (EPS). The company's Q2 earnings were $385 million, or $1.84 per share, up from $262 million, or $1.26 per share last year. Revenue rose 22.4% to $3.215 billion, exceeding analysts' estimates of $3.57 per share.

The company's AI-powered portfolio has been a key driver of its success. ServiceNow reached 508 customers in the first quarter of 2025, generating over $5 million in annual contract value (ACV), a 20% year-over-year increase [1]. This growth is expected to continue into the second quarter.

ServiceNow's stock has been negatively impacted by a worsening macroeconomic environment, including higher tariffs and trade uncertainty. The company's federal business is also expected to face challenges related to DOGE-related issues in the upcoming quarter [1]. Despite these challenges, ServiceNow's shares have outperformed the broader sector and industry. Since the beginning of the year, NOW shares have dropped 9.2% year-to-date (YTD), outperforming the Zacks Computer & Technology sector's return of 9.1% but underperforming the Zacks Computers – IT Services industry's decline of 10.2% [1].

ServiceNow has expanded its portfolio and strengthened its partner base through strategic acquisitions and collaborations. In May 2025, the company introduced its Core Business Suite, an AI-powered solution designed to streamline core business operations. Additionally, ServiceNow has partnered with Amazon Web Services and NVIDIA to enhance its AI capabilities [1].

References:
[1] https://stockanalysis.com/stocks/now/
[2] https://www.ainvest.com/news/servicenow-q2-earnings-preview-subscription-revenue-growth-expected-drive-results-2507/