ServiceNow Reports Q2 Non-GAAP EPS of $4.09, Revenue of $3.22B, Beating Estimates by $0.52 and $100M Respectively. Subscription Revenues Reach $3.11B, Up 22.5% YoY.

ServiceNow reported Q2 Non-GAAP EPS of $4.09, beating the estimate by $0.52. Revenue reached $3.22B, a 22.4% YoY increase and a $100M beat. Subscription revenues grew 22.5% YoY, while current remaining performance obligations increased. The company's strong financial performance is attributed to its growing customer base and increasing adoption of its cloud-based services.

ServiceNow (NOW) reported its Q2 2025 earnings, exceeding analysts' expectations with a strong performance driven by its growing customer base and increasing adoption of cloud-based services. The company's Non-GAAP EPS of $4.09 beat the estimate by $0.52, while revenue reached $3.22 billion, a 22.4% year-over-year (YoY) increase, surpassing expectations by $100 million. Subscription revenues grew 22.5% YoY, with current remaining performance obligations increasing significantly [3].

The company's robust financial performance can be attributed to its expanding customer base and the increasing adoption of its cloud-based services. ServiceNow's AI-powered portfolio has been a significant driver of its success, with the company reaching 508 customers in the first quarter of 2025, generating over $5 million in annual contract value (ACV) [1]. This growth is expected to continue into the second quarter.

Despite these positive developments, 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]. However, ServiceNow's shares have outperformed the broader sector and industry, with NOW shares dropping 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].

In conclusion, ServiceNow's Q2 2025 earnings show strong revenue growth, driven by its AI-powered portfolio and cloud-based services. However, investors should be aware of the potential challenges posed by the macroeconomic environment and the company's stretched valuation.

References:
[1] https://www.ainvest.com/news/servicenow-q2-earnings-preview-subscription-revenue-growth-expected-drive-results-2507/
[2] https://www.cnbc.com/2025/07/23/servicenow-now-q2-earnings-2025.html
[3] https://seekingalpha.com/news/4470953-servicenow-non-gaap-eps-of-4_09-beats-by-0_52-revenue-of-3_22b-beats-by-100m