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What were the key takeaways from ServiceNow's earnings call?

Did ServiceNow beat or miss consensus estimates last quarter?

What factors drove the changes in ServiceNow's revenue and profit?

- **Revenue Growth Accelerates**: 20.5% YoY to $3.299B, beating guidance with 103+ $1M deals and 12+ $10M AI deals.
- **AI Adoption Surge**: Now Assist consumption up 55x since May, on track for $500M+ ACV with 1,700 customers.
- **Margin Expansion**: Operating margin 33.5% (vs. 30% guide), raising 2025 targets to 31% op margin and 34% free cash flow.
- **Federal Resilience**: U.S. federal ACV +30% YoY, but Q4 guidance cautious on timing amid shutdown.
- **Key Innovations**: AI Control Tower adoption by 1,700 customers, 90% internal process automation, and 30%+ Now Assist price uplift.

**【CEO Summary Section】**
- Delivered 20.5% year-over-year subscription revenue growth to $3.299 billion, driven by AI product adoption and core workflow expansion.
- Highlighted 103 deals over $1 million in net new ACV, including 12 over $10 million, with Now Assist consumption growing 55x since May.
- Announced AI Control Tower adoption by 1,700 customers, with use cases like Lenovo resolving cases 35% faster and Bell deflecting 3M+ customer support calls.
- Raised 2025 guidance to $12.835B-$12.845B subscription revenue, +20.5% YoY, and operating margin target to 31%.

**【CFO Financial Commentary】**
- Generated $3.299B subscription revenue (20.5% YoY), $24.3B RPO (23% YoY), and $11.15B current RPO (20.5% YoY).
- Operating margin expanded to 33.5% (vs. 30% guidance), free cash flow margin 17.5%, with $9.7B cash and $2B remaining on buyback program.
- Raised full-year operating margin to 31% (from 30.5%) and free cash flow margin to 34% (from 32%).

**【Q&A Highlights】**
- **AI Implementation**: 100+ pre-packaged Agentic workflows reduce implementation time to weeks, with 90% of internal processes automated.
- **Federal Business**: Q3 U.S. federal ACV grew 30% YoY, but Q4 guidance includes prudence for deal timing amid government shutdown.
- **Now Assist Pricing**: Hybrid subscription/consumption model drives 30%+ price uplift, with $500M+ ACV target for 2025 (subscription-only).
- **MoveWorks Update**: Expected to close by end of Q4, adding AI talent to accelerate Zurich release innovations.
- **Security Growth**: Risk & Security business crosses $1B ACV, with AI Control Tower adoption accelerating compliance and governance.

ServiceNow, Inc. (NOW) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: 21.5% YoY subscription revenue growth, driven by AI adoption and workflow expansion.
- **AI Leadership**: Now Assist ACV exceeds expectations, with largest deal >$20M. AI Control Tower adoption accelerates, managing all enterprise agents.
- **Financial Strength**: 29.5% operating margin, 16.5% free cash flow margin, and $10.8B cash balance.
- **Strategic Moves**: Logik.ai acquisition drives CPQ growth, Data.world enhances data governance, and Nemotron LLM with NVIDIA improves AI reasoning.
- **Customer Momentum**: 98% renewal rate, 528+ customers >$5M ACV, and 11 deals >$5M in net new ACV.


**【CEO Summary Section】**
- **Revenue Growth**: Subscription revenue grew 21.5% YoY in constant currency, exceeding guidance by 200 basis points. CRPO and current RPO also outperformed expectations.
- **AI Momentum**: Now Assist net new ACV exceeded expectations, with 21 deals including 5+ Now Assist products. Largest deal to date was over $20 million. AI Control Tower adoption is accelerating, with 2025 ACV target on track.
- **Workflow Performance**: All workflow segments (Tech, CRM, Core Business) delivered strong growth. ITAM, Security & Risk, and CRM workflows saw year-over-year growth of 70%, 60%, and 50% respectively.
- **Strategic Acquisitions**: Acquisition of Logik.ai is driving explosive growth in CPQ, with 9 deals closed in June alone. Data.world acquisition enhances data governance capabilities for the agentic AI era.

**【CFO Financial Commentary】**
- **Top Line**: Q2 subscription revenue of $3.113B, up 21.5% YoY. RPO ended at $23.9B, growing 25.5% YoY. Current RPO was $10.92B, up 21.5% YoY.
- **Profitability**: Non-GAAP operating margin of 29.5%, 250bps above guidance. Free cash flow margin of 16.5%, up 300bps YoY. GAAP net income was $420M, with Non-GAAP EPS of $1.08.
- **Customer Metrics**: 98% renewal rate, 528+ customers generating >$5M ACV, and 11 deals >$5M in net new ACV.
- **Guidance Update**: 2025 subscription revenue raised by $125M to $12.775B-$12.795B. Q3 revenue expected between $3.260B-$3.265B, with 18.5% YoY CRPO growth.

**【Q&A Key Highlights】**
- **Demand Environment**: Bill emphasized AI as the primary driver of demand, with enterprises consolidating onto ServiceNow's platform. Federal team executed well despite budget constraints, closing 6 new logos in Q2.
- **AI Control Tower**: Customers are adopting Control Tower to govern all AI agents (including third-party), with ServiceNow agents outperforming in collaboration and execution. Nemotron LLM with NVIDIA is enhancing reasoning capabilities.
- **CRM Expansion**: Front office workflows (sales, order management, CPQ) are seeing rapid adoption. Logik.ai integration is driving 9x YoY growth in CPQ deals. Public sector interest in replacing legacy CRM stacks is growing.
- **Sales Productivity**: AI OpEx efficiencies (e.g., CodeAssist) are improving engineering capacity. Sales productivity gains are being reinvested in technical sellers and AI talent.
- **Competitive Position**: ServiceNow's enterprise AI platform differentiates through workflow integration, data fabric, and cross-functional AI agents. Brand value ranked 42nd globally, with Colin Fleming and Idris Elba campaigns resonating strongly.


ServiceNow, Inc. (NOW) Q2 2025 Earnings Call Transcript

- **Record Q1 Growth**: 20% YoY subscription revenue, 22% YoY cRPO, 72 deals >$1M in ACV
- **AI-Driven Efficiency**: 86% internal work deflection, 16x lead-to-sale conversion improvement
- **Federal Strength**: 11 federal deals >$1M, $22B RPO includes 500+ federal customers
- **CRM Acceleration**: 16/20 top deals include CRM, Logik.ai acquisition to boost AI sales
- **Guidance Raised**: FY25 revenue $12.64B-$12.68B (+$5M midpoint), 19% YoY growth
- **Profitability**: 31% operating margin, 48% free cash flow margin, $10.9B cash
- **Long-Term Vision**: AI platform leadership, 500+ >$5M ACV customers, 98% renewal rate

**【CEO Summary Section】**
- ServiceNow reported its largest Q1 ever with 20% YoY growth in subscription revenue and 22% YoY growth in cRPO (constant currency). Key highlights include:
  - 72 deals >$1M in net new ACV (up 14% YoY), with 9 >$5M
  - 500+ customers now generating >$5M in ACV (up 18% YoY)
  - AI-driven Now Assist adoption surged, with Pro Plus deals quadrupling YoY
  - RaptorDB Pro saw accelerating net new ACV, including 5 deals >$1M
- Emphasized AI as the company's competitive advantage, with internal AI adoption reducing manual work by 86% and improving lead-to-sale conversion by 16x.
- Raised FY25 subscription revenue guidance to $12.64B-$12.68B (midpoint +$5M), reflecting 19% YoY growth.

**【CFO Financial Commentary】**
- Q1 subscription revenue: $3.005B (20% YoY growth in constant currency)
- GAAP net income: $420M; Non-GAAP EPS: $1.08 (vs. $0.95 consensus)
- Operating margin: 31% (vs. 30% guidance)
- Free cash flow margin: 48% (vs. 38% YoY)
- RPO: $22.1B (25.5% YoY growth)
- Renewal rate: 98% (best-in-class)
- Manufacturing and healthcare net new ACV grew >100% and 70% YoY, respectively.
- Federal government revenue exceeded expectations, with 11 deals >$1M (vs. 8 YoY).

**【Q&A Key Takeaways】**
1. **Federal Government Risk Management**: 
   - Guided conservatively due to macro uncertainty, but long-term federal opportunity remains strong (e.g., $22B RPO includes 500+ federal customers).
   - Gov't Transformation Suite adoption accelerating (e.g., 1,700 federal attendees at Fed Forum).
2. **AI Adoption & Efficiency**: 
   - Internal AI deflection rate: 86% (e.g., system admin tasks resolved in seconds vs. 20 mins)
   - Now Assist Pro Plus deals quadrupled YoY, with 39 deals including 3+ Now Assist products.
3. **CRM Expansion**: 
   - CRM workflows now in 16 of top 20 deals (vs. 9 YoY)
   - Logik.ai acquisition to accelerate AI-powered sales and order management
   - CRM net new ACV growth >50% in EMEA/Japan, 60% in finance/supply chain.
4. **Competitive Positioning**: 
   - ServiceNow as the enterprise AI platform of choice, with 500+ customers >$5M in ACV (vs. 425 YoY)
   - 98% renewal rate underscores sticky platform value.


ServiceNow (NOW)-23 Apr 25-2025 Q1 Earnings call transcript

- **Record Q4 Growth**: 21% YoY subscription revenue and 22% CRPO growth, driven by largest new logo deal and 150% QoQ AI deal expansion.
- **AI-Driven Innovation**: Gen AI net new ACV growth exceeds historical product launches; RaptorDB Pro achieves $1M+ ACV within three months.
- **Financial Strength**: $3.5B free cash flow in 2024; 2025 guide includes 20% revenue growth, 30.5% operating margin, and $3B share buyback authorization.
- **Hybrid Pricing Model**: Combines predictable seat-based subscriptions with consumption-based AI monetization, accelerating customer adoption.

**【CEO Summary Section】**
- ServiceNow achieved Q4 2024 subscription revenue growth of 21% YoY, with CRPO growth of 22%, outpacing the IT sector's 2024 growth rate. Operating margin reached 29.5%, and free cash flow margin was 31.5% for the full year.
- The company secured its largest new logo deal in history, with 19 deals exceeding $5 million in net new ACV. AI-driven Pro Plus deals grew 150% QoQ, signaling strong adoption of agentic AI solutions.
- ServiceNow's platform integrates AI agents, workflow orchestration, and data fabrics, positioning it as the control tower for enterprise AI transformation. The company aims to reach $15 billion+ revenue by 2026 and $30 billion+ long-term.

**【CFO Financial Commentary】**
- Q4 2024 subscription revenue was $2.866 billion, exceeding guidance by 50 basis points. RPO ended at $22.3 billion (26% YoY growth), with current RPO at $10.27 billion (22% YoY growth). The renewal rate remained strong at 98%.
- Gen AI net new ACV growth outpaced historical product launches, with RaptorDB Pro achieving five customers over $1 million in ACV within three months of launch. Free cash flow for 2024 totaled $3.5 billion, driven by operating margin expansion and disciplined cost management.
- 2025 guidance includes subscription revenue of $12.635-$12.675 billion (20% YoY growth), operating margin of 30.5%, and free cash flow margin of 32%. The company authorized an additional $3 billion share buyback program.

**【Q&A Key Highlights】**
- **AI Consumption Model**: Hybrid subscription/consumption pricing allows customers to start with predictable seat-based licensing while monetizing AI agent usage over time. This approach accelerates adoption without upfront subscription commitments.
- **Market Leadership**: ServiceNow's unified platform, RaptorDB, and AI orchestration capabilities differentiate it from siloed competitors. Public sector growth (40% YoY) and manufacturing (50% YoY) highlight sector-specific momentum.
- **Federal Dynamics**: 2025 guide reflects back-half weighted federal deal linearity due to U.S. administration changes, but long-term AI-driven growth remains intact.


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