In This Article:
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Subscription Revenue: $3.005 billion, growing 20% year over year in constant currency.
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CRPO (Current Remaining Performance Obligations): $10.31 billion, representing 22% year-over-year constant currency growth.
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Operating Margin: 31%, approximately 100 basis points above guidance.
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Free Cash Flow Margin: 48%.
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Remaining Performance Obligation (RPO): $22.1 billion, growing 25.5% year over year.
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Deals Greater Than $1 Million: 72 deals, with 9 deals over $5 million in net new ACV.
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Customers Generating Over $5 Million in ACV: 508 customers.
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Cash and Investments: $10.9 billion.
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Share Repurchase: Approximately 316,000 shares bought back.
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Subscription Revenue Guidance for 2025: Raised to $12.64 billion to $12.68 billion, representing 18.5% to 19% year-over-year growth.
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Q2 Subscription Revenue Guidance: Between $3.030 billion and $3.035 billion, representing 19% to 19.5% year-over-year growth.
Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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ServiceNow Inc (NYSE:NOW) reported its biggest Q1 ever for net new ACV, with subscription revenue growing 20% year over year in constant currency.
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The company achieved an operating margin of 31%, which was approximately 100 basis points above their guidance.
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ServiceNow Inc (NYSE:NOW) saw a significant increase in large deals, with 72 deals greater than a million in net new ACV, up from 63 a year ago.
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The company reported strong growth in its AI initiatives, with the number of Pro Plus deals more than quadrupling year over year.
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ServiceNow Inc (NYSE:NOW) raised its guidance for the full year 2025, reflecting strong demand and a healthy pipeline.
Negative Points
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There is uncertainty in the global economy, which could impact future performance and decision-making among enterprise customers.
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The company is facing potential risks from geopolitical factors, including tariffs and trade negotiations.
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ServiceNow Inc (NYSE:NOW) acknowledged the challenges in the public sector, with federal agencies navigating changes from tightening budgets.
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Despite strong performance, the company is taking a conservative approach to its full-year outlook due to potential macroeconomic headwinds.
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There is a risk of deal elongations or delays in decision-making among enterprise customers due to the uncertain environment.
Q & A Highlights
Q: Gina, when considering your guidance, what are you seeing in your enterprise customers? Is there any delay in decision-making or elongation in the sales cycle, and have you factored any potential risks into the guidance? A: Gina Mastantuono, CFO: We conducted a rigorous analysis of our business, considering potential impacts from the current geopolitical environment. Demand remains strong, and our guidance reflects real-world complexity with a healthy degree of conservatism. Our platform is a deflationary tool that customers lean into during uncertainty, setting us up for success for the remainder of the year.