ServiceNow, Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 28 January 2026: press release. Guidance figures: 10 new. The quarter’s numbers.

Read the filing

Key takeaways

• Subscription revenue grew 21% in Q4: Q4 2025 subscription revenues were $3,466 million, up 21% year over year, or 19.5% in constant currency. Total revenues were $3,568 million, up 20.5%. Source
• CRPO grew 25% to $12.85 billion: Current remaining performance obligations were $12.85 billion at December 31, 2025, up 25% year over year, or 21% in constant currency. Source
• Large-deal transactions rose nearly 40%: The company recorded 244 transactions over $1 million in net new ACV in Q4 2025, representing nearly 40% year-over-year growth. Source
• Non-GAAP operating margin reached 31%: Q4 GAAP operating margin was 12.5% and non-GAAP operating margin was 31%. Full-year GAAP operating margin was 13.5% and non-GAAP 31%. Source
• Q4 free cash flow was $2.0 billion: Q4 operating cash flow was $2,238 million and free cash flow was $2,032 million, or 57% of total revenues. Full-year free cash flow was $4,636 million, or 35%. Source
• Armis expected to triple security market: Armis is expected to more than triple the company's market for security and risk, and to accelerate its roadmap to autonomous cybersecurity. Source
• 2026 subscription revenue range set: Full-year 2026 GAAP subscription revenue guidance is $15,530 million to $15,570 million, or 20.5% to 21% growth. In constant currency, growth is 19.5% to 20%. Source

“With our consistent Rule of 55+ profile, there is no AI company in the enterprise better positioned for sustainable profitable revenue growth than ServiceNow.”

ServiceNow Chairman and CEO Bill McDermott

Guidance

What changed from last quarter

• New guidance: Guidance for first quarter 2026 and full-year 2026 appears in this release. The prior release gave guidance only for fourth quarter 2025 and full-year 2025. Source
• New: Company announced its intent to acquire Armis to build a unified security exposure and operations stack. Source
• New: Company announced its intent to acquire Veza to strengthen identity security. Source
• New: Acquisition of Moveworks closed on December 15, 2025. This was not in the prior release. Source
• New: The five-for-one stock split approved by the board in October became effective December 17, 2025. Source
• New: Board authorized an additional $5 billion under the share repurchase program in January 2026. Source

Results and growth drivers

• Subscription revenue grew 21% in Q4: Q4 2025 subscription revenues were $3,466 million, up 21% year over year, or 19.5% in constant currency. Total revenues were $3,568 million, up 20.5%. Source
• Full-year revenue reached $13.3 billion: Full-year 2025 total revenues were $13,278 million, up 21%. Full-year subscription revenues were $12,883 million, also up 21%. Non-GAAP total revenues were $13,189 million. Source
• Q4 net income and diluted EPS: Q4 GAAP net income was $401 million, or $0.38 per diluted share. Non-GAAP net income was $959 million, or $0.92 per diluted share. Full-year GAAP diluted EPS was $1.67. Source

Demand and the order book

• CRPO grew 25% to $12.85 billion: Current remaining performance obligations were $12.85 billion at December 31, 2025, up 25% year over year, or 21% in constant currency. Source
• Total RPO reached $28.2 billion: Remaining performance obligations were $28.2 billion at the end of Q4 2025, up 26.5% year over year, or 22.5% in constant currency. Source
• Large-deal transactions rose nearly 40%: The company recorded 244 transactions over $1 million in net new ACV in Q4 2025, representing nearly 40% year-over-year growth. Source
• 603 customers above $5 million ACV: The company ended the quarter with 603 customers with more than $5 million in ACV, representing approximately 20% year-over-year growth. Source

“Q4 was another strong quarter, concluding a remarkable year of AI innovation, with emerging products like Now Assist, Workflow Data Fabric, Raptor, and CPQ all outperforming,”

ServiceNow President and CFO Gina Mastantuono

Products, partners and customers

• Now Assist net new ACV doubled: Net new annual contract value for Now Assist in Q4 2025 more than doubled year over year. Source
• Anthropic partnership expanded: Claude models will be integrated more deeply into the ServiceNow AI Platform, and used in its platform for highly regulated industries. Source
• Microsoft agent governance integration: The Microsoft Agent 365 integration gives joint customers agentic AI orchestration and governance across copilots, agents and data. Source
• Fiserv scales Now Assist and ITSM: Fiserv will scale its use of Now Assist for Financial Services Operations and ITSM. Panasonic Avionics will deploy AI-driven CRM across more than 300 airline customers. Source

Margins and costs

• Subscription gross margin held near 80%: Q4 subscription gross margin was 79.5% on a GAAP basis and 82.5% non-GAAP. Full-year non-GAAP subscription gross margin was 83.5%. Source
• Non-GAAP operating margin reached 31%: Q4 GAAP operating margin was 12.5% and non-GAAP operating margin was 31%. Full-year GAAP operating margin was 13.5% and non-GAAP 31%. Source
• Services segment posted a gross loss: Professional services and other gross loss was $15 million on a GAAP basis, or 13.5% of revenue. The non-GAAP gross loss was $2 million. Source
• Deal and severance charges excluded: Q4 business combination and related costs were $65 million, excluded from non-GAAP results. Q4 stock-based compensation was $494 million. Source

“But the ambition is higher, and our confidence in sustained high organic growth has never been greater.”

ServiceNow President and CFO Gina Mastantuono

Cash, capital and returns

• Q4 free cash flow was $2.0 billion: Q4 operating cash flow was $2,238 million and free cash flow was $2,032 million, or 57% of total revenues. Full-year free cash flow was $4,636 million, or 35%. Source
• Q4 buyback of 3.6 million shares: About 3.6 million shares were repurchased for $597 million in Q4 to manage dilution. About $1.4 billion remained available for repurchases at quarter end. Source
• Full-year repurchases of $1.84 billion: Repurchases of common stock totaled $1,840 million for full-year 2025, compared with $696 million a year earlier. Source
• Cash and marketable securities at year-end: Cash and cash equivalents were $3,726 million at December 31, 2025, against $2,304 million a year earlier. Marketable securities were $2,558 million current and $3,771 million long-term. Source

Acquisitions and regional commitments

• Armis expected to triple security market: Armis is expected to more than triple the company's market for security and risk, and to accelerate its roadmap to autonomous cybersecurity. Source
• Veza adds identity and access visibility: The Veza acquisition would let customers see and manage access across people, applications, data, cloud environments and AI agents. Source
• Moveworks adds agentic AI capabilities: Management said Moveworks adds agentic AI, intelligent workflows and enterprise search, creating an AI-native front door for employee engagement. Source
• Canada public-sector AI commitment: CA$110 million multi-year commitment for AI adoption in Canada's public sector, including Canadian-hosted infrastructure, a Canada Centre of Excellence and about 100 new jobs. Source

2026 guidance and margin plan

• 2026 subscription revenue range set: Full-year 2026 GAAP subscription revenue guidance is $15,530 million to $15,570 million, or 20.5% to 21% growth. In constant currency, growth is 19.5% to 20%. Source
• Q1 2026 revenue and cRPO range given: First quarter 2026 GAAP subscription revenue guidance is $3,650 million to $3,655 million, with cRPO growth of 22.5% on a GAAP basis. Source
• 2026 margin and cash flow targets: Full-year 2026 non-GAAP targets are 82% subscription gross margin, 32% operating margin and 36% free cash flow margin. Source
• Moveworks adds about 100bps to growth: Q1 2026 subscription revenue and cRPO growth guidance, and full-year 2026 subscription revenue growth guidance, each include about 100bps from Moveworks. Source

Recognition

• Analyst reports named ServiceNow a leader: The company said it was recognized as a leader in multiple analyst reports, including the Forrester Wave for Enterprise Service Management Platforms and an IDC MarketScape. Source
• Named to Fortune most admired list: ServiceNow was named to Fortune's World's Most Admired Companies 2026 list, and also appeared on Glassdoor, TIME and Fortune workplace lists. Source

Coming up, as management said on 28 January 2026

• Armis closing expected in second half: The Armis acquisition is expected to close in the second half of 2026. Source
• Veza closing expected in first half: The Veza acquisition is expected to close in the first half of 2026. Source
• Accelerated repurchase launch imminent: Company plans to launch a $2 billion accelerated share repurchase imminently, with no date given. Source
• Bernstein TMT Forum panel on February 25: Lou Fiorello will take part in the Securing AI Panel at the Bernstein TMT Forum on February 25, 2026, at 3:30 p.m. PT. Source
• Morgan Stanley fireside chat on March 4: Bill McDermott will take part in a fireside chat at the Morgan Stanley TMT Conference on March 4, 2026, at 12:20 p.m. PT. Source

Figures management reported

Risks management discussed

• Financial: First quarter 2026 subscription revenue growth guidance carries about 150bps of headwind from the shift from self-hosted to hosted revenue. Source
• Operational: Business combination and related costs were $65 million in Q4, with further acquisition activity expected during 2026 as Armis and Veza are integrated. Source

Earlier plans management reported on

• Ahead: Management said Q4 2025 topline growth and profitability metrics exceeded guidance. Source
• Not stated: Management said the strategy, including a disciplined focus on margin expansion, is unchanged. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.