ServiceNow, Inc. reported strong financial performance for the first quarter of 2025, with total revenues reaching $3.088 billion, a 19% increase from $2.603 billion in the same period last year. Subscription revenues, which constitute the majority of the company's income, rose to $3.005 billion, up from $2.523 billion, driven by increased purchases from both new and existing customers. The company’s net income also saw a significant rise, reaching $460 million, compared to $347 million in the prior year, resulting in a diluted earnings per share of $2.20, up from $1.67.
In terms of operational metrics, ServiceNow's remaining performance obligations (RPO) stood at $22.1 billion as of March 31, 2025, reflecting a 25% increase year-over-year. The number of customers with an annual contract value (ACV) exceeding $5 million grew to 508, up from 425 a year earlier. The company also reported a renewal rate of 98%, indicating strong customer retention. Additionally, ServiceNow's cash and cash equivalents increased to $3.369 billion, up from $2.304 billion at the end of 2024, highlighting improved liquidity.
Strategically, ServiceNow announced its intention to acquire Moveworks, a provider of AI-driven enterprise solutions, for approximately $2.9 billion, with the deal expected to close in the second half of 2025. This acquisition aims to enhance ServiceNow's capabilities in automating workflows and improving customer experiences. The company also completed several smaller acquisitions in 2024, totaling $112 million, to bolster its technology and engineering workforce.
ServiceNow's operating expenses increased to $1.986 billion from $1.751 billion, primarily due to higher sales and marketing costs associated with increased headcount and investments in customer support. The company reported a gross profit of $2.437 billion, with a gross margin of 79%, slightly down from 80% in the previous year. Looking ahead, ServiceNow anticipates continued revenue growth driven by expanding customer usage and new customer acquisitions, while also managing costs associated with its growth strategy. The company expects subscription revenues to increase in absolute terms for the full year 2025, maintaining a stable percentage of total revenues.
About ServiceNow, Inc.
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