ServiceNow beats Q3 revenue estimates, raises 2025 subscription revenue
Overview
ServiceNow Q3 total revenue beats analyst expectations, growing 22% yr/yr
Adjusted EPS for Q3 exceeds analyst expectations
Company announces five-for-one stock split, subject to shareholder approval
Outlook
ServiceNow expects Q4 2025 subscription revenues of $3.42 bln to $3.43 bln
ServiceNow forecasts full-year 2025 subscription revenues of $12.835 bln to $12.845 bln
Company anticipates 250bps expansion in free cash flow margin year-over-year
Result Drivers
AI PLATFORM DEMAND - Co attributes strong Q3 results to high demand for its AI platform, including new products like AI Experience and Zurich platform release
PARTNERSHIPS AND INVESTMENTS - Strategic partnerships with NVIDIA and FedEx Dataworks, and investments in AI capabilities, supported growth
SUBSCRIPTION REVENUE GROWTH - Subscription revenues rose 21.5% yr/yr, driven by AI-driven efficiencies and product adoption
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Beat | $3.40 bln | $3.35 bln (34 Analysts) |
Q3 ADJUSTED EPS | Beat | $4.82 | $4.26 (34 Analysts) |
Q3 EPS | $2.40 | ||
Q3 Net Income | $502 mln | ||
Q3 Subscription Revenue | $3.29 bln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 44 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
Wall Street's median 12-month price target for ServiceNow Inc is $1,172.50, about 20% above its October 28 closing price of $937.91
The stock recently traded at 48 times the next 12-month earnings vs. a P/E of 57 three months ago
Press Release:
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