ServiceNow (NYSE:NOW) posted stronger-than-expected third-quarter results on Thursday, driven by continued demand for its AI-powered workflow automation tools. Shares of the enterprise software company gained 3% in premarket trading following the release.
The company reported earnings of $4.82 per share, comfortably ahead of analyst forecasts of $4.26, while revenue surged 22% year over year to $3.41 billion, topping expectations of $3.35 billion.
Subscription revenue, which represents the bulk of ServiceNow’s business, increased 21.5% to $3.30 billion.
On a constant-currency basis, current remaining performance obligations (CRPO) rose 20.5% year over year to $11.28 billion. Although the growth rate slowed by 100 basis points from the prior quarter, it still exceeded the company’s guidance by roughly 250 basis points.
“Q3 CRPO beat was partially due to Q4 cohort pull-ins into Q3, of approximately 150bps,” analysts at BMO Capital Markets noted.
ServiceNow said it had surpassed expectations across both revenue and profitability metrics and raised its full-year 2025 outlook, now projecting higher subscription revenue, operating margin, and free cash flow. For the fourth quarter, the company expects subscription revenue between $3.42 billion and $3.43 billion.
BMO analysts commented that the subscription revenue “was a bit disappointing, though NOW management called out that on-prem renewals impacted the sub rev guide.”
Jefferies analysts also pointed to a cautious tone in the guidance, stating, “With the gov’t shutdown, NOW chose to guide prudently.”
They added, “The stock has spent much of 2025 sideways due to slowdown fears, but with AI ACV growing rapidly and 2025 tracking to close on a high note, we see it primed for a rally.”
Chief Executive Bill McDermott said the quarter underscored ServiceNow’s role as a leading AI platform for enterprise transformation, highlighting broad-based adoption across industries.
The company said current remaining performance obligations rose 21% to $11.35 billion, while total remaining performance obligations increased 24% to $24.3 billion.
President and Chief Financial Officer Gina Mastantuono said growth was widespread, supported by strong performance in the U.S. Federal segment and increasing traction from new AI products, including Now Assist and Workflow Data Fabric.
ServiceNow’s board of directors approved a five-for-one stock split, pending shareholder approval at a meeting scheduled for December 5.
However, the company warned that tightening budgets among U.S. Federal agencies and deal-timing effects from the recent government shutdown could impact fourth-quarter performance.