ServiceNow Stock Rallies After Q1 Beat, Positive Outlook: Retail Lauds String Of Upbeat Prints

ServiceNow, Inc. (NOW) stock jumped in Wednesday’s after-hours session after the Santa Clara, California-based company announced better-than-expected quarterly results, riding on tailwinds from the artificial intelligence (AI) boom. 

The end-to-end intelligent workflow automation platform solutions provider reported adjusted earnings per share (EPS) of $4.04 for the first quarter of the fiscal year 2025, up from $2.20 for the year-ago quarter and $3.67 in the preceding quarter.

The bottom-line result also beat the Finchat-compiled consensus estimate of $3.83 per share.

Total adjusted revenue jumped 19.5% year over year (YoY) and 5.6% sequentially to $3.12 billion, compared to the $3.09 billion consensus estimate.

ServiceNow noted that its first-quarter subscription revenue jumped 20% to $3.03 billion, exceeding the $2.995  billion to $3.000 billion guidance. 

Current remaining performance obligations (cRPO) climbed 22% to $10.31 billion versus the 20.5% guidance, while the RPO was $22.1 billion, marking 25% growth.

The company noted that the number of customers with annual contract value (ACV) of over $5 billion exceeded 500.

Operating income rose 31% YoY on a constant currency basis to $953 million, faster than the 30% growth guidance.

CEO Bill McDermott said, “ServiceNow’s position as the platinum standard for enterprise‑grade AI drove these outstanding first quarter results.”

ServiceNow expects subscription revenue of $3.03 billion to $3.035 billion for the second quarter, cRPO growth of 19.5%, and operating income growth of 27% on a constant currency basis.

The company raised its 2025 subscription revenue guidance to $12.64 billion to $12.68 billion from a prior range of $12.635 billion to $12.675 billion. It maintained its subscription gross profit growth guidance at 83.5% on a constant currency basis and adjusted operating income growth guidance at 30.5%.

In March, ServiceNow announced an agreement to acquire Mountain View, California-based agentic AI assistant provider Moveworks, for $2.85 billion in cash and stock.

On Stocktwits, retail sentiment toward Service Now stock turned to ‘extremely bullish’ (97/100) by late Wednesday from ‘bullish’ a day ago, with the message volume spiking to ‘extremely high’ levels. 

A bullish watcher complimented the company for delivering, adding that it has had 29 consecutive earnings beats.

Incidentally, even after reporting solid fourth-quarter results in late January, the stock tumbled over 11% as traders whined over the slim beat.

Another said ServiceNow’s McDermott was the best CEO after Nvidia’s Jensen Huang.

ServiceNow stock jumped 10.52% in Wednesday’s after-hours after tacking on nearly 6% in the regular session. The stock is down over 23% this year.

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