ServiceNow handily topped expectations in the second quarter and said it is gaining traction in CRM as it expands its footprint.
The company reported second quarter net income of $385 million, or $1.84 a share, on revenue of $3.22 billion, up 22.5% from a year ago. Non-GAAP earnings were $4.09 a share.
Wall Street was looking for non-GAAP second quarter earnings of $3.57 a share on revenue of $3.12 billion.
ServiceNow also saw current remaining performance obligation growth of 24.5% in the second quarter compared to a year ago.
CEO Bill McDermott said the company delivered across all metrics and saw traction in CRM.
- ServiceNow launches Workflow Data Network, acquires Data.world
- ServiceNow, UKG integrate AI agents across platforms
- ServiceNow launches ServiceNow CRM: Aims to redefine category with platform, AI, workflows
- ServiceNow makes its CRM ambitions crystal clear
In the second quarter, ServiceNow had 89 transactions of more than $1 million in annual contract value and ended the quarter with more than 528 customers with more than $5 million in ACV.
As for the outlook, ServiceNow projected subscription revenue growth between 20% and 20.5% in the third quarter. For 2025, ServiceNow projected revenue growth of 20%.
On a conference call with analysts, McDermott said:
- "Enterprises in every industry and every region of the world have AI transformation as priority number one, I see budgets are highly resilient and increasingly focused on strategic, mission critical AI."
- "We run the real risk of a new generation of teams, this time with AI agents scattered around like spare parts. We have no intention, ladies and gentlemen, of allowing that to happen."
- ServiceNow is focusing on deploying its engineering teams to get customers live quickly.
- Data Fabric was included in 17 of ServiceNow's top 20 largest deals.
- "All of our workflows are growing, especially CRM front office workflows. The CRM opportunity for ServiceNow could render traditional CRM obsolete. We secured several notable wins with strong momentum."
Separately, ServiceNow said it launched an extension to its AI agent orchestration platform so enterprises can better manage digital workers. The extension aims to enable AI agents to learn from past experiences, curtail sprawl and optimize processes and provisioning.
In addition, ServiceNow said it would partner with CapZone Impact Investments to develop a national network of digital tools for manufacturing facilities.
