Enterprise software maker ServiceNow reported second-quarter earnings and revenue that topped consensus estimates while guidance came in above views. ServiceNow stock popped on the news.
Reported after the market close on Wednesday, ServiceNow earnings for the quarter ending June 30 rose over 30% to $4.09 per share on an adjusted basis. Revenue climbed more than 22% to $3.215 billion, the Santa Clara, Calif.-based company said.
ServiceNow stock analysts had expected the company to report earnings of $3.57 a share on revenue of $3.12 billion. The company said subscription revenue rose more than 22% to $3.11 billion versus estimates of $3.03 billion.
"ServiceNow delivered a solid quarter and outlook, surpassing what was a high bar of investor expectations in our view for Q2," said RBC Capital analyst Matthew Hedberg in a report.
ServiceNow Stock: Strong Q3 Guidance
The company's current remaining performance obligations, or CRPO, rose 24% to $10.92 billion. Analysts had projected CRPO of $10.49 billion.
CRPO bookings are an aggregate of deferred revenue and order backlog and serve as a sales growth metric.
Meanwhile, ServiceNow said it had 89 transactions over $1 million in net new annual contract value in Q2. As of June 30, the software maker had 528 customers with more than $5 million in annual contract value, up over 19% from a year earlier.
For the current quarter ending in September, ServiceNow forecast subscription revenue in a range of $3.26 billion to $3.265 billion, topping estimates of $3.21 billion. Also, ServiceNow said it expects CRPO growth of 18.5% versus estimates of 18% growth to $10.89 billion.
ServiceNow's AI Push
"Our beat-and-raise quarter showcases the mission-critical nature of the ServiceNow AI Platform," said Chief Executive CEO Bill McDermott in a news release. "Every business process in every industry is being refactored for agentic AI. ServiceNow has never been more differentiated as a full stack agentic operating system for the enterprise."
ServiceNow and other software makers are rolling out autonomous, goal-driven AI "agents" that complete tasks on their own.
On the stock market today, ServiceNow stock climbed more than 6% to 1,020 in extended trading.
Heading into the ServiceNow earnings report, the software stock had retreated 8% in 2025.
The company's software tracks and manages services provided by information-technology departments. Also, its self-service tech portal enables company employees to access administrative and workflow tools.
Further, ServiceNow has expanded from its core business into software for human resources, customer service management and security. Also, ServiceNow recently has pushed into "front office" software (customer service, field service and supply chain management).
In March, ServiceNow agreed to buy artificial intelligence software maker Moveworks for $2.85 billion, marking its biggest acquisition ever. Moveworks' platform features a generative AI assistant for employee support.
Coming into the ServiceNow earnings report, the software stock had an IBD Composite Rating of 95 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
