ServiceNow(US:NOW)2025-10-29 23:03Financial Performance - As of September 30, 2025, the remaining performance obligations (RPO) amounted to $24.3 billion, with 47% representing current remaining performance obligations (cRPO), reflecting increases of 24% and 21% respectively compared to September 30, 2024[112]. - Free cash flow for the nine months ended September 30, 2025, was $2.604 billion, a 27% increase from $2.055 billion in the same period of 2024[114]. - Non-GAAP income from operations for the three months ended September 30, 2025, was $1.140 billion, representing a 31% increase from $872 million in the same period of 2024[117]. - Non-GAAP consolidated income from operations for the nine months ended September 30, 2025, was $3.048 billion, a 28% increase from $2.383 billion in the same period of 2024[117]. - Total revenues reached $3,407 million (22% increase) and $9,710 million (21% increase) for the three and nine months ended September 30, 2025, compared to the same periods in 2024[130]. Revenue Breakdown - Subscription revenues increased by $584 million (22%) and $1,637 million (21%) for the three and nine months ended September 30, 2025, compared to the same periods in 2024, driven by increased purchases by new and existing customers[130]. - Professional services and other revenues increased by $26 million (32%) and $46 million (19%) for the three and nine months ended September 30, 2025, respectively, due to an increase in services and training provided[132]. - The gross profit percentage for subscription revenues was 80% for the three and nine months ended September 30, 2025, down from 82% in the same periods in 2024[136]. Customer Metrics - The number of customers with annual contract value (ACV) greater than $5 million increased to 553 as of September 30, 2025, up from 469 in the same period of 2024[113]. - The renewal rate was 97% for the three months ended September 30, 2025, and 98% for the nine months ended September 30, 2025, consistent with the same periods in 2024[117]. - Revenues outside North America represented 37% of total revenues for both Q3 2025 and the nine months ended September 30, 2025, compared to 36% and 37% in the same periods of 2024[150]. Expenses and Costs - Cost of subscription revenues increased by $170 million (34%) and $446 million (32%) for the three and nine months ended September 30, 2025, primarily due to increased headcount and costs to support subscription growth[134]. - Sales and marketing expenses rose by $112 million (12%) and $411 million (15%) for the three and nine months ended September 30, 2025, primarily due to increased personnel-related costs[140]. - Research and development expenses increased by $124 million (20%) and $312 million (17%) for the three and nine months ended September 30, 2025, primarily due to increased headcount[142]. - General and administrative (G&A) expenses increased by $30 million (13%) for Q3 2025 and $76 million (11%) for the nine months ended September 30, 2025, compared to the same periods in 2024, primarily due to increased headcount and personnel-related costs[146]. - Stock-based compensation rose by $66 million (15%) for Q3 2025 and $169 million (13%) for the nine months ended September 30, 2025, driven by additional grants to employees[148]. Cash Flow and Investments - Net cash provided by operating activities was $3,206 million for the nine months ended September 30, 2025, compared to $2,632 million in 2024, reflecting higher collections driven by revenue growth[166]. - Net cash used in investing activities decreased to $1,191 million for the nine months ended September 30, 2025, from $1,763 million in 2024, primarily due to a decrease in net purchases of marketable securities[167]. - Net cash used in financing activities increased to $1,601 million for the nine months ended September 30, 2025, compared to $872 million in 2024, mainly due to increased repurchases of common stock[168]. - As of September 30, 2025, the company had cash and cash equivalents, marketable securities, and long-term marketable securities totaling $9.7 billion[158]. Market and Economic Conditions - The company has not experienced any impact on liquidity or financial condition due to recent macroeconomic events, maintaining a diversified cash and cash equivalents portfolio[109]. - The company is closely monitoring ongoing geopolitical conflicts, which are not expected to materially impact business operations at this time[107]. - There have been no material changes in market risk compared to the previous disclosures in the Annual Report on Form 10-K for the year ended December 31, 2024[170].