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1. Company Snapshot

1.a. Company Description

ServiceNow, Inc.provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide.It operates the Now platform for workflow automation, artificial intelligence, machine learning, robotic process automation, performance analytics, electronic service catalogs and portals, configuration management systems, data benchmarking, encryption, and collaboration and development tools.


The company also provides information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; IT business management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT Asset Management to automate IT asset lifecycles; and security operations that connects with internal and third party.In addition, it offers governance, risk, and compliance product to manage risk and resilience; human resources, legal, and workplace service delivery products; safe workplace applications; customer service management product; and field service management applications.Further, it provides App Engine product; IntegrationHub enables application to extend workflows; and professional, industry solutions, and customer support services.


It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through direct sales team and resale partners.It has a strategic partnership with Celonis to help customers identify and prioritize processes that are suitable for automation.The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc.


in May 2012.The company was founded in 2004 and is headquartered in Santa Clara, California.

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1.b. Last Insights on NOW

ServiceNow's recent performance has been impacted by concerns over high valuation, increasing competition in AI workflows, and dependence on enterprise IT expenditures. The company's AI-driven growth rebounded to 22% YoY, but investors are cautious due to broader macroeconomic challenges. Shaker Investments reduced its position in the company by 2,910 shares, an estimated $2.72 million trade. Despite strong fundamentals and a maturing SaaS profile, the stock faces challenges. (Source: Shaker Investments SEC filing, ServiceNow: A Defensive Tech Play With AI-Driven Growth Revival)

1.c. Company Highlights

2. ServiceNow's Q3 2025 Earnings: A Stellar Performance

ServiceNow's third-quarter 2025 earnings report was nothing short of exceptional, with subscription revenues reaching $3.299 billion, growing 20.5% year-over-year in constant currency, 100 basis points above the high end of guidance. The operating margin was 33.5%, 3 full points above guidance, while EPS came in at $4.82, beating estimates of $4.26. The company's financial performance was characterized by strong growth, with cRPO increasing by 20.5% year-over-year in constant currency, 2.5 points above guidance.

Publication Date: Oct -31

📋 Highlights
  • Subscription Revenue Growth:: 20.5% YoY, 100 bps above guidance, reaching $3.299B in Q3.
  • AI Product Momentum:: On track for $500M+ ACV in 2025 (up from $1B target in 2026), with AI Control Tower deal volume up 4x QoQ.
  • Large Deal Wins:: 103 net new ACV deals >$1M, including 6 >$10M, with 6/15 top deals in cRPO growth.
  • Margin Expansion:: Operating margin hit 33.5% (300 bps above guidance), with full-year margin guidance raised to 31%.
  • 2025 Guidance:: Subscription revenue midpoint raised to $12.84B (20.5% growth), with full-year cRPO growth at 23% YoY.

Revenue Growth and Operating Margin Expansion

The revenue growth was driven by the company's robust platform, with 103 deals greater than $1 million in net new ACV, including 3 deals over $20 million. The renewal rate remained strong at 97%. As Gina Mastantuono mentioned, the team proactively pulled some of the renewal cohort into Q3, providing strong momentum heading into Q4. The operating margin expansion was a result of AI-driven operational efficiencies, with the company raising its full-year operating margin target by 50 basis points to 31%.

AI-Driven Growth and Industry-Specific Solutions

ServiceNow's AI products are on pace to exceed $0.5 billion in ACV this year, with the company tracking ahead of its goal to reach $1 billion in AI revenue next year. The AI control tower has been gaining traction, with customers looking for a way to manage and govern their AI initiatives. Amit Zavery discussed the importance of industry-specific solutions, citing examples such as Ulta Beauty and AstraZeneca. The company's unified architecture provides a single governance framework for AI, addressing security, compliance, and ethics.

Valuation Metrics and Future Outlook

With a P/E Ratio of 112.31 and an EV/EBITDA of 67.35, the market is pricing in significant growth expectations. Analysts estimate next year's revenue growth at 18.8%. Given the company's strong performance and growth prospects, the current valuation multiples appear justified. However, investors should continue to monitor the company's ability to sustain its growth momentum and expand its operating margin.

3. NewsRoom

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NOW's Veza Buyout Expands Portfolio: What's Ahead for the Stock?

Dec -04

Source: zacks.com

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Anthropic Engineers Reveal AI Is Transforming Workflows, Killing Mentorship, Sparking Fears Of Becoming 'Irrelevant' In AI Era

Dec -03

Source: feeds.benzinga.com

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Checkmate in the Cloud: ServiceNow's Shopping Spree

Dec -02

Source: marketbeat.com

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ServiceNow to Expand Security Portfolio With Acquisition of Veza's Leading AI-native Identity Security Platform

Dec -02

Source: businesswire.com

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Vbrick Unveils Integration with ServiceNow to Power Generative AI via Video Content

Dec -02

Source: businesswire.com

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Wedbush Analyst Unveils Bold AI Picks -- Tech Stocks Could Jump 20% in 2026

Dec -02

Source: gurufocus.com

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G vs. NOW: Which Stock Should Value Investors Buy Now?

Dec -01

Source: zacks.com

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Live Nasdaq Composite: Stocks Start December on Sour Note as Tech Retreats

Dec -01

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.40%)

6. Segments

Internet Software & Services

Expected Growth: 25.4%

Growing adoption of digital transformation and hybrid IT environments fuels demand for ServiceNow's cloud-based solutions, driving growth in the enterprise IT management and operations segment.

7. Detailed Products

IT Service Management (ITSM)

A comprehensive platform for managing IT services, including incident, problem, and change management.

IT Operations Management (ITOM)

A suite of tools for monitoring, managing, and optimizing IT infrastructure and applications.

IT Business Management (ITBM)

A platform for managing IT projects, portfolios, and resources, enabling strategic IT planning and execution.

Customer Service Management (CSM)

A comprehensive platform for managing customer service requests, issues, and feedback.

Security Operations (SecOps)

A suite of tools for detecting, responding to, and preventing security threats and vulnerabilities.

GRC (Governance, Risk, and Compliance)

A platform for managing risk, compliance, and audit processes, ensuring organizational governance and regulatory adherence.

HR Service Delivery (HRSD)

A platform for managing HR services, including employee onboarding, case management, and knowledge management.

Field Service Management (FSM)

A platform for managing field service operations, including scheduling, dispatch, and work order management.

8. ServiceNow, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ServiceNow's platform is highly customizable and integrated, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative IT service management solutions, ServiceNow's strong brand and customer loyalty mitigate this power.

Bargaining Power Of Suppliers

ServiceNow has a diverse supplier base, and the company's scale and bargaining power reduce the influence of individual suppliers.

Threat Of New Entrants

While new entrants may emerge, ServiceNow's established brand, customer base, and high barriers to entry make it challenging for new competitors to gain traction.

Intensity Of Rivalry

The IT service management market is highly competitive, with established players like BMC, CA Technologies, and IBM, as well as newer entrants, contributing to a high level of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.04%
Debt Cost 3.95%
Equity Weight 76.96%
Equity Cost 8.81%
WACC 7.69%
Leverage 29.94%

11. Quality Control: ServiceNow, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Intuit

A-Score: 5.5/10

Value: 1.2

Growth: 8.2

Quality: 8.6

Yield: 1.0

Momentum: 6.5

Volatility: 7.7

1-Year Total Return ->

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Salesforce

A-Score: 5.0/10

Value: 2.2

Growth: 8.9

Quality: 8.4

Yield: 1.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

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Cadence Design Systems

A-Score: 4.9/10

Value: 0.0

Growth: 7.3

Quality: 8.4

Yield: 0.0

Momentum: 8.0

Volatility: 5.7

1-Year Total Return ->

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AppLovin

A-Score: 4.9/10

Value: 0.0

Growth: 9.7

Quality: 8.0

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

1-Year Total Return ->

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Stock-Card
ServiceNow

A-Score: 4.6/10

Value: 0.0

Growth: 9.1

Quality: 8.0

Yield: 0.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

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FICO

A-Score: 4.0/10

Value: 2.0

Growth: 8.1

Quality: 7.6

Yield: 0.0

Momentum: 2.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

838.87$

Current Price

838.87$

Potential

-0.00%

Expected Cash-Flows