The leaves are changing colors across many parts of the world, but some things, like ServiceNow's continued evolution, don't seem to be changing much at all.
Look, we're not going to pretend we're surprised by today's announcement. But, in an ever-unpredictable market, ServiceNow's Q3 2025 results exceeded all expectations and demonstrate how enterprise AI has moved from pilot programs to production operations.
Plus, the company exceeded guidance across all financial metrics while announcing platform capabilities that reshape how organizations should think about digital transformation. Here's why:
Financial Performance
ServiceNow reported subscription revenue of $3.299 billion for the quarter ending September 30, 2025, representing 21.5% year-over-year growth. Total revenue reached $3.407 billion, up 22% from the prior year.
The company's current remaining performance obligations (cRPO) grew to $11.35 billion, a 21% increase, while total RPO expanded 24% to $24.3 billion. ServiceNow closed 103 transactions exceeding $1 million in net new annual contract value and now serves 553 customers with more than $5 million in ACV, an 18% year-over-year increase.
Free cash flow margin is expected to expand by 250 basis points year-over-year, demonstrating operational efficiency at scale.
“This outstanding Q3 performance is the clearest demonstration yet that ServiceNow is the AI platform for business transformation,” said Bill McDermott, ServiceNow Chairman and CEO. “Every enterprise in every industry is focused on AI as the innovation opportunity of our generation. Leaders work with ServiceNow because they trust this proven platform as the core of their technology estate for decades to come. From autonomous workflows to AI-driven CRM, ServiceNow is putting AI to work for people, driving massive value creation for customers and shareholders.”
Platform Evolution
The quarter introduced several technical capabilities that define ServiceNow's direction, including but not limited to:
- AI Experience provides a multimodal, context-aware interface that integrates people, data, and workflows with embedded governance and security controls.
- The Zurich Release delivers multi-agentic development tools, natural language coding capabilities (described by ServiceNow as "vibe" coding), and autonomous workflow orchestration.
These releases signal ServiceNow's architectural shift toward agentic systems capable of handling complex, multi-step business processes without continuous human intervention.
Ecosystem Expansion
ServiceNow established several strategic relationships during Q3. The OneGov agreement with the U.S. General Services Administration extends the platform into federal operations. A partnership with NVIDIA advances Apriel 2.0, ServiceNow's AI reasoning framework. The FedEx Dataworks collaboration brings AI-driven orchestration to supply chain operations.
The company also announced equity investments in Zaelab and Genesys, expanding its presence in commerce and customer experience platforms.
On the talent and infrastructure front, ServiceNow committed to an AI Institute in West Palm Beach, projected to create 850 jobs and generate $1.8 billion in economic impact. In Brazil, a nationwide AI skills program, led by SENAI-SP, addresses workforce development at scale.
The CoreX Perspective
Rick Wright, CEO of CoreX, offered context on the announcement: "ServiceNow's Q3 results validate what we've observed with clients over the past 18 months. AI capabilities are delivering measurable ROI when they're implemented with disciplined execution and clear success criteria. The challenge for most organizations is connecting platform innovation to operational reality."
Wright also noted the strategic window: "Enterprises that reevaluate their ServiceNow architecture to enable agentic workflows now will establish a significant competitive advantage. Those who treat AI as an add-on to existing processes will see marginal returns. The gap between these two approaches widens with each release."
What This Means for Enterprise Strategy
Organizations evaluating or expanding ServiceNow implementations will likely want to focus on three areas:
- Platform architecture: The continued shift to agentic AI necessitates the integration of data fabrics and workflow designs that support autonomous operations. Legacy configurations built for human-mediated processes will limit AI capability.
- Measurement frameworks: Traditional IT metrics like ticket volume and SLA compliance do not capture the value of AI-driven automation. Organizations need to establish productivity, experience, and outcome velocity metrics.
- Consumption models: ServiceNow's evolution suggests a move toward usage-based pricing tied to AI activation and business value delivery. Budget planning should account for this shift.
Looking Forward
ServiceNow announced a five-for-one stock split pending shareholder approval in December. The company raised full-year guidance for subscription revenue, operating margin, and free cash flow.
For organizations in the ServiceNow ecosystem, Q3 2025 marks a clear transition point. The platform's capabilities now support true autonomous operations. But will enterprise implementations evolve at the same pace?
We suppose we'll have more of those answers when the year-end earnings are announced early next year.
