ServiceNow has reported robust financial performance for the first quarter of 2025, posting a 19% year-over-year increase in subscription revenues to $3.005 billion, or 20% in constant currency.
Total revenues increased by 18.5% to $3.088 billion, meeting expectations and surpassing all of the top four Indian IT firms, including TCS, Infosys, HCLTech, and Wipro, in their Q4 FY25 reports released this fortnight.
In a powerful Q1 analyst call, ServiceNow CEO Bill McDermott left no doubt about where the company sees its future: enterprise AI.
Throughout a wide-ranging call covering financial performance, strategic acquisitions, and government engagement, AI remained the unifying thread, driving both narrative and numbers.
According to McDermott, the number of Pro Plus deals, which include Now Assist AI products, quadrupled year-over-year, with 39 deals featuring three or more Now Assist products. Moreover, deal sizes grew by one-third quarter-over-quarter, and 15 of the top 20 deals included Pro Plus products.
“We are leading the AI race because we ourselves are running it,” McDermott declared.
Overall remaining performance obligations increased by 25% to $22.1 billion. The company closed 72 transactions over $1 million in net new annual contract value (ACV) and now counts 508 customers with more than $5 million in ACV, reflecting 20% year-over-year growth.
“Q1 was a quarter of great execution in a dynamic market,” said Gina Mastantuono, president and CFO of ServiceNow. “Our use of AI internally also continues to drive meaningful opex efficiencies, yielding strong profitability and free cash flow. In times of uncertainty, customers focus on maximising ROI and reducing costs.”
ServiceNow further expanded its AI footprint this quarter, with Pro Plus deals—its AI-powered offering featuring Now Assist—more than quadrupling compared to the same period last year.
Looking ahead, the company expects Q2 subscription revenue between $3.03 billion and $3.035 billion, representing 19.5% growth, which is substantially ahead of the growth reported by Indian IT firms in their results over the fortnight.
ServiceNow also raised its full-year 2025 guidance for subscription revenue to a range of $12.64 billion to $12.68 billion, projecting 19.5% growth in constant currency.
AI Takes the Lead
“Pro Plus adoption has accelerated, with customers using Now Assist to improve efficiency,” said Amit Zavery, president, COO and CPO at ServiceNow. He emphasised that Pro Plus is now a cornerstone of ServiceNow’s growth strategy, driven by demand for AI agentic capabilities.
During the quarter, ServiceNow announced major strategic moves, including the acquisitions of Moveworks, known for its front-end AI assistant and enterprise search technology, and Logik.ai, which offers AI-powered CPQ solutions. These moves are aimed at enhancing its AI and CRM offerings.
Adding to this momentum, RaptorDB, ServiceNow’s AI-first database designed for next-generation workloads, reported a net new ACV acceleration with five deals exceeding $1 million. McDermott emphasised that this data platform is their “next-generation database for the AI world”.
AI’s utility wasn’t just theoretical. McDermott shared how a US auto manufacturer is using ServiceNow’s AI agents to reconfigure supply chain rules in real-time, helping avoid up to $10,000 in cost increases per vehicle due to tariffs.
In product innovation, the company launched several agentic AI solutions, including AI Agent Studio and AI Agent Orchestrator, enabling customers to build and deploy specialised AI agents across domains such as CRM, HR, and IT.
The Yokohama platform update further expanded these capabilities with improved workflow and performance tools. New telecom-specific AI agents, powered by NVIDIA AI, are also being introduced to improve customer service and network operations.
The India Factor
In a previous interaction with AIM, Paul Smith, president of global customer and field operations at ServiceNow, stated that the rise of agentic AI is generating not just curiosity or anticipation, but real and measurable impact across organisations.
Smith took BT, the telecom giant partially owned by Airtel, as an example, and explained that by leveraging ServiceNow’s Now Assist platform, the company has managed to resolve customer service calls 55% faster.
Internally, ServiceNow has fully embraced AI. The company currently runs over 200 agentic use cases in production, generating $325 million in annual savings.
In India, ServiceNow has significantly expanded its presence. “One in five of all ServiceNow employees is based in India. And 85% of the resources that we have in ServiceNow India are in R&D and engineering roles—especially core engineering,” Smith said.
He went on to highlight that a significant number of these engineers are working on cutting-edge research around AI, underlining India’s role in building the future of enterprise automation.
In earlier conversations, Sumeet Mathur, who leads the India business for ServiceNow, reinforced this trajectory. Mathur said that there is an enormous appetite among Indian firms to partner with ServiceNow, not just because of the tech, but because of the one platform, one architecture, and one data model.