ServiceNow Inc Q1 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Keith Weiss - Morgan Stanley - Analyst : Thank you, guys, for taking the questions and congratulations on a really solid quarter. And it really seems to be an uncertain environment out there. Definitely a lot of uncertainty in the market that we're looking at. And we hear a lot of that from our end customers. Gina, maybe for you. When you were thinking about your guidance, you talked to us a lot about the federal side of the equation, so big opportunity there, maybe taking a little bit of the risk off the table, what are you seeing in your enterprise customers? Is there any delay in decision-making, any elongation in the sales cycle? And have you put any of that potential risk into the guidance on a go-forward basis? Thank you.

Question: Keith Weiss - Morgan Stanley - Analyst : Excellent, thanks.

Question: Kash Rangan - Goldman Sachs - Analyst : Hi, thank you very much and congrats on the quarter as well. Just when I look at Moveworks, what does that technology allow ServiceNow to execute on that you couldn't do with the platform? And then if I could follow up, how is the sales playbook changing, particularly at time when the end customers are going through different kind of who knows if the tariffs are going to be implemented or not, but there are more variables at play with respect to your end customers' business outcomes. So how is the ServiceNow playbook changing for that word? Thank you so much.

Question: Kash Rangan - Goldman Sachs - Analyst : Great to hear that very reassuring. Thanks so much.

Question: Mark Murphy - JPMorgan - Analyst : Thank you very much, and congrats on just superb execution. Bill, I wanted to ask you how grand are your aspirations in the front office market because you're speaking to just a huge threat of capabilities. You mentioned configure, price, quote, sell, fulfill and service in one platform. And that doesn't sound completely like you want to be out on the periphery of the CRM market, it sounds a little closer to the core or the system of record. So can you speak to that CRM plan and just whether it is kind of a wider scope than maybe you have deployed in other areas?

Question: Keith Bachman - BMO Capital Markets - Analyst : Yes, many thanks, and I'll also offer my congratulations on the quarter. I wanted to jump back to public sector, if I could. And a, could you just clarify when you said public sector grew 30%. Was that ACV billings revenues? And then, b, more importantly, what is reflected in the guidance for the year? I know, Bill, you had characterized it as being a tremendous longer opportunity. I certainly agree. But how are you thinking about public sector within the context of the guidance you provided versus the 30%. For instance, did you include some deal elongations perhaps not closing deals, but just any maybe context on the guidance versus public sector. Many thanks.

Question: Keith Bachman - BMO Capital Markets - Analyst : Perfect. Many thanks, Bill, and thank you.

Question: Alex Zukin - Wolfe Research - Analyst : Hey, guys, thanks for taking the question. I guess maybe, Bill, for you, it's the first time that tech workflows dipped below 50% in the quarter and quite extraordinary that I think CRM and industry jumped up to 34%. How do you see those two trending as the year progresses, given the incremental focus? And when CRM is part of these deals, how much bigger do they get? And if I can sneak one in for Gina. Manufacturing and federal clearly exceeded everyone's expectations, obviously, including ours. Did you feel as though there was any meaningful pull-forward activity or early renewals here to get in front of uncertainty from certain customers that may have amplified that CRPO strength?

Question: Alex Zukin - Wolfe Research - Analyst : Sounds amazing. Can't wait to see you guys at Knowledge.

Question: Karl Keirstead - UBS Securities LLC - Analyst : Thank you. Gina, you've been, I think, refreshingly candid with all of us about the shape of the short-term backlog growth throughout the year, calling for a trough in 3Q and then an acceleration in 4Q. I'm just curious whether all of this macro change and uncertainty in the last couple of months would have changed your view of that bookings, CRPO seasonality? Thank you.

Question: Karl Keirstead - UBS Securities LLC - Analyst : Okay, good. Thank you.

Question: Michael Turrin - Wells Fargo Securities, LLC - Analyst : Hey. Thanks much. Appreciate you taking the question and nice start to the year. Gina, you also mentioned AI driving meaningful OpEx efficiencies. I'm just curious if you could speak to those a bit more and whether that gives you more confidence in the ability to continue to expand margin in an uncertain environment. Maybe just help frame those trade-offs for us a bit more given the still fluid backdrop. Thank you.

Question: Michael Turrin - Wells Fargo Securities, LLC - Analyst : Thanks very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 9:00PM, NOW.N - Q1 2025 ServiceNow Inc Earnings Call

Question: Samad Samana - Jefferies - Analyst : Hi, good evening. Thanks for taking my questions, and congrats to the whole organization on the quarter. Maybe just Bill or Amit, I think this is for either one of you. Just as I think about Moveworks. It's a relatively large acquisition. I know it's still small versus how big ServiceNow is and then the Logik acquisition, is the framework still going to be as you do larger deals to still rewrite them into the code base, or is there any change in maybe the -- not just the size or scale of M&A, but the approach of how it will ultimately be incorporated into ServiceNow?

Question: Samad Samana - Jefferies - Analyst : Appreciate it. Thank you.

Question: Raimo Lenschow - Barclays - Analyst : Thank you, and congrats from me as well. Going back to that mix effect question on where revenue is going or where our revenue is coming from. Is there also like an argument that with agentic and more easier ROI use cases straightaway in CRM and the business workflows that you kind of mix will change from that perspective? And where do you -- could you see that going? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 9:00PM, NOW.N - Q1 2025 ServiceNow Inc Earnings Call

Question: Raimo Lenschow - Barclays - Analyst : Yeah, that makes sense. Thank you.

Question: Patrick Walravens - Citizens JMP - Analyst : Great. Thank you very much, and congratulations on a fully remarkable results. Bill, investors, there's a lot of debate about how AI might be disintermediating Software as a Service, and you were there for the last shift from on-prem to the cloud, and that shift created ServiceNow and Salesforce and Workday. How do you look at this shift? How do you think it's similar and how do you think it might be different?

Question: Patrick Walravens - Citizens JMP - Analyst : That's awesome. Thank you for that perspective.

Question: Kirk Materne - Evercore ISI - Analyst : Thanks. I'll echo the congrats on the quarter. I was wondering, can you just talk a little bit about the customer feedback on the agentic technologies that you released under Yokohama thus far? And specifically, just on the consumption pricing aspect of that. I was just kind of curious what kind of -- I realize it's early, but I was curious about the feedback. And how customers are thinking about sort of the pricing for value aspect of that? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 9:00PM, NOW.N - Q1 2025 ServiceNow Inc Earnings Call

Question: Kirk Materne - Evercore ISI - Analyst : Thanks, Amit. Looking forward to seeing you in Vegas.

Question: Rob Owens - Piper Sandler - Analyst : Great. I appreciate you taking my questions. Just curious to get a little bit of color around impact guided adoption and what that attach rate looks like and some of the various errors you have in your quiver to speed time to value, especially in this environment. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 23, 2025 / 9:00PM, NOW.N - Q1 2025 ServiceNow Inc Earnings Call

Question: Brian Schwartz - Oppenheimer - Analyst : Yeah. Thank you for taking my question, and congratulations on the quarter. Bill, you've seen a lot of macro disruptions over the course of your career, and you also sold a lot of different software products similar to the broth of ServiceNow's portfolio. When you talk to executives, how do you think focus and priorities within the different software markets is changing versus past macro disruptions? Thanks.

Question: Brad Sills - BofA Global Research - Analyst : Okay. Thank you so much for squeezing me in here. I wanted to ask a question around the deployment cycle for agents. You're obviously seeing the benefit from Now Assist agents internally with some of the metrics you described. Very impressive. What does it take for you to get there? Is it a question of getting the data, is it a place where it's all standardized and data management and data integration is really where a lot of the effort is. Is it more at the orchestration layer. Just give us a sense for the time line for getting, say, a single agent out that you experienced internally? And then once that's done, is it a question of just rinse and repeat and you start to really start to see some of the scale of getting more agents out.

Question: Brad Sills - BofA Global Research - Analyst : Super exciting. Thanks, Bill. Thanks, Amit.