Home / Business and Economy / ServiceNow Shares Slide 5% Despite Robust Q3 Earnings
ServiceNow Shares Slide 5% Despite Robust Q3 Earnings
13 Nov
Summary
- ServiceNow's Q3 2025 revenue grew 21.8%, beating estimates
- Adjusted EPS grew nearly 30%, exceeding forecasts by 13%
- Margins expanded significantly, aided by AI-driven cost savings
As of November 13, 2025, tech giant ServiceNow (NYSE: NOW) has seen its shares decline 5% since reporting better-than-expected Q3 2025 earnings on October 29. The company's revenue grew 21.8% (20.5% in constant currency) to around $3.41 billion, slightly exceeding analyst forecasts of 19.8% growth. Adjusted earnings per share (EPS) surged nearly 30%, beating estimates by 61 cents or 13%.
Notably, ServiceNow's margins expanded significantly during the quarter. Operating margin increased by 180 basis points to 16.8%, while adjusted operating margin rose 230 basis points to 33.5%, exceeding the company's own guidance by 300 basis points. Additionally, free cash flow (FCF) grew 26%, outpacing revenue growth, with a 50-basis-point expansion in adjusted FCF margin to 17.5%.
Driving this margin improvement is ServiceNow's use of artificial intelligence (AI) to drive operational expense efficiency and lower costs. The company says it is leveraging AI to improve its operations and boost profitability, a key factor behind its bullish outlook.
Despite the stock's decline, sell-side Wall Street analysts remain optimistic about ServiceNow's prospects. They are forecasting significant upside for the company's shares going forward, citing its strong financial performance and the positive impact of AI on its business.
