ServiceNow Inc logo on phone-by viewimage via Shutterstock
ServiceNow (NOW) continues to deliver impressive growth. The provider of cloud-based solutions for digitizing and managing enterprise workflows is witnessing strong demand for its artificial intelligence (AI) and customer relationship management (CRM) offerings, which is translating into a growing customer base with larger annual contract values (ACVs).
Yet, despite these strong fundamentals, ServiceNow stock has underperformed broader market indexes this year and remains in the red. This disconnect presents a buying opportunity. The market appears to be overlooking the company’s solid long-term prospects. For instance, its customer growth remains strong, retention rates are high, and current remaining performance obligations (cRPO) — a key metric for future revenue growth — are on the rise.
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Most notably, demand for ServiceNow’s AI-powered platform continues to accelerate, reflecting broader enterprise adoption trends in intelligent workflow automation. Moreover, internally, AI efficiencies are helping the company drive margin expansion.
The strong demand is translating into solid financial performance. In Q2 2025, its subscription revenue rose 21.5% year-over-year to $3.113 billion, while total RPO grew 25.5% year-over-year to nearly $24 billion. The cRPO reached $10.92 billion, up 21.5% in constant currency.
The company also achieved a 98% renewal rate, reflecting the significance of its platform for digital transformation. By the end of Q2, ServiceNow had 528 customers generating over $5 million in ACV, and the number of clients contributing $20 million or more jumped by over 30% year-over-year. The quarter also saw the company close 89 net new ACV deals exceeding $1 million, including 11 deals topping $5 million. Notably, every one of its top 20 deals included five or more products, showcasing growing adoption of multiple products, which will drive average revenue per customer and customer retention.
ServiceNow’s CRM business…
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