ServiceNow maintains structural resilience with gross margins consistently between 75.1% and 80.0% over the last ten quarters, even as revenue growth remains strong at 22.1% in 2026Q1.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Jun'11 | Jun'10 |
|---|
| Sales/Revenue | 13.96B | 13.28B | 10.98B | 8.97B | 7.25B | 5.9B | 4.52B | 3.46B | 2.61B | 1.93B | 1.39B | 1.01B | 682.56M | 424.65M | 243.71M | 92.64M | 43.33M |
| Revenue Growth % | 21.72% | 20.88% | 22.44% | 23.82% | 22.88% | 30.46% | 30.6% | 32.64% | 34.96% | 39.02% | 38.29% | 47.31% | 60.74% | 74.24% | 163.07% | 113.81% | - |
| Cost of Goods Sold | 3.27B | 2.98B | 2.29B | 1.92B | 1.57B | 1.35B | 987.11M | 796.64M | 622.66M | 499.77M | 398.68M | 329.41M | 248.78M | 155.26M | 104.01M | 31.57M | 16.19M |
| COGS % of Revenue | - | 22.47% | 20.82% | 21.41% | 21.71% | 22.95% | 21.84% | 23.02% | 23.87% | 25.85% | 28.67% | 32.76% | 36.45% | 36.56% | 42.68% | 34.08% | 37.37% |
| Gross Profit | 10.69B | 10.29B | 8.7B | 7.05B | 5.67B | 4.54B | 3.53B | 2.66B | 1.99B | 1.43B | 991.83M | 676.07M | 433.79M | 269.39M | 139.7M | 61.07M | 27.14M |
| Gross Margin % | 76.56% | 77.53% | 79.18% | 78.59% | 78.29% | 77.05% | 78.16% | 76.98% | 76.13% | 74.15% | 71.33% | 67.24% | 63.55% | 63.44% | 57.32% | 65.92% | 62.63% |
| Gross Profit Growth % | - | 18.37% | 23.36% | 24.29% | 24.85% | 28.61% | 32.61% | 34.12% | 38.58% | 44.51% | 46.71% | 55.85% | 61.03% | 92.83% | 128.77% | 125.01% | - |
| Operating Expenses | 8.81B | 8.47B | 7.33B | 6.29B | 5.32B | 4.29B | 3.33B | 2.62B | 2.03B | 1.53B | 1.14B | 842.43M | 585.62M | 335.66M | 177.29M | 50.51M | 55.34M |
| OpEx % of Revenue | - | 63.8% | 66.76% | 70.09% | 73.39% | 72.69% | 73.76% | 75.76% | 77.76% | 79.39% | 82.32% | 83.78% | 85.8% | 79.04% | 72.74% | 54.52% | 127.72% |
| Selling, General & Admin | 5.73B | 5.51B | 4.79B | 4.16B | 3.55B | 2.89B | 2.31B | 1.87B | 1.5B | 1.16B | 859.4M | 625.04M | 437.36M | 256.98M | 137.95M | 43.5M | 48.14M |
| SG&A % of Revenue | - | 41.5% | 43.61% | 46.42% | 48.99% | 49% | 51.09% | 54.13% | 57.46% | 59.86% | 61.8% | 62.16% | 64.08% | 60.52% | 56.61% | 46.96% | 111.11% |
| Research & Development | 3.08B | 2.96B | 2.54B | 2.12B | 1.77B | 1.4B | 1.02B | 748.37M | 529.5M | 377.52M | 285.24M | 217.39M | 148.26M | 78.68M | 39.33M | 7M | 7.19M |
| R&D % of Revenue | - | 22.29% | 23.15% | 23.68% | 24.4% | 23.69% | 22.66% | 21.63% | 20.3% | 19.53% | 20.51% | 21.62% | 21.72% | 18.53% | 16.14% | 7.56% | 16.6% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 3.53M | -341K | 244K | 251K | -350K | -100K | 0 | 0 | 0 | 0 |
| Operating Income | 1.88B | 1.82B | 1.36B | 762M | 355M | 257M | 198.86M | 42M | -42.43M | -101.41M | -422.81M | -166.37M | -151.84M | -66.27M | -37.58M | 10.56M | -28.2M |
| Operating Margin % | 13.44% | 13.74% | 12.42% | 8.49% | 4.9% | 4.36% | 4.4% | 1.21% | -1.63% | -5.25% | -30.41% | -16.55% | -22.24% | -15.61% | -15.42% | 11.4% | -65.08% |
| Operating Income Growth % | - | 33.72% | 79% | 114.65% | 38.13% | 29.23% | 373.48% | 199% | 58.17% | 76.01% | -154.14% | -9.57% | -129.13% | -76.32% | -455.91% | 137.45% | - |
| EBITDA | 2.71B | 2.56B | 1.83B | 1.32B | 697M | 729M | 469.86M | 244.5M | 105.77M | 11.49M | -339.73M | -106.01M | -109.78M | -42.12M | -24.08M | 12.03M | -27.83M |
| EBITDA Margin % | 19.43% | 19.3% | 16.65% | 14.76% | 9.62% | 12.36% | 10.4% | 7.07% | 4.05% | 0.59% | -24.43% | -10.54% | -16.08% | -9.92% | -9.88% | 12.99% | -64.23% |
| EBITDA Growth % | 32.16% | 40.08% | 38.14% | 89.96% | -4.39% | 55.15% | 92.17% | 131.15% | 820.89% | 103.38% | -220.47% | 3.43% | -160.66% | -74.91% | -300.12% | 143.23% | - |
| D&A (Non-Cash Add-back) | 836M | 738M | 465M | 562M | 342M | 472M | 271M | 202.5M | 148.2M | 112.9M | 83.08M | 60.36M | 42.06M | 24.15M | 13.51M | 1.47M | 369K |
| EBIT | 2.22B | 2.26B | 1.76B | 1.03B | 426M | 257M | 183M | 100.47M | 13.71M | -62.78M | -378.93M | -163.58M | -148.04M | -67.89M | -35.98M | 0 | 10.56M |
| Net Interest Income | 412M | 451M | 396M | 278M | 55M | -8M | 6.74M | 22.13M | -18.11M | -36.29M | -24.75M | -26.35M | -26.09M | 0 | 1.6M | 0 | 606K |
| Interest Income | 424M | 451M | 419M | 302M | 82M | 20M | 39M | 55.41M | 56.13M | 5.8M | 8.53M | 4.75M | 2.96M | 865K | 351K | 0 | 606K |
| Interest Expense | 12M | 0 | 23M | 24M | 27M | 28M | 33M | 33.28M | 52.73M | 53.39M | 33.28M | 31.1M | 29.06M | 4.93M | 0 | 0 | 0 |
| Other Income/Expense | 503M | 437M | 374M | 246M | 44M | -8M | -49M | 25M | 3.4M | -49.01M | -28.25M | -26.65M | -23.7M | -4.93M | 1.6M | 606K | -1.23M |
| Pretax Income | 2.38B | 2.26B | 1.74B | 1.01B | 399M | 249M | 150M | 67.19M | -39.02M | -149M | -450.05M | -193.01M | -175.54M | -71.2M | -35.98M | 11.17M | -29.43M |
| Pretax Margin % | 17.04% | 17.03% | 15.82% | 11.24% | 5.51% | 4.22% | 3.32% | 1.94% | -1.5% | -7.71% | -32.37% | -19.2% | -25.72% | -16.77% | -14.76% | 12.05% | -67.91% |
| Income Tax | 622M | 513M | 313M | -723M | 74M | 19M | 31M | -559.51M | -12.32M | 126K | 1.75M | 5.41M | 3.85M | 2.51M | 1.37M | 1.34M | 280K |
| Effective Tax Rate % | 26.15% | 22.69% | 18.01% | -71.73% | 18.55% | 7.63% | 20.67% | -832.79% | 31.57% | -0.08% | -0.39% | -2.81% | -2.19% | -3.53% | -3.8% | 11.96% | -0.95% |
| Net Income | 1.76B | 1.75B | 1.43B | 1.73B | 325M | 230M | 119M | 626.7M | -26.7M | -149.13M | -451.8M | -198.43M | -179.39M | -73.71M | -37.35M | 9.83M | -29.7M |
| Net Margin % | 12.59% | 13.16% | 12.97% | 19.3% | 4.49% | 3.9% | 2.63% | 18.11% | -1.02% | -7.71% | -32.49% | -19.73% | -26.28% | -17.36% | -15.32% | 10.61% | -68.56% |
| Net Income Growth % | 14.24% | 22.67% | -17.68% | 432.62% | 41.3% | 93.28% | -81.01% | 2446.83% | 82.09% | 66.99% | -127.69% | -10.61% | -143.38% | -97.35% | -479.94% | 133.09% | - |
| Net Income (Continuing) | 1.76B | 1.75B | 1.43B | 1.73B | 325M | 230M | 119M | 626.7M | -26.7M | -116.85M | -451.8M | -198.43M | -179.39M | -73.71M | -37.35M | 9.83M | 9.83M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 1.69 | 1.67 | 1.37 | 1.68 | 0.32 | 0.23 | 0.12 | 0.64 | -0.03 | -0.17 | -0.55 | -0.25 | -0.25 | -0.11 | -0.06 | 0.02 | -0.05 |
| EPS Growth % | 14.13% | 21.9% | -18.45% | 425% | 39.13% | 91.67% | -81.13% | 2220% | 82.76% | 68.36% | -116.54% | -3.25% | -127.78% | -86.21% | -434.49% | 134.68% | - |
| EPS (Basic) | - | 1.69 | 1.38 | 1.70 | 0.32 | 0.23 | 0.12 | 0.67 | -0.03 | -0.17 | -0.55 | -0.25 | -0.25 | -0.11 | -0.06 | 0.02 | -0.05 |
| Diluted Shares Outstanding | 1.04B | 1.05B | 1.04B | 1.03B | 1.02B | 1.02B | 1.01B | 986.12M | 889.23M | 855.88M | 822.67M | 778.53M | 726.78M | 677.08M | 634.46M | 567.15M | 601.5M |
| Basic Shares Outstanding | 1.04B | 1.04B | 1.03B | 1.02B | 1.01B | 990.47M | 965.48M | 932.33M | 889.23M | 855.88M | 822.67M | 778.53M | 726.78M | 677.08M | 634.46M | 567.15M | 601.5M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
High stock-based compensation dilution
As reported in recent financial statements, ServiceNow has maintained a steady revenue growth trajectory, achieving a 22.1% year-over-year increase in 2026Q1, which suggests that the company's platform-based land-and-expand strategy remains effective at capturing incremental enterprise spend despite the firm's increasingly large revenue base.
The consistent top-line performance indicates that the company is successfully navigating the transition from a specialized IT service management provider to a broader enterprise workflow platform. Investors should monitor whether this growth rate can be sustained as the company faces tougher year-over-year comparisons and potential saturation in its core IT markets.
According to the provided income statement data, ServiceNow has sustained gross margins in the 75% to 80% range over the last ten quarters, reflecting the inherent scalability of its cloud-native architecture and strong pricing power within the enterprise software ecosystem.
The slight compression in gross margins observed in 2026Q1 compared to historical peaks may suggest rising compute costs associated with the integration of generative AI features. This warrants further investigation into whether the company can maintain these premium margins as it scales its AI-powered Pro Plus tiers.
Based on the company's reported figures, stock-based compensation remains a significant non-cash expense, reaching $547 million in 2026Q1, which creates a meaningful divergence between GAAP net income and the underlying cash-generative capacity of the business model.
The persistent reliance on equity-based incentives suggests that a substantial portion of shareholder value is being redirected toward employee retention. Analysts should consider the dilutive impact of these grants when evaluating the true quality of earnings and the sustainability of EPS growth.
As indicated by the income statement, the company continues to prioritize market share expansion, with SG&A expenses reaching $1.5 billion in 2026Q1, a trend that appears to reflect ongoing heavy investment in direct sales force capacity and partner ecosystem development.
The high level of operating expenditure relative to gross profit suggests that management is not yet optimizing for maximum bottom-line profitability. This strategy may indicate a belief that capturing market share now is more critical than immediate margin expansion, though it leaves the firm vulnerable to shifts in enterprise IT budgets.
Quick answers to the most common questions about buying NOW stock.
For fiscal year 2025, ServiceNow, Inc. (NOW) reported total revenue of $13.28B. This represents a 30544.6% increase compared to $43.3M in 2010.
ServiceNow, Inc. (NOW) is profitable, generating $1.75B in net income for the fiscal year ending 2025 with a net profit margin of 13.2%.
ServiceNow, Inc. (NOW) reported an operating income of $1.82B, resulting in an operating profit margin of 13.7%. This margin reflects the operational efficiency of the business before interest and taxes.
ServiceNow, Inc. (NOW) generated $10.29B in gross profit for the year, representing a gross profit margin of 77.5%. This demonstrates the company's core pricing power and production efficiency.