ServiceNow, Inc. stock research
FY2025 Q1
ServiceNow (NOW) Gross Margin — Quarter Ended Mar 31, 2025
Revenue, gross profit, and cost of revenue all increased compared to the prior quarter and the same quarter last year. Gross margin improved slightly from the prior quarter but weakened relative to the same quarter a year ago.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue, gross profit, and cost of revenue all increased compared to the prior quarter and the same quarter last year. Gross margin improved slightly from the prior quarter but weakened relative to the same quarter a year ago.
- The gross margin improved sequentially as revenue grew more than cost of revenue, but weakened year-over-year as cost of revenue grew more than revenue.
- Revenue, gross profit, and cost of revenue each increased from the prior quarter and from the same quarter a year ago. The gross margin was slightly higher than the prior quarter but lower than the year-ago quarter.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
78.9%
Gross profit
$2.4B
Revenue
$3.1B
Cost of revenue
$651.0M
Quarter-over-quarter change
+0.3 pts
Year-over-year change
-1.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2024 | $2.6B | $2.1B | $552.0M | 79.0% |
| Sep 30, 2024 | $2.8B | $2.2B | $584.0M | 79.1% |
| Dec 31, 2024 | $3.0B | $2.3B | $631.0M | 78.7% |
| Mar 31, 2025 | $3.1B | $2.4B | $651.0M | 78.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
+0.3 pts
Year-over-year change
Mar 31, 2024
-1.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The gross margin improved sequentially as revenue grew more than cost of revenue, but weakened year-over-year as cost of revenue grew more than revenue.
Revenue, gross profit, and cost of revenue each increased from the prior quarter and from the same quarter a year ago. The gross margin was slightly higher than the prior quarter but lower than the year-ago quarter.
Monitor the trend of cost of revenue relative to revenue, as the year-over-year decline in gross margin indicates a shift in their growth relationship.