"Speaking on an analyst call, she said demand from federal agencies was strong and growing, however, the shutdown was not reflected in the results so far. "90 days ago the government was not shut down," she said. "We absolutely have factored in a bit more prudence into this guide because - as much as I would like to say I know how to forecast when the government is going to reopen - I just don't. Procurement processes do take a bit of time.""
"She said the timing of government deals was the question, not whether they would take place, "because demand is healthy, strong and the opportunity for us in federal space, and more broadly state and local government, remains stronger than ever." Questioned on why guidance on subscription revenue growth did not seem to match the current remaining performance obligations - the value of contracts signed but not recognized - overall, Mastantuono said the public sector performance was factored in."
ServiceNow posted $3.4 billion in calendar Q3 revenue, a 22% year‑on‑year increase, and recorded a 33.5% operating margin, three percentage points above expectations. Subscription revenue surpassed analyst forecasts and supported an increase in full‑year guidance. CFO Gina Mastantuono said demand from federal agencies is strong and growing but that the federal government shutdown has not yet affected reported results; the company added prudence to guidance because procurement timing could be delayed. The firm expects healthy demand across federal, state and local government. CEO Bill McDermott said roughly 90% of IT, customer service and HR processes are now being performed by AI agents to augment people.
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