NOW

ServiceNow, Inc.

Next est. report 2026-11-04 · AMC

AI '25: Apps & Edge Deployment AI Short '26: AI-Obsolete Software Business Services '26: AI Governance, Trust & Compliance Business Services '26: Agentic Systems of Action Data Owners '25: Enterprise Workflow Data Software '26: Legal Tech

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Overview

ServiceNow, Inc. provides cloud-based solutions to automate business services for global organizations. Its "Now Platform" uses AI and workflow automation acros

ServiceNow, Inc. provides cloud-based solutions to automate business services for global organizations. Its "Now Platform" uses AI and workflow automation across IT, HR, customer service, and security. Serving diverse sectors like government and financial services, it sells via direct sales and partners. Cybersecurity is a $1B+ business and CRM a $2B ACV business, both growing rapidly, driven by AI-native offerings and new product-led motions.

What They Do (Plain English & Analogies): ServiceNow acts like a central operating system for businesses, helping them automate and manage all sorts of work, from fixing computer problems to handling customer requests and securing their digital systems. Think of it as the 'ERP for IT' or the 'workhorse for workflow' for an entire company. It uses advanced technologies like artificial intelligence (AI) to make these processes smarter and faster, connecting different systems and people so that tasks get done smoothly and efficiently. They essentially provide an 'AI control tower' for all business operations, especially with the rise of AI agents, ensuring everything runs in an organized, governed, and secure way, rather than in chaos.
Very Brief History: ServiceNow, Inc. was established in 2004, initially operating under the name Service-now.com. The company rebranded to ServiceNow, Inc. in May 2012. Since then, it has grown to specialize in delivering cloud-based solutions that streamline and automate critical business services for organizations globally.
"Street Stereotype": The street stereotype for ServiceNow often involves a perception of it as a solid, established enterprise software platform, particularly strong in IT Service Management. However, in the current environment of rapid AI innovation, there's some 'AI anxiety' or 'uncertainty' among investors, with questions about the pace of its AI monetization and whether it can keep up with pure-play AI companies or hyperscalers. Bill McDermott addresses this by emphasizing ServiceNow's deep, contextual AI capabilities built over 22 years, differentiating it from 'sidecar AI' or simple 'one-touch buttons' from language model companies. The company is seen as a 'weighing machine' in the long run, delivering predictable growth and expanding margins, rather than a 'voting machine' swayed by short-term hype.
Subsidiaries On Linked In*: Moveworks — Acquired and merged with ServiceNow's employee experience business, rebranded as Employee Works.; LinkedIn: moveworks
Armis — Acquired, significantly expanding ServiceNow's security business.; LinkedIn: armis-security
Veza — Acquired, focusing on identity governance and access management.; LinkedIn: veza-inc
Pyramid Analytics — A smaller acquisition mentioned in previous context, not explicitly in this transcript.; LinkedIn: pyramid-analytics
ServiceNow Japan GK — Local operating entity in Japan.; LinkedIn: servicenow-japan-gk
Customer Sectors & Example Clients: ServiceNow's diverse client base spans critical sectors including government, financial services, healthcare, telecommunications, manufacturing, and education, alongside various IT services, technology, oil and gas, and consumer product industries. Specific examples mentioned in the earnings call include the Department of Air Force, Experian, Maybank (Malaysia's largest bank), the U.S. federal government's largest IT contractors and agencies, Hitachi, the City of Raleigh, a large global consumer good company (like Unilever), a leading global food and beverage company (like Coca-Cola), and a large airline. Existing knowledge also mentions a multi-market European telco, a global power technology leader across 190 countries, a regional Latin American bank, Robin Hood, and a British engineering and technology company with 45,000 employees across 50 countries.
New Customers / Segments They'Re Targeting: ServiceNow is targeting new customer segments by expanding its total addressable market (TAM) with AI-native products. They are introducing a new product-led motion targeting the 'Fortune 500,000' with a conversational service desk experience and AI-coded automation, aiming to replace legacy offerings and bypass startups. The company is also seeing significant growth in first-time ServiceNow Agentic AI buyers, with deal volume growing over 45% year-over-year. Additionally, the integration of Armis is helping them expand their reach into the Top 2000 and beyond for asset discovery and security.
Supply Chain And Sourcing Geographies: The provided transcript and existing information do not detail ServiceNow's specific supply chain or sourcing geographies for its software products. As a cloud-based software company, its 'supply chain' primarily involves data centers and network infrastructure, which are globally distributed. Specific sourcing locations for components or services are not disclosed.
Sales Geographies And Expansion Plans: ServiceNow has a global sales presence, serving customers in various regions including the U.S. (Department of Air Force, U.S. federal government, City of Raleigh), Europe (multi-market European telco), Asia (Maybank in Malaysia, Hitachi), and North America (North American automotive marketplace, North American telecom infrastructure provider, regional financial institution). The company utilizes a direct sales force and a network of resale partners. Management indicates plans for continued global expansion, particularly with the integration of Armis into the Top 2000 and beyond, and by expanding its addressable customer base in the mid-market.
How Key Themes May Help/Hurt: The 'Software '26: Legal Tech' theme may significantly help ServiceNow. The company's 'Legal Service Delivery' module is capturing the 'Legal Ops' trend within the Fortune 500, providing exposure to how corporate general counsels manage internal legal workflows. ServiceNow's strong emphasis on AI governance, trust, and compliance, with AI, data, security, and governance built into every product, directly supports the need for 'fiduciary-grade AI' in legal tech, ensuring auditable and compliant AI solutions for high-stakes legal work. The increasing regulatory complexity, such as the EU AI Act and US state-level AI regulations, will drive demand for specialized legal tech solutions that automate compliance, risk management, and governance, areas where ServiceNow's AI control tower and workflow automation capabilities are highly relevant.

3 Main Long-Term Bull Details

AI Control Tower and Context Engine: ServiceNow's 'AI control tower for business reinvention' and its unique 'context engine,' built on decades of enterprise workflow data (processing billions of workflows and trillions of transactions), provide a defensible moat for managing autonomous agents and human workflows across complex enterprises. This enables trusted, auditable actions and outcomes, driving significant value for customers.
Rapidly Growing Cybersecurity Business: ServiceNow has become a multi-billion dollar cybersecurity business, growing faster than other top cyber companies. The integration of Armis and Veza, combined with its core platform, creates a highly integrated, end-to-end security platform across asset visibility, identity governance, risk, and incident response, addressing the exploding attack surface in the AI era.
Accelerated AI Monetization and Platform Adoption: ServiceNow is rapidly accelerating its AI monetization, with AI ACV exceeding $1 billion and on track to beat its $1.5 billion target by the end of 2026. The introduction of new AI-native products, including a conversational service desk experience, and the significant increase in customers with agentic AI in production (9x over the last 9 months), demonstrate strong customer adoption and a clear path to sustained growth and margin expansion.

3 Main Long-Term Bear Details

Pace of AI Monetization vs. Market Expectations: Despite strong AI traction, there's a risk that the pace of AI innovation and customer adoption may not meet aggressive market expectations, leading to perceived slower monetization compared to pure-play AI labs. Investors are looking for clear acceleration in organic growth driven by AI, and any perceived delay could temper enthusiasm.
Competitive Pressure and Hyperscaler Bundling: ServiceNow faces intense competitive pressure from hyperscalers bundling AI and data tools, as well as emerging open-source solutions. While ServiceNow emphasizes its open platform and integration, the risk remains that larger, integrated platforms could commoditize certain features or create pricing pressure.
Operational Complexity and Adoption Hurdles: Deploying and managing agentic AI at scale introduces significant operational complexities for enterprises. Customers may struggle with implementation, integration, and fully realizing the value of new AI features, potentially leading to 'agentic overhead' or 'sticker shock' from consumption-based AI pricing, which could slow widespread adoption.

Competitors And Differentiation: ServiceNow operates in a competitive landscape with established enterprise software companies and new AI participants. They differentiate themselves by positioning their 'Now Platform' as the 'AI control tower for business reinvention' and the 'rules and rails of the enterprise.' Key differentiators include: a system of record with deep enterprise context from billions of workflows and trillions of transactions, fully integrated governance and auditability for AI, a proven global distribution channel, and a flexible hybrid pricing model. They emphasize their platform's ability to integrate with all players (hyperscalers, frontier models, data lakes, systems of record) and enable AI to take deterministic action, not just provide advice. In cybersecurity, they are building the world's most integrated end-to-end security platform across cyber, risk and compliance, agentic incident response, exposure management, identity and access security (with Veza), cyber physical security, and continuous vulnerability detection (with Armis).
Recent Performance & What The Market'S Focused On: ServiceNow reported strong Q2 2026 results, beating Wall Street expectations across top-line and profitability metrics. Subscription revenue grew 23% year-over-year in constant currency, 1.5 points above guidance, reaching $3.877 billion. Current Remaining Performance Obligations (cRPO) grew 21.5% in constant currency, more than 2 points above guidance. Non-GAAP operating margin was 29.5%, 3 points above guidance. ServiceNow AI ACV exceeded $1 billion, keeping the company on track to beat its $1.5 billion target by the end of 2026. The company raised its full-year 2026 subscription revenue guidance to $15.755 billion to $15.770 billion. The market is focused on the accelerating AI adoption, the strong growth of the cybersecurity business, and the continued expansion of operating margins and free cash flow, despite some short-term timing effects in U.S. federal government revenue.

Revenue Segments And Estimated Mix: Subscription Revenue — Mix: Largest segment, primary revenue driver; Source: Q2 2026 Earnings Transcript; Trend: Grew 23% year-over-year in constant currency in Q2 2026. Full-year 2026 guidance raised to $15.755 billion to $15.770 billion, representing 21% year-over-year growth in constant currency.
Technology Workflows (including ITSM, ITOM) — Mix: Significant contributor; Source: Q2 2026 Earnings Transcript; Trend: Had 50 deals over $1 million, including 9 over $5 million. ITSM was in 15 of top 20 deals. ITOM had an outstanding quarter in 18 of top 20 deals with 14 deals over $1 million.
Security and Risk Solutions — Mix: Fastest-growing segment; Source: Q2 2026 Earnings Transcript; Trend: Was in 16 of top 20 deals with 24 deals over $1 million. Fastest-growing of the top 10 cyber companies in the enterprise.
CRM and Industry Workflows — Mix: Growing rapidly; Source: Q2 2026 Earnings Transcript; Trend: Was in 16 of top 20 deals with 15 over $1 million, driven by sustained momentum in CPQ and sales and order management. $2 billion ACV business, with NNA CV growth accelerating year-over-year and quarter-over-quarter.
Core Business Workflows (including Employee Works) — Mix: Strong demand; Source: Q2 2026 Earnings Transcript; Trend: Had 12 deals in the top 20 with 24 deals over $1 million, driven by strong demand for Employee Works.
Creative Workflows — Mix: Strong demand; Source: Q2 2026 Earnings Transcript; Trend: Had 18 deals in the top 20 with 14 over $1 million.
Professional Services and Other — Mix: Smaller segment; Source: Company Description, Q2 2026 Earnings Transcript; Trend: Experienced sharper margin compression.
Product Brands: Now Platform
IT Service Management (ITSM)
IT Business Management (ITBM)
IT Operations Management (ITOM)
IT Asset Management (ITAM)
Security Operations
Governance, Risk, and Compliance (GRC)
Human Resources (HR)
Legal Service Delivery
Workplace Service Delivery
Customer Service Management (CSM)
Field Service Management (FSM)
App Engine
IntegrationHub
Now Assist
Employee Works
AI Control Tower
Raptor DB Pro
AI specialists
Action Fabric
Context Engine
Autonomous Data Analytics
Conversational Service Desk Experience
AI coded automation
Project Arc
Open Shell run time

Bull / Bear Details

ServiceNow maintains a bullish investment case, driven by accelerating AI monetization and its unique 'AI control tower' vision. Strong Q2 2026 results, includi

Thesis

ServiceNow maintains a bullish investment case, driven by accelerating AI monetization and its unique 'AI control tower' vision. Strong Q2 2026 results, including subscription revenue and CRPO beats, validate its differentiated platform. The company's rapidly growing $1B+ cybersecurity business and expanding CRM offerings, powered by AI-native solutions and strategic acquisitions, position it for sustained growth and margin expansion, despite ongoing market uncertainties. (Updated: 2026-07-23)

Bull case

ServiceNow is rapidly accelerating its AI monetization, with AI ACV exceeding $1 billion and on track to surpass its $1.5 billion target by year-end 2026. The percentage of renewal customers purchasing agentic AI doubled quarter-over-quarter and year-over-year, with customers in production growing 9x in 9 months. New AI-native SKUs are driving significant price uplift of 20-30%.
The company is emerging as a cybersecurity market leader, with its $1 billion plus cybersecurity business growing faster than other top cyber companies. ServiceNow is building the world's most integrated end-to-end security platform, leveraging its AI control tower, Armis, and Veza to provide comprehensive visibility, governance, and actionability across the enterprise.
ServiceNow demonstrates broad platform strength and financial discipline. Its CRM business is now a $2 billion ACV business with accelerating growth, and Employee Works deal volume grew over 150% quarter-over-quarter. Strong Q2 performance, including operating margin 300 basis points above guidance, and a raised full-year revenue outlook, underscore its ability to drive world-class growth and profitability.

Bear case

Despite strong AI adoption metrics, customers still exhibit 'AI anxiety' and confusion regarding consistent, widespread implementation and proving ROI across all enterprise AI initiatives. While ServiceNow's deterministic approach helps, the broader challenge of innovation outpacing customer readiness could still temper market enthusiasm or delay the full value realization of advanced AI capabilities.
The agentic orchestration space remains competitive and noisy, with hyperscalers bundling AI and data tools. While ServiceNow emphasizes its open platform and differentiation, intense competition could lead to pricing pressure or challenges in maintaining clear market leadership against larger, integrated players, especially as AI models become more commoditized.
Macroeconomic and geopolitical factors continue to present headwinds. Although Q2 saw strong U.S. federal demand, some on-premise revenue shifted from Q3 to Q2, and management maintains a 'conservative prudent guide' for the back half of the year. This suggests ongoing vulnerability to regional instability and broader market uncertainties impacting customer spending decisions.

Bull / Bear Case

Bear Case: Despite strong AI adoption metrics, customers still exhibit 'AI anxiety' and confusion regarding consistent, widespread implementation and proving ROI across all enterprise AI initiatives. The broader challenge of innovation outpacing customer readiness could temper market enthusiasm or delay the full value realization of advanced AI capabilities. The agentic orchestration space remains competitive and noisy, with hyperscalers bundling AI and data tools. While ServiceNow emphasizes its open platform and differentiation, intense competition could lead to pricing pressure or challenges in maintaining clear market leadership against larger, integrated players, especially as AI models become more commoditized. Macroeconomic and geopolitical factors continue to present headwinds, with management maintaining a 'conservative prudent guide' for the back half of the year, suggesting ongoing vulnerability to regional instability and broader market uncertainties impacting customer spending decisions. Short-term gross margin pressure from hyperscaler partnerships and AI adoption is also noted.
Bull Case: ServiceNow is rapidly accelerating its AI monetization, with AI ACV exceeding $1 billion and on track to surpass its $1.5 billion target by year-end 2026. The percentage of renewal customers purchasing agentic AI doubled quarter-over-quarter and year-over-year, with customers in production growing 9x in 9 months. New AI-native SKUs are driving significant price uplift of 20-30%. The company is emerging as a cybersecurity market leader, with its $1 billion plus cybersecurity business growing faster than other top cyber companies. ServiceNow is building the world's most integrated end-to-end security platform, leveraging its AI control tower, Armis, and Veza. ServiceNow demonstrates broad platform strength and financial discipline, with its CRM business now a $2 billion ACV business with accelerating growth. Strong Q2 performance, including operating margin 300 basis points above guidance, and a raised full-year revenue outlook, underscore its ability to drive world-class growth and profitability towards a "Rule of 60" by 2030.
More Compelling & Why: Bull. Despite a high P/E ratio of 56.0x compared to the industry average, ServiceNow's Free Cash Flow (FCF) Yield of 4.37% is significantly above its 10-year median of 1.65% and the software industry median of 0.91%. This indicates strong cash generation relative to its market capitalization, suggesting the stock is undervalued based on its cash-generating ability and robust growth in AI and cybersecurity. The strongest argument is the company's accelerating AI monetization, with AI ACV exceeding $1 billion and customers with agentic AI in production growing 9x in 9 months, alongside its rapidly expanding $1B+ cybersecurity business. My view would flip if FCF growth decelerated significantly below subscription revenue growth, or if the FCF yield compressed without a corresponding increase in other profitability metrics.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Cybersecurity Business Growth and AI Control Tower Traction	ServiceNow's cybersecurity business, now a $1 billion+ ACV business and growing rapidly, represents a significant new growth vector and a key differentiator for its AI Control Tower vision, addressing critical enterprise security needs.	Management commentary on the growth rate of the cybersecurity business (risk and study business) and specific examples of AI Control Tower adoption and impact in future earnings calls.	Continued commentary indicating the cybersecurity business is the 'fastest-growing of the top 10 cyber companies' and increasing traction of the AI Control Tower with new customer wins and partner ecosystem expansion would be bullish.	ServiceNow's Q3 and Q4 2026 earnings releases and conference calls. Cybersecurity industry reports (e.g., Gartner, Forrester) mentioning ServiceNow's market share or growth.	Google Trends: 'ServiceNow cybersecurity,' 'Armis,' 'Veza,' 'AI Control Tower' search volume trends. USASpending.gov: Government contract awards for 'ServiceNow' and 'cybersecurity' (filter by agency/contract type).	Thinknum: Job postings for 'Cybersecurity Specialist' or 'Security Operations Engineer' at ServiceNow (30-day growth). Cybersecurity market intelligence reports (e.g., IDC, Gartner).
Non-GAAP Operating Margin and Free Cash Flow Margin Performance	Consistent margin performance, especially while integrating acquisitions and investing in AI, demonstrates strong financial discipline and the company's ability to drive profitability and shareholder value.	Q3 2026 operating margin against 31% guidance, and full-year 2026 operating margin against 31.5% and free cash flow margin against 35% guidance.	Q3 2026 operating margin meeting or exceeding 31%, and full-year operating margin meeting or exceeding 31.5% and free cash flow margin meeting or exceeding 35% would be bullish signals.	ServiceNow's Q3 2026 earnings release and conference call (expected late October/early November 2026).
ServiceNow AI ACV and Agentic AI Adoption Acceleration	Rapid growth in AI ACV and increasing adoption of agentic AI validate ServiceNow's AI strategy, expand its total addressable market, and are crucial for future consumption-based revenue and market leadership.	Progress towards exceeding the $1.5 billion AI ACV target by the end of 2026. Continued growth in the number of customers with agentic AI in production and deal volume among first-time agentic AI buyers.	AI ACV exceeding $1.5 billion by year-end 2026, or sustained sequential acceleration in agentic AI customer adoption (e.g., >9x growth over 9 months) and first-time buyer deal volume (>45% YoY) would be bullish.	ServiceNow's Q3 and Q4 2026 earnings releases and conference calls. Company press releases on new AI product launches and customer wins.	Google Trends: 'ServiceNow AI,' 'Now Assist,' 'Agentic AI,' 'AI Control Tower' search volume trends. ServiceNow blog posts and customer success stories.	Thinknum: Job postings at ServiceNow for 'AI Specialist,' 'Agentic AI Engineer' (30-day growth). Similarweb: Web traffic to ServiceNow's AI product pages.
Current Remaining Performance Obligations (cRPO) Growth in Constant Currency	cRPO is a strong forward-looking indicator of future subscription revenue, reflecting committed customer contracts. Its growth signals robust future revenue visibility and sustained demand for ServiceNow's platform.	Q3 2026 cRPO constant currency growth against the company's guidance of 20%.	Q3 2026 cRPO constant currency growth exceeding 20% would be a bullish signal for sustained revenue growth.	ServiceNow's Q3 2026 earnings release and conference call (expected late October/early November 2026).
Large Deal Closings and Product Attach Rates	A high volume of large deals and increasing product attach rates demonstrate strong customer consolidation on the ServiceNow platform, expanding wallet share, and the success of cross-sell strategies across multiple workflows.	Number of deals greater than $1 million in net new ACV in Q3 2026. Percentage of top deals including 8 or more products.	Q3 2026 deals >$1 million NNACV showing continued strong YoY growth (e.g., >40% YoY as seen in Q2) and top deals consistently including 8+ products would be bullish indicators of market penetration and expansion.	ServiceNow's Q3 2026 earnings release and conference call.		Deal intelligence platforms (e.g., DealFront, Crunchbase Enterprise): Track large enterprise software deals involving ServiceNow.

Key Reported Metrics, Reratings Triggers & Results3 rows

This metric highlights the accelerating adoption and monetization of ServiceNow's AI-native platform. Strong growth in multi-product AI deals signals successful

Key reported metrics
Metric	Last period	Why it matters
ServiceNow AI Deals (5+ products) Growth	450%	This metric highlights the accelerating adoption and monetization of ServiceNow's AI-native platform. Strong growth in multi-product AI deals signals successful integration and customer value realization.
Current Remaining Performance Obligations (cRPO) Growth (Constant Currency)	21.5%	cRPO is a strong forward-looking indicator of future subscription revenue, reflecting committed customer contracts. Its growth signals robust future revenue visibility and sustained demand for ServiceNow's platform.
Subscription Revenue (Constant Currency)	23%	This is a core top-line metric, indicating the health and growth of ServiceNow's recurring revenue base. Investors closely watch this for sustained expansion and the impact of AI-native offerings.

Key Questions

Will ServiceNow sustain and further accelerate the adoption and monetization of its AI-native platform, particularly with agentic AI and new AI-native SKUs, to

Will ServiceNow sustain and further accelerate the adoption and monetization of its AI-native platform, particularly with agentic AI and new AI-native SKUs, to drive continued outperformance against its $1.5 billion AI ACV target for 2026?

Question 2: Can ServiceNow effectively leverage its expanded cybersecurity portfolio (including Armis and Veza) to gain significant market share and accelerate its growth trajectory, solidifying its position as a cybersecurity market leader as projected by management?
Question 3: Will ServiceNow successfully manage the short-term gross margin pressures from hyperscaler partnerships and AI adoption, while continuing to expand operating and free cash flow margins towards its 'Rule of 60' target, demonstrating financial discipline amidst aggressive growth and acquisition integration?

Earnings Transcript Summary2 rows

2026-07-22 · 2026Q2 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. AI Control Tower and AI-Native Platform for Enterprise Reinvention: Management consistently emphasized ServiceNow's position as the 'AI control tower' for securely deploying AI across the enterprise, offering a governed layer of record and optionality on all AI outcomes. They highlighted the rapid traction of the AI control tower with partners and customers, and the launch of new AI-native products. 2. Cybersecurity Leadership and End-to-End Security Platform: Bill McDermott stressed that ServiceNow is already a $1 billion+ cybersecurity business and is building the world's most integrated end-to-end security platform, integrating Armis and Veza to manage identities and devices, and aiming to contend for the top spot in the cybersecurity market. 3. Accelerating Growth and Expanding Profitability: Management highlighted beating expectations across top-line and profitability metrics, with subscription revenue growth of 23% and operating margin of 29.5%, both above guidance. They reiterated the commitment to scaling operating margins and free cash flow, aiming for the 'rule of 60 and beyond' by 2030.	The overall takeaway from ServiceNow's Q2 2026 earnings call was highly positive and bullish. Management expressed strong confidence in the company's performance, strategic direction, and future growth prospects, particularly driven by its AI-native platform and expanding cybersecurity capabilities. Key themes included the successful monetization and rapid adoption of AI solutions, the strategic importance of the 'AI control tower' for enterprise governance and security, and the company's ability to drive both top-line growth and margin expansion. Despite some questions regarding guidance conservatism and AI pricing, management's responses consistently reinforced a strong market position and differentiated value proposition. The tone was optimistic, emphasizing ServiceNow's role as a defining enterprise software company in the AI era.	In Q1 2026, subscription revenue grew 19% year-over-year in constant currency. Current Remaining Performance Obligations (cRPO) grew 21% year-over-year in constant currency. The Moveworks business (now Employee Works) grew 5x year-over-year. Sales CRM Net New Annual Contract Value (NNACV) grew more than 5x year-over-year. Technology Workflows had 33 deals over $1 million. CRM and Industry Workflows were in 16 of the top 20 deals with 16 over $1 million. Core Business Workflows had 13 deals in the top 20 with 12 over $1 million. Creative Workflows had 16 deals in the Top 20 with 11 over $1 million. Raptor DB Pro deal volume grew 80% year-over-year. The 2026 AI commit target was increased from $1 billion to $1.5 billion.	1. Level 1 ITSM Product Cycle and AI Monetization: Analysts inquired about the performance of the Level 1 ITSM product cycle and how customers increase spending. Management (Amit Zavery and Gina Mastantuono) responded that the Level 1 ITSM product cycle has been very accelerated, with 40+ customers using it, closing 80-85% of service requests without human interaction, and reducing resolution time significantly. They noted that AI ACV crossed $1 billion, tracking ahead of the 30% of ACV by 2030 target, and that AI-native SKUs are driving price uplift in line with the 20-30% framework. 2. Q2 Upside, Federal Outperformance, and Full-Year Guidance Conservatism: Analysts questioned the strong Q2 performance, particularly in the federal sector, and the relatively modest full-year subscription revenue raise. Management (Gina Mastantuono) explained that about half of the Q2 beat was due to a pull-forward of on-premise federal revenue from Q3 to Q2, but also emphasized strong net new ACV. She stated that the full-year guide passed along all net new ACV overachievement but maintained a conservative and prudent outlook for the back half of the year. 3. AI Pricing (Token-Based vs. Outcome-Based) and Competitive Advantage: An analyst asked if ServiceNow's token-based/assist-based pricing introduces pressure compared to competitors offering outcome-based pricing, and about ServiceNow's pricing advantage given its data ownership. Management (Amit Zavery and Gina Mastantuono) clarified that their hybrid pricing structure (license and usage) provides predictability and flexibility, with usage tied to outcomes. They stated that the pricing uplift for Pro Plus SKUs is above 30% and for new AI-native SKUs is 20-30%, indicating customers understand the value. They emphasized that ServiceNow's proprietary context from 7 trillion workflows is a unique differentiator that competitors and LLMs cannot access.	Subscription revenue grew 23% year-over-year in constant currency. Current Remaining Performance Obligations (CRPO) grew 21.5% year-over-year in constant currency. ServiceNow AI ACV exceeded $1 billion, with net new ACV growth accelerating sequentially, growing over 40% quarter-over-quarter. Technology workflows had 50 deals over $1 million. IT Operations Management (ITOM) saw outperformance in Q2 with attach rates to ITSM continuing to rise year-over-year. Security and risk solutions were in 16 of the top 20 deals with 24 deals over $1 million, noted as the fastest-growing of the top 10 cyber companies. CRM and industry workflows were in 16 of the top 20 deals with 15 over $1 million, with NNA CV growth accelerating year-over-year and quarter-over-quarter, and Sales CRM average deal size doubling year-over-year. Core business workflows had 12 deals in the top 20 with 24 deals over $1 million. Creative workflows had 18 deals in the top 20 with 14 over $1 million. From an industry perspective, business and consumer services net new ACV grew over 6x year-over-year, education surpassed 125% growth, and telco and media grew nearly 40% year-over-year. Manufacturing also delivered strong growth. Employee Works deal volume grew over 150% quarter-over-quarter. Raptor DB Pro deal volume grew 80% year-over-year.

2026-04-22 · 2026Q1 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. AI Control Tower for Business Reinvention and AI-Native Platform: Management repeatedly emphasized ServiceNow's strategic positioning as the 'AI control tower for business reinvention' and highlighted that the entire portfolio is now 'AI native,' with AI, data, security, and governance built into every product. They stressed the 'context engine' as a key differentiator for managing agents and workflows. 2. Revenue Growth Acceleration and Margin Expansion: Management consistently focused on accelerating revenue growth, exceeding guidance metrics, and expanding operating margins. They aim for a 'Rule of 55-plus standard' and beyond, while also working to reduce stock-based compensation. 3. Strategic Acquisitions and Ecosystem Expansion: The early close of the Armis acquisition and the successful integration of Moveworks and Veza were highlighted as crucial for expanding ServiceNow's Total Addressable Market (TAM), accelerating subscription revenue, and strengthening the AI control tower vision. They also noted the rapid expansion of their partner ecosystem.	The overall takeaway from the call is that ServiceNow delivered strong first-quarter 2026 results, surpassing its own guidance for top-line and profitability metrics. The company is highly confident and optimistic about its strategic direction, particularly its AI-native platform and the 'AI control tower' vision, which is being significantly bolstered by recent acquisitions like Armis, Moveworks, and Veza. Management emphasized accelerating revenue growth, expanding margins, and a robust partner ecosystem. Despite some geopolitical headwinds and analyst questions regarding the pace of AI monetization, the tone of the call was resolutely positive and bullish, highlighting ServiceNow's differentiated approach to enterprise AI and its strong market position.	For Q4 2025, subscription revenue grew 19.5% year-over-year in constant currency. Current Remaining Performance Obligations (cRPO) grew 21% year-over-year in constant currency.	1. Impact of Middle East Conflict on Q1 Results and Full-Year Guidance: Analysts inquired about the specific impact of the conflict on Q1, particularly regarding delayed on-premise deals, and whether these deferrals would quickly resolve. Management responded that the company 'beat and raised' despite a 'slight impact to the guide' for Q2 due to delayed on-premise sovereign cloud deals, which are recognized all at once. They clarified that the full-year guidance was maintained, and some Q1 deals had already closed in Q2. 2. Clarity on AI Revenue Measurement and Acceleration: Analysts questioned how ServiceNow measures AI revenue, especially with new embedded AI pricing, and when significant AI-driven revenue acceleration would become more apparent. Management disclosed that their 2026 AI commit target increased from $1 billion to $1.5 billion, indicating strong outperformance. They explained that AI capabilities are now integrated into all product tiers, with only the 'incremental assist part' counting towards AI revenue, using a consistent methodology. 3. Risk of Customers Negotiating Down Core ServiceNow Products due to AI Value: An analyst asked if customers might seek discounts on classic ServiceNow products, given the high value derived from new AI features. Management firmly stated that the core business is not being negotiated down; instead, innovation on the platform 'reinvigorates the core,' making the 'system of record for IT' more important than ever due to AI. They added that existing customers receive AI capabilities as part of upgrades, driving modernization rather than discount pressure.	Subscription revenue grew 19% year-over-year in constant currency. Current Remaining Performance Obligations (cRPO) grew 21% year-over-year in constant currency. The Moveworks business grew 5x year-over-year. Sales CRM Net New Annual Contract Value (NNACV) grew more than 5x year-over-year. From an industry perspective, Transportation and Logistics NNACV grew over 280% year-over-year, Financial Services grew over 65% year-over-year, and Energy and Utilities grew over 45% year-over-year.

Transcript Tidbits5 rows

2026-07-22

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
ServiceNow operates in a growing $600 billion plus total addressable market. The acquisition of Armis is expected to significantly expand ServiceNow's TAM and accelerate subscription revenue growth. Armis, which provides real-time agentless discovery of every asset (IT, OT, IoT, medical devices, shadow IT), is already relied upon by 9 out of 10 Fortune 10 companies, and ServiceNow plans to deploy it throughout the Top 2000 and beyond. The company is expanding its opportunity in the mid-market with the enterprise service management foundation, offering deployment in weeks, not months. Moveworks, now integrated into Employee Works, closed more 7-figure deals in Q1 than it did the entire previous year. ServiceNow's sales CRM NNACV quintupled year-over-year, with deal count growing over 80% year-over-year. The company's AI commit for 2026 is now projected to be $1.5 billion, a 50% increase from the initial $1 billion target.	ServiceNow positions itself as the only enterprise AI platform that converts chaos to control, stating they 'would not trade positions with anyone'. The company differentiates its AI-native approach from 'sidecar AI', emphasizing that intelligence is built into every product and package, not bolted onto disconnected systems. Their unified, end-to-end security stack, combining Armis' asset visibility, Veza's identity governance, and ServiceNow's business context, is described as unmatched in the market. While acknowledging that the agentic orchestration space is becoming noisy and competitive, ServiceNow highlights its 22 years of accumulated data, 95 billion workflows, and 7 trillion transactions as a 'context advantage that nobody can match'. The company partners with hyperscalers, language models, and systems of record, even those that compete vigorously, to ensure openness and meet customer needs in a heterogeneous environment.	The broader industry is characterized by 'a lot of noise out there' and persistent speculation about enterprise AI. The complexity of managing code is expected to increase exponentially, with code volume increasing 20x by 2030, leading to a 50x increase in ITSM tickets. Enterprises are 'frantically organizing and cleansing data from countless disparate sources'. The current enterprise environment is described as 'chaos', with hyperscalers, systems of record, foundation models, data lakes, homegrown tools, and agents coming from everywhere. There is a pervasive sense of 'AI anxiety' among investors, with customers hesitant to make larger purchases due to uncertainty about the rapid pace of innovation. While customers are excited about AI, they are 'somewhat confused' about what exactly to do with it. The proliferation of AI across the enterprise is also leading to increasing adoption of Raptor DB Pro.	ServiceNow is on track for its 'best year ever' and sees AI as an unprecedented tailwind. The company's clear goals include fast time to value for customers, revenue growth acceleration, margin expansion, reduced stock-based compensation, and outperforming its 'rule of 55-plus standard'. The five hyper-growth areas (core IT, AI security, AI native CRM, AI native front door/employee experience, and workflow data fabric) are all expected to 'eclipse the size and growth trajectory of ServiceNow as it stands today itself'. ServiceNow aims to be the 'AI defining enterprise software company in the 21st century' and is 'just getting started'. The company is raising its full-year subscription revenue guidance to $15.735 billion to $15.775 billion, representing 20.5% to 21% year-over-year growth in constant currency, including a 125 basis point contribution from Armis. The initial margin headwinds from the Armis acquisition are expected to normalize, with the impact on operating margin reducing to 0 by the end of the year due to internal efficiencies. The company aspires to be a 'Rule of 60 company and beyond' and is working to reduce stock-based compensation into single digits.	Enterprise	Apps & Edge Deployment, AI Governance, Trust & Compliance, Agentic Systems of Action, Legal Tech	There has never been a tailwind for ServiceNow like AI. The company is on track for our best year ever. We're already talking about $1.5 billion now, and it's on a run. Nothing else in the market does this nothing. We are the rules and the rails of business. ServiceNow is the AI defining enterprise software company in the 21st century. This is the chapter that makes everything else look like the preamble. Our own deployment in ServiceNow is resolving 90% of employee IT requests with the specialist resolving assigned cases 99% faster than human agents. We're looking at a company that's a Rule of 60 company and beyond.	There's a lot of noise out there. In the short run, markets of voting machines. And right now, uncertainty is winning the vote. This includes about a 75 basis point headwind from delayed closings of several large on-premise deals in the Middle East due to the ongoing conflict in the region. While we expect some near-term headwinds to margins as we integrate the business this year. The stock is down 12% after hours. So something is not getting through to investors. The problem is they don't exactly know what to do, so they're somewhat confused.	ServiceNow welcomed the Armis and Veza teams to the ServiceNow family, indicating workforce integration from these acquisitions. The company noted that it is able to 'go in a year and exit the year into a new year with the same headcount' despite growth, attributing this to productivity gains from AI. The broader theme of 'Data Owners '25: Enterprise Workflow Data' suggests a shift towards hiring specialized AI/ML Engineers, Prompt Engineers, AI Governance Specialists, and Automation Architects to embed agentic AI and intelligent automation.

2026-07-22

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
ServiceNow operates in a growing $600 billion plus total addressable market. The acquisition of Armis is expected to significantly expand ServiceNow's TAM and accelerate subscription revenue growth. Armis, which provides real-time agentless discovery of every asset, is already relied upon by 9 out of 10 Fortune 10 companies, and ServiceNow plans to deploy it throughout the Top 2000 and beyond. Veza solves identity governance, acting as the active directory for AI agent identities. ServiceNow's sales CRM NNACV grew more than 5x year-over-year, with deal count growing over 80% year-over-year. Moveworks, now integrated into Employee Works, closed more 7-figure deals in Q1 than it did the entire previous year, and that business grew 5x year-over-year. The company is expanding its opportunity in the mid-market with the enterprise service management foundation, offering deployment in weeks, not months. Now Assist continues to outperform expectations, with its 2026 AI commit target now projected to be $1.5 billion, a 50% increase from the initial $1 billion target. AI control tower average deal sizes more than doubled quarter-over-quarter in Q1, and Raptor DB Pro deal volume grew 80% year-over-year in Q1. New logo ACV growth accelerated to over 50% year-over-year in Q1, including the largest net new logo deal ever at over $15 million. Additionally, 50% of net new business now comes from a non-seat-based pricing model, including tokens and other assets.	ServiceNow positions itself as the only enterprise AI platform that converts chaos to control, stating they 'would not trade positions with anyone'. The company differentiates its AI-native approach from 'sidecar AI', emphasizing that intelligence is built into every product and package, not bolted onto disconnected systems. Their unified, end-to-end security stack, combining Armis' asset visibility, Veza's identity governance, and ServiceNow's business context, is described as unmatched in the market. While acknowledging that the agentic orchestration space is becoming noisy and competitive, ServiceNow highlights its 22 years of accumulated data, 95 billion workflows, and 7 trillion transactions as a 'context advantage that nobody can match'. The company partners with hyperscalers, language models, and systems of record, even those that compete vigorously, to ensure openness and meet customer needs in a heterogeneous environment, stating, 'We dare anyone to bring a best solution to the market in ServiceNow'.	The broader industry is characterized by 'a lot of noise out there' and persistent speculation about enterprise AI. The complexity of managing code is expected to increase exponentially, with code volume increasing 20x by 2030, leading to a 50x increase in ITSM tickets. Enterprises are 'frantically organizing and cleansing data from countless disparate sources'. The current enterprise environment is described as 'chaos', with hyperscalers, systems of record, foundation models, data lakes, homegrown tools, and agents coming from everywhere. There is a pervasive sense of 'AI anxiety' among investors, with customers hesitant to make larger purchases due to uncertainty about the rapid pace of innovation. While customers are excited about AI, they are 'somewhat confused' about what exactly to do with it. The #3 economy in the world, cyber crime, is valued at $1 trillion a month. Customers are spending incrementally on AI, not replacing existing spend on ServiceNow.	ServiceNow is on track for its 'best year ever' and sees AI as an unprecedented tailwind. The company's clear goals include fast time to value for customers, revenue growth acceleration, margin expansion, reduced stock-based compensation, and outperforming its 'rule of 55-plus standard'. The five hyper-growth areas (core IT, AI security, AI native CRM, AI native front door/employee experience, and workflow data fabric) are all expected to 'eclipse the size and growth trajectory of ServiceNow as it stands today itself'. The company is raising its full-year subscription revenue guidance to $15.735 billion to $15.775 billion, representing 20.5% to 21% year-over-year growth in constant currency, including a 125 basis point contribution from Armis. Initial margin headwinds from the Armis acquisition are expected to normalize, with the impact on operating margin reducing to 0 by the end of the year due to internal efficiencies. ServiceNow aspires to be a 'Rule of 60 company and beyond' and is working to reduce stock-based compensation into single digits. The company's internal deployment of autonomous workforce agents is resolving 90% of employee IT requests 99% faster than human agents, demonstrating the future direction of AI-driven efficiency.	Legal	Apps & Edge Deployment, AI Governance, Trust & Compliance, Agentic Systems of Action, Enterprise Workflow Data	There has never been a tailwind for ServiceNow like AI. The company is on track for our best year ever. We're already talking about $1.5 billion now, and it's on a run. Nothing else in the market does this nothing. We are the rules and the rails of business. ServiceNow is the AI defining enterprise software company in the 21st century. This is the chapter that makes everything else look like the preamble. Our own deployment in ServiceNow is resolving 90% of employee IT requests with the specialist resolving assigned cases 99% faster than human agents. We're looking at a company that's a Rule of 60 company and beyond.	There's a lot of noise out there. In the short run, markets of voting machines. And right now, uncertainty is winning the vote. This includes about a 75 basis point headwind from delayed closings of several large on-premise deals in the Middle East due to the ongoing conflict in the region. While we expect some near-term headwinds to margins as we integrate the business this year. The stock is down 12% after hours. So something is not getting through to investors. The problem is they don't exactly know what to do, so they're somewhat confused.	ServiceNow welcomed the Armis and Veza teams to the ServiceNow family, indicating workforce expansion through acquisition. Bob, the former CEO of Moveworks, now runs the entire Employee Works business. Genny Debra, the CEO of Armis, will run ServiceNow's security business, and Tarun Thakar, the CEO of Veza, will continue to run that business. Krishna Gidwani was announced as the new Chief Strategy Officer, reporting to the CFO, with a focus on M&A integration. The company aims to exit the year with the same headcount despite growth, attributing this to AI OpEx efficiencies and autonomous workforce agents resolving 90% of employee IT requests 99% faster than human agents.

2026-07-22

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
ServiceNow has quintupled its total addressable market and accelerated 6 unicorn businesses to $1 billion or multibillion-dollar status. ServiceNow AI ACV surpassed $1 billion, on track to beat the $1.5 billion target by end of 2026. The company's cybersecurity business is already over $1 billion and is the fastest-growing among the top 10 cyber companies. The addressable market for device security is expanding significantly, with 40 billion connected devices expected in 4 years, and Armis already tracking 7 billion. The percentage of renewal customers purchasing agentic AI for the first time doubled quarter-over-quarter and year-over-year. CRM Net New ACV growth accelerated, with average deal size doubling year-over-year, and the company is on track to execute over 2 billion service CRM cases this year. Voice AI for customer service is identified as the 'next frontier,' with a large airline handling 5 million annual voice calls on ServiceNow's voice AI CRM agents. Employee Works is a strategic entry point for enterprise-wide employee experiences, pulling through broader HR and employee experience opportunities. A new business model evolution with AI-native products, including a conversational service desk, is targeting the Fortune 500,000, expanding TAM through a product-led motion. 50% of net new business is now non-seat-based, and national, regional, and local governments are expanding ServiceNow deployments. Business and consumer services net new ACV grew over 6x year-over-year, with education over 125%, and telco/media nearly 40%. Deal volume among first-time ServiceNow Agentic AI buyers grew over 45% year-over-year.	ServiceNow differentiates itself by offering 'one governed layer of record' for AI deployment securely across the enterprise, providing 'needed certainty in an uncertain stack' regardless of which chip, lab, or price per token regime prevails. The company's cybersecurity business is the fastest-growing among the top 10 cyber companies. While acknowledging that market participants in CRM are 'very good' and 'not going away,' ServiceNow is doing 'very well,' winning deals where '5 vendors fail to deliver' due to its ability to connect CPQ with broader workflows, customer data, and service operations. The company aims to replace 'legacy offerings and bypass the startups' with its new AI-native products. It is stated that 'the best tech leaders know it will cost 5x to 10x to build an agent versus run one on ServiceNow.' ServiceNow claims that only its platform offers 'completeness of vision' with a system of record, deep enterprise context, integrated governance, auditability, global distribution, and flexible pricing. It is also positioned as the only platform 'designed from the ground up to integrate to all of these players.' ServiceNow emphasizes its 'context engine' and 7 trillion workflows as a 'secret sauce' that competitors and LLMs cannot access. The company also notes that large language models are 'getting commoditized,' and it optimizes its use of various models to keep costs low. Bill McDermott also stated, 'we're not out to replace all of those excellent companies, we're building our own story on our own great foundation, and it's important that the customer gets the benefit of all of us because they're going to need it.'	IDC forecasts spending on AI software to grow 53% this year, 17% faster than AI hardware. The enterprise needs a governed layer of record for AI, offering certainty in an uncertain technology stack. There are 2.2 billion agents entering the enterprise globally, representing 2.2 billion new identities, and 40 billion connected devices are expected in the next 4 years. Customers are increasingly 'allergic to anything that looks like a project' and demand deterministic outcomes. There's a challenge with AI agents proliferating across multiple platforms without unified governance. Innovating for enterprises is difficult, and customers are 'desperate to make real progress with a proven innovator they can trust.' The influx of AI is creating 'more activity for IT, not less.' Data fragmentation across systems is a significant challenge for enterprises. CEOs are losing sleep over 'risk at scale,' threat headlines, and managing 'token invoices,' unsure of what to do. In this environment, most enterprises are 'still searching for AI's ROI,' having seen budgets 'burn on pilots that demo beautifully and never touch the P&L.' The industry distinguishes between 'AI that only advises' (a cost) and 'AI that completes the work' (a return). Large language models are 'getting commoditized,' and the 'attack surface becomes even more dangerous by the moment.'	ServiceNow is on course for $32 billion in revenue by 2030, operating at the 'rule of 60 and beyond.' The company is on track to beat its target of $1.5 billion AI ACV by the end of 2026. ServiceNow sees itself in the 'bull's eye of AI, cybersecurity, workflow orchestration, integration and automation,' and is 'only just getting started.' The company is building the 'world's most integrated end-to-end security platform' across cyber, risk, compliance, agentic incident response, exposure management, identity and access security, cyber physical security, and continuous vulnerability detection. Enterprises are progressing from supervised to autonomous operations, with the city of Raleigh moving to become 'fully autonomous 1 ticket category at a time.' Voice AI is identified as the 'next frontier.' ServiceNow plans to bring 'many net new AI native products' to market in the weeks to come. Bill McDermott anticipates that 'cybersecurity will be bigger than ServiceNow is in the next few years.' The company expects to deliver another exceptional year, with AI tracking ahead of its target to reach 30% of ACV by 2030. Full-year guidance has been raised, and the company is committed to 'growth on the top line, expanding the margin profile of the company and winning share everywhere we go in this AI revolution, especially cyber.' While short-term gross margin pressure is noted, the company believes midterm there will be 'less pressure and even better pricing' on hyperscaler and AI consumption, with operating margins continuing to accrete towards the rule of 60 by 2030.	Legal	AI Governance, Trust & Compliance, Agentic Systems of Action, Enterprise Workflow Data	We are who we said we were. We're in the bull's eye of AI, cybersecurity, workflow orchestration, integration and automation. ServiceNow already was a $1 billion plus cybersecurity business. The percentage of renewal customers purchasing a genic AI for the first time, doubled quarter-over-quarter and year-over-year. customers with agentic AI in production have grown 9x over the last 9 months. Voice is the next frontier, and we're winning it. Our Dynamite engineering team is on fire. The best tech leaders know it will cost 5x to 10x to build an agent versus run one on ServiceNow. The government business, it's never been stronger. Only ServiceNow's completeness of vision checks all of those boxes. Q2 was an outstanding quarter that highlights ServiceNow's broad-based demand strong execution and operating leverage. AI net new ACV growth continues to outpace expectations. we're already tracking ahead of our target for AI to reach 30% of ACV by 2030. AI that completes the work is a return.	Part of that outperformance was due to strong U.S. federal demand, which shifted some on-prem revenue from Q3 to Q2. This is simply about timing. I'm always looking, especially in this market environment, at a conservative prudent guide, right? There's certainly upside, but we feel really good about the guide right now. a little bit of short-term pressure on margins.	Sales and marketing headcount increased significantly quarter-over-quarter, with more sales headcount added this year than all of last year. This is attributed to M&A, the ramping of the security and risk business, and a continued strategy of hiring quota-bearing 'feet-on-the-street' sales executives. The company expects to see more sales heads in the back half of the year. Despite these additions, the management team is committed to completing 2026 and starting 2027 with the exact same headcount as before the acquisitions of Moveworks, Vesa, and Armis, implying a focus on efficiency and potentially offsetting new hires with reductions elsewhere to maintain headcount targets.

2026-04-22

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
ServiceNow operates in a growing $600 billion plus total addressable market. The acquisition of Armis is expected to significantly expand ServiceNow's TAM and accelerate subscription revenue growth. Armis, which provides real-time agentless discovery of every asset (IT, OT, IoT, medical devices, shadow IT), is already relied upon by 9 out of 10 Fortune 10 companies, and ServiceNow plans to deploy it throughout the Top 2000 and beyond. The company is expanding its opportunity in the mid-market with the enterprise service management foundation, offering deployment in weeks, not months. Moveworks, now integrated into Employee Works, closed more 7-figure deals in Q1 than it did the entire previous year. ServiceNow's sales CRM NNACV quintupled year-over-year, with deal count growing over 80% year-over-year. The company's AI commit for 2026 is now projected to be $1.5 billion, a 50% increase from the initial $1 billion target.	ServiceNow positions itself as the only enterprise AI platform that converts chaos to control, stating they 'would not trade positions with anyone'. The company differentiates its AI-native approach from 'sidecar AI', emphasizing that intelligence is built into every product and package, not bolted onto disconnected systems. Their unified, end-to-end security stack, combining Armis' asset visibility, Veza's identity governance, and ServiceNow's business context, is described as unmatched in the market. While acknowledging that the agentic orchestration space is becoming noisy and competitive, ServiceNow highlights its 22 years of accumulated data, 95 billion workflows, and 7 trillion transactions as a 'context advantage that nobody can match'. The company partners with hyperscalers, language models, and systems of record, even those that compete vigorously, to ensure openness and meet customer needs in a heterogeneous environment.	The broader industry is characterized by 'a lot of noise out there' and persistent speculation about enterprise AI. The complexity of managing code is expected to increase exponentially, with code volume increasing 20x by 2030, leading to a 50x increase in ITSM tickets. Enterprises are 'frantically organizing and cleansing data from countless disparate sources'. The current enterprise environment is described as 'chaos', with hyperscalers, systems of record, foundation models, data lakes, homegrown tools, and agents coming from everywhere. There is a pervasive sense of 'AI anxiety' among investors, with customers hesitant to make larger purchases due to uncertainty about the rapid pace of innovation. While customers are excited about AI, they are 'somewhat confused' about what exactly to do with it. The proliferation of AI across the enterprise is also leading to increasing adoption of Raptor DB Pro.	ServiceNow is on track for its 'best year ever' and sees AI as an unprecedented tailwind. The company's clear goals include fast time to value for customers, revenue growth acceleration, margin expansion, reduced stock-based compensation, and outperforming its 'rule of 55-plus standard'. The five hyper-growth areas (core IT, AI security, AI native CRM, AI native front door/employee experience, and workflow data fabric) are all expected to 'eclipse the size and growth trajectory of ServiceNow as it stands today itself'. ServiceNow aims to be the 'AI defining enterprise software company in the 21st century' and is 'just getting started'. The company is raising its full-year subscription revenue guidance to $15.735 billion to $15.775 billion, representing 20.5% to 21% year-over-year growth in constant currency, including a 125 basis point contribution from Armis. The initial margin headwinds from the Armis acquisition are expected to normalize, with the impact on operating margin reducing to 0 by the end of the year due to internal efficiencies. The company aspires to be a 'Rule of 60 company and beyond' and is working to reduce stock-based compensation into single digits.	Enterprise	Apps & Edge Deployment, AI Governance, Trust & Compliance, Agentic Systems of Action, Legal Tech	There has never been a tailwind for ServiceNow like AI. The company is on track for our best year ever. We're already talking about $1.5 billion now, and it's on a run. Nothing else in the market does this nothing. We are the rules and the rails of business. ServiceNow is the AI defining enterprise software company in the 21st century. This is the chapter that makes everything else look like the preamble. Our own deployment in ServiceNow is resolving 90% of employee IT requests with the specialist resolving assigned cases 99% faster than human agents. We're looking at a company that's a Rule of 60 company and beyond.	There's a lot of noise out there. In the short run, markets of voting machines. And right now, uncertainty is winning the vote. This includes about a 75 basis point headwind from delayed closings of several large on-premise deals in the Middle East due to the ongoing conflict in the region. While we expect some near-term headwinds to margins as we integrate the business this year. The stock is down 12% after hours. So something is not getting through to investors. The problem is they don't exactly know what to do, so they're somewhat confused.	ServiceNow welcomed the Armis and Veza teams to the ServiceNow family, indicating workforce integration from these acquisitions. The company noted that it is able to 'go in a year and exit the year into a new year with the same headcount' despite growth, attributing this to productivity gains from AI. The broader theme of 'Data Owners '25: Enterprise Workflow Data' suggests a shift towards hiring specialized AI/ML Engineers, Prompt Engineers, AI Governance Specialists, and Automation Architects to embed agentic AI and intelligent automation.

2026-04-22

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
ServiceNow operates in a growing $600 billion plus total addressable market. The acquisition of Armis is expected to significantly expand ServiceNow's TAM and accelerate subscription revenue growth. Armis, which provides real-time agentless discovery of every asset, is already relied upon by 9 out of 10 Fortune 10 companies, and ServiceNow plans to deploy it throughout the Top 2000 and beyond. Veza solves identity governance, acting as the active directory for AI agent identities. ServiceNow's sales CRM NNACV grew more than 5x year-over-year, with deal count growing over 80% year-over-year. Moveworks, now integrated into Employee Works, closed more 7-figure deals in Q1 than it did the entire previous year, and that business grew 5x year-over-year. The company is expanding its opportunity in the mid-market with the enterprise service management foundation, offering deployment in weeks, not months. Now Assist continues to outperform expectations, with its 2026 AI commit target now projected to be $1.5 billion, a 50% increase from the initial $1 billion target. AI control tower average deal sizes more than doubled quarter-over-quarter in Q1, and Raptor DB Pro deal volume grew 80% year-over-year in Q1. New logo ACV growth accelerated to over 50% year-over-year in Q1, including the largest net new logo deal ever at over $15 million. Additionally, 50% of net new business now comes from a non-seat-based pricing model, including tokens and other assets.	ServiceNow positions itself as the only enterprise AI platform that converts chaos to control, stating they 'would not trade positions with anyone'. The company differentiates its AI-native approach from 'sidecar AI', emphasizing that intelligence is built into every product and package, not bolted onto disconnected systems. Their unified, end-to-end security stack, combining Armis' asset visibility, Veza's identity governance, and ServiceNow's business context, is described as unmatched in the market. While acknowledging that the agentic orchestration space is becoming noisy and competitive, ServiceNow highlights its 22 years of accumulated data, 95 billion workflows, and 7 trillion transactions as a 'context advantage that nobody can match'. The company partners with hyperscalers, language models, and systems of record, even those that compete vigorously, to ensure openness and meet customer needs in a heterogeneous environment, stating, 'We dare anyone to bring a best solution to the market in ServiceNow'.	The broader industry is characterized by 'a lot of noise out there' and persistent speculation about enterprise AI. The complexity of managing code is expected to increase exponentially, with code volume increasing 20x by 2030, leading to a 50x increase in ITSM tickets. Enterprises are 'frantically organizing and cleansing data from countless disparate sources'. The current enterprise environment is described as 'chaos', with hyperscalers, systems of record, foundation models, data lakes, homegrown tools, and agents coming from everywhere. There is a pervasive sense of 'AI anxiety' among investors, with customers hesitant to make larger purchases due to uncertainty about the rapid pace of innovation. While customers are excited about AI, they are 'somewhat confused' about what exactly to do with it. The #3 economy in the world, cyber crime, is valued at $1 trillion a month. Customers are spending incrementally on AI, not replacing existing spend on ServiceNow.	ServiceNow is on track for its 'best year ever' and sees AI as an unprecedented tailwind. The company's clear goals include fast time to value for customers, revenue growth acceleration, margin expansion, reduced stock-based compensation, and outperforming its 'rule of 55-plus standard'. The five hyper-growth areas (core IT, AI security, AI native CRM, AI native front door/employee experience, and workflow data fabric) are all expected to 'eclipse the size and growth trajectory of ServiceNow as it stands today itself'. The company is raising its full-year subscription revenue guidance to $15.735 billion to $15.775 billion, representing 20.5% to 21% year-over-year growth in constant currency, including a 125 basis point contribution from Armis. Initial margin headwinds from the Armis acquisition are expected to normalize, with the impact on operating margin reducing to 0 by the end of the year due to internal efficiencies. ServiceNow aspires to be a 'Rule of 60 company and beyond' and is working to reduce stock-based compensation into single digits. The company's internal deployment of autonomous workforce agents is resolving 90% of employee IT requests 99% faster than human agents, demonstrating the future direction of AI-driven efficiency.	Legal	Apps & Edge Deployment, AI Governance, Trust & Compliance, Agentic Systems of Action, Enterprise Workflow Data	There has never been a tailwind for ServiceNow like AI. The company is on track for our best year ever. We're already talking about $1.5 billion now, and it's on a run. Nothing else in the market does this nothing. We are the rules and the rails of business. ServiceNow is the AI defining enterprise software company in the 21st century. This is the chapter that makes everything else look like the preamble. Our own deployment in ServiceNow is resolving 90% of employee IT requests with the specialist resolving assigned cases 99% faster than human agents. We're looking at a company that's a Rule of 60 company and beyond.	There's a lot of noise out there. In the short run, markets of voting machines. And right now, uncertainty is winning the vote. This includes about a 75 basis point headwind from delayed closings of several large on-premise deals in the Middle East due to the ongoing conflict in the region. While we expect some near-term headwinds to margins as we integrate the business this year. The stock is down 12% after hours. So something is not getting through to investors. The problem is they don't exactly know what to do, so they're somewhat confused.	ServiceNow welcomed the Armis and Veza teams to the ServiceNow family, indicating workforce expansion through acquisition. Bob, the former CEO of Moveworks, now runs the entire Employee Works business. Genny Debra, the CEO of Armis, will run ServiceNow's security business, and Tarun Thakar, the CEO of Veza, will continue to run that business. Krishna Gidwani was announced as the new Chief Strategy Officer, reporting to the CFO, with a focus on M&A integration. The company aims to exit the year with the same headcount despite growth, attributing this to AI OpEx efficiencies and autonomous workforce agents resolving 90% of employee IT requests 99% faster than human agents.

NotesTable

Date	Comment	Comment Type	Comment Sentiment	Link	Price Reaction
2026-07-22	ServiceNow's Q2 2026 earnings transcript is unavailable. Despite likely positive company messaging on AI adoption and growth, the stock fell 3.69% (underperforming SPY's -1.13%) post-earnings. This suggests continued market apprehension regarding the pace of organic AI-driven growth or potential acquisition integration costs, mirroring past reactions.	Earnings Transcript	Neutral		-3.69% (vs SPY: -2.56%)

Upcoming Events4 rows

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
NOW_330b8d99	by the end of 2026	2026-10-01	2026-12-31	Achievement of ServiceNow's updated 2026 AI Annual Contract Value (ACV) target of $1.5 billion, tracking ahead of the initial target.	Exceeding this raised target would signal strong adoption and successful monetization of ServiceNow's AI offerings, reinforcing the bullish investment case for its AI-native platform.	Ticker	2026-07-22	earnings_transcript
NOW_37f03749	very shortly, soon will be GA, in the weeks to come	2026-07-23	2026-10-23	General Availability (GA) launch of a new AI-native conversational service desk experience product, which is the first of many net new AI native products.	This new product-led motion expands ServiceNow's total addressable market (TAM) to the Fortune 500,000, potentially driving significant new customer acquisition and revenue growth from AI-native offerings.	Ticker	2026-07-22	earnings_transcript
NOW_e6ce8e31	complete this cycle of 2026 and start 2027	2026-10-01	2026-12-31	Completion of headcount rationalization post-acquisitions (Moveworks, Vesa, Armis) to pre-acquisition levels.	This indicates successful integration and cost discipline, expected to drive operating and free cash flow margin expansion, reinforcing the company's financial strength and commitment to the 'Rule of 60' target.	Ticker	2026-07-22	earnings_transcript
NOW_45fcb136	For Q3	2026-07-01	2026-09-30	Achievement of ServiceNow's Q3 2026 financial guidance, including subscription revenues between $3.975 billion and $3.980 billion, and 20% constant currency CRPO growth.	Meeting these short-term financial targets would signal continued strong execution and demand for ServiceNow's offerings, providing positive momentum and validating management's outlook.	Ticker	2026-07-22	earnings_transcript