ServiceNow Raises Annual Subscription Revenue Forecast Amid AI Adoption
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
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Source: Newsfilter
- Revenue Forecast Increase: ServiceNow raised its 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion, up from the previous estimate of $15.53 billion to $15.57 billion, indicating strong demand for its AI-powered software despite a more than 10% drop in shares during extended trading.
- Accelerated AI Integration: The company's partnerships with Anthropic and OpenAI are accelerating AI integration, and while concerns grow that AI tools may diminish traditional software demand, ServiceNow's COO noted that over 50% of new business comes from a usage-based pricing model, highlighting the potential for business model transformation.
- Financial Performance Exceeds Expectations: In the first quarter, ServiceNow reported revenue of $3.77 billion and adjusted earnings per share of 97 cents, both surpassing market expectations of $3.74 billion and 96 cents, demonstrating the company's robust profitability in a competitive market.
- Acquisition Challenges: The acquisition of cybersecurity startup Armis for $7.75 billion is expected to negatively impact free cash flow margin by approximately 200 basis points and operating margin by about 125 basis points in the second quarter, reflecting short-term challenges faced during business expansion.
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Analyst Views on NOW
Wall Street analysts forecast NOW stock price to rise
32 Analyst Rating
30 Buy
2 Hold
0 Sell
Strong Buy
Current: 100.140
Low
172.00
Averages
222.81
High
263.00
Current: 100.140
Low
172.00
Averages
222.81
High
263.00
About NOW
ServiceNow, Inc. provides an artificial intelligence (AI) platform for business transformation. The Company’s AI platform connects people, processes, data, and devices to increase productivity and maximize business outcomes. Its intelligent platform, the Now Platform, is a cloud-based solution that helps enterprises and organizations across public and private sectors digitize workflows. The workflow applications built on the Now Platform are organized into four primary areas: Technology, CRM and Industry, Core Business and Creator. Its products include IT Service Management, IT Operations Management, HR Service Delivery, ServiceNow AI Agents, AI Experience, Build Agent, ServiceNow AI Control Tower, AI Agent Fabric, RaptorDB, Workflow Data Fabric, Workplace Service Delivery, ServiceNow Platform Encryption, Telecommunications Service Operations Management, and others. The Company also offers identity security, helping organizations secure access across the enterprise.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
ServiceNow Beats Q1 Earnings Expectations Amid Middle East Conflict
- Earnings Beat: ServiceNow reported Q1 adjusted earnings per share of $0.97, slightly above the expected $0.96, with revenue of $3.77 billion exceeding estimates of $3.74 billion, demonstrating resilience in a challenging environment.
- Subscription Revenue Headwinds: Despite a 22% year-over-year revenue growth, subscription revenue growth faced a 75 basis point headwind due to delayed closings of several large on-premise deals in the Middle East, highlighting the potential threats posed by geopolitical tensions.
- Optimistic Outlook: The company raised its fiscal 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion, up from the previous estimate of $15.53 billion to $15.57 billion, reflecting confidence in future growth prospects.
- Expanded Buyback Program: In Q1, ServiceNow repurchased approximately 20 million shares, more than double the total for 2025, and received board approval for an additional $5 billion in buybacks, aimed at enhancing shareholder value and market confidence.
See More
ServiceNow Reports First Quarter Earnings Growth
- Earnings Growth: ServiceNow reported a net income of $469 million for the first quarter, translating to an earnings per share (EPS) of $0.45, which is an increase from last year's $460 million and $0.44 EPS, indicating sustained profitability improvements.
- Adjusted Earnings: Excluding certain items, the company reported adjusted earnings of $1.01 billion, or $0.97 per share, showcasing strong performance in its core business and enhanced profitability metrics.
- Revenue Surge: The company's revenue rose by 22.4% year-over-year to $3.77 billion, up from $3.08 billion last year, reflecting robust market demand and the competitiveness of its product offerings.
- Market Outlook: With both revenue and earnings growth, ServiceNow solidifies its market position in digital transformation and enterprise services, likely attracting increased investor interest in its future growth potential.
See More
ServiceNow Q1 Results Beat Expectations Amid Geopolitical Challenges
- Strong Earnings Beat: ServiceNow reported adjusted earnings per share of 97 cents for Q1, slightly surpassing Wall Street's expectation of 96 cents, with revenue reaching $3.77 billion, exceeding the anticipated $3.74 billion, demonstrating resilience in a challenging environment.
- Subscription Revenue Growth: Despite a 75 basis point headwind from the ongoing conflict in the Middle East, the company's quarterly subscription revenue hit $3.67 billion, slightly above the FactSet expectation of $3.65 billion, indicating stable revenue streams amid adversity.
- Optimistic Future Outlook: ServiceNow raised its fiscal 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion, reflecting confidence in future market conditions, although CFO Gina Mastantuono adopted a cautious stance due to geopolitical uncertainties.
- Aggressive Share Buyback: In Q1, ServiceNow repurchased approximately 20 million shares, more than double the total for 2025, and received board approval for an additional $5 billion in buybacks, showcasing confidence in the intrinsic value of its stock.
See More
ServiceNow Raises Annual Subscription Revenue Forecast Amid AI Adoption
- Revenue Forecast Increase: ServiceNow raised its 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion, up from the previous estimate of $15.53 billion to $15.57 billion, indicating strong demand for its AI-powered software despite a more than 10% drop in shares during extended trading.
- Accelerated AI Integration: The company's partnerships with Anthropic and OpenAI are accelerating AI integration, and while concerns grow that AI tools may diminish traditional software demand, ServiceNow's COO noted that over 50% of new business comes from a usage-based pricing model, highlighting the potential for business model transformation.
- Financial Performance Exceeds Expectations: In the first quarter, ServiceNow reported revenue of $3.77 billion and adjusted earnings per share of 97 cents, both surpassing market expectations of $3.74 billion and 96 cents, demonstrating the company's robust profitability in a competitive market.
- Acquisition Challenges: The acquisition of cybersecurity startup Armis for $7.75 billion is expected to negatively impact free cash flow margin by approximately 200 basis points and operating margin by about 125 basis points in the second quarter, reflecting short-term challenges faced during business expansion.
See More
Market Recovery Amid AI Chip Innovations
- Market Recovery: Following a couple of days of declines, U.S. stocks rebounded on Wednesday afternoon, with the S&P 500 and Nasdaq rising nearly 1% and 1.3%, respectively, despite West Texas Intermediate crude climbing nearly 4% back to the low $90s, indicating market optimism due to President Trump's extension of the U.S. ceasefire.
- AI Chip Launch: Google unveiled its eighth-generation custom tensor processing units (TPUs) at its Cloud Next conference, with the TPU 8t delivering nearly three times the compute performance per pod over the previous generation, establishing itself as a
See More
ServiceNow (NOW) Q3 2024 Earnings Transcript
See More
ServiceNow Beats Q1 Earnings Expectations Amid Middle East Conflict
- Earnings Beat: ServiceNow reported Q1 adjusted earnings per share of $0.97, slightly above the expected $0.96, with revenue of $3.77 billion exceeding estimates of $3.74 billion, demonstrating resilience in a challenging environment.
- Subscription Revenue Headwinds: Despite a 22% year-over-year revenue growth, subscription revenue growth faced a 75 basis point headwind due to delayed closings of several large on-premise deals in the Middle East, highlighting the potential threats posed by geopolitical tensions.
- Optimistic Outlook: The company raised its fiscal 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion, up from the previous estimate of $15.53 billion to $15.57 billion, reflecting confidence in future growth prospects.
- Expanded Buyback Program: In Q1, ServiceNow repurchased approximately 20 million shares, more than double the total for 2025, and received board approval for an additional $5 billion in buybacks, aimed at enhancing shareholder value and market confidence.
See More
ServiceNow Reports First Quarter Earnings Growth
- Earnings Growth: ServiceNow reported a net income of $469 million for the first quarter, translating to an earnings per share (EPS) of $0.45, which is an increase from last year's $460 million and $0.44 EPS, indicating sustained profitability improvements.
- Adjusted Earnings: Excluding certain items, the company reported adjusted earnings of $1.01 billion, or $0.97 per share, showcasing strong performance in its core business and enhanced profitability metrics.
- Revenue Surge: The company's revenue rose by 22.4% year-over-year to $3.77 billion, up from $3.08 billion last year, reflecting robust market demand and the competitiveness of its product offerings.
- Market Outlook: With both revenue and earnings growth, ServiceNow solidifies its market position in digital transformation and enterprise services, likely attracting increased investor interest in its future growth potential.
See More
ServiceNow Q1 Results Beat Expectations Amid Geopolitical Challenges
- Strong Earnings Beat: ServiceNow reported adjusted earnings per share of 97 cents for Q1, slightly surpassing Wall Street's expectation of 96 cents, with revenue reaching $3.77 billion, exceeding the anticipated $3.74 billion, demonstrating resilience in a challenging environment.
- Subscription Revenue Growth: Despite a 75 basis point headwind from the ongoing conflict in the Middle East, the company's quarterly subscription revenue hit $3.67 billion, slightly above the FactSet expectation of $3.65 billion, indicating stable revenue streams amid adversity.
- Optimistic Future Outlook: ServiceNow raised its fiscal 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion, reflecting confidence in future market conditions, although CFO Gina Mastantuono adopted a cautious stance due to geopolitical uncertainties.
- Aggressive Share Buyback: In Q1, ServiceNow repurchased approximately 20 million shares, more than double the total for 2025, and received board approval for an additional $5 billion in buybacks, showcasing confidence in the intrinsic value of its stock.
See More
ServiceNow Raises Annual Subscription Revenue Forecast Amid AI Adoption
- Revenue Forecast Increase: ServiceNow raised its 2026 subscription revenue forecast to between $15.74 billion and $15.78 billion, up from the previous estimate of $15.53 billion to $15.57 billion, indicating strong demand for its AI-powered software despite a more than 10% drop in shares during extended trading.
- Accelerated AI Integration: The company's partnerships with Anthropic and OpenAI are accelerating AI integration, and while concerns grow that AI tools may diminish traditional software demand, ServiceNow's COO noted that over 50% of new business comes from a usage-based pricing model, highlighting the potential for business model transformation.
- Financial Performance Exceeds Expectations: In the first quarter, ServiceNow reported revenue of $3.77 billion and adjusted earnings per share of 97 cents, both surpassing market expectations of $3.74 billion and 96 cents, demonstrating the company's robust profitability in a competitive market.
- Acquisition Challenges: The acquisition of cybersecurity startup Armis for $7.75 billion is expected to negatively impact free cash flow margin by approximately 200 basis points and operating margin by about 125 basis points in the second quarter, reflecting short-term challenges faced during business expansion.
See More
Market Recovery Amid AI Chip Innovations
- Market Recovery: Following a couple of days of declines, U.S. stocks rebounded on Wednesday afternoon, with the S&P 500 and Nasdaq rising nearly 1% and 1.3%, respectively, despite West Texas Intermediate crude climbing nearly 4% back to the low $90s, indicating market optimism due to President Trump's extension of the U.S. ceasefire.
- AI Chip Launch: Google unveiled its eighth-generation custom tensor processing units (TPUs) at its Cloud Next conference, with the TPU 8t delivering nearly three times the compute performance per pod over the previous generation, establishing itself as a
See More
ServiceNow (NOW) Q3 2024 Earnings Transcript
See More
