ServiceNow, Inc. (NOW) Q2 2026 Earnings Call July 22, 2026 5:00 PM EDT
Company Participants
Darren Yip - Head of Investor Relations
William McDermott - Chairman & CEO
Gina Mastantuono - President & CFO
Amit Zavery - President, Chief Product Officer & COO
Conference Call Participants
Gabriela Borges - Goldman Sachs Group, Inc., Research Division
Michael Turrin - Wells Fargo Securities, LLC, Research Division
Tal Liani - BofA Securities, Research Division
Samik Chatterjee - JPMorgan Chase & Co, Research Division
Tyler Radke - Citigroup Inc., Research Division
Matthew Hedberg - RBC Capital Markets, Research Division
Samad Samana - Jefferies LLC, Research Division
Brad Zelnick - Deutsche Bank AG, Research Division
Keith Bachman - BMO Capital Markets Equity Research
Gregg Moskowitz - Mizuho Securities USA LLC, Research Division
Adam Wood - Morgan Stanley, Research Division
Presentation
Operator
Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the ServiceNow Second Quarter 2026 Earnings Conference Call. [Operator Instructions] We will now turn the conference over to Darren Yip, Senior Vice President, Investor Relations and Market Insights. Darren, please go ahead.
Darren Yip
Head of Investor Relations
Good afternoon, and thank you for joining ServiceNow's Second Quarter 2026 Earnings Conference Call. Joining me are Bill McDermott, our Chairman and Chief Executive Officer; Gina Mastantuono, our President and Chief Financial Officer; and Amit Zavery, President, Chief Product Officer and Chief Operating Officer.
During today's call, we will review our second quarter results and discuss our guidance for the third quarter and full year 2026. Before we get started, we want to emphasize that the information discussed on this call, including our guidance, is based on information as of today and contains forward-looking statements that involve risks, uncertainties and assumptions. We undertake no duty or obligation to update such statements as a result
Bill McDermott uvedl, že ServiceNow má „kill switch“ pro zdivočelé AI agenty a AI adopce posiluje jeho konkurenceschopnost. Firma zároveň zvýšila celoroční výhled.
ServiceNow CEO Bill McDermott said on Wednesday that the rapid adoption of artificial intelligence is strengthening the company's competitive position.
His comments come just one day after OpenAI disclosed that one of its advanced AI agents escaped a controlled testing environment during a cybersecurity evaluation and compromised the infrastructure of AI startup Hugging Face before it was detected and contained.
"We have a kill switch that stops AI agents that go rogue, so those things don't need to happen, and they wouldn't happen when companies run ServiceNow," McDermott said on CNBC's "Mad Money."
ServiceNow offers a suite of software applications and tools used by companies to manage and automate workflows across IT, human resources, and customer service operations. It's also expanded its cybersecurity presence, in part through the acquisitions of Veza and Armis. Both deals closed this year.
Agentic systems are an increasingly popular corner of AI, going beyond a more simplistic chatbot that answers queries with a written response. These advanced systems are capable of executing multi-step tasks with little to no human intervention.
McDermott said ServiceNow's AI Control Tower is its system that gives companies a central place to monitor, manage, and secure the growing number of AI agents, helping businesses move "from AI chaos to AI discipline."
Shares of ServiceNow rose in extended trading after the company reported better-than-expected earnings and revenue. Even after the jump, however, the stock remains down more than 30% this year after software shares sold off during what investors dubbed the "SaaSpocalypse" amid concerns that advances in AI would disrupt the industry's traditional seat-based business model.
McDermott dismissed concerns that growing AI competition could pressure ServiceNow's profits or cause customers to shorten contract terms.
"If you look at the terms of our contracts, they've actually gotten longer," McDermott said.
Instead, he argued that broader AI adoption should increase demand for ServiceNow's software.
"There's going to be more AI. There's going to be more incidents, and all these things drive more and more volume to ServiceNow," he said. "That's why we increased the full-year guide."
OpenAI did not immediately respond to CNBC's request for comment but said earlier that AI is accelerating the discovery and exploitation of vulnerabilities, which means model security and safety need to keep up.
"We are strengthening the containment, monitoring, access controls, and evaluation practices used during model development," the ChatGPT maker said.
ServiceNow koupil zhruba 5% podíl v BusinessNext v transakci, která oceňuje indickou softwarovou firmu na 700 milionů USD. BusinessNext zároveň získal 40 milionů USD v rámci kola Series C.
CompaniesJuly 22 (Reuters) - ServiceNow (NOW.N), opens new tab has acquired roughly 5% of BusinessNext in a deal that values the software provider at $700 million, as the Indian company looks to expand its autonomous banking tools through a partnership with the U.S.-based software giant.
BusinessNext said on Wednesday it raised $40 million in a Series C round from ServiceNow Ventures, a venture capital arm of the company.
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Here are some details:
BusinessNext CEO Nishant Singh told Reuters that the funding will primarily be allocated to strengthening the company's sales efforts, initially focusing on expanding distribution in Southeast Asia and Australia.
"Every company has to go to an IPO. Right now, we're not looking at the IPO part," he said, adding that BusinessNext's ambition "right now is to run in every bank in the world."
The deal comes as banks are increasingly adopting AI tools offered by companies like BusinessNext to customize services, address customer queries and automate operations, helping them in saving time and attract more customers.
BusinessNext competes with companies like Freshworks (FRSH.O), opens new tab and has more than 120 customers including India's largest lender State Bank of India (SBI.NS), opens new tab and HDFC Bank (HDBK.NS), opens new tab.
The company said this partnership that will allow for enhanced monitoring of BusinessNext's AI agents through ServiceNow's AI control tower, a centralized platform for managing and governing AI models and agents across an enterprise.
Singh said BusinessNext has been "above $50 million for a couple of years now" in annual revenue, adding that the company has nearly 1,300 employees.
On Wednesday, ServiceNow raised its forecast for annual subscription revenue for the second time after beating second-quarter revenue and profit estimates, driven by growing demand for its AI-powered software.
Reporting by Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Live Coverage Updates appear automatically as they are published.
Live Updates Pinned 1 hour ago
Live
This live blog is being updated by Thomas Richmond, a 24/7 Wall St. contributor. You’ll get expert analysis of ServiceNow’s Q2 earnings.
Simply stay on this page, and new updates will appear below automatically. We expect ServiceNow to release earnings shortly after 4:10 p.m. ET.
19 minutes ago
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ServiceNow closed 123 transactions worth more than $1 million in net new annual contract value during Q2, an increase of nearly 40% year over year.
The company finished the quarter with 658 customers generating more than $5 million in ACV, up approximately 23%. Total remaining performance obligations increased 21% to $29.0 billion, supported by longer customer commitments and stronger partner demand.
Current remaining performance obligations reached $13.20 billion, also up 21%, providing substantial visibility into revenue expected over the next 12 months.
The deal data reinforces the idea that large enterprises are consolidating more workflows, security functions, and AI deployments onto ServiceNow’s platform.
20 minutes ago
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ServiceNow’s Q2 subscription revenue reached $3.88 billion, exceeding the high end of its guidance by 150 basis points and rising 24.5% year over year.
However, investors should note that part of the upside came from strong U.S. federal demand accelerating some on-premise subscription revenue from Q3 into Q2. That timing benefit helps explain why management expects Q3 subscription revenue growth to moderate to 20.5%.
Q3 cRPO growth is also expected to slow to 19.5% on a reported basis, or 20% in constant currency, compared with 21% reported growth in Q2.
The quarter was fundamentally strong, but the pull-forward means investors should avoid extrapolating all of the Q2 outperformance into the second half of the year.
24 minutes ago
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ServiceNow raised its full-year subscription revenue guidance to between $15.76 and $15.78 billion, representing approximately 22.5% growth.
The previous outlook called for $15.53 billion to $15.57 billion, meaning the midpoint increased by roughly $220 million. Management attributed the raise to stronger-than-expected net new annual contract value.
For Q3, ServiceNow expects subscription revenue of $3.975 billion to $3.980 billion, representing 20.5% reported growth. The company maintained its full-year non-GAAP operating margin target of 31.5% and free cash flow margin target of 35%.
The higher revenue outlook suggests enterprise demand remains durable despite the stock’s steep year-to-date decline.
27 minutes ago
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ServiceNow reached a major AI monetization milestone during Q2, with its AI products surpassing $1 billion in annual contract value.
Management said agentic AI deployments increased ninefold over the past nine months, while AI net new ACV growth continued to exceed its expectations. The company’s AI Control Tower is also driving additional demand across its Security and Risk business.
ServiceNow ultimately expects AI products to generate 30% of companywide ACV by 2030. Crossing $1 billion this early provides tangible evidence that its AI strategy is producing commercial results rather than remaining a long-term promise.
51 minutes ago
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ServiceNow just reported Q2 earnings, with shares initially up 2% following the report. Here are the key numbers:
Revenue: $3.99 billion vs. $3.93 billion expected EPS: $0.90 vs. $0.86 expected Quick Read:
ServiceNow beat expectations on both the top and bottom lines, with revenue rising 24% year over year and 6% sequentially.
EPS increased 10% year over year despite declining 7% from the previous quarter, while the positive initial reaction suggests the results cleared investors’ lowered expectations.
53 minutes ago
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ServiceNow CEO Bill McDermott previously delivered one of the boldest forecasts on Wall Street: “ServiceNow will become a $1 trillion company by 2030.”
With ServiceNow currently valued at just under $100 billion, McDermott is effectively calling for the company’s market value to increase tenfold within four years. He has also put his own money behind the business, purchasing about $3 million of NOW shares at $107 apiece.
Nvidia CEO Jensen Huang has reportedly suggested ServiceNow could eventually grow 100-fold, while President Trump purchased approximately $5 million of the stock.
Amazon, Microsoft, Alphabet, OpenAI, and Anthropic are also expanding their partnerships with the enterprise software leader.
The bull case is that ServiceNow is becoming the essential operating system for AI-powered enterprise workflows. Building a custom alternative through “vibe coding” could reportedly cost 5-10x more than adopting ServiceNow’s platform.
After the stock’s brutal decline, investors now face a remarkable question: Is ServiceNow one of the strongest buying opportunities in the market?
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and ServiceNow didn't make the cut. Grab the names FREE today.
1 hour ago
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ServiceNow (NYSE:NOW | NOW Price Prediction) reports Q2 earnings tonight.
The Consensus Bar EPS estimate: $0.40, versus $0.82 in Q2 2025 (pre-split) Subscription revenue guide: $3.650B–$3.655B, +21.5% GAAP cRPO growth guide: 22.5% GAAP Non-GAAP operating margin: 31.5% Price and Positioning NOW last traded at $95.66, off 6.27% intraday, -8.08% on the week, and -37.59% YTD.
The full-chain put/call has slipped to 0.53, and the July 24 expiry shows 27,419 calls versus 19,615 puts, pricing in an outsized move.
What Triggers a Rebound A cRPO print above 23% GAAP, a Now Assist update pacing toward the $1B ACV target, and an FY2026 subscription raise above $15.57B would reset the narrative.
A subscription cut below $15.53B, margin under 31.5%, or vague AI monetization language could extend the stock’s drawdown.
1 hour ago
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With shares trading at $95.84, down 6.09% intraday ahead of the 4:10 PM ET Q2 earnings release, here is what to listen for on tonight’s call.
Top 5 Analyst Questions Is Now Assist tracking to the $1B ACV target by 2026? How much cRPO was pulled forward by the July 1 pricing change? Financial exposure from CVE-2026-6875? Armis, Veza, and Moveworks integration timeline? Federal deal slippage quantified? Key Topics Management Must Address Subscription gross margin trajectory after the drop to 82.5% Pace of the $2B accelerated buyback H2 guidance framing Buzzwords to Listen For “AI control tower,” “agentic operating system,” “Rule of 55+,” “platinum standard” Red Flags cRPO growth below 22.5% guidance Operating margin softer than 31.5% Any FY2026 subscription cut below $15.53B Vague AI monetization metrics 1 hour ago
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Several wildcards could swing tonight’s reaction for ServiceNow’s (NYSE:NOW) Q2 earnings.
Security Exploit in the Wild A critical sandbox-escape flaw, CVE-2026-6875 with a CVSS score of 9.5, is being actively exploited, and 31% of tested instances exposed data without credentials.
Management commentary on remediation costs is a swing factor.
Pricing Pull-Forward A new pricing model effective July 1, 2026, triggered early renewals, which Jefferies flagged and KeyBanc cited in its Underweight, $85 target.
cRPO strength could potentially be borrowed from the upcoming Q3 quarter.
Mix Shift and M&A Drag Self-hosted-to-hosted conversion carries a ~150bps subscription headwind, while Armis, Veza, and Moveworks integration adds noise.
Options positioning is calm, with a full-chain put/call ratio of 0.54.
1 hour ago
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ServiceNow reports Q2 FY2026 earnings at 4:10 PM ET tonight after the closing bell, with shares down 33.38% year to date.
The central question is whether the company’s underlying growth remains strong enough to justify a rebound. Revenue is still growing 22.1%, while Now Assist net new annual contract value more than doubled year over year in Q4, keeping the company’s $1 billion AI target within reach.
Investors will also measure the results against ServiceNow’s FY2026 subscription revenue guidance of $15.53 billion to $15.57 billion. Current remaining performance obligations, or cRPO, will be one of the most important indicators of future demand.
Wall Street remains firmly bullish, with 43 buy ratings, only one sell rating, and an average price target of $141.64. A strong cRPO result could reestablish ServiceNow as a durable software compounder.
ServiceNow (NYSE:NOW) reports Q2 FY2026 earnings results tonight at 4:10 PM ET after today’s close. With shares down 46.84% over the past year and trading at $95.61, this earnings report carries unusual weight for Bill McDermott’s AI narrative.
Momentum Meets a Reset in Sentiment ServiceNow closed out fiscal year 2025 in a big way. Revenue hit $3.568B (+20.66% YoY), subscription revenue reached $3.466B (+21% YoY), and cRPO climbed to $12.85B, up 25%. Free cash flow of $2.0B pushed Q4 FCF margin to 57%.
However, the stock’s performance tells a different story. A 5-for-1 split took effect December 2025, and shares have since compressed, sitting roughly 55% below the 52-week high of $210.20. The stock’s forward P/E of 25 reflects that reset. Reddit’s r/stockmarket flagged the disconnect, noting NOW has been “growing free cash flow per share by over 20% per year for over a decade.”
Consensus Estimates Metric Q2 FY26 Guide YoY FY26 Guide Subscription Revenue N/A (Q1 guide: $3,650M-$3,655M) ~21.5% GAAP $15,530M-$15,570M Non-GAAP Op Margin Q1: 31.5% expanding 32% FCF Margin (FY) – – 36% Growth is expected to hold in the low 20s, but a ~150bps self-hosted-to-hosted mix headwind and ~100bps Moveworks drag weigh on Q1 optics. That means any softening in cRPO could suggest deceleration is coming.
What I’m Watching: AI Monetization, Margins, and M&A Tonight, I’ll be watching how ServiceNow frames Now Assist against the $1B ACV target originally set for 2026. Q4’s 244 transactions above $1M in net new ACV raised the bar, and repeat traction here anchors the agentic AI thesis.
Investors will also focus on subscription gross margin, which slipped to 82.5% in Q4 from 84.5% on AI infrastructure spend. FY26 is guided to 82%, so any further slippage complicates the operating margin path to 32%.
Integration cadence for Moveworks and the pending Armis and Veza acquisitions are also important factors. So does U.S. Federal commentary given upcoming agency budget tightening.
Earnings History Quarter EPS Surprise 1-Day Move 1-Week Move 30-Day Move Q4 25 +3.37% +0.24% -12.08% -3.03% Q3 25 +13.00% -1.65% -8.12% -11.80% Q2 25 +14.63% -2.75% -5.33% -11.67% Q1 25 +5.36% +0.71% +2.06% +9.46% On average, shares moved -5.87% one week after earnings over the past year.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and ServiceNow didn't make the cut. Grab the names FREE today.
Leidos rozšiřuje více než 10letou spolupráci se ServiceNow a zavádí ServiceNow AI Platform pro autonomní pracovní postupy s využitím AI. Cílem je snížit náklady a zlepšit efektivitu i zaměstnaneckou zkušenost.
Fortune 500® national security technology leader is expanding its 10+ year relationship with ServiceNow – deploying the ServiceNow AI Platform to provide autonomous, AI-driven workflows designed to cut costs, improve employee experiences, and free employees for mission critical work.
SANTA CLARA, Calif. & RESTON, Va.--(BUSINESS WIRE)--ServiceNow (NYSE: NOW), the AI control tower for business reinvention, and Leidos (NYSE: LDOS), a Fortune 500 industry and technology leader serving government and commercial customers, today announced that Leidos is expanding its use of the ServiceNow AI Platform to power employee experiences and efficient operations with agentic AI. The collaboration is focused on deploying autonomous, AI-driven workflows designed to cut costs, improve employee experiences and satisfaction, scale IT self-service, and centralize AI agent governance with the ServiceNow AI Platform. The deployment runs across FedRAMP environments, supporting the use of AI within government-grade compliance guardrails.
Leidos delivers advanced technology solutions across defense, intelligence, civil, and health markets, supporting some of the most demanding national security programs in the world. With approximately 50,000 employees and $17B+ annual revenue, Leidos operates at a scale where efficient, secure employee services are key for program performance, compliance, and workforce onboarding.
The challenge: expanding the self-service IT experience
As a ServiceNow customer for over 10 years, Leidos was already driving efficiencies with ServiceNow IT, Creator, and Asset Management workflows. As it grew, however, it sought new opportunities to help address rising IT and HR tickets. Leidos turned to ServiceNow to give employees a seamless, AI-enabled self-service experience.
The solution: ServiceNow connects IT, HR, and shared services on a single AI platform
Leidos is expanding its relationship with ServiceNow and deploying the ServiceNow AI Platform across its enterprise – providing autonomous, AI-driven workflows designed to cut costs, improve employee experiences, and free employees for mission critical work.
Leidos is deploying Now Assist and embedding AI across all areas of the business, unifying its employee experience life cycle with ServiceNow EmployeeWorks and HR Service Delivery; the AI Control Tower will further the company’s automated governance and agent orchestration for secure enterprise management. The implementation is expected to significantly reduce manual work and tickets, and free up IT, HR, and shared services resources to help focus on mission-critical tasks. In addition, Leidos’ ServiceNow deployment runs across FedRAMP environments, allowing the company to securely manage data for sensitive digital workflows, IT services, and conversational AI.
Key projected outcomes include:
$3M+ projected annual savings: As a result of AI-driven IT help desk automation, Level 1 incident resolution time is expected to be reduced from days to minutes.Up to 60% autonomous IT ticket resolution: AI agents are targeted to fully resolve the majority of IT support requests without human intervention, with the potential to eliminate approximately 80,000 tickets annually.Automated employee services for increased efficiency: ServiceNow EmployeeWorks to provide a fast, seamless conversational AI front door for everyday employee requests, helping accelerate productivity for Leidos employees and reduce ticket requests for service teams.Visibility and control of AI agents: AI Control Tower governs and orchestrates across the portfolio of AI agents and workflows, designed to help ensure that models and actions remain compliant, auditable, and aligned with Leidos’ security posture.Comments on the news:
"When you're managing national security workflows, you can't move fast without visibility and governance," said Paul Fipps, president of global customer operations at ServiceNow. "By unifying HR, IT, and shared services on the ServiceNow AI Platform, with AI Control Tower governing the deployment, Leidos can identify workflows and scale AI-enabled operations without adding complexity."
“We’re advancing our use of the ServiceNow AI Platform to augment our AI capabilities to make it easier for employees to deliver mission-critical outcomes at speed and scale, with the security our work demands,” said Alexandra Guenther, chief information officer at Leidos. “ServiceNow AI is helping us automate routine requests so our service desk teams can focus on more complex issues, improving both the employee experience and operational efficiency. By connecting employees with the right information when they need it, we’re enabling our employees to stay focused on solving our customers’ toughest challenges and turning technology into advantage.”
About Leidos
Leidos is an industry and technology leader serving government and commercial customers with smarter, more efficient digital and mission innovations. Headquartered in Reston, Virginia, with approximately 50,000 global employees, Leidos reported annual revenues of approximately $17.2 billion for the fiscal year ended Jan. 2, 2026. For more information, visit www.Leidos.com.
About ServiceNow
ServiceNow (NYSE: NOW) is the AI control tower for business reinvention. The ServiceNow AI Platform integrates with any cloud, any model, and any data source to orchestrate how work flows across the enterprise. By unifying legacy systems, departmental tools, cloud applications, and AI agents, ServiceNow provides a single pane of glass that connects intelligence to execution across every corner of business. With more than 100 billion workflows running on the platform each year, ServiceNow helps organizations turn fragmented operations into coordinated, autonomous workflows that deliver measurable results. Learn how ServiceNow puts AI to work for people at www.servicenow.com.
Leidos Forward-Looking Statements
Certain statements in this announcement constitute “forward-looking statements” within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management’s current beliefs and expectations and are subject to significant risks and uncertainties. These statements are not guarantees of future results or occurrences. A number of factors could cause our actual results, performance, achievements, or industry results to be different from the results, performance, or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, the “Risk Factors” set forth in Leidos’ Annual Report on Form 10-K for the fiscal year ended January 2, 2026, and other such filings that Leidos makes with the SEC from time to time. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Leidos does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.
ServiceNow Forward-Looking Statements
This press release contains “forward-looking statements” about the expectations, beliefs, plans, and intentions relating to ServiceNow’s expanded relationship with Leidos. Such statements include statements regarding future product capabilities and offerings and expected benefits to ServiceNow. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, ServiceNow’s results could differ materially from the results expressed or implied by the forward-looking statements made. ServiceNow undertakes no obligation, and does not intend to update the forward-looking statements. Factors that may cause actual results to differ materially from those in any forward-looking statements include: (i) delays and unexpected difficulties and expenses in executing the product capabilities and offerings, (ii) changes in the regulatory landscape related to AI and (iii) uncertainty as to whether sales will justify the investments in the product capabilities and offerings. Further information on factors that could affect ServiceNow’s financial and other results is included in the filings ServiceNow makes with the Securities and Exchange Commission from time to time.
ServiceNow oznámil silný rozmach ve veřejném sektoru ve téměř všech 50 státech USA pro svou AI platformu. V Raleighu agenti AI už autonomně řeší téměř polovinu IT požadavků.
Nearly all 50 U.S. states join ~90% of the Fortune 500 in putting AI to work with the ServiceNow AI Platform
California, Hawaii, North Carolina, and Washington, D.C. are among the state and local agencies using ServiceNow to improve citizen experiences and modernize operations
SANTA CLARA, Calif.--(BUSINESS WIRE)-- ServiceNow (NYSE: NOW), the AI control tower for business reinvention, today announced strong momentum in the public sector, with nearly all 50 U.S. states transforming mission outcomes with the ServiceNow AI Platform. State and local agencies in California, Hawaii, North Carolina, and Washington, D.C. are among those using the ServiceNow AI Platform to help deliver better citizen services and modernized operations on a trusted and integrated government-grade platform designed for the scale and efficiency public sector missions demand.
With the ServiceNow AI Platform, we're creating one unified front door for employee requests, so our workforce can spend less time navigating systems and more time serving the District.
ShareTurning government complexity into coordinated action
ServiceNow helps state and local governments modernize operations, unlock the value of their data, and strengthen cybersecurity, designed to deliver strong ROI on every dollar invested. With an autonomous workforce of AI specialists, employees gain a teammate to work alongside them—helping to cut wait times on things like permits, benefits, and constituent requests—all while maintaining government-grade security across any cloud, AI model, data source, and system.
“State and local leaders are redefining what government can deliver, and ServiceNow is proud to be the platform making it possible,” said Mike Hurt, group vice president of U.S. Public Sector at ServiceNow. “We bring AI that's governed by design through our AI Control Tower, built to scale across agency missions, and designed to keep humans in the loop so agencies can earn and keep the citizen trust their missions depend on.”
Putting AI to work for mission-critical services
State and local agencies are achieving durable value ROI from the ServiceNow AI Platform, including:
California: The California Housing Finance Agency (CalHFA) is using ServiceNow’s AI-powered Public Sector Digital Services to provide AI assistance to human call center agents and agentic AI ticket resolution to help manage thousands of calls and questions related to services they provide: low-interest rate home loans, down payment assistance, and financing for the development of affordable rental and ownership housing. With ServiceNow’s multi-channel self-service capabilities, auto-generated case summaries, and AI-powered case resolution, CalHFA has reduced costs while improving the citizen experience.Hawaii: Launched the ServiceNow AI Platform in just six weeks, establishing a shared enterprise service platform for the State of Hawaii. The platform reflects the State's vision for digital transformation. Today, it powers the statewide HIP help desk, AI-enabled self-service, knowledge management, and enterprise IT service management, creating a scalable foundation for future statewide adoption.North Carolina: The City of Raleigh became the first municipal government to deploy ServiceNow’s L1 AI Specialist in production, with no in-house AI engineering bench behind it. The city is using ServiceNow AI agents to route service tickets with precision and speed, cutting service desk costs by 66% and returning more than 1,300 staff hours a year. Now they’re extending that same AI-powered service to all 500,000 residents.Washington, D.C.: The Office of the Chief Technology Officer (OCTO) is replacing a patchwork of contact center and workflow tools with the ServiceNow AI Platform, using EmployeeWorks to give every DC Government employee a single conversational entry point for service requests and agentic AI to automate fulfillment on the backend. The new experience is expected to enable employees to resolve most routine requests on their own, reducing wait times and allowing IT and HR teams to focus on more complex work. OCTO is also extending the platform to grants management with Public Sector Digital Services, targeting reducing processing time in half and clearer visibility for agencies overseeing awards. OCTO also plans to use ServiceNow AI Control Tower to gain visibility into every AI model and agent in production, helping govern AI at scale.“Our ServiceNow AI Platform represents the new path we're charting for the future of government in Hawaii,” said Darren Cantrill, information system manager, State of Hawaii. “In just six weeks, we built a shared enterprise service platform that's already changing how agencies collaborate and how quickly we can respond to the people we serve. This is just the beginning of our modernization journey, creating a foundation that agencies across Hawaii can continue to build upon.”
“We are a long-time ServiceNow customer and we've continued to expand our use of the platform to transform how we serve both employees and our community,” said Mark Wittenburg, chief information officer, City of Raleigh. “Today, ServiceNow AI agents are autonomously resolving nearly half of our IT support requests, and our goal is to reach 85% as we continue to automate routine work and empower our teams to focus on more complex, high-value services. Together, we're building a more efficient, responsive government while taking a thoughtful, responsible approach to AI that puts people first.”
“Our goal is to make DC Government simpler on the front end and smarter on the back end,” said Stephen N. Miller, chief technology officer, the District of Columbia. “With the ServiceNow AI Platform, we're creating one unified front door for employee requests, so our workforce can spend less time navigating systems and more time serving the District. On that same platform, we're reimagining grants management, where we expect to reduce processing time by 60 percent. All of this is built on the foundation of DC's AI Values—and with AI Control Tower giving us visibility across every AI agent and model in production, we're building government that's simpler, faster, and more trusted.”
About ServiceNow
ServiceNow (NYSE: NOW) is the AI control tower for business reinvention. The ServiceNow AI Platform integrates with any cloud, any model, and any data source to orchestrate how work flows across the enterprise. By unifying legacy systems, departmental tools, cloud applications, and AI agents, ServiceNow provides a single pane of glass that connects intelligence to execution across every corner of business. With more than 100 billion workflows running on the platform each year, ServiceNow helps organizations turn fragmented operations into coordinated, autonomous workflows that deliver measurable results. Learn how ServiceNow puts AI to work for people at www.servicenow.com.
ServiceNow podruhé zvýšila celoroční výhled tržeb z předplatného na 15,760–15,780 mld. USD díky silné poptávce po softwaru s AI. Ve 2. čtvrtletí překonala odhady tržeb i zisku.
Bill McDermott, chairman and CEO of ServiceNow, speaks during an interview on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., October 26, 2023. REUTERS/Brendan McDermid Purchase Licensing Rights, opens new tab
July 22 (Reuters) - ServiceNow (NOW.N), opens new tab on Wednesday raised its forecast for annual subscription revenue for the second time after beating second-quarter revenue and profit estimates, driven by growing demand for its AI-powered software.
Shares of ServiceNow rose over 5% in volatile extended trading. They have fallen about 37% so far this year.
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The results come as software giants are grappling with concerns of a "SaaSpocalypse" - a term reflecting the gloom around software-as-a-service companies amid growing capabilities of new AI tools provided by startups like OpenAI and Anthropic.
But ServiceNow is expanding its AI agent portfolio across domains like IT and customer service, helping enterprise clients to automate complex, time-consuming workflows.
Earlier this year, ServiceNow launched Otto, an AI experience designed to handle requests from employees and complete complex cross-department workflows. It also enhanced its capabilities by acquiring cybersecurity startup Armis and AI startup Moveworks.
ServiceNow said its AI platform has seen widespread adoption across the public sector, with nearly all 50 U.S. states now using it to improve citizen services and modernize operations.
The company now expects full-year 2026 subscription revenue of $15.760 billion to $15.780 billion, up from its earlier projection of $15.735 billion to $15.775 billion.
Second-quarter subscription revenue of $3.88 billion and adjusted profit per share of 90 cents exceeded LSEG-compiled analysts' average estimates of $3.82 billion and 85 cents, respectively.
However, the company's forecast for third-quarter subscription revenue of $3.975 billion to $3.980 billion came in below the average estimate of about $4 billion.
ServiceNow said its current remaining performance obligations, contract revenue expected to be recognized within the next 12 months, hit $13.20 billion as of June 30, a 21% increase from a year earlier.
"Our $29 billion in remaining performance obligations is fueled by longer customer commitments and skyrocketing demand from our partner ecosystem," CEO Bill McDermott said in a statement.
Reporting by Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber
Our Standards: The Thomson Reuters Trust Principles., opens new tab
ServiceNow oznámila zisk 90 centů na akcii, nad odhadem 85 centů, a tržby 3,99 miliardy USD, také nad konsensem. Akcie NOW v prodlouženém obchodování vzrostly o 4,78 % na 100 USD.
Here’s a look at the key metrics from the quarter.
NOW stock is moving. Watch the price action here. ServiceNow reported quarterly earnings of 90 cents per share, which beat the Street estimate of 85 cents, according to Benzinga Pro data.
Quarterly revenue clocked in at $3.99 billion, which beat the analyst consensus estimate of $3.93 billion and was up from $3.22 billion in the same period last year.
ServiceNow reported the following second-quarter highlights:
“ServiceNow’s exceptional Q2 results solidify our position as the fastest-growing major enterprise software and cybersecurity company,” said ServiceNow CEO Bill McDermott.
“The company’s sterling fundamentals have us operating to the Rule of 56, well on our way to the Rule of 60,” McDermott added.
NOW Stock Price Activity: According to data from Benzinga Pro, ServiceNow stock was up 4.78% to $100 in Wednesday’s extended trading.
Photo: Shutterstock
Market News and Data brought to you by Benzinga APIs
ServiceNow klesá o 5,9 %, protože slabé výsledky Pegasystems naznačily, že zákazníci odkládají objednávky softwaru kvůli přesunu výdajů do AI. Investoři teď čekají na dnešní výsledky ServiceNow.
Shares of ServiceNow (NOW -6.42%) were pulling back today after disappointing results from Pegasystems (PEGA -17.13%), a small-cap enterprise automation software company, seemed to confirm a concerning trend for ServiceNow, that customers were delaying software orders as they spend on AI.
As of 12:44 p.m. ET, ServiceNow was down 5.9%, while Pegasystems had lost 16.2%, and the iShares Expanded-Tech Software ETF, which tracks top software stocks like ServiceNow, was down 2.7%, showing software stocks were down broadly even as the major indexes were flat.
Image source: Getty Images.
Why the Pegasystems report is bad news for ServiceNow Pegasystems missed estimates on the top and bottom lines as management said, "Unprecedented changes in the AI market caused clients to delay their purchasing decisions."
That commentary and the poor results echo the update from IBM last week, as the legacy tech giant plunged after it warned that several large customer deals were delayed as its customers redirect capital expenditure budgets to AI hardware, with prices for components like memory rising rapidly.
Pega CEO Alan Trefler also said cost uncertainties around generative AI programs were causing companies to be more hesitant, adding that decision cycles have lengthened.
The development has implications for ServiceNow, which relies on similar budgetary spending on its cloud software.
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What's next for ServiceNow ServiceNow is due to report second-quarter earnings after the bell, and investors may be expecting to hear similar commentary from the enterprise software giant.
The analyst consensus calls for revenue to grow 22.2% to $3.93 billion, and for adjusted earnings per share to tick up from $0.82 to $0.86.
ServiceNow has been one of the biggest losers in the so-called SaaSpocalypse as software stocks have plunged on fears of AI disruption. The stock is now down more than 50% from its peak in late 2024, even as it's continued to deliver solid results.
Tonight's report comes at a pivotal moment. Expect the stock to swing big one way or the other tomorrow, depending on the results.
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines and ServiceNow. The Motley Fool has a disclosure policy.
ServiceNow má podle Jefferies ve 2. čtvrtletí překonat odhady u příjmů z předplatného i cRPO a může zvýšit celoroční výhled příjmů z předplatného. Tahounem jsou časné obnovy smluv a poptávka po NowAssist AI.
ServiceNow Inc (NYSE:NOW, XETRA:4S0) is expected to report a solid second-quarter performance, with Jefferies analysts forecasting results above guidance for key subscription metrics and a potential increase to its full-year subscription revenue outlook, supported by strong execution, early customer renewals and AI-related demand.
Ahead of the company's earnings release, Jefferies expects ServiceNow to report second-quarter subscription revenue and constant currency current remaining performance obligations (cRPO) above its guidance, helped by strong execution and customers renewing contracts ahead of planned price increases.
The firm also expects the company to meet third-quarter cRPO expectations and raise its full-year 2026 subscription revenue guidance, supported by early renewals and continued adoption of its NowAssist AI products.
Jefferies expects stronger-than-guided results to be supported by healthy partner activity, early renewals before pricing changes in Australia, improving customer decision-making in Europe, and contributions from recent acquisitions.
The firm also forecast an operating margin beat of around two percentage points, citing lower-than-expected operating expense growth excluding acquisition-related costs.
Feedback from channel partners pointed to stronger-than-expected customer renewal activity during the quarter, as some organizations sought to secure existing pricing before new product packaging and pricing took effect on July 1 in Australia.
Partners also reported growing interest in ServiceNow's NowAssist AI offering, with some enterprise customers making seven-figure commitments ahead of broader deployments. Jefferies said demand continued to be supported by IT operations management and IT service management products, while the company was also seeing success cross-selling its customer relationship management offerings.
Looking ahead, Jefferies expects ServiceNow to issue third-quarter cRPO guidance broadly in line with market expectations while increasing its full-year subscription revenue outlook to reflect stronger second-quarter performance and improved visibility into the second half of the year.
The firm added that investor reaction is likely to depend on the strength of the earnings beat and any signs that demand remains sustainable following the pull-forward of renewals ahead of price increases. Jefferies also said it continues to view the stock's risk-reward profile favorably at current valuation levels.
ServiceNow shares traded down 3% at $102 on Tuesday, down more than 33% so far this year.
ServiceNow čeká ve středu 22. července po uzavření trhu výsledky za 2. čtvrtletí, které mají ukázat, zda obavy z AI už zasahují byznys. Akcie jsou asi 51 % pod 52týdenním maximem.
The market has spent 2026 betting that generative artificial intelligence (AI) will hollow out enterprise software, and few large companies wear that bet more visibly than ServiceNow (NOW +1.60%). Shares trade near $103 as of this writing, down about 51% from their 52-week high of $210.20.
The sell-off has come even as the company's reported growth has barely wobbled.
That sets up an unusually clean experiment. On Wednesday, July 22, after the market closes, ServiceNow reports second-quarter results. If the AI-disruption thesis is right, the damage should be starting to show up in the numbers by now. If it's wrong, the stock is trading at a steep discount for no good reason.
Here's what to watch.
Image source: The Motley Fool.
The bear case meets the reported numbers The fear weight on the stock is easy to peg: AI agents could let companies automate workflows themselves, eroding demand for the subscription software ServiceNow sells. The same worry has dragged down software stocks broadly this year. Salesforce, for instance, trades almost 40% below its own 52-week high.
So far, though, ServiceNow's results read like a rebuttal. First-quarter subscription revenue rose 22% year over year to $3.67 billion, or 19% on a constant-currency basis, beating the high end of management's guidance. That was an acceleration from 21% growth in the fourth quarter of 2025. Current remaining performance obligations (cRPO), which represent contract revenue the company expects to recognize over the next 12 months, climbed 22.5% year over year to $12.64 billion. And the company closed 16 deals over $5 million in net new annual contract value during the quarter, up nearly 80% from a year earlier.
Notably, AI looks more like the thing ServiceNow is selling than the thing killing it. The company said its customers with more than $1 million in annual contract value for Now Assist, its generative AI offering, grew more than 130% year over year in Q1.
Also worth noting: Total remaining performance obligations, which capture all of ServiceNow's contracted revenue including amounts beyond the next 12 months, rose 25% year over year to $27.7 billion, growing faster than the current portion.
Cash generation is holding up as well. First-quarter free cash flow was about $1.7 billion, translating to a 44% free cash flow margin.
If there's a soft spot, it's subtle. That 22.5% cRPO growth was modestly slower than the 25% pace ServiceNow posted in the fourth quarter of 2025, though currency explains much of the step-down (growth held at 21% in constant currency in both periods). Still, contracted revenue is where real demand erosion would show up first -- well before it reaches reported revenue -- which makes it the line bears are watching.
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The numbers to watch on Wednesday Management's own targets make the scorecard simple. Guidance calls for second-quarter subscription revenue of $3.815 billion to $3.82 billion, or about 22.5% year-over-year growth. For the full year, the company expects subscription revenue of $15.735 billion to $15.775 billion, up 22% to 22.5%.
Three numbers will tell the story. Subscription revenue against that guidance range. The cRPO growth rate, and specifically its ability to hold above 20%. And the full-year outlook, which management has raised once already this year.
The stakes come down to valuation. ServiceNow trades at about 24 times consensus earnings-per-share estimates for the next 12 months and about 7.5 times trailing sales.
For a company growing revenue north of 20% with a 44% free cash flow margin, that is arguably a price built on fear. Software businesses with this profile commanded far richer multiples before AI anxiety took over -- ServiceNow itself did.
Of course, the discount only looks irrational if the growth holds. A meaningful cRPO slowdown or a trimmed outlook on Wednesday would hand the bears their first real piece of evidence, and the growth stock could get hit hard from an already low base.
I believe the fear is running well ahead of the facts. Customers aren't behaving like a disruption is underway. They're signing bigger, longer contracts that include the company's AI products.
But nobody has to guess here. Wednesday's report will either show the forward metrics holding -- or it won't.
If I owned the stock, I'd hold it through the report. For anyone considering buying, however, be cautious. It's impossible to know what happens in the short-term.
If subscription growth and cRPO hold up and the outlook rises again, the AI-disruption discount will start to look less like foresight and more like fear. And a 51% markdown on a 20% grower likely won't stay unnoticed for long.
ServiceNow čeká za čtvrtletí zisk 0,86 USD na akcii a tržby 3,92 miliardy USD, což by znamenalo meziroční růst o 4,9 % a 22 %. Výsledky má oznámit 22. července.
Wall Street expects a year-over-year increase in earnings on higher revenues when ServiceNow (NOW - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 22. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis maker of software that automates companies' technology operations is expected to post quarterly earnings of $0.86 per share in its upcoming report, which represents a year-over-year change of +4.9%.
Revenues are expected to be $3.92 billion, up 22% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for ServiceNow?For ServiceNow, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.59%.
On the other hand, the stock currently carries a Zacks Rank of #4.
So, this combination makes it difficult to conclusively predict that ServiceNow will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that ServiceNow would post earnings of $0.95 per share when it actually produced earnings of $0.97, delivering a surprise of +2.11%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
ServiceNow doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Atlassian ve 3. čtvrtletí fiskálního roku 2026 zvýšil tržby z cloudu o 29 % meziročně na více než 1,1 miliardy USD a celkové tržby o 32 % na 1,8 miliardy USD. Růst táhla AI, cross-selling a migrace do cloudu.
Key Takeaways Atlassian is seeing strong cloud growth driven by AI adoption, cross-selling and customer expansion. TEAM trades at a lower forward sales multiple than ServiceNow, offering a more attractive valuation. ServiceNow is benefiting from AI adoption but faces margin pressure from multiple acquisitions. ServiceNow (NOW - Free Report) and Atlassian (TEAM - Free Report) are two of the most important enterprise cloud software companies, helping large organizations modernize operations, automate workflows and manage critical business processes.
While both benefit from long-term digital transformation trends, their business momentum and execution profiles differ meaningfully. For investors trying to choose between these two software leaders, a closer look at their fundamentals, growth outlook and risks helps determine which stock currently offers a stronger investment case.
The Case for ServiceNow StockServiceNow has been benefiting from the rising adoption of its workflows by enterprises undergoing digital transformation. The company expects to achieve $1.5 billion in AI revenues in 2026 on the back of rising adoption of ServiceNow's AI products, such as Now Assist, across its customer base, where customers are deploying AI faster and on a much larger scale.
Deals including three or more Now Assist products grew nearly 70% year over year in the first quarter, suggesting that customers are expanding AI usage across multiple workflows rather than testing a single AI feature. This bodes well for ServiceNow's prospects as customers are increasingly moving from AI pilots to full production deployments across their organizations and are now investing in AI across multiple business functions.
Now Assist is also helping ServiceNow grow other AI products. The company stated that the adoption of Now Assist is driving demand for AI Control Tower and RaptorDB Pro. In the first quarter, AI Control Tower’s average deal sizes more than doubled sequentially, while RaptorDB Pro deal volume increased 80% year over year. Rising customer adoption and higher AI revenue expectations are positioning Now Assist to become an important driver of ServiceNow's AI growth strategy.
However, ServiceNow is integrating several acquisitions at the same time, including Moveworks, Armis, Veza and Pyramid Analytics. As a result of its back-to-back acquisitions, ServiceNow will need to integrate the acquired products, employees, technologies and sales teams into its existing business. As a result, the company will incur higher costs. These costs are expected to hurt the company's profitability before the benefits of synergies from acquisitions are fully realized.
For instance, the Armis acquisition is also expected to put pressure on profitability in 2026. Management expects Armis to reduce 2026 subscription gross margin by 25 basis points, operating margin by 75 basis points and free cash flow margin by 200 basis points. For the second quarter of 2026, Armis is expected to reduce its operating margin by 125 basis points. If customer adoption is slower than expected, the revenue contribution from these businesses could take longer to materialize.
The Case for Atlassian StockAtlassian's cloud business remained a key growth driver in the third quarter of fiscal 2026. Cloud revenues increased 29% year over year to more than $1.1 billion, helping total revenues grow 32% to $1.8 billion. The strong performance was driven by higher customer adoption, cross-selling and continued demand for the company's cloud-based products.
AI is playing an important role in this growth. Management said customers using its AI product, Rovo, are growing their annual recurring revenues (ARR) at about twice the rate of customers that do not use Rovo. Rovo's credit usage is growing more than 20% month over month, while millions of users are actively using the platform. In addition, more customers are adopting Teamwork Collection, which combines Jira, Confluence, Loom and Rovo into one offering. This bundle is helping Atlassian sell more products to existing customers and increase cloud spending.
The company's cloud business is benefiting from steady enterprise adoption. Management said cloud migrations from the Data Center remain on track and are expected to contribute mid- to high-single-digit cloud growth over time. TEAM's seat expansion remains healthy, while Net Revenue Retention stayed above 120% in the third quarter, as customers continue to adopt more products and expand their spending across the Atlassian platform.
The above-mentioned factors show that Atlassian's cloud business appears well positioned for continued growth. Rising AI adoption, higher cross-selling through Teamwork Collection and ongoing cloud migrations are helping the company expand its customer relationships. If these trends continue, the cloud business is likely to remain Atlassian's biggest growth driver in the coming quarters.
How do Earnings Estimates Compare for NOW & TEAM?The Zacks Consensus Estimate for NOW’s 2026 EPS is pegged at $4.13, unchanged over the past 30 days, indicating year-over-year growth of 17.7%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for TEAM’s fiscal 2026 EPS is pinned at $5.48, unchanged over the past 30 days, indicating year-over-year growth of 48.9%.
Image Source: Zacks Investment Research
NOW vs. TEAM: Price Performance and ValuationYear to date, shares of NOW and TEAM have plunged 29.7% and 45.2%, respectively.
NOW Vs. TEAM: YTD Price Return Performance
Image Source: Zacks Investment Research
Currently, TEAM is trading at a forward sales multiple of 3.06X, lower than NOW’s forward sales multiple of 6.26X. TEAM’s reasonable valuation makes it more attractive for investors looking for value and stability.
NOW vs. TEAM: Forward 12-Month P/S Ratio
Image Source: Zacks Investment Research
Conclusion: TEAM Has an Edge Over NOWBoth ServiceNow and Atlassian are well-positioned to benefit from the AI wave. However, ServiceNow faces near-term risks, such as dilutive impact on margins as a result of its back-to-back acquisitions, which could hurt the company’s prospects in the near term.
In contrast, Atlassian shows steadier execution, where the company is witnessing strong momentum in its cloud business, driven by robust adoption of its AI products. TEAM’s reasonable valuation offers some downside protection as well, giving TEAM a clear edge over NOW.
Currently, NOW and TEAM carry a Zacks Rank #3 (Hold) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Akcie ServiceNow v první polovině roku klesly o 36 %, protože trh se obává dopadu agentické AI na SaaS. Firma ale hlásí 22% meziroční růst předplatného tržeb v 1. čtvrtletí 2026.
ServiceNow (NOW 1.09%) stock dropped 36% in the first half of the year, according to data provided by S&P Global Market Intelligence. The market has been worried about the impact of agentic artificial intelligence (AI) on software-as-a-service (SaaS) stocks like ServiceNow, but ServiceNow is pushing back with its own AI platform.
Out with SaaS, in with AI? ServiceNow is a major player in organizational management, with more than 8,800 clients who rely on it to manage their workflows. Its platform is embedded into these clients' databases, unifying and automating various workplace processes.
When agentic AI first came out on a major scale a few months back, SaaS stocks plunged. The market has been worried about how SaaS companies will fare if clients can get the same value through AI agents that can be customized to do the same thing.
Image source: Getty Images.
ServiceNow has been ahead of the curve, and it launched its Control Tower product just over a year ago. The Control Tower acts, as the name implies, as a single point connecting all of the client's AI agents and platforms, as well as the rest of the organization. And it uses AI to analyze how it all works and provide insights. After all, even if AI agents can take care of the work of some employees, companies still need to set up, monitor, and manage them. And since it's also based in AI and machine learning, it's continually upgraded to improve along with advances in technology.
At least for now, the response has been positive, and ServiceNow hasn't seen a disruption in its business. It reported a 22% year-over-year increase in subscription revenue in the 2026 first quarter, and management is guiding for similar growth in the second quarter and for the full year.
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Is ServiceNow stock priced to buy? At the current price, ServiceNow stock trades at 64 times trailing 12 months. That's a hefty price tag, but it's actually a lot lower than it's been over the past few years. In fact, it's just off its lowest P/E ratio ever as it starts to climb back higher. Investors have been willing to pay a high premium for the stock, since it has a strong economic moat as the platform of choice for a large percentage of the country's top companies.
That kind of valuation can hardly be called a bargain, especially in the changing AI landscape, but it could still be a defensive play as more workflow goes toward AI, and investors could feel comfortable taking a small position right now.
Salesforce oznámil tržby 11,13 miliardy USD za 1. čtvrtletí FY27 dne 27. května 2026 a spustil zpětný odkup akcií za 25 miliard USD. ServiceNow mezitím uzavřel FY25 s tržbami 3,568 miliardy USD za 4. čtvrtletí a vsadil na akvizice v oblasti bezpečnosti.
Salesforce (NYSE:CRM | CRM Price Prediction) and ServiceNow (NYSE:NOW) both just delivered results that reset the enterprise AI conversation. Salesforce posted $11.13 billion in Q1 FY27 revenue on May 27, 2026, leaning on Agentforce and a massive buyback.
ServiceNow closed FY25 on January 28, 2026 with $3.568 billion in Q4 revenue and a wave of security-focused acquisitions. Two AI platforms, two very different playbooks.
Agentforce Carries Salesforce. Workflow M&A Carries ServiceNow. Salesforce is monetizing agents faster than most skeptics expected. Agentforce ARR hit $1.2 billion, up 205% year over year, and combined AI plus data ARR reached nearly $3.40 billion. Customers processed 3.8 billion Agentic Work Units, with more than 50% of Agentforce and Data 360 bookings coming from existing accounts. That is a healthy signal that Customer 360 remains sticky.
ServiceNow is playing a wider game. Now Assist net new ACV more than doubled year over year, and the platform closed 244 transactions above $1 million in net new ACV.
CEO Bill McDermott framed the mission bluntly: “We are building the AI control tower for business reinvention so enterprises can operate securely in an agentic AI world.” The Moveworks close, plus pending deals for Armis and Veza, push ServiceNow deeper into security and identity.
Business Driver Salesforce ServiceNow Growth Engine Agentforce + Data 360 Now Assist + workflow M&A Revenue Growth 13.3% YoY 20.66% YoY Capital Strategy $25B debt-funded ASR $5B buyback + acquisitions One Buys Back Stock. The Other Buys Companies. Salesforce is defending its core with a very expensive fence. The $25 billion accelerated share repurchase cut diluted shares from 970 million to 871 million, but noncurrent debt jumped to $39.3 billion from $10.4 billion.
Benioff called it “an outstanding quarter”, yet investors have not been convinced: CRM is down 36.97% year to date. ServiceNow is spending on capability instead of shares, and it has bled harder, off 47.35% over the past year.
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Valuation tells the tension. CRM trades at a forward P/E of 12x with a PEG of 0.779. NOW trades at a forward P/E of 25x and an EV/EBITDA of 33x. You pay up for the growth rate.
The Next Test Is Whose Agents Get Adopted Fastest I will be watching cRPO. Salesforce guided FY27 revenue of $45.90 billion to $46.20 billion, with cRPO at $33.6 billion, up 14%.
ServiceNow guided FY26 subscription revenue of $15.53 to $15.57 billion with cRPO growth of 22.5%. If McDermott’s “AI-driven CRM” language turns into real wins against Customer 360, the growth gap widens. Reddit already smells the fight: a viral investing thread framed Salesforce’s Informatica buy as proof the disruption is real.
Why I Lean Toward ServiceNow, But Only Just If you want cheap cash flow and a shareholder yield story, Salesforce fits. A PEG under 0.8 and $6.556 billion in Q1 free cash flow are hard to ignore, and the $0.42 quarterly dividend adds a floor. My hesitation is the debt: leveraging up to buy your own stock while a competitor targets your customers is a defensive move dressed as confidence.
I lean toward ServiceNow for the next 18 months because growth is accelerating while margins expand. Non-GAAP operating margin reached 31%, FCF margin hit 57% in Q4, and the Armis and Veza deals give the platform something Salesforce lacks: a credible security layer for agentic workflows.
The valuation is steep, which is worth noting given the growth premium. If Agentforce bookings decelerate next quarter, I revisit the whole thesis.
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ServiceNow stock is gaining positive traction. What’s pushing NOW stock higher? What Is Driving ServiceNow’s Stock Momentum?The move follows ServiceNow’s rollout with Accenture of two AI-focused offerings: managed security services built on the ServiceNow AI Platform and an Accenture AI-powered automation solution aimed at lowering the cost and complexity of modernizing enterprise risk and security operations. The news flow also includes an upgrade to Buy from Guggenheim, which framed the pullback as a better entry setup.
Critical Price Levels To Watch For NOW StockThe bigger-picture chart is still in repair mode: the stock is down 47.86% over the past 12 months and remains 15.9% below its 200-day SMA ($132.45), which is why rallies can still face "prove it" price action. That said, the near-term trend has improved with shares trading 9.7% above the 20-day SMA ($101.54), 11.2% above the 50-day SMA ($100.25), and 8.3% above the 100-day SMA ($102.88).
Momentum looks like it’s trying to turn the corner using MACD as the cleaner read here: MACD is above its signal line and the histogram is positive, which points to improving upside pressure versus the prior downswing. In plain terms, when MACD is above the signal line, it suggests downside momentum is fading and buyers are gaining traction.
The moving-average structure is mixed, which fits the "bounce vs. trend reversal" debate. The 20-day SMA is above the 50-day SMA (bullish), but the death cross from August 2025 (50-day below 200-day) is still a longer-term headwind until price can reclaim and hold that long average.
Key Resistance: $126.50 — a nearby ceiling that lines up closely with the 200-day EMA ($126.10), a common area where countertrend rallies can stall Key Support: $89.50 — a prior demand zone that sits above the 52-week low area ($81.24), making it a key "last line" if the bounce fails How ServiceNow Operates in the SaaS MarketServiceNow provides software solutions to structure and automate various business processes via a SaaS delivery model, with a core focus on the IT function for enterprise customers. It started in IT service management, expanded across IT workflows, and has pushed workflow automation into customer service, HR service delivery, and security operations.
That backdrop matters for the Accenture tie-up because security operations and risk workflows are areas where large enterprises often want packaged solutions plus implementation help. Partnerships that bundle platform software with services can shorten adoption cycles, but the stock still needs follow-through on monetization to shift the longer-term trend.
ServiceNow Earnings Preview for July 2026Looking further out, the next major catalyst for the stock arrives with the July 22, 2026 (confirmed) earnings report.
EPS Estimate: 76 cents (Down from 82 cents YoY) Revenue Estimate: $3.93 Billion (Up from $3.21 Billion YoY) Valuation: P/E of 64.2x (Indicates premium valuation relative to peers) Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $138.21. Recent analyst moves include:
Guggenheim: Upgraded to Buy (Target $125.00) (July 1) BTIG: Buy (Maintains Target $150.00) (June 29) Benchmark: Buy (Raises Target $130.00) (June 15) ServiceNow’s Benzinga Edge Scorecard BreakdownBelow is the Benzinga Edge scorecard for ServiceNow, highlighting its strengths and weaknesses compared to the broader market:
The Verdict: ServiceNow’s Benzinga Edge signal reveals a growth-heavy profile with weak value and weak momentum, meaning the setup can work, but it tends to need sustained upside follow-through to justify the premium. For longer-term bulls, reclaiming the 200-day area is the cleaner "trend repair" tell; for risk control, the $89.50 zone is the key downside level to monitor.
ServiceNow Stock Price Movement NOW Stock Price Activity: ServiceNow shares were up 3.40% at $111.60 at the time of publication on Tuesday, according to Benzinga Pro data.
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ServiceNow čelí klíčovému riziku: AI může v podnicích zrušit více workflow, než jich vytvoří, a tím zmenšit jeho dlouhodobý trh. Firma přitom ve 1. čtvrtletí 2026 zvýšila tržby o 22 % meziročně.
ServiceNow (NOW +0.23%) has made a solid comeback of late, despite the ongoing pessimism in the software-as-a-service (SaaS) industry.
The company recently delivered strong results, investors have embraced its growing portfolio of artificial intelligence (AI) products, and many now see ServiceNow as a potential winner in the next phase of enterprise AI.
The bullish argument is straightforward. As businesses deploy more AI agents, they will need a way to manage, monitor, and coordinate all the work those systems create. ServiceNow hopes to become the platform that handles those workflows.
It is an appealing vision. But before investors buy into that story, they should consider one important question: Will AI create more workflows than it eliminates? The answer could have a major impact on ServiceNow's long-term prospects.
Image source: Getty Images.
The traditional software model may be changing Historically, businesses purchased software to help employees perform specific tasks.
A company might use one application for customer support, another for human resources, and another for approving expenses or managing inventory. ServiceNow built a highly successful business by enabling systems to communicate with one another through automated workflows.
The model worked because software applications often work independently. Someone needed to coordinate information between departments and systems.
But artificial intelligence may change how employees interact with software altogether. Instead of opening multiple applications and following predefined workflows, employees may increasingly rely on AI assistants that can perform tasks on their behalf.
Consider a simple example. Today, a new employee joining a company might trigger a series of workflows. A manager submits a request; IT prepares a laptop; human resources creates employee records; security grants system access; and finance updates payroll information.
Tomorrow, a manager may simply tell an AI assistant: "Prepare everything for our new employee starting next Monday." The AI could automate much of the process behind the scenes, coordinating tasks across multiple systems with little direct human involvement.
If that happens on a large scale, businesses may require fewer traditional workflows than investors currently expect. For a company that relies on managing the ever-more-complicated workflow for its customers, that is a risk it cannot ignore.
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ServiceNow believes it is part of the solution To be fair, ServiceNow's management sees the future very differently.
The company argues that AI agents will still require governance, security controls, approvals, compliance checks, and monitoring. In other words, even if AI handles more work, organizations will still need a system to determine what actions AI agents can take and how those actions are tracked.
That is the opportunity ServiceNow is pursuing. The company is investing heavily in becoming an AI-native business, embedding AI into every product, feature, and interaction on its platform. It also aims to become the AI Control Tower, helping customers manage ever more complex AI-driven workflows.
So far, customers appear receptive to that strategy, which explains the company's ongoing revenue growth -- up 22% year over year in the first quarter of 2026. Particularly, its Now Assist (AI service) customers spending over $1 million in annual contracts grew 130% year-over-year in the same period.
In short, the company's growth remains strong, suggesting that AI is currently acting as a tailwind rather than a threat.
Investors should watch one key question The debate on whether AI is an enabler or destroyer of ServiceNow's business model ultimately comes down to the same question: Will AI generate more workflows than it eliminates?
If the answer is yes, ServiceNow could emerge even stronger than it is today. Every AI agent would create actions, approvals, decisions, and processes that require oversight. ServiceNow's platform could become increasingly valuable as organizations deploy thousands of AI-powered workers.
However, if AI eventually becomes capable of managing many of those processes independently, the long-term opportunity may prove smaller than investors expect. And that's what investors should recognize: the biggest risk facing ServiceNow isn't a recession, competition, or slowing demand.
It's the possibility that AI changes enterprise software in ways that are difficult to predict today.
What does it mean for investors? ServiceNow has built one of the highest-quality software businesses in the market. Its recurring revenue, high switching costs, and expanding product portfolio have created tremendous value for shareholders over time.
The company's next chapter may be even larger if it succeeds in becoming the control center for enterprise AI.
But that future is not guaranteed. If AI gradually reduces the number of workflows within organizations, it may shrink ServiceNow's addressable market.
And that's the biggest risk that investors should watch closely in the coming years.
Akcie ServiceNow v červnu klesly o 20 % kvůli obavám trhu z dopadu AI na SaaS. Firma ale dál hlásí silné výsledky: tržby z předplatného dosáhly ve 1. čtvrtletí 2026 3,7 miliardy USD, meziročně o 22 % více.
ServiceNow (NOW +0.49%) stock fell 20% in June, according to data provided by S&P Global Market Intelligence. It's been fairly volatile as the market weighs the impact of artificial intelligence (AI) on its business and how it should be valued today, and the drop was on the heels of a 41% rebound in May.
Does AI help, or hinder? As a category, software-as-a-service (SaaS) stocks have been falling as the market recognizes that agentic AI can be used to accomplish many of the tasks they're used for for free or more inexpensively. The idea behind SaaS is that clients pay a monthly fee for services that include upgrades and customer support, but if developers can create AI agents that take care of the same work, the SaaS products can become obsolete.
Image source: Getty Images.
ServiceNow has been fighting this theory with an AI-included platform that management claims provides great value for its clients. Its Control Tower product, which was already in progress before agentic AI became the threat it is right now, supervises all of a client's operations, including agentic AI, unifying its management and keeping the business, and its AI tools, safe.
Based on the company's current performance, worries about an AI takeover are far overblown. The company is as strong as ever, with $3.7 billion in subscription revenue in the 2026 first quarter, a 22% increase year over year, and $27.7 billion in remaining performance obligations (RPO), up 25%. It's highly profitable, with strong cash flow, and it's guiding for similar performance for the rest of the year.
Its platform is embedded within its 8,500 clients' operations, a strong economic moat with high barriers to entry, and its focus on pre-emptive AI measures protects its business.
The view from the market The stock was propelled higher in May after a bullish analyst rating, but the market is still weighing the opportunity. On the one hand, it's in a healthy position and reporting outstanding results. On the other hand, the AI landscape continues to shift rapidly, and it's unclear how it will ultimately impact ServiceNow.
Adding to the mix, the company has a dominant position in its category and is growing at double-digit rates, but it's past its upstart phase. The valuation piece fits in there, too -- ServiceNow stock trades at a P/E ratio of 63 and a price-to-sales ratio of 8, which makes it expensive. It's reasonable to see the stock slide at this valuation, and even if it still has a bright future, it comes at a premium.
ServiceNow těží ze silné poptávky po AI Control Tower, ale vysoké ocenění a tlak na marže kvůli akvizicím zvyšují krátkodobé riziko. Firma má navíc zpožděné obchody na Blízkém východě.
Key Takeaways ServiceNow is seeing strong AI Control Tower demand as enterprises expand AI adoption and governance.NOW faces margin pressure and execution risk as it integrates multiple acquisitions across AI and security.NOW's premium valuation and Middle East deal delays warrant a cautious near-term outlook. ServiceNow (NOW - Free Report) is currently trading at a high price-to-earnings (P/E) multiple, above the Zacks Computers - IT Services industry. ServiceNow’s forward 12-month P/E ratio sits at 21.76X, higher than the industry’s forward 12-month P/E ratio of 16.80X. The Zacks Value Score of D also suggests that NOW stock is overvalued.
The stock trades at a premium valuation to its peers as well, including Microsoft (MSFT - Free Report) , Salesforce (CRM - Free Report) and Oracle (ORCL - Free Report) . At present, Microsoft, Salesforce and Oracle have P/E multiples of 21.52X, 11.11X and 17.75X, respectively.
NOW Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
ServiceNow’s elevated valuation raises concerns about whether the stock can justify such lofty multiples. Considering the premium valuation, investors must be wondering whether they should buy, sell or hold the stock, especially amid near-term challenges.
NOW Faces Integration Risk From Multiple AcquisitionsServiceNow is integrating several acquisitions at the same time, including Moveworks, Armis, Veza and Pyramid Analytics. While these acquisitions add new AI, security and data capabilities, they also increase execution risk.
As a result of its back-to-back acquisitions, ServiceNow will need to integrate the acquired products, employees, technologies and sales teams into its existing business. As a result, the company will incur higher costs. These costs are expected to hurt the company's profitability before the benefits of synergies from acquisitions are fully realized.
For instance, the Armis acquisition is also expected to put pressure on profitability in 2026. Management expects Armis to reduce 2026 subscription gross margin by 25 basis points, operating margin by 75 basis points and free cash flow margin by 200 basis points. For the second quarter of 2026, Armis is expected to reduce its operating margin by 125 basis points.
Management expects efficiency gains to offset these pressures over time and eventually eliminate the margin impact. However, if customer adoption is slower than expected, the revenue contribution from these businesses could take longer to materialize.
Middle East Deal Delays Hurt NOW's ProspectsSeveral large sovereign cloud and on-premise deals in the Middle East were delayed during the first quarter of 2026 due to the ongoing regional conflict. Management stated these delays reduced first-quarter subscription revenue growth by approximately 75 basis points. These deals are recognized differently from recurring subscription contracts, so even a small number of delayed transactions can have a noticeable impact on quarterly revenue growth.
Although the delays were due to timing-related issues and not due to a change in underlying demand, the situation highlights that large government and sovereign cloud deals can be affected by geopolitical events. If geopolitical tensions continue, additional delays could affect the timing of future revenue recognition and result in significant volatility in the company's overall growth.
Key Technical Indicator Signals Bearish Trend for NOWServiceNow shares have dipped below their 200-day moving averages, a bearish technical signal that indicates the potential for continued downward pressure in the short term.
NOW 200-Day Simple Moving Average
Image Source: Zacks Investment Research
The above-mentioned factors seem to have weighed on investors’ sentiments, as reflected in the underperformance of NOW’s share price over the past 12 months.
NOW stock has plunged 49.6% over the past 12 months, underperforming the industry’s decline of 36%. The stock has outperformed its industry peers as well, such as Microsoft, Salesforce and Oracle. Over the past 12 months, shares of Microsoft, Salesforce and Oracle have plunged 22.9%, 40.2% and 39.8%, respectively.
12-Month Price Return Performance
Image Source: Zacks Investment Research
Despite the above-mentioned challenges, it’s not all doom and gloom for ServiceNow.
Strong Demand for AI Control Tower Boosts NOW's ProspectsServiceNow is seeing strong demand for AI Control Tower. Rising adoption of AI tools is creating the need for visibility into how these systems operate, what actions they take and whether they comply with company policies. This is where ServiceNow's AI Control Tower comes in to address the above-mentioned requirements and help customers monitor, manage and govern AI agents from a single platform.
Average AI Control Tower deal sizes more than doubled sequentially in the first quarter of 2026. Per management, customers view AI governance more as a requirement rather than an optional feature. Further, as AI agents become more capable and are used across more business functions, they need a platform that can monitor and govern these systems, which should help drive demand for AI Control Tower.
ServiceNow believes its large workflow platform gives AI Control Tower a significant advantage. Management stated that its systems have been trained on more than 95 billion workflows and over seven trillion transactions. Through its Context Engine, AI Control Tower can use information from existing workflows, approvals and business rules to help customers manage AI-driven actions. This allows organizations to manage AI-driven actions using existing business controls and governance frameworks.
Rising adoption of ServiceNow's AI products is boosting the demand for AI Control Tower. For instance, Now Assist is helping generate interest in AI Control Tower as customers expand AI deployments across their organizations. Further, with rising AI adoption, governance becomes more important, and this positions AI Control Tower to become a meaningful contributor to ServiceNow's future growth.
The Zacks Consensus Estimate for ServiceNow's 2026 and 2027 revenues indicates year-over-year growth of 21.9% and 18.1%, respectively.
Image Source: Zacks Investment Research
Conclusion: Hold NOW Stock Right NowServiceNow continues to benefit from strong demand for AI governance as more companies deploy AI agents across their operations. Larger deal sizes for AI Control Tower reflect growing adoption of NOW’s workflow platform. NOW’s large workflow platform and Context Engine give it an advantage as customers deploy more AI agents and provide a favorable long-term growth opportunity for the company.
However, ServiceNow faces several near-term risks, such as geopolitical headwind in the Middle East and dilutive impact on margins as a result of its back-to-back acquisitions, which could hurt NOW’s prospects in the near term. Further, the company’s premium valuation warrants a cautious approach to the stock.
Currently, ServiceNow carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ServiceNow v 1. čtvrtletí zvýšil předplatné tržby o 22 % na 3,67 miliardy USD a cRPO o 22,5 % na 12,64 miliardy USD. AI podle firmy není hrozbou, ale tahounem růstu.
ServiceNow (NOW +6.57%) has been one of the hardest-hit large-cap software stocks in 2026. After setting a split-adjusted 52-week high of $211.48 last summer, shares of the enterprise workflow software company have fallen about 50%, to around $105 as of this writing. The cause wasn't the business, but rather a marketwide fear that artificial intelligence (AI) would disrupt the software industry, letting customers swap pricey subscriptions for AI agents that do the same work.
Lately, that fear has eased, and the stock has climbed nearly 30% off its low. So is this beaten-down software leader finally a buy, or has the bounce already run too far?
Image source: Getty Images.
An AI winner, not a victim The bull case starts with how little the AI scare actually shows up in ServiceNow's results.
ServiceNow's first quarter of 2026 was strong by pretty much every measure. Subscription revenue rose 22% year over year (19% in constant currency) to $3.67 billion. And current remaining performance obligations (cRPO) -- contracted revenue the company expects to book over the next 12 months, and a useful read on near-term demand -- climbed 22.5% to $12.64 billion. Bigger deals, specifically, grew faster still: ServiceNow closed 16 transactions worth more than $5 million in net new annual contract value in the quarter, up nearly 80% from a year earlier.
More important for the AI debate, AI is landing as a tailwind, not a threat. Now Assist, ServiceNow's suite of generative AI features, is tracking toward about $1.5 billion in annual contract value for 2026 -- well above management's original $1 billion target. And customers spending more than $1 million a year on Now Assist grew more than 130% year over year.
"There has never been a tailwind for ServiceNow like AI," said CEO Bill McDermott on the company's first-quarter earnings call.
There's also a structural reason the AI-disruption worry may be overdone here. About half of ServiceNow's net new business now comes from pricing that isn't tied to user seats -- consumption-based models built around tokens, infrastructure, and connectors, McDermott said. The bear case assumes AI shrinks headcount, and with it the seats software vendors bill against. But when customers pay for how many workflows run on the platform, more automation can mean more usage, not less.
ServiceNow has leaned into that position. In January, it signed a multi-year agreement to make OpenAI's models a preferred option across the more than 80 billion workflows that run on its platform each year. The recent rebound in software stocks even has a tidy catalyst: in late June, the White House reportedly asked OpenAI to limit its most powerful new model to a small group of vetted partners, cooling fears that frontier AI would instantly commoditize enterprise software.
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The valuation still isn't a bargain Here's the harder part. Even after a sell-off this steep, ServiceNow doesn't look cheap. The stock trades at a forward price-to-earnings ratio of about 24 and a price-to-sales ratio of about 7. Both have compressed sharply -- the price-to-sales figure sat closer to 8 earlier this year, and far higher in years past. But neither is a bargain for a business whose growth, while strong, is gradually slowing from the high-20s rates of a few years ago.
Even more, the company's outlook looks good. For all of 2026, management guided for subscription revenue of about $15.75 billion, up more than 20%, and ServiceNow turns much of that into cash, posting a 44% free cash flow margin in the first quarter.
Still, this is a high-risk stock. The AI uncertainty that crushed shares this year hasn't been resolved so much as quieted, and another scare could send software names lower again.
So, with shares still down about 50% from their 52-week highs, a small position could make sense for investors who want exposure to a software company that is monetizing AI rather than being displaced by it. But I'd keep it modest. Shares aren't cheap enough yet to make this an easy call. And in a corner of the market moving this fast, paying up for even a strong business still carries plenty of risk.
ServiceNow NOW and Salesforce shares climbed 5% on Wednesday after Guggenheim upgraded the software companies, arguing that their valuations have become attractive despite ongoing risks posed by artificial intelligence.
The upgrade comes after a difficult year for enterprise software stocks, with investors reassessing growth prospects as AI reshapes the industry.
ServiceNow shares are down 33% so far in 2026, while Salesforce has fallen 38%.
Guggenheim analyst John DiFucci upgraded ServiceNow to Buy from Neutral and assigned a $125 price target, valuing the company at 7.5 times enterprise value to next-12-month recurring revenue.
According to DiFucci, the upgrade reflects valuation rather than optimism that ServiceNow will emerge as a major AI winner.
"We believe current levels present an attractive opportunity for investors to purchase a comfortably profitable stock likely to continue to grow at double digits," DiFucci noted, citing expected improvements in the company's US federal government business.
His discussions with management suggest that ServiceNow's government-related business could improve as disruptions tied to federal spending changes and procurement delays associated with the Department of Government Efficiency begin to ease.
DiFucci also upgraded Salesforce to Buy from Neutral, saying investors have become overly pessimistic about the software company.
He described the "Armageddon scenario" reflected in Salesforce's valuation as "misaligned with reality."
Salesforce is currently trading at about 3.7 times projected enterprise value to revenue over the next 12 months, a valuation DiFucci believes is "grossly undervalued."
AI remains a risk, not a growth driverAlthough DiFucci turned more constructive on both companies, he maintained a cautious stance on artificial intelligence.
He has previously described AI as a major threat to software companies and said that view has not changed materially.
"We want to be clear that we are not upgrading shares because we see [ServiceNow] as an AI beneficiary," he wrote, adding that he believes AI monetization is "unlikely to materialize" for the company, and that the threat of artificial intelligence "does pose significant risks."
Regarding Salesforce, DiFucci also tempered expectations for future growth.
"Realistically, the company will 'struggle to grow much, but does not decline much either,'" he said. "This is not a call that [Salesforce] will be a beneficiary of AI, but we don't believe it will decline as implied in the current valuation."
The brokerage also pointed to ongoing risks, including talent migration to AI-native startups and the company's reliance on acquisitions, including Armis, to support growth.
Separately, Evercore ISI reiterated its Outperform rating on ServiceNow with a $150 price target ahead of the company's second-quarter earnings report.
The brokerage said investor attention has shifted from long-term AI strategy toward execution over the coming quarters.
ServiceNow recently outlined its AI Control Tower strategy, AI-native product packaging, and a target of generating more than $30 billion in subscription revenue by fiscal 2030.
According to Evercore ISI, the company's long-term target implies subscription revenue compound annual growth of approximately 17.5% without requiring an acceleration in growth.
According to Evercore ISI, the company's long-term target implies subscription revenue compound annual growth of approximately 17.5% without requiring an acceleration in growth.
For the second quarter, ServiceNow guided current remaining performance obligations growth of about 19.5% in constant currency, including contributions from the Moveworks and Armis acquisitions.
Evercore ISI said investors will closely watch whether organic growth stabilizes as pressure in the federal government market eases and AI adoption increases.
The firm added that constant-currency growth of 20% to 20.5% would likely meet expectations, while results closer to 21% or higher could help ease concerns about slowing organic growth.
ServiceNow a Accenture spustily dvě AI řešení pro kyberbezpečnost a automatizaci modernizace rizikových bezpečnostních operací. Akcie ServiceNow v předobchodní fázi vzrostly o 3,45 % na 102,71 USD.
Editor’s note: This story has been updated to include additional context from Guggenheim’s analyst note.
ServiceNow stock is surging to new heights today. What’s behind NOW gains? What Is Driving ServiceNow’s AI-Powered Offerings?ServiceNow and Accenture rolled out two offerings: managed security services built on the ServiceNow AI Platform and an Accenture AI-powered automation solution designed to reduce the cost and complexity of modernizing enterprise risk and security operations.
The companies tied the push to a faster threat cycle—saying AI has compressed the time between vulnerability discovery and exploitation from months to hours—and pointed to U.S. data breach costs hitting $10.22 million per incident in 2025, up 9%.
Why Guggenheim Turned Bullish on ServiceNowCritical Price Levels To Watch For NOW StockThe premarket pop is happening inside a still-damaged longer-term chart: the stock is down 50.94% over the past 12 months and is trading 22.5% below its 200-day SMA ($133.66), which keeps the bigger trend cautious until price can reclaim that long average.
Near term, the setup is more constructive, with shares trading above the 50-day SMA ($99.90) and the 100-day SMA ($102.76), while sitting basically on top of the 20-day SMA ($103.78)—a spot that often decides whether a bounce turns into follow-through or fades back into chop.
RSI is the cleaner momentum read right now at 48.10, which is neutral and suggests the move isn’t "stretched" yet; in plain English, RSI helps gauge whether buying or selling has become overheated.
The mixed moving-average backdrop explains the two-way trade: the 20-day SMA is above the 50-day SMA (bullish), but the death cross from August 2025 (50-day below 200-day) still argues rallies may need repeated confirmation.
Key Resistance: $111.00 — a nearby round-number area where rebounds can stall Key Support: $85.50 — a prior demand zone that sits above the 52-week low area ($81.24) How ServiceNow Automates Business ProcessesServiceNow provides software solutions to structure and automate various business processes via a SaaS delivery model, with a core focus on IT workflows for enterprise customers. It started in IT service management and has expanded its workflow automation into customer service, HR service delivery, and security operations.
That backdrop matters for today’s news because security and risk modernization is a natural extension of the company’s "single platform" pitch—using the same workflow and automation logic to replace older, fragmented tools.
Pairing with Accenture also speaks to how these platforms get adopted in large enterprises, where implementation and managed services can be as important as the software itself.
ServiceNow Earnings Preview for July 2026Looking further out, the next major catalyst for the stock arrives with the July 22, 2026 (estimated) earnings report.
EPS Estimate: 76 cents (Down from 82 cents YoY) Revenue Estimate: $3.93 billion (Up from $3.21 billion YoY) Valuation: P/E of 59.1x (Indicates premium valuation relative to peers) Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price target of $138.21. Recent analyst moves include:
Guggenheim: Upgraded to Buy (Target $125.00) (July 1) BTIG: Buy (Maintains Target to $150.00) (June 29) Benchmark: Buy (Raises Target to $130.00) (June 15) What Would $1,000 Invested In NOW Be Worth?A $1,000 investment in ServiceNow on July 1, 2021, would have been worth $911 on June 30, 2026—a total return of -8.9% over the period. The stake swung between $627 and more than $2,000, ending well below its 2025 peak.
The ride included a deep drawdown, with the position hitting its period low on October 14, 2022, and a maximum drawdown of -64.5% along the way. Momentum later reversed, culminating in a period high on January 28, 2025, before the investment finished the five-year window at $911 on June 30, 2026.
On an annualized basis, ServiceNow returned -1.9% over the holding period, lagging the S&P 500’s 11.7% annualized return and the Nasdaq 100’s 15.8%. Among the listed peers, Meta Platforms, Inc. was the standout, posting a 106.2% annualized return over the same timeframe.
Today, SERVICENOW, INC. has a market capitalization of about $107.6 billion. The stock’s current P/E ratio is 59.1.
ServiceNow Benzinga Edge Rankings ExplainedBelow is the Benzinga Edge scorecard for ServiceNow, highlighting its strengths and weaknesses compared to the broader market:
The Verdict: ServiceNow’s Benzinga Edge signal reveals a growth-heavy profile with weak momentum and weak value, meaning the bull case leans on execution and continued demand rather than "cheap" pricing. For longer-term trend followers, the key technical tell is whether the stock can build above the $111.00 area and start working back toward its 200-day moving average.
NOW Stock Price Movement Wednesday MorningNOW Stock Price Activity: ServiceNow shares were up 3.45% at $102.71 on Wednesday, according to Benzinga Pro data.
Image: Shutterstock
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ServiceNow (NOW 3.73%) regularly racks up 20%-plus yearly revenue growth and attractive margins. It has won praise from Nvidia CEO Jensen Huang, who called ServiceNow the "enterprise operating system" for artificial intelligence (AI). Huang also regularly speaks at ServiceNow's annual events, showing how much he believes in the company.
The Nvidia endorsement is huge, and it's backed by real fundamentals. Even with those tailwinds, the growth stock is down by roughly 35% year to date, but it likely won't remain that way for long.
Image source: Getty Images.
AI workflows have produced high retention rates and steady growth ServiceNow helps businesses set up AI operating systems for every part of their business. Companies can use these bots to enhance productivity, reduce expenses, and produce higher-quality customer experiences. While other companies also offer AI bot platforms, ServiceNow has become the premier option, with more than 85% of Fortune 500 companies using its platform.
The company has also expanded to approximately 8,800 customers on subscription plans. That stream of annual recurring revenue makes growth more scalable and easier to predict. It also helped ServiceNow beat all top-line growth and profitability metrics in the first quarter. ServiceNow also decided to raise its full-year subscription revenue outlook.
Revenue increased by 22% year over year in Q1 to reach $3.77 billion. The company also has $12.64 billion in current remaining performance obligations, a 22.5% year-over-year increase. That backlog offers clear revenue visibility for the next 12 months, with $27.7 billion in total remaining performance obligations that stretch for multiple years.
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The AI control tower for business reinvention ServiceNow CEO Bill McDermott touted the company as the "AI control tower for business reinvention." ServiceNow integrates with any model, cloud, interface, data, or system that customers use for their businesses. That gives ServiceNow a compelling competitive advantage and explains why retention rates are high. ServiceNow enjoyed a 97% renewal rate in Q1, showing that most customers stick around.
The continued expansion of agentic AI serves as another catalyst that can increase the average contract value of its customers. As AI workflows expand, companies may have to upgrade their subscriptions to get more capabilities and handle more volume.
That's part of the reason the number of Now Assist customers spending more than $1 million in annual contract value grew by more than 130% year over year. ServiceNow is seeing more demand from high-paying customers, which acts as a good foundation for future revenue growth.
