ServiceNow, Inc. Common Stock
Adjusted EPS of 90 cents beat the Street estimate of 85 cents, according to Benzinga Pro data. Revenue clocked in at $3.99 billion, which beat the analyst consensus estimate of $3.93 billion.
Subscription revenue rose 24.5% year-over-year (Y/Y) to $3.88 billion, 1.5 percentage points above guidance.
Current remaining performance obligations (RPO) increased 21% Y/Y to $13.2 billion, while total RPO reached nearly $29 billion, up 21% Y/Y in the quarter.
Adjusted operating margin came in at 29.5%, 300 basis points above guidance, supported by revenue outperformance and cost discipline.
Remaining performance obligations of $29 billion as of second quarter 2026, representing 21% Y/Y growth.
Key Metrics
AI adoption accelerated, with AI annual contract value (ACV) surpassing $1 billion and tracking toward the company's $1.5 billion 2026 target.
AI net new ACV growth increased over 40% sequentially, and deals involving five or more AI products grew 5.5x Y/Y. Customers deploying agentic AI in production rose 9x over the past nine months.
ServiceNow secured 123 deals with more than $1 million in net new ACV, up 40% Y/Y.
The company ended the quarter with 658 customers generating over $5 million in ACV, including 32 more customers above the $20 million threshold. Renewal rates remained strong at 98%, highlighting continued customer adoption.
Cybersecurity also surpassed $1 billion in revenue, supported by acquisitions such as Armis and Veza.
Outlook & Management Commentary
ServiceNow raised its fiscal year 2026 subscription revenue guidance midpoint by $15 million to approximately $15.77 billion, implying 21% Y/Y growth. This is supported by strong U.S. federal demand and accelerating AI adoption.
For the third quarter of 2026, the company expects subscription revenue of $3.975 billion-$3.980 billion and cRPO growth of 20% Y/Y in constant currency.
The company maintained expectations for a 31.5% operating margin and 35% free cash flow margin for the fiscal year 2026.
Management reaffirmed its long-term target of reaching $32 billion in revenue by 2030 while sustaining a Rule of 60+ growth profile.
ServiceNow executives expressed confidence in the company's third quarter and full-year outlook.
The CEO highlighted an upcoming announcement around a conversational service desk experience and noted that cybersecurity has grown into a 10-figure business for the company.
Experian & TeamViewer Partnership
In a separate release today, the company expanded its partnership with Experian to accelerate enterprise AI adoption through the integration of Experian's Ascend Platform with the ServiceNow AI Platform. The collaboration will embed Experian's data, insights, and decisioning capabilities into ServiceNow workflows, enabling AI agents to improve automation across areas such as employee onboarding, third-party risk management, and model governance.
Apart from this, ServiceNow penned a multi-year technology partnership with TeamViewer to integrate TeamViewer's Digital Employee Experience and Remote Connectivity solutions with the ServiceNow AI Platform. The collaboration will combine their capabilities to deliver end-to-end autonomous IT solutions, supported by joint go-to-market investments.
NOW Stock Price Activity: ServiceNow shares were up 7.46% at $102.58 during premarket trading Thursday.
