Key Moments
- ServiceNow shares advanced about 4.5% in U.S. premarket trading after reporting second-quarter results above Wall Street expectations.
- The company lifted its full-year 2026 subscription revenue forecast to a range of $15.76 billion to $15.78 billion, implying roughly 22.5% growth.
- AI annual contract value surpassed $1 billion, with agentic AI deployments increasing ninefold over the last nine months.
Market Reaction and Guidance
ServiceNow shares rose about 4.5% in premarket U.S. trading on Thursday after the enterprise software provider posted a stronger-than-expected second quarter and raised its full-year subscription revenue outlook. The company cited robust enterprise demand for its artificial intelligence products and ongoing strength across its software platform as key drivers.
ServiceNow now projects full-year 2026 subscription revenue between $15.76 billion and $15.78 billion, which it said represents approximately 22.5% growth. The upward revision follows better-than-anticipated net new annual contract value.
For the third quarter, the company forecast subscription revenue of $3.98 billion at the midpoint. It also warned that a stronger U.S. dollar is expected to create a roughly $35 million headwind to third-quarter current remaining performance obligations (cRPO) growth.
Quarterly Financial Performance
Adjusted earnings for the quarter were $0.90 per share, ahead of analysts’ expectations of $0.86 per share. Total revenue reached $3.99 billion.
Subscription revenue increased 24.5% year over year to $3.88 billion, underscoring the company’s core growth engine. cRPO, a key indicator of future revenue, climbed 21% to $13.2 billion.
| Metric | Result | Additional Detail |
|---|---|---|
| Adjusted earnings per share | $0.90 | Above estimates of $0.86 |
| Total revenue | $3.99 billion | – |
| Subscription revenue | $3.88 billion | Up 24.5% year over year |
| cRPO | $13.2 billion | Up 21% |
| Full-year 2026 subscription revenue outlook | $15.76 billion – $15.78 billion | Approx. 22.5% growth |
| Q3 subscription revenue guidance (midpoint) | $3.98 billion | FX expected to be a ~$35 million cRPO headwind |
AI Momentum and Enterprise Demand
The results highlighted accelerating enterprise adoption of ServiceNow’s AI platform. The company said it surpassed $1 billion in AI annual contract value, delivered broad-based growth across key operating metrics, and raised its full-year subscription revenue outlook despite anticipated foreign exchange headwinds.
“ServiceNow had a solid beat-and-raise, but this doesn’t come close to erasing the cloud of negative sentiment suffocating legacy software,” analysts at Vital Knowledge said in a note. Software companies like ServiceNow have been grappling with the emergence of new offerings from cutting-edge AI models made by startups like Anthropic and OpenAI.
ServiceNow reported that AI annual contract value exceeded $1 billion during the quarter, while agentic AI deployments increased ninefold over the past nine months. Management indicated that stronger demand for its AI Control Tower platform, security solutions, and IT operations products contributed to firm customer spending.
The company recorded 123 transactions valued at more than $1 million in net new annual contract value during the quarter, an increase of nearly 40% from the prior year period.
Strategic Enterprise and Partner Expansion
ServiceNow said enterprises are increasingly using its AI platform to govern, deploy, and scale AI applications across their organizations.
During the quarter, the firm expanded partnerships with Nvidia, Microsoft, Amazon Web Services, Accenture, Experian, FedEx and Lenovo, aiming to deepen its AI capabilities and support broader enterprise adoption of its platform.
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