ServiceNow
ServiceNow sells large companies and governments one cloud system for handling their internal requests, from a broken laptop to a new hire, and increasingly the AI agents that answer them.
Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth4/4 →
Revenue grew 21% to 24% a year from 2023 to 2025; 2026 is guided to 21% at constant currency, about 2 points bought.
Business quality3/4 →
Customers renew 98% and large ones keep growing, but Salesforce and Microsoft agents attack the desk, and AI's effect on users is untested.
Financial position3/4 ↓
Net debt of about $0.9B against $5.3B of yearly operating cash, but $2.1B of commercial paper rolls every few months.
Execution record3/4 →
Beat every quarterly guide, but cut 2026 margin guides twice and spent $11B on deals in six months; 4 if the deals pay.
Per share capture2/4 →
Stock pay takes about half of free cash flow and buybacks only hold the count flat; 3 if stock pay falls toward 10%.
Potential3/4 →
$29.0B is contracted, and the 2030 plan needs about 18% a year in a market Gartner sees growing 15%; each step shows quarterly.
Risk profile3/4 ↓
One federal partner is 13% of revenue and rising, with an open Justice Department investigation; survivable.
Valuation2/4 ↑
About 46 times 2026 cash after stock pay implies about 7% growth for ever: the 2030 plan landing. 3 if stock pay falls as pledged.
Evidence quality3/4 →
Results, renewals and contracts are filed; users, AI contract value and the 2030 plan are management's word only.
The Verdict
We rate ServiceNow Neutral. It is a solid business: customers renew 98% of their contracts and sales are guided to grow about 21% this year. The price is full: counting pay in shares as the cost it is, buyers pay about 46 times the cash this year should produce, which only makes sense if the company hits its 2030 plan. The view hinges on one question nobody can yet answer from the filings: whether AI agents that do support staff's work will shrink the number of users customers pay ServiceNow for.
The long caseCompanies keep running more of their work through one system that routes requests to people and AI agents, and ServiceNow's record stays that system.
The evidence under this - 7 claims
C05facthigh confidence
Customers sign contracts of about three years and renewed 98% of what came up for renewal in each of 2023, 2024 and 2025 and in the first half of 2026. Customers paying more than $5M a year rose from 420 at the end of 2023 to 603 at the end of 2025 and 658 in June 2026.
C04management claimmedium confidence
Management's Q3 2026 subscription revenue of $3,988M beat the $3.975B to $3.98B guide; it raised the full-year subscription revenue outlook, lifted the 2026 free cash flow margin guide from 35% to 36% and guides Q4 2026 subscription revenue to $4,245M to $4,255M, up 22.5% to 23% (21.5% at constant currency). In January it guided $15.53B to $15.57B before Armis with 32% and 36%.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 and full-year 2025 results release and 2026…primaryServiceNow Q1 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
against this
- In April the guide outside Armis was held, not raised, and the shares fell 17.7% the next day (S08, S14).
- Each margin in the guide was cut by half a point to a point between January and July (S03, S05).
- 2026-10-28editedQ3 2026 release (S35): Q3 beat the guide, free cash flow margin guide raised by one point to 36%, Q4 guide set.
C18inferencemedium confidence
At $137.97 the company is worth about $142.7B, about 60 times free cash flow after stock pay over the year to June 2026 and about 46 times the 2026 plan's, which at a 9% required return implies about 7.3% and 6.8% growth for ever. It is 34 times 2026 and 27 times 2027 consensus adjusted earnings.
derived1,034M shares (C10) at $137.97 (C17) is $142.66B. Free cash flow after stock pay of $2,395M over the year to June (C40) gives 59.6 times, a 1.68% yield. On the plan, 35% of consensus 2026 revenue of $16.21B (C04, S14) is $5.67B, less stock pay at about 16% of revenue, $2.59B (C10), is $3.08B, so 46.3 times, a 2.16% yield. Growth for ever is the 9% return less the yield. $137.97 over $4.07 and $5.02 consensus adjusted earnings per share gives 33.9 and 27.5.
against this
- If the 2030 plan lands, about $30B of subscription revenue at a Rule of 60 margin with stock pay under 10% gives roughly $10B of cash after stock pay, so today's price is about 14 times 2030 (C13).
- Net debt of about $0.9B is ignored here; adding it moves the multiple by under 1% (C09).
C13management claimmedium confidence
At its May 2026 analyst day management set 2030 targets of more than $30B of subscription revenue, AI at 30% of contract value, growth plus free cash flow margin of 60% or more, and stock pay below 10% of revenue by 2029.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q2 2026 earnings call transcript (FMP), held 22…primary
against this
A $30B 2030 needs about 18% a year from the $15.8B 2026 guide while cRPO growth is slowing toward 19.5% with acquisitions inside it (C06).
C16inferencemedium confidence
If AI agents resolve the requests that IT support and service staff handle today, customers may need fewer of the staff ServiceNow has historically charged for by the user, so seat revenue could shrink at renewal even while customers stay.
derivedThe BLS projects fewer computer user support specialists and customer service representatives by 2035 because of automation (C34); ServiceNow's own agent closes 80% to 85% of service requests without a person (C39); Salesforce and Microsoft sell agents for the same desk (C30, C38).
against this
- Management says active users grew 25% and seats are rising, and half of new business is no longer priced per user (C15, C12).
- Renewals have held at 98% through 2026, and no customer has been reported cutting ServiceNow seats because of AI (C05).
C15management claimlow confidence
Management says monthly active users grew 25% and that active seats are rising, not falling, as customers add AI.
sourceServiceNow Q4 2025 earnings call transcript (FMP), held 28…primaryServiceNow Q2 2026 earnings call transcript (FMP), held 22…primary
against this
No user or seat count appears in any filing, and the renewal rate leaves out changes in users, so the claim cannot be checked (S01).
C10facthigh confidence
Stock pay was $1.96B in 2025, 14.7% of revenue, and $655M in Q2 2026, 16.5%. Buybacks of $1.84B in 2025 and $2.23B in the first half of 2026, including 18.5M shares at an average $107.97, cut diluted shares from 1,047M in 2025 to 1,034M in Q2 2026. There were no buybacks in Q2 and $4.2B of authority remains.
The company
Every large organisation has a stream of internal requests: a laptop breaks, someone joins, a supplier needs approving, a customer complains, a security alert fires. ServiceNow's cloud system logs each request, sends it to the right person or AI agent, and records the fix, on one shared map of the company's devices and staff.
Its buyers are big companies and governments; US agencies certified it for their highest security tier in 2019. Without it they would run older help-desk software and separate tools that do not share data.
The evidence under this - 3 claims
C01facthigh confidence
ServiceNow sells companies and governments one cloud system for running internal requests and the work behind them: IT service desks and IT operations, security and risk, customer service and field service, HR, legal and procurement requests, and tools to build their own apps, with AI agents added to each. It reports one segment, and had about 8,700 customers and 29,187 staff at the end of 2025.
C27facthigh confidence
In 2025 hosted subscriptions were $12.39B, 93.3% of revenue, subscriptions customers run on their own servers $0.49B, 3.7%, booked up front, and professional services $0.40B, 3.0%. North America was 63% of revenue.
C37facthigh confidence
ServiceNow's government cloud has been certified at FedRAMP's High level since August 2019, with 101 agency authorisations; to move agencies onto its AI editions it offered the GSA up to 70% off upgrades in September 2025.
How it makes money
Almost all the money is subscriptions. In 2025 customers paid $12.88B of $13.28B of revenue for the software, usually on three-year contracts, so most of each year's sales were signed before it began.
It has charged mostly by the user, the staff who work the requests. Management says half of new business is now priced by usage or by AI packs instead, and that its AI editions cost customers 30% more.
The evidence under this - 3 claims
C27facthigh confidence
In 2025 hosted subscriptions were $12.39B, 93.3% of revenue, subscriptions customers run on their own servers $0.49B, 3.7%, booked up front, and professional services $0.40B, 3.0%. North America was 63% of revenue.
C02facthigh confidence
In 2025 revenue was $13.28B, up 21%, of which subscriptions were $12.88B. GAAP operating income was $1.82B, a 13.7% margin; on the company's adjusted basis, which leaves out $1.96B of stock pay and acquisition costs, it was 31%. Net income was $1.75B. Operating cash flow was $5.44B and capital spending $0.87B, so free cash flow was $4.58B.
C12management claimmedium confidence
Management says annual contract value from its AI products passed $1B in Q2 2026, against a target of $1.5B by the end of 2026, that half of new business is no longer priced per user, and that its Pro Plus AI editions carry a price rise of more than 30%.
sourceServiceNow Q2 2026 earnings call transcript (FMP), held 22…primaryServiceNow Q1 2026 earnings call transcript (FMP), held 22…primaryServiceNow Q2 2026 results release (8-K Exhibit 99.1)primary
against this
The AI figure counts only the extra price of AI editions, its label changed from Now Assist to ServiceNow AI this year, and none of it appears in a filing (S04, S08).
Where the money comes from, stream by stream
| Stream | Share of sales (FY 2025) | How it earns it |
|---|---|---|
| Hosted subscriptions | 93.3% | Yearly fees for the workflow software, AI editions and usage packs, run in ServiceNow's or a public cloud's data centres and booked over the contract. |
| Self-hosted subscriptions | 3.7% | Subscriptions customers, mostly governments, run on their own servers, part of which is booked up front. |
| Professional services and other | 3.0% | Implementation and training, run at a loss. |
Who runs it
Bill McDermott, formerly SAP's chief executive, has run ServiceNow since 2019 and agreed to stay through 2030. Directors and officers own about 0.34% of the shares, mostly options.
Their bonus pays mainly on new contract value and long-term awards on 2027 subscription sales, nothing on cash after pay in shares. In February 2026 five executives cancelled planned share sales and McDermott bought $3M of stock, his first purchase since 2019.
The evidence under this - 4 claims
C24facthigh confidence
Directors and executive officers held about 3.6M shares in February 2026, about 0.34% of the company, two thirds of it options. Bill McDermott, chief executive since November 2019, held 2.2M, of which 2.0M were options, and agreed in December 2025 to stay through at least 2030.
C23facthigh confidence
The yearly bonus pays 70% on net new annual contract value and 30% on adjusted operating margin, and paid 101% of target for 2025. Long-term awards are 60% performance units paying on 2027 adjusted subscription revenue, moved up to 20% either way by return against the S&P 500, and 40% time-vested units. McDermott was paid $51.6M for 2025, against $37.6M for 2024.
C19facthigh confidence
In February 2026 five executives cancelled their pre-set share-sale plans and Bill McDermott bought 28,677 shares at about $104.60, about $3M, his first purchase since 2019. A director and the chief people officer later sold about $2.3M near $90 outside any plan.
C25management claimlow confidence
McDermott says ServiceNow will start 2027 with the same headcount it had before buying Moveworks, Veza and Armis, while still hiring sales staff, and that AI has already saved about $0.5B of costs.
sourceServiceNow Q2 2026 earnings call transcript (FMP), held 22…primaryServiceNow Q1 2026 earnings call transcript (FMP), held 22…primary
against this
No headcount appears in either 2026 10-Q, and severance costs of $80M in the first half are the only filed sign of cuts (S02).
Why it wins, and who could beat it
Why customers come back
Leaving is hard. A company builds years of its own rules, forms and links to other systems on ServiceNow, and its staff are trained on it; a government agency would also have to win security approval for a replacement. So customers renewed 98% of contracts in each of the last three years.
What it does is worth a lot to the buyer. The government counts 750,600 US support specialists whose work it routes, and ServiceNow says its agent closes in minutes cases that take a person two days.
The evidence under this - 5 claims
C05facthigh confidence
Customers sign contracts of about three years and renewed 98% of what came up for renewal in each of 2023, 2024 and 2025 and in the first half of 2026. Customers paying more than $5M a year rose from 420 at the end of 2023 to 603 at the end of 2025 and 658 in June 2026.
C37facthigh confidence
ServiceNow's government cloud has been certified at FedRAMP's High level since August 2019, with 101 agency authorisations; to move agencies onto its AI editions it offered the GSA up to 70% off upgrades in September 2025.
C34factmedium confidence
The Bureau of Labor Statistics counts 750,600 US computer user support specialists in 2025 and projects a 3% fall by 2035 because of chatbots, and 2,666,000 customer service representatives falling 5%.
C39management claimlow confidence
ServiceNow says its Level 1 service desk agent closes 80% to 85% of service requests without a person at more than 40 customers, and that a case taking a person about 2 days takes it under 20 minutes.
sourceServiceNow Q2 2026 earnings call transcript (FMP), held 22…primaryServiceNow Q1 2026 earnings call transcript (FMP), held 22…primary
against this
These are the seller's figures from unnamed customers, and the product is priced partly on usage, so its value to ServiceNow is not filed (S01).
C02facthigh confidence
In 2025 revenue was $13.28B, up 21%, of which subscriptions were $12.88B. GAAP operating income was $1.82B, a 13.7% margin; on the company's adjusted basis, which leaves out $1.96B of stock pay and acquisition costs, it was 31%. Net income was $1.75B. Operating cash flow was $5.44B and capital spending $0.87B, so free cash flow was $4.58B.
The threat
Rivals are attacking the core service desk with AI. Salesforce says 180 organisations chose its new IT desk in four months, one of them replacing ServiceNow. Microsoft is building agents into licences companies already own, and Freshworks and start-ups like Serval sell cheaper desks.
The deeper worry is that agents do the support staff's work, so customers need fewer of the users ServiceNow charges for.
The evidence under this - 5 claims
C30management claimmedium confidence
Salesforce says more than 180 organizations selected its Agentforce IT Service desk in the four months after its October 2025 launch, one of them, CoolSys, replacing ServiceNow.
against this
Selected is not contracted, no value is given, the product appears in no Salesforce filing, and CoolSys is a private services firm (S23, S20).
C38facthigh confidence
KeyBanc cut ServiceNow to underweight in December 2025, citing competition from Microsoft's Agent 365; Microsoft's own 10-K does not name ServiceNow.
C31facthigh confidence
Freshworks' 10-K names ServiceNow among the traditional IT service management vendors it competes with, and its employee experience business, led by Freshservice, grew annual recurring revenue 24% in Q2 2026. Workday's 10-K names ServiceNow as a competitor, and Atlassian's did until its 2026 10-K stopped naming anyone.
C33facthigh confidence
Serval, an AI-native IT service desk, raised $75M at a $1B valuation in December 2025; its named customers are small AI companies.
C16inferencemedium confidence
If AI agents resolve the requests that IT support and service staff handle today, customers may need fewer of the staff ServiceNow has historically charged for by the user, so seat revenue could shrink at renewal even while customers stay.
derivedThe BLS projects fewer computer user support specialists and customer service representatives by 2035 because of automation (C34); ServiceNow's own agent closes 80% to 85% of service requests without a person (C39); Salesforce and Microsoft sell agents for the same desk (C30, C38).
against this
- Management says active users grew 25% and seats are rising, and half of new business is no longer priced per user (C15, C12).
- Renewals have held at 98% through 2026, and no customer has been reported cutting ServiceNow seats because of AI (C05).
The rivals: CRM, MSFT, FRSH, TEAM, ORCL, WDAY, and 3 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| CRM | Salesforce Agentforce IT ServicePriced against it: One segment only | Workflow subscriptions | On sale | One segment only |
| MSFT | Microsoft Agent 365 and Copilot agentsPriced against it: One segment only | Workflow subscriptions | On sale | One segment only |
| FRSH · TEAM | Freshservice and Jira Service ManagementPriced against it: Same product | Workflow subscriptions | On sale | Same product |
| Private | AI-native service desks such as ServalPriced against it: Private | Workflow subscriptions | On sale | Private |
| Private | OpenAI Frontier and other model makers' agent platformsPriced against it: Private | Workflow subscriptions | Announced | Private |
| In-house | Fewer human agents at the customerPriced against it: In-house | Workflow subscriptions | On sale | In-house |
| ORCL | OraclePriced against it: One segment only | - | On sale | One segment only |
| WDAY | WorkdayPriced against it: One segment only | - | On sale | One segment only |
How big it could get
How big this could get
Companies worldwide spent $1,271B on software in 2025, and Gartner expects 15.5% more in 2026, much of it on AI models. ServiceNow took about 1% of that.
Nobody publishes, free, how much goes on the kind of software it sells, so its real share of its own market is unknown, and larger than that 1%.
The evidence under this - 3 claims
C35facthigh confidence
Gartner counts worldwide software spending of $1,271B in 2025, up 13.9%, and forecasts $1,468B in 2026, up 15.5%, with much of the growth in AI models rather than business applications.
C26inferencemedium confidence
ServiceNow's 2025 revenue of $13.28B was about 1.0% of the $1,271B Gartner counts as worldwide software spending in 2025.
derived$13,278M (C02) over $1,271B (C35) is 1.04%. Gartner's total includes AI model spending and infrastructure software ServiceNow does not sell, so the share of what it does sell is higher.
against this
Nobody publishes the slice of software spending that is service management and internal workflows, so this ratio is an understatement of ServiceNow's place in its own market (C35).
C34factmedium confidence
The Bureau of Labor Statistics counts 750,600 US computer user support specialists in 2025 and projects a 3% fall by 2035 because of chatbots, and 2,666,000 customer service representatives falling 5%.
Who has signed
Customers have signed $29.0B of contracts not yet billed, and expect about 46% of it to arrive within a year. That covers most of next year's sales before a new deal is won.
The evidence under this - 2 claims
C03facthigh confidence
In Q2 2026 subscription revenue was $3.88B, up 24.5% (23% at constant currency), and total revenue $3.99B. Contracted revenue due in the next twelve months (cRPO) was $13.20B, up 21%, and all contracted revenue (RPO) $29.0B. GAAP operating margin was 4% against 29.5% adjusted: stock pay took 16.5 points, amortisation of what it bought 5.5, deal costs 2 and severance 1.5.
sourceServiceNow Form 10-Q for the quarter ended 30 June 2026primaryServiceNow Q2 2026 results release (8-K Exhibit 99.1)primary
against this
The company says part of the beat was US federal on-premise revenue pulled forward from Q3 2026; the CFO put it at about half of the beat (S03, S04).
C05facthigh confidence
Customers sign contracts of about three years and renewed 98% of what came up for renewal in each of 2023, 2024 and 2025 and in the first half of 2026. Customers paying more than $5M a year rose from 420 at the end of 2023 to 603 at the end of 2025 and 658 in June 2026.
Where the growth is coming from, business by business
Where the growth is coming from
| Business | Share of revenue | Growth: last quarter | Last half-year | Last year | Share in 3 years at its half-year rate |
|---|---|---|---|---|---|
| License and Service | 97% | +20.9% | +22.7% | - | 98% |
| Technology Service | 3% | +9.3% | +8.6% | - | 2% |
| Whole company | 100% | +20.5% | +22.2% | - | 100% |
On the filed split through 2026-09-30, if each business keeps its last half-year's growth, the company grows about 22% next year and 22% in year 3, against 22.2% over the last twelve months. A scenario, not a forecast: no business holds its rate.
The results
The numbers
Is it growing?Steady
Sales grew 22% over the twelve months to Sep 2026, about the same pace as the 21% in the year to Dec 2025.
Is it profitable?Thin
Operating margin is 9.7%, about where it was (8.5%) in the year to Dec 2023.
Does growth pay off?Pays off
Running costs take 63¢ of each sales dollar, down from 73¢ in the year to Dec 2021.
Does it earn good returns?Low
Each dollar put into the business earns 6.7% a year after tax, about where it was (5.7%) in the year to Dec 2021.
Is it making cash?Strong
It turned 31% of sales into free cash, $4.75B over the last twelve months.
Is the balance sheet safe?Light debt
It owes $2.92B more than the cash it holds, about 0.5 years of the cash its operations bring in.
Are shares being diluted?Stable
The share count rose 1.5% in 2.8 years, and pay in shares costs 15% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-28. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Sep 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $5.90B | $7.25B | $8.97B | $11.0B | $13.3B | $15.4B |
| Sales growth | +30% | +23% | +24% | +22% | +21% | +22% |
| Profit | ||||||
| Gross margin | 77% | 78% | 79% | 79% | 78% | 73% |
| Operating margin | 4.4% | 4.9% | 8.5% | 12% | 14% | 9.7% |
| Net margin | 3.9% | 4.5% | 19% | 13% | 13% | 9.4% |
| What growth costs, per sales dollar | ||||||
| Research and development | 24% | 24% | 24% | 23% | 22% | 22% |
| Sales and marketing | 39% | 39% | 37% | 35% | 33% | 32% |
| General and admin | 10% | 10% | 9.6% | 8.5% | 8.5% | 8.5% |
| Pay in shares | 19% | 19% | 18% | 16% | 15% | 15% |
| Capital spending | 6.6% | 7.6% | 7.7% | 7.8% | 6.5% | 3.8% |
| Cash | ||||||
| Cash from operations | $2.19B | $2.72B | $3.40B | $4.27B | $5.44B | $5.33B |
| Free cash flow | $1.80B | $2.17B | $2.70B | $3.42B | $4.58B | $4.75B |
| Balance sheet | ||||||
| Cash and short-term investments | $3.30B | $4.28B | $4.88B | $5.76B | $6.28B | $4.61B |
| Debt | $92.0M | $0 | - | - | $1.49B | $7.52B |
| Net cash | $3.21B | $4.28B | - | - | $4.79B | −$2.92B |
| Returns and shares | ||||||
| Return on capital | 5.7% | 6.6% | 12% | 13% | 12% | 6.7% |
| Shares (diluted) | - | - | 1.03B | 1.04B | 1.05B | 1.04B |
What growth costs
Until this year growth got cheaper. From 2021 to 2025 selling, research, overheads and pay in shares all fell as a share of sales, lifting the operating margin from 4.4% to 13.7%. In 2026 the acquisitions reversed that: write-offs of what it bought, deal costs and cloud hosting cut the June quarter's margin to 4%.
The evidence under this - 3 claims
C22facthigh confidence
From 2021 to 2025 every operating cost fell as a share of revenue: sales and marketing from 38.9% to 33.0%, research from 23.7% to 22.3%, admin from 10.1% to 8.5% and stock pay from 19.2% to 14.7%, so GAAP operating margin rose from 4.4% to 13.7% and free cash flow after stock pay from 11.3% to 19.7% of revenue.
C03facthigh confidence
In Q2 2026 subscription revenue was $3.88B, up 24.5% (23% at constant currency), and total revenue $3.99B. Contracted revenue due in the next twelve months (cRPO) was $13.20B, up 21%, and all contracted revenue (RPO) $29.0B. GAAP operating margin was 4% against 29.5% adjusted: stock pay took 16.5 points, amortisation of what it bought 5.5, deal costs 2 and severance 1.5.
sourceServiceNow Form 10-Q for the quarter ended 30 June 2026primaryServiceNow Q2 2026 results release (8-K Exhibit 99.1)primary
against this
The company says part of the beat was US federal on-premise revenue pulled forward from Q3 2026; the CFO put it at about half of the beat (S03, S04).
C07facthigh confidence
Adjusted subscription gross margin fell from 83% in Q2 2025 to 80.5% in Q2 2026 and was 80.5% again in Q3 2026; the 2026 guide, cut from 82% to 81% earlier, was held at 81%. The 10-Q puts it on staff, data centres and $63M more paid to outside cloud providers; management says more customers run on Amazon, Microsoft and Google clouds and use more AI.
sourceServiceNow Form 10-Q for the quarter ended 30 June 2026primaryServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 2025 earnings call transcript (FMP), held 28…primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
- 2026-10-28editedQ3 2026 release (S35) reconciles Q3 non-GAAP subscription margin to 80.5% and holds the full-year guide at 81%.
The last report (22 Jul)
Quarter ended June 2026, filed figures.
24%
Sales growth
against the same quarter a year earlier
5.8%
Growth from the quarter before
against 5.7% the quarter before that
4¢
Operating profit
per dollar of sales
In the September 2026 quarter subscription sales rose 21% to $3,988M, above the top of the company's guide, and contracted sales due within a year grew 20.5%, above the 19.5% it had guided. The company raised its goal for free cash flow, the cash left after spending, to 36% of sales from 35%.
The slowing continues: it guides contracted growth down to 18.5% for the December quarter. Subscription margin held at 80.5%, and the company kept its yearly guide at 81%.
What it did to the thesisIt supported the case that customers stay and growth holds up. It did not change the price question: growth is still slowing and the shares are higher than where we last priced them, so the view stays Neutral.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.90 against $0.86 expected; $0.29 as filed, the gap being what the company adds back.
The evidence under this - 4 claims
C41facthigh confidence
In Q3 2026 subscription revenue was $3,988M, up 21% (20.5% at constant currency), and total revenue $4,106M. Contracted revenue due in the next twelve months (cRPO) was $13.65B, up 20.5% (21% at constant currency), and all contracted revenue (RPO) $29.7B, up 22%. Non-GAAP subscription margin was 80.5% and GAAP operating results are in the release's reconciliation.
against this
Q2 pulled US federal on-premise revenue forward from Q3, so the Q3 beat is against a guide that already lost that revenue; the release does not size the effect.
C04management claimmedium confidence
Management's Q3 2026 subscription revenue of $3,988M beat the $3.975B to $3.98B guide; it raised the full-year subscription revenue outlook, lifted the 2026 free cash flow margin guide from 35% to 36% and guides Q4 2026 subscription revenue to $4,245M to $4,255M, up 22.5% to 23% (21.5% at constant currency). In January it guided $15.53B to $15.57B before Armis with 32% and 36%.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 and full-year 2025 results release and 2026…primaryServiceNow Q1 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
against this
- In April the guide outside Armis was held, not raised, and the shares fell 17.7% the next day (S08, S14).
- Each margin in the guide was cut by half a point to a point between January and July (S03, S05).
- 2026-10-28editedQ3 2026 release (S35): Q3 beat the guide, free cash flow margin guide raised by one point to 36%, Q4 guide set.
C06facthigh confidence
Growth in contracted revenue due within a year (cRPO) slowed from 25% at the end of 2025 to 22.5% in Q1 2026, 21% in Q2 2026 and 20.5% in Q3 2026 (21% at constant currency), and the Q4 guide is 18.5%. Part of Armis's contract value is cancellable for convenience and left out of cRPO.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 and full-year 2025 results release and 2026…primaryServiceNow Q1 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
- 2026-10-28editedQ3 2026 release (S35) reports cRPO growth of 20.5%, above the 19.5% guide, and guides Q4 to 18.5%.
C07facthigh confidence
Adjusted subscription gross margin fell from 83% in Q2 2025 to 80.5% in Q2 2026 and was 80.5% again in Q3 2026; the 2026 guide, cut from 82% to 81% earlier, was held at 81%. The 10-Q puts it on staff, data centres and $63M more paid to outside cloud providers; management says more customers run on Amazon, Microsoft and Google clouds and use more AI.
sourceServiceNow Form 10-Q for the quarter ended 30 June 2026primaryServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 2025 earnings call transcript (FMP), held 28…primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
- 2026-10-28editedQ3 2026 release (S35) reconciles Q3 non-GAAP subscription margin to 80.5% and holds the full-year guide at 81%.
What management did with the money
In six months it spent about $11B on three companies, $7.6B in cash on Armis, which secures connected devices. Net cash of $8.6B became about $0.9B of net debt. It also spent $2.2B buying back shares in early 2026, mostly at about $108.
Insiders in 2026Q3: 30 purchases and 64 sales, from their Form 4 filings.
The evidence under this - 3 claims
C08facthigh confidence
ServiceNow bought Moveworks for $2.4B, $1.47B of it in shares, in December 2025; Veza for about $1.2B in March 2026; and Armis, which tracks a company's connected devices for security, for about $7.6B in cash in April 2026. Goodwill rose from $3.58B to $9.84B, and amortisation of what it bought runs about $776M in 2027.
C09facthigh confidence
At 30 June 2026 ServiceNow held $6.71B of cash and securities against $5.5B of notes and $2.1B of commercial paper maturing in about 81 days on average, so about $0.9B of net debt, against $8.6B of net cash at the end of 2025. The notes fall due from 2028 to 2056 and a $3B credit line is undrawn.
C10facthigh confidence
Stock pay was $1.96B in 2025, 14.7% of revenue, and $655M in Q2 2026, 16.5%. Buybacks of $1.84B in 2025 and $2.23B in the first half of 2026, including 18.5M shares at an average $107.97, cut diluted shares from 1,047M in 2025 to 1,034M in Q2 2026. There were no buybacks in Q2 and $4.2B of authority remains.
The price, and where we disagree
In short. Full. The price pays for the 2030 plan, including a sharp cut in pay in shares, and leaves little if growth slows or AI shrinks the users customers pay for.
Share price
$137.97
close,
Spare cash as a share of the price
3.2%
its 6-year normal 1.7%
The shares closed at $154.78 on 27 October 2026, 12.2% above the $137.97 the case was struck at, ahead of the third-quarter results that came out on 28 October and beat the guide.
The next test is the December-quarter results in late January 2027, with the first view of 2027: whether subscription sales reach the $4,245M to $4,255M guide, contracted growth holds at 18.5%, and what growth the company guides for next year.
The evidence under this - 4 claims
C17facthigh confidence
The shares closed at $137.97 on 6 October 2026, 28.5% below their 52-week high of $192.97. Over the year to 6 October the price fell 24.4% while revenue per share rose 23.3%, so what buyers pay for each dollar of sales fell 38.7%.
C21facthigh confidence
After Q4 2025 results KeyBanc's analyst said organic growth of 19% was below the 20% investors look for, and the shares closed down 11.4%. On 3 February 2026 software stocks sold off on fears AI tools would cut per-user software spending. After Q1 2026, Middle East government deal delays sent the shares down 12% in late trading.
C20facthigh confidence
The shares fell 9.9% after Q4 2025 results on 28 January 2026 and 17.7% after Q1 2026 results on 22 April 2026, when Morgan Stanley's analyst said the guide outside Armis had not moved while AI labs were taking the new spending.
C04management claimmedium confidence
Management's Q3 2026 subscription revenue of $3,988M beat the $3.975B to $3.98B guide; it raised the full-year subscription revenue outlook, lifted the 2026 free cash flow margin guide from 35% to 36% and guides Q4 2026 subscription revenue to $4,245M to $4,255M, up 22.5% to 23% (21.5% at constant currency). In January it guided $15.53B to $15.57B before Armis with 32% and 36%.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 and full-year 2025 results release and 2026…primaryServiceNow Q1 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
against this
- In April the guide outside Armis was held, not raised, and the shares fell 17.7% the next day (S08, S14).
- Each margin in the guide was cut by half a point to a point between January and July (S03, S05).
- 2026-10-28editedQ3 2026 release (S35): Q3 beat the guide, free cash flow margin guide raised by one point to 36%, Q4 guide set.
How we read the multiple
1. Over the year to June 2026 the business produced $2.40B of cash after pay in shares. 2. The company is valued at about $142.7B, about 60 times that. 3. On the 2026 plan that cash is about $3.1B, so about 46 times. 4. A common rule of thumb asks a share for about 9% a year; at 46 times the cash must grow about 7% a year for ever.
That is roughly the 2030 plan landing.
Against its own history. Buyers pay far less for each dollar of sales than a year ago while sales kept growing, so the fall came from the price, not the business.
The evidence under this - 5 claims
C18inferencemedium confidence
At $137.97 the company is worth about $142.7B, about 60 times free cash flow after stock pay over the year to June 2026 and about 46 times the 2026 plan's, which at a 9% required return implies about 7.3% and 6.8% growth for ever. It is 34 times 2026 and 27 times 2027 consensus adjusted earnings.
derived1,034M shares (C10) at $137.97 (C17) is $142.66B. Free cash flow after stock pay of $2,395M over the year to June (C40) gives 59.6 times, a 1.68% yield. On the plan, 35% of consensus 2026 revenue of $16.21B (C04, S14) is $5.67B, less stock pay at about 16% of revenue, $2.59B (C10), is $3.08B, so 46.3 times, a 2.16% yield. Growth for ever is the 9% return less the yield. $137.97 over $4.07 and $5.02 consensus adjusted earnings per share gives 33.9 and 27.5.
against this
- If the 2030 plan lands, about $30B of subscription revenue at a Rule of 60 margin with stock pay under 10% gives roughly $10B of cash after stock pay, so today's price is about 14 times 2030 (C13).
- Net debt of about $0.9B is ignored here; adding it moves the multiple by under 1% (C09).
C40facthigh confidence
Over the year to June 2026 operating cash flow was $5.31B and capital spending $0.73B, so free cash flow was $4.58B; stock pay was $2.19B, leaving $2.40B after it.
C10facthigh confidence
Stock pay was $1.96B in 2025, 14.7% of revenue, and $655M in Q2 2026, 16.5%. Buybacks of $1.84B in 2025 and $2.23B in the first half of 2026, including 18.5M shares at an average $107.97, cut diluted shares from 1,047M in 2025 to 1,034M in Q2 2026. There were no buybacks in Q2 and $4.2B of authority remains.
C04management claimmedium confidence
Management's Q3 2026 subscription revenue of $3,988M beat the $3.975B to $3.98B guide; it raised the full-year subscription revenue outlook, lifted the 2026 free cash flow margin guide from 35% to 36% and guides Q4 2026 subscription revenue to $4,245M to $4,255M, up 22.5% to 23% (21.5% at constant currency). In January it guided $15.53B to $15.57B before Armis with 32% and 36%.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 and full-year 2025 results release and 2026…primaryServiceNow Q1 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
against this
- In April the guide outside Armis was held, not raised, and the shares fell 17.7% the next day (S08, S14).
- Each margin in the guide was cut by half a point to a point between January and July (S03, S05).
- 2026-10-28editedQ3 2026 release (S35): Q3 beat the guide, free cash flow margin guide raised by one point to 36%, Q4 guide set.
C13management claimmedium confidence
At its May 2026 analyst day management set 2030 targets of more than $30B of subscription revenue, AI at 30% of contract value, growth plus free cash flow margin of 60% or more, and stock pay below 10% of revenue by 2029.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q2 2026 earnings call transcript (FMP), held 22…primary
against this
A $30B 2030 needs about 18% a year from the $15.8B 2026 guide while cRPO growth is slowing toward 19.5% with acquisitions inside it (C06).
Priced against its rivals
Only Freshworks sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Where we disagree with the market
The market believes
An AI loser: agents will do support staff's work, customers will pay for fewer users, and the growth is behind it.
We believe
The AI damage is unproven, since customers stay and growth holds; but the price already pays for the 2030 plan.
The filings do not yet show the damage the market fears. Customers renew 98%, those paying over $5M a year keep rising, and growth held near 21% after currency. Management says active users grew 25%, though it files no user count.
But even if the fear is wrong, the price already pays for the 2030 plan. And against us on the downside, growth in contracted sales is slowing toward 19.5%.
What analysts say, and the evidence
Analysts positive
92%
of 49, 1 Oct
Four months earlier
90%
of 48, 1 Jun
The evidence under this - 6 claims
C05facthigh confidence
Customers sign contracts of about three years and renewed 98% of what came up for renewal in each of 2023, 2024 and 2025 and in the first half of 2026. Customers paying more than $5M a year rose from 420 at the end of 2023 to 603 at the end of 2025 and 658 in June 2026.
C03facthigh confidence
In Q2 2026 subscription revenue was $3.88B, up 24.5% (23% at constant currency), and total revenue $3.99B. Contracted revenue due in the next twelve months (cRPO) was $13.20B, up 21%, and all contracted revenue (RPO) $29.0B. GAAP operating margin was 4% against 29.5% adjusted: stock pay took 16.5 points, amortisation of what it bought 5.5, deal costs 2 and severance 1.5.
sourceServiceNow Form 10-Q for the quarter ended 30 June 2026primaryServiceNow Q2 2026 results release (8-K Exhibit 99.1)primary
against this
The company says part of the beat was US federal on-premise revenue pulled forward from Q3 2026; the CFO put it at about half of the beat (S03, S04).
C15management claimlow confidence
Management says monthly active users grew 25% and that active seats are rising, not falling, as customers add AI.
sourceServiceNow Q4 2025 earnings call transcript (FMP), held 28…primaryServiceNow Q2 2026 earnings call transcript (FMP), held 22…primary
against this
No user or seat count appears in any filing, and the renewal rate leaves out changes in users, so the claim cannot be checked (S01).
C16inferencemedium confidence
If AI agents resolve the requests that IT support and service staff handle today, customers may need fewer of the staff ServiceNow has historically charged for by the user, so seat revenue could shrink at renewal even while customers stay.
derivedThe BLS projects fewer computer user support specialists and customer service representatives by 2035 because of automation (C34); ServiceNow's own agent closes 80% to 85% of service requests without a person (C39); Salesforce and Microsoft sell agents for the same desk (C30, C38).
against this
- Management says active users grew 25% and seats are rising, and half of new business is no longer priced per user (C15, C12).
- Renewals have held at 98% through 2026, and no customer has been reported cutting ServiceNow seats because of AI (C05).
C18inferencemedium confidence
At $137.97 the company is worth about $142.7B, about 60 times free cash flow after stock pay over the year to June 2026 and about 46 times the 2026 plan's, which at a 9% required return implies about 7.3% and 6.8% growth for ever. It is 34 times 2026 and 27 times 2027 consensus adjusted earnings.
derived1,034M shares (C10) at $137.97 (C17) is $142.66B. Free cash flow after stock pay of $2,395M over the year to June (C40) gives 59.6 times, a 1.68% yield. On the plan, 35% of consensus 2026 revenue of $16.21B (C04, S14) is $5.67B, less stock pay at about 16% of revenue, $2.59B (C10), is $3.08B, so 46.3 times, a 2.16% yield. Growth for ever is the 9% return less the yield. $137.97 over $4.07 and $5.02 consensus adjusted earnings per share gives 33.9 and 27.5.
against this
- If the 2030 plan lands, about $30B of subscription revenue at a Rule of 60 margin with stock pay under 10% gives roughly $10B of cash after stock pay, so today's price is about 14 times 2030 (C13).
- Net debt of about $0.9B is ignored here; adding it moves the multiple by under 1% (C09).
C06facthigh confidence
Growth in contracted revenue due within a year (cRPO) slowed from 25% at the end of 2025 to 22.5% in Q1 2026, 21% in Q2 2026 and 20.5% in Q3 2026 (21% at constant currency), and the Q4 guide is 18.5%. Part of Armis's contract value is cancellable for convenience and left out of cRPO.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 and full-year 2025 results release and 2026…primaryServiceNow Q1 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
- 2026-10-28editedQ3 2026 release (S35) reports cRPO growth of 20.5%, above the 19.5% guide, and guides Q4 to 18.5%.
What could go wrong, and how we would know
The risks
- AI shrinks the users If agents do support staff's work, customers may renew for fewer users, and AI editions and usage fees may not make up the difference.
- Rivals with agents Salesforce says 180 organisations chose its new IT desk in four months, and Microsoft builds agents into licences companies already own.
- Contracted growth is slowing Growth in sales due within a year slowed from 25% to 21%, with 19.5% guided next, even with acquisitions inside it.
- Margins are being squeezed Cloud hosting and AI cut the subscription margin from 83% to 80.5%, and management cut its 2026 margin guides twice.
- One federal partner One government reseller is 13% of sales and rising, while the Justice Department investigates the 2023 hiring of the Army's information chief.
- Debt after the spree About $2.1B of short-term borrowing must be rolled every few months after $11B of deals turned net cash into net debt.
The evidence under this - 7 claims
C16inferencemedium confidence
If AI agents resolve the requests that IT support and service staff handle today, customers may need fewer of the staff ServiceNow has historically charged for by the user, so seat revenue could shrink at renewal even while customers stay.
derivedThe BLS projects fewer computer user support specialists and customer service representatives by 2035 because of automation (C34); ServiceNow's own agent closes 80% to 85% of service requests without a person (C39); Salesforce and Microsoft sell agents for the same desk (C30, C38).
against this
- Management says active users grew 25% and seats are rising, and half of new business is no longer priced per user (C15, C12).
- Renewals have held at 98% through 2026, and no customer has been reported cutting ServiceNow seats because of AI (C05).
C30management claimmedium confidence
Salesforce says more than 180 organizations selected its Agentforce IT Service desk in the four months after its October 2025 launch, one of them, CoolSys, replacing ServiceNow.
against this
Selected is not contracted, no value is given, the product appears in no Salesforce filing, and CoolSys is a private services firm (S23, S20).
C06facthigh confidence
Growth in contracted revenue due within a year (cRPO) slowed from 25% at the end of 2025 to 22.5% in Q1 2026, 21% in Q2 2026 and 20.5% in Q3 2026 (21% at constant currency), and the Q4 guide is 18.5%. Part of Armis's contract value is cancellable for convenience and left out of cRPO.
sourceServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 and full-year 2025 results release and 2026…primaryServiceNow Q1 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
- 2026-10-28editedQ3 2026 release (S35) reports cRPO growth of 20.5%, above the 19.5% guide, and guides Q4 to 18.5%.
C07facthigh confidence
Adjusted subscription gross margin fell from 83% in Q2 2025 to 80.5% in Q2 2026 and was 80.5% again in Q3 2026; the 2026 guide, cut from 82% to 81% earlier, was held at 81%. The 10-Q puts it on staff, data centres and $63M more paid to outside cloud providers; management says more customers run on Amazon, Microsoft and Google clouds and use more AI.
sourceServiceNow Form 10-Q for the quarter ended 30 June 2026primaryServiceNow Q2 2026 results release (8-K Exhibit 99.1)primaryServiceNow Q4 2025 earnings call transcript (FMP), held 28…primaryServiceNow Q3 2026 results release (8-K Exhibit 99.1)primary
- 2026-10-28editedQ3 2026 release (S35) reconciles Q3 non-GAAP subscription margin to 80.5% and holds the full-year guide at 81%.
C11facthigh confidence
One US federal channel partner and systems integrator was 13% of revenue in Q2 2026, up from 11% in 2025, and the Department of Justice is still investigating the 2023 hiring of the US Army's chief information officer; the company says it cannot predict the outcome.
C09facthigh confidence
At 30 June 2026 ServiceNow held $6.71B of cash and securities against $5.5B of notes and $2.1B of commercial paper maturing in about 81 days on average, so about $0.9B of net debt, against $8.6B of net cash at the end of 2025. The notes fall due from 2028 to 2056 and a $3B credit line is undrawn.
C10facthigh confidence
Stock pay was $1.96B in 2025, 14.7% of revenue, and $655M in Q2 2026, 16.5%. Buybacks of $1.84B in 2025 and $2.23B in the first half of 2026, including 18.5M shares at an average $107.97, cut diluted shares from 1,047M in 2025 to 1,034M in Q2 2026. There were no buybacks in Q2 and $4.2B of authority remains.
What we still do not know
- Whether the users customers pay for are rising or falling as AI spreads; the company files no user count.
- How much revenue Armis brings and how fast it grows; only its effect on growth, about 1.25 points, is given.
- How big ServiceNow's own market is, and its share of it; the research firms that measure it charge for it.
- What the Justice Department's investigation will conclude, and when.
The evidence under this - 4 claims
C15management claimlow confidence
Management says monthly active users grew 25% and that active seats are rising, not falling, as customers add AI.
sourceServiceNow Q4 2025 earnings call transcript (FMP), held 28…primaryServiceNow Q2 2026 earnings call transcript (FMP), held 22…primary
against this
No user or seat count appears in any filing, and the renewal rate leaves out changes in users, so the claim cannot be checked (S01).
C08facthigh confidence
ServiceNow bought Moveworks for $2.4B, $1.47B of it in shares, in December 2025; Veza for about $1.2B in March 2026; and Armis, which tracks a company's connected devices for security, for about $7.6B in cash in April 2026. Goodwill rose from $3.58B to $9.84B, and amortisation of what it bought runs about $776M in 2027.
C26inferencemedium confidence
ServiceNow's 2025 revenue of $13.28B was about 1.0% of the $1,271B Gartner counts as worldwide software spending in 2025.
derived$13,278M (C02) over $1,271B (C35) is 1.04%. Gartner's total includes AI model spending and infrastructure software ServiceNow does not sell, so the share of what it does sell is higher.
against this
Nobody publishes the slice of software spending that is service management and internal workflows, so this ratio is an understatement of ServiceNow's place in its own market (C35).
C11facthigh confidence
One US federal channel partner and systems integrator was 13% of revenue in Q2 2026, up from 11% in 2025, and the Department of Justice is still investigating the 2023 hiring of the US Army's chief information officer; the company says it cannot predict the outcome.
What would change our view
- Neutral→AttractiveA cheaper price on an unchanged plan
It needs:
- ○The company is valued at about 30 times this year's cash after pay in shares, from about 46 today.about ≈$98.25 today, 29% below the last close
- Neutral→AttractiveGrowth re-accelerates and the margin steadies
It needs all of:
- ○Growth in contracted sales due within a year, after currency, speeds back up to 22% or more.checked at the next results, due by 28 Jan
- ○The subscription margin on the company's own basis holds at 80.5% or better.checked at the next results, due by 28 Jan
- Neutral→UnattractiveCustomers start to shrink
It needs any of:
- ○Growth in contracted sales due within a year, after currency, falls below 17%.checked at the next results, due by 28 Jan
- ○Customers renew less than 97% of their contracts in a year.checked at the next results, due by 28 Jan
We would also be wrong if
- The subscription margin on the company's own basis falls below 78% in any quarter.
- The Justice Department charges ServiceNow, or an agency bars it from federal contracts.
What is coming
- 28 October 2026 Q3 2026 results: Subscription revenue against the $3.975B to $3.98B guide after Q2 pulled revenue forward, cRPO growth against 19.5%, and the subscription margin.
Every dated event ahead
- 28 October 2026 Q3 2026 results: Subscription revenue against the $3.975B to $3.98B guide after Q2 pulled revenue forward, cRPO growth against 19.5%, and the subscription margin.
- 31 January 2027 Q4 2026 results and the 2027 guide: Whether 2027 is guided near the 18% a year the 2030 plan needs, with stock pay falling and headcount flat as pledged.
- 28 February 2027 2026 10-K: The renewal rate for 2026, the federal partner's share, headcount, and whether a risk factor on AI and per-user pricing appears.
Since we wrote this
Written
7 Oct
Price the thesis read
$137.97
6 Oct
- 29 OctEarningsServiceNow's call: early renewals flattered Q3 contracted sales and trim Q4. View heldQ3 2026 results.
- 28 OctEarningsBeat and raise: cRPO 20.5%, free cash flow guide 36%All three supports-if clauses cleared, but growth is still slowing to 18.5% by Q4 and the price is 12% above where the case was struck; Neutral holds.
- 7 OctThesis writtenNeutral, medium convictionWritten three weeks before Q3 results, with the shares 28.5% below their high after a year in which buyers paid 39% less per dollar of sales.
Sources 34
Where this came from
Sources - 34
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-01-29what it sells and how it prices, the four product areas, about 8,700 customers, 29,187 staff, the 98% renewal rate, customers over $5M, the competition section, the federal channel partner at 11% of revenue, the risk factors, RPO, the FY2025 statements, Moveworks and the pending Armis and Veza dealsbacksC01C02C05C08C10C11C14C22C27
- S02primarycompany filing2026-07-23the June 2026 balance sheet, the notes and commercial paper, the Armis and Veza purchase accounting, the amortisation schedule, the share count and buybacks, the federal channel partner at 13% of revenue, the DOJ matter and the cost of subscriptionbacksC03C05C07C08C09C10C11C14C17C40
- S03primarycompany release2026-07-22Q2 2026 subscription revenue, cRPO, RPO, GAAP and non-GAAP margins and their reconciliation, the on-premise pull-forward, the raised 2026 outlook, the Q3 guide and the 2030 targets set at the May analyst daybacksC03C04C05C06C07C12C13
- S04primarytranscript2026-07-22ServiceNow Q2 2026 earnings call transcript (FMP), held 22 July 2026the AI contract value, non-seat share of new business, Pro Plus price uplift, the Level 1 service desk agent, the headcount pledge, and analysts' questions on Salesforce's outcome pricing, seats and margins
ServiceNow AI ACV exceeded expectations again surpassing $1 billion, keeping us on track to beat our target of $1.5 billion ACV by the end of 2026.
backsC12C13C15C25C39 - S05primarycompany release2026-01-28FY2025 non-GAAP results and free cash flow, the first 2026 outlook, the $5B buyback authority and the 5-for-1 splitbacksC02C04C06C10
- S06primarycompany release2026-04-22Q1 2026 results, the Armis close and its 125 basis points of growth, the margin headwinds, termination-for-convenience in Armis contracts and the $4B term loanbacksC04C06C08
- S07primarycompany filing2026-04-23the Veza close, the accelerated buyback, and the federal channel partner at 12% of revenueread, but no claim rests on it
- S08primarytranscript2026-04-22ServiceNow Q1 2026 earnings call transcript (FMP), held 22 April 2026Morgan Stanley's question on the organic guide and the AI labs' growth, the $1.5B AI target, the 50% non-seat share of new business and the switching-cost anecdote; analysts' questions are a separate origin from the answers
yes, we didn't increase the revenue guide, excluding Armis, but we didn't take it down either
backsC12C20C25C39 - S09primarytranscript2026-01-28ServiceNow Q4 2025 earnings call transcript (FMP), held 28 January 2026Now Assist above $600M of ACV, active users, the Armis rationale, and analysts' questions on seats, model costs and gross margin
our monthly active users grew 25%
backsC07C15 - S10primarycompany filing2026-05-15the five note tranches, rates and maturitiesbacksC09
- S11primarycompany filing2026-02-17five executives cancelled their 10b5-1 sale plans and McDermott contracted to buy $3M of shares on 27 February 2026backsC19
- S12primarycompany filing2025-12-23McDermott stays through at least 31 December 2030backsC24
- S13primarycompany filing2026-04-06the executive officers, ownership table, the annual bonus and long-term award design and payouts, McDermott's 2025 pay and the pay ratiobacksC23C24
- S14secondaryvendor data2026-10-07NOW research pack (FMP, FINRA, SEC XBRL), frozencontent/NOW/research-pack.jsonthe close of 6 October 2026, the price move split, the rating series, short interest, insider trades, analysts' estimates and the filed five-year statementsbacksC17C19C20C22
- S15primaryindustry data2026-07-27worldwide software spending in 2025 and the 2026 forecast, with growth; read on Gartner's own mirror because www.gartner.com refused
Software || 1,271 || 13.9 || 1,468 || 15.5
backsC35 - S17primarygovernment data2026-09-01US Bureau of Labor Statistics, Occupational Outlook Handbook: computer support specialists (2025 to 2035 projections) US Bureau of Labor Statistics750,600 computer user support specialists in 2025, projected to fall 3% to 724,400 by 2035; read twice through an agent fetch because bls.gov refuses scripts
Employment of computer user support specialists is projected to decline as organizations continue to implement automated tools, such as chatbots, for troubleshooting.
backsC34 - S18primarygovernment data2026-09-01US Bureau of Labor Statistics, Occupational Outlook Handbook: customer service representatives (2025 to 2035 projections) US Bureau of Labor Statistics2,666,000 customer service representatives in 2025, projected to fall 5% by 2035
There is expected to be less demand for customer service representatives, especially in retail trade, as their tasks continue to be automated.
backsC34 - S19primaryregulator2026-10-07FedRAMP Marketplace: ServiceNow Government Community Cloud US General Services Administration (FedRAMP)certified at the High impact level since 12 August 2019, with 101 agency authorisations to operate or use it
Total Authority to Operate (ATO) and/or Authority to Use (ATU) letters, including initial and reuse authorizations.
backsC37 - S20primarycompany filing2026-02-26Freshworks names ServiceNow among traditional IT service management vendors it competes withbacksC31
- S21primarycompany filing2026-03-06Workday names ServiceNow among its competitors and warns of rivals built on general-purpose AI agentsbacksC31
- S22primarycompany release2026-08-04employee experience (Freshservice) annual recurring revenue growth
EX ARR grew 24% year-over-year, and Freddy AI Copilot is now attached to over 71% of new enterprise deals.
backsC31 - S23primarycompany release2026-02-26more than 180 organizations selected Agentforce IT Service in four months; CoolSys replacing ServiceNow
CoolSys is adopting Agentforce to increase IT team productivity, reduce total cost of ownership, and replace its legacy ServiceNow implementation.
backsC30 - S24primarycompany release2025-12-05Serval release: $75M Series B at a $1B valuation, led by Sequoia (CIO Dive press-release section) Serval (private)an AI-native IT service desk raising at $1B, with small AI companies as named customers
Serval , the AI-native IT service management (ITSM) platform, today announced it has raised $75 million in Series B funding, attaining a $1 billion valuation.
backsC33 - S25secondarynews2026-02-05OpenAI's agent platform launch, its rivals, and OpenAI's three-year model deal with ServiceNow
Frontier is a one-stop shop for enterprise oversight and management of "AI coworkers" that can operate across existing business systems.
backsC32 - S26primarygovernment data2026-09-24US Census Bureau, Business Trends and Outlook Survey, national response estimates (period ending 6 September 2026) US Census Bureau23.8% of businesses using AI in the latest two weeks against 17.7% in late December 2025, and 27.6% expecting to within six months
In the last two weeks, did this business use Artificial Intelligence (AI) in any of its business functions?
backsC36 - S27primarygovernment data2026-04-03Federal Reserve Board, FEDS Note: Monitoring AI Adoption in the U.S. Economy Federal Reserve Boardfirm adoption of about 18% at end-2025, and about 78% of the labour force working at firms that have adopted AI
Business survey data from the Census Bureau show that about 18 percent of firms have adopted AI as of year-end 2025.
backsC36 - S28secondarynews2025-09-02the federal discount ServiceNow gave to move agencies onto its AI editions
ServiceNow offer up to a 70% discount off the list price to upgrades of its new Information Technology Service Management Pro and Pro-plus bundle
backsC37 - S29secondarynews2026-01-29the objection the market stated after Q4 2025 results
that works out to organic growth of 19%, below the key psychological threshold of 20% investors look for, according to KeyBanc analyst Jackson Ader.
backsC21 - S30secondarynews2026-04-22the objection the market stated after Q1 2026 results
delays in closing several large government deals in the Middle East hurt first-quarter subscription revenue growth, sending its shares down 12% in extended trading.
backsC21 - S31secondarynews2026-02-03Reuters (via Yahoo Finance): Anthropic's AI tools deepen selloff in software and data stocks Reutersthe per-user pricing fear behind the February 2026 software selloff
AI tools allow businesses to do more with fewer staff, threatening the traditional model of charging per software user.
backsC21 - S32secondarynews2025-12-15Sherwood News: ServiceNow tumbles on report it is nearing a deal to buy a cybersecurity firm Sherwood NewsKeyBanc's downgrade on Microsoft Agent 365, and Bloomberg Intelligence calling the Armis price expensive
warning that the software company is facing stiff competition from Microsoft's Agent 365.
backsC38 - S33primarycompany filing2024-08-16Atlassian named ServiceNow among cloud vendors competing for IT teams; its FY2026 10-K names no competitorbacksC31
- S34primarycompany filing2026-10-07ServiceNow filed statements, SEC company facts (content/NOW/financials.json)content/NOW/financials.jsonfive fiscal years and the twelve months to June 2026 of filed revenue, cash flow, stock pay and cost linesbacksC40
- S35primarycompany release2026-10-28Q3 2026 subscription revenue, cRPO, RPO, the subscription margin reconciliation, the raised free cash flow margin and AI contract value target, and the Q4 2026 guidebacksC04C06C07C41