Company Reports

ServiceNow's second-quarter revenue grew by 22.5% year over year in constant currency to $3.99 billion, driven by broad-based demand. Non-GAAP operating margin was 29.5% for the quarter.

ServiceNow's investor day showcased its artificial intelligence solutions and overall innovation, while providing a new baseline subscription revenue target of at least $30 billion in 2030 in a total addressable market that will hit $350 billion in 2027.

ServiceNow's first-quarter revenue grew by 19% year over year in constant currency to $3.77 billion, driven by broad-based demand. Non-GAAP operating margin was 31.8% for the quarter.

The pace of change in the software industry has accelerated in recent months, leading to heightened uncertainty and prompting us to reassess our moat ratings.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.

Software stocks have underperformed for months, with a sharp sell-off on Feb. 3, which we surmise was driven by Anthropic’s release of the legal plugin for its large language model Claude and by Gartner's stark 2026 guidance, which reflects negatively on the enterprise IT spending environment.

ServiceNow's fourth-quarter revenue grew by 19.5% year over year in constant currency to $3.57 billion, driven by broad-based demand. Non-GAAP operating margin was 30.9% for the quarter. Results topped the high end of guidance on key measures.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.

ServiceNow's third-quarter revenue grew by 20.5% year over year in constant currency to $3.41 billion, driven by solid renewals, generative artificial intelligence, and other new solutions. Non-GAAP operating margin was 33.5% for the quarter. Results topped the high end of guidance on key measures.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.

ServiceNow's second-quarter revenue grew by 22% year over year in constant currency to $3.22 billion, driven by solid renewals, generative AI, and customer workflow adoption. Non-GAAP operating margin was 29.7% for the quarter. Results topped the high end of guidance on key measures.

ServiceNow hosted an investor day that showcased its artificial intelligence roadmap and overall product innovation, while providing minor updates to its previously established financial targets through 2027.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.

ServiceNow's first-quarter revenue grew by 20% year over year in constant currency to $3.09 billion, driven by solid renewals, generative AI, and customer workflow adoption. The non-GAAP operating margin was 30.9% for the quarter. Results topped the high end of guidance on key measures.

We are raising our fair value estimate for wide-moat ServiceNow to $990 per share from $900 after the company reported fourth-quarter results that were generally in line with or better than our expectations. While headline guidance was shy of our model on revenue, this is explained by worsening currency headwinds. Profitability was slightly better than anticipated. Our fair value estimate moves higher based on slightly higher growth and profitability estimates for 2026 and 2027. Concurrent with earnings, the company made a variety of announcements, including new agentic artificial intelligence features and expanded partnerships with Google and Oracle. The shares had appreciated about 80% from June until recent highs, which we thought was aggressive. Given the pullback after hours and our fair value estimate increase, we now see the shares as approximately fairly valued.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.

We are raising our fair value estimate for ServiceNow to $900 per share from $840 after the wide-moat company delivered outstanding results. The company beat the top end of guidance for all key metrics. Guidance was mixed with upside to revenue but lower margins than reflected in our estimates. Concurrent with earnings, the company also made a variety of announcements, including new product introductions and the hiring of Amit Zavery as president, COO, and chief product officer.

ServiceNow has been successful so far in executing a classic land-and-expand strategy. First, it built a best-of-breed SaaS solution for IT service management, or ITSM, based on being modular and flexible, having a superior familiar user interface, offering a way to automate a wide variety of workflow processes, and becoming a platform to serve as a single system of record for the IT function within the enterprise. Having established itself in ITSM and the IT operations management, or ITOM, market, the firm moved beyond the IT function. The same set of product design features and technologies allowed ServiceNow to bring its process automation approach to HR service delivery, customer service, finance, and operations. The firm then introduced more sophisticated and industry-specific versions of its core solutions. In September 2023, ServiceNow was one of the first software companies to release generative artificial intelligence solutions. Each of these products carries higher pricing to help drive incremental growth and boost margins.