Story
ServiceNow Lifts 2026 Outlook on Strong AI Adoption and Q2 Beat
Summary
The enterprise software company surpassed Wall Street estimates for its second quarter and raised its full-year subscription revenue forecast, citing accelerating enterprise demand for its AI platform.
ServiceNow (NYSE: NOW) raised its full-year revenue outlook after reporting second-quarter results that exceeded analyst expectations, driven by strong enterprise demand for its artificial intelligence products. The company's shares rose approximately 4.5% in extended trading following the announcement.
Second-Quarter Performance
ServiceNow reported adjusted earnings of $0.90 per share on revenue of $3.99 billion for the second quarter. These figures topped consensus estimates of $0.86 per share and $3.93 billion in revenue, according to Investing.com.
Key financial metrics highlighted the company's continued growth:
- Subscription revenue grew 24.5% year-over-year to $3.88 billion.
- Current remaining performance obligations (cRPO), a key indicator of future revenue, increased 21% to $13.2 billion.
AI Drives Growth and Large Deals
AdThe company attributed its strong performance to accelerating adoption of its AI platform. ServiceNow announced that its AI annual contract value (ACV) surpassed $1 billion during the quarter. Management noted that deployments of its agentic AI have increased ninefold over the last nine months.
This momentum was reflected in customer spending, with ServiceNow closing 123 transactions worth over $1 million in net new ACV, an increase of nearly 40% from the same period a year ago. The company also highlighted expanded partnerships with NVIDIA, Microsoft, and Amazon Web Services to broaden its AI capabilities.
Updated Financial Outlook
Buoyed by the strong results, ServiceNow lifted its financial guidance for the full year. The company now expects 2026 subscription revenue to be between $15.76 billion and $15.78 billion, which represents growth of approximately 22.5%.
For the upcoming third quarter, ServiceNow forecasts subscription revenue of approximately $3.98 billion. However, the company cautioned that a stronger U.S. dollar is expected to create a roughly $35 million headwind to cRPO growth in Q3.
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