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FY2025 Q4
Improving
ServiceNow, Inc. earnings call
Buzzberg read
Now Assist ACV surpassed $600 million, tracking to $1B+ target.
ServiceNow delivered a strong Q4 beat, with subscription revenue growth of 21% (19.5% CC), CRPO up 21% CC, and operating margin 31%. Management guided to 20% subscription revenue growth for FY2026 with expanding margins, dismissed AI disruption fears, and detailed strategic acquisitions of Armis and Vesa to build a unified security orchestration platform. Key partnerships with Microsoft, OpenAI, and Anthropic were highlighted, along with rapid AI monetization (Now Assist ACV surpassed $600M). The tone was extremely bullish, with the CEO reiterating a $1 trillion market cap goal. Q4 subscription revenue $3.466B (+19.5% CC), beat high end by 150bps; CRPO +21% CC, beat guide by 200bps.
Buzzberg read Now Assist ACV surpassed $600 million, tracking to $1B+ target. ServiceNow delivered a strong Q4 beat, with subscription revenue growth of 21% (19.5% CC), CRPO up 21% CC, and operating margin 31%. Management guided to 20% subscription revenue growth for FY2026 with expanding margins, dismissed AI disruption fears, and detailed strategic acquisitions of Armis and Vesa to build a unified security orchestration platform. Key partnerships with Microsoft, OpenAI, and Anthropic were highlighted, along with rapid AI monetization (Now Assist ACV surpassed $600M). The tone was extremely bullish, with the CEO reiterating a $1 trillion market cap goal. Q4 subscription revenue $3.466B (+19.5% CC), beat high end by 150bps; CRPO +21% CC, beat guide by 200bps. Read full analysisCollapse analysis
ServiceNow delivered a strong Q4 beat, with subscription revenue growth of 21% (19.5% CC), CRPO up 21% CC, and operating margin 31%. Management guided to 20% subscription revenue growth for FY2026 with expanding margins, dismissed AI disruption fears, and detailed strategic acquisitions of Armis and Vesa to build a unified security orchestration platform. Key partnerships with Microsoft, OpenAI, and Anthropic were highlighted, along with rapid AI monetization (Now Assist ACV surpassed $600M). The tone was extremely bullish, with the CEO reiterating a $1 trillion market cap goal. Q4 subscription revenue $3.466B (+19.5% CC), beat high end by 150bps; CRPO +21% CC, beat guide by 200bps.
- FY2026 guidance: subscription revenue $15.53-15.57B (+19.5-20% CC), operating margin 32%, FCF margin 36%.
- Now Assist ACV surpassed $600M, more than doubled YoY; AI control tower deal volume nearly tripled QoQ.
- Partnerships with Microsoft, OpenAI, and Anthropic deepen AI integration; FedEx partnership expands beyond source-to-pay.
Revenue$3.568B+5% QoQ
EPS$0.92-4% QoQ
Gross margin76.63%Reported
Operating margin12.42%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Leadership
CEO extends commitment to 2030, calls ServiceNow a $1T company.
Guidance
2026 subscription revenue to grow 20%, beat-and-raise culture remains.
Show 3 more callouts
Capital Allocation
New $5B buyback authorization with $2B ASR announced.
M&A
M&A not needed for growth; security portfolio doubling YoY.
AI
AI Control Tower deal volume nearly tripled in Q4.
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $3.568B | +5% QoQ |
| EPS | $0.92 | -4% QoQ |
| Gross margin | 76.63% | Reported |
| Operating margin | 12.42% | Reported |
| Free cash flow | $2B | Reported |
| Capex | $0.238B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Free cash flow | FY2026 | 36% | 36% | Maintained |
| Operating margin | FY2026 | 32% | 32% | Maintained |
| Revenue | FY2026 | $15.53B–$15.57B | $15.55B | Maintained |
| Revenue | FY2026 Q1 | $3.65B–$3.655B | $3.6525B | Maintained |
| Units | FY2026 Q1 | 20% | 20% | Maintained |
AI, capex & demand read
Management read
Upbeat
Management is confident and assertive, repeatedly emphasizing record results, strategic M&A, and a bullish outlook on AI and growth.
Management AI read
Management emphasizes that AI is a major growth driver, with strong adoption of Now Assist and AI Control Tower, and they position ServiceNow as the essential orchestration layer that complements LLM partnerships.
Investment and capacity
Management expects subscription gross margin of 82% for 2026, reflecting incremental data center investments related to public cloud, geo-expansion, and AI, but they are offsetting this with operating expense savings and expect continued margin expansion.
all 10 named companies below
Companiesreturns since call
Partners
Partners
Bill McDermott
FedEx is expanding its strategic partnership beyond source-to-pay, leveraging ServiceNow's AI platform for broader orchestration, signaling deepening collaboration.
Evidence
“We're combining ServiceNow's orchestration with FedEx's unique data DNA to provide procurement leaders with trusted insights in our source-to-pay solution.”
Partners
Bill McDermott
ServiceNow is guiding to a 1.5 ppt headwind in Q1 from the shift of on-prem to hosted revenue, partly due to strong adoption of hyperscaler offerings, but expects this to normalize over time. — The shift to hyperscaler infrastructure temporarily depresses gross margins but signals deeper cloud partnerships and eventual margin recovery with scale.
Evidence
“ServiceNow and Microsoft have announced a deep AI integration, connecting copilots, agents, and data across Microsoft 365 and the ServiceNow AI platform.”
ANTHROPIC
Partners
Bill McDermott
Deeper integration of Claude models into ServiceNow will drive enterprise AI adoption, especially for coding and workflows.
Evidence
“ServiceNow and Anthropic have announced an expanded partnership to integrate cloud models more deeply into the ServiceNow AI platform.”
OPENAI
Partners
Bill McDermott
ServiceNow gains preferred access to frontier models, enabling differentiated voice and multilingual AI capabilities in CRM and other workflows.
Evidence
“OpenAI models will be a preferred intelligence capability for several agentic use cases offered to ServiceNow Enterprise customers.”
ANDURIL
Partners
Bill McDermott
Armis provides unmatched asset visibility across IT, OT, IoT, and medical devices, forming the foundation for ServiceNow's unified security stack.
Evidence
“Armis is already protecting over 40% of the Fortune 100, precisely because they've cracked the visibility challenge.”
Partners
Bill McDermott
Vesa's dynamic identity mapping is critical for governing AI agent permissions, a bottleneck for enterprise AI deployment at scale.
Evidence
“VESA will solve the identity governance problem through its patented access graph technology.”
Supply chain
Supply chain
Gina Mastantuono
ServiceNow is guiding to a 1.5 ppt headwind in Q1 from the shift of on-prem to hosted revenue, partly due to strong adoption of hyperscaler offerings, but expects this to normalize over time. — The shift to hyperscaler infrastructure temporarily depresses gross margins but signals deeper cloud partnerships and eventual margin recovery with scale.
Evidence
“We expect subscription growth margin of 82%, reflecting incremental data center investments related to public cloud, geo-expansion, and AI.”
Supply chain
Armis is already protecting over 40% of the Fortune 100, giving ServiceNow immediate credibility in OT/IoT security and a large installed base to cross-sell their AI platform. — ServiceNow can rapidly expand its security footprint by integrating Armis into its AI control tower, potentially displacing incumbent security vendors in visibility and orchestration.
Bill McDermottExternal signals
Supply-chain alpha · 3returns since call
ServiceNow is guiding to a 1.5 ppt headwind in Q1 from the shift of on-prem to hosted revenue, partly due to strong adoption of hyperscaler offerings, but expects this to normalize over time.
Armis is already protecting over 40% of the Fortune 100, giving ServiceNow immediate credibility in OT/IoT security and a large installed base to cross-sell their AI platform.
ServiceNow's now assist ACV surpassed $600M and more than doubled YoY, with deals over $1M nearly tripling QoQ, indicating rapid enterprise adoption and token reload cycles.
Methodology & coverage
Management-only analysis. All 10 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.