ServiceNow Reports Third Quarter 2026 Financial Results
ServiceNow beats high end of guidance across all Q3 2026 topline growth and profitability metrics, raises full year subscription revenues and free cash flow margin outlook
Subscription revenues of $3,988 million in Q3 2026, representing 21% year-over- year growth, 20.5% in constant currency
Total revenues of $4,106 million in Q3 2026, representing 20.5% year-over-year growth, 20% in constant currency
Current remaining performance obligations of $13.65 billion as of Q3 2026, representing 20.5% year-over-year growth, 21% in constant currency
Remaining performance obligations of $29.7 billion as of Q3 2026, representing 22% year-over-year growth, 22.5% in constant currency
ServiceNow raises AI annual contract value target again for 2026 to $1.7 billion, up 70% from the beginning of the year
SANTA CLARA, Calif. - October 28, 2026 - ServiceNow (NYSE: NOW), the Super Intelligence Control Tower for business reinvention, today announced financial results for its third quarter ended September 30, 2026, with subscription revenues of $3,988 million in Q3 2026, representing 21% year-over-year growth and 20.5% in constant currency.
“This was more than another beat-and-raise quarter for ServiceNow, this was the inflection point for ServiceNow as the Super Intelligence Control Tower,” said ServiceNow Chairman and CEO Bill McDermott. “Our customers have validated our strategic relevance as the single harness for enterprise intelligence and security. The Control Tower is the elixir that simplifies tech debt, limits token overload and manages unprecedented cybersecurity risk. That’s why AI adoption is accelerating, surging our hybrid business model to $30 billion in RPO, growing 23 percent. What other company at the forefront of the agentic enterprise has no capital or compute constraints? This is a one-of-one, rule of 57 1 growth company firing on all cylinders.” As of September 30, 2026, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $13.65 billion, representing 20.5% year-over-year growth and 21% in constant currenc y. The company had 19 transactions over $5 million in net new annual contract value (“ACV”) in Q3 2026, representing over 135% year-over-year growth , and ended the quarter with 680 cu stomers with more than $5 million in ACV, representing approximately 23% year-over-year growth. "Our strong Q3 results reinforce how ServiceNow is perfectly positioned to help customers put AI to work across their business, govern every agent and action, and translate intelligence into secure, measurable outcomes,” said ServiceNow President and CFO Gina Mastantuono. “Our AI momentum continues to build, with AI net new ACV exceeding expectations and enabling us to raise our year-end target for the second time this year, from $1 billion at the start of the year to $1.7 billion now. Customers are also rapidly increasing their use of agentic AI, with year-to-date consumption in production up more than 13x year-over-year. Importantly, we are capturing this significant opportunity with a capital- efficient model, reducing capex and raising our full-year free cash flow margin target by 100 basis points to 36 percent."
(1) The Rule of 57 reflects a combined subscription revenue growth rate on a constant currency basis and free cash flow margin. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures.
Today, ServiceNow announced an expanded partnership with OpenAI to help enterprises move seamlessly from AI reasoning to governed action. The partnership expansion starts with a new ServiceNow plugin for ChatGPT, enabled by Action Fabric. The companies aim to develop Security and Risk solutions powered by OpenAI cyber models, a Codex integration in AI Workflow Factory, and voice-driven governance and risk assessment for ServiceNow’s Super Intelligence Control Tower.
Today, ServiceNow announced that HPE has selected ServiceNow to help transform customer support and field service for its Cloud & AI business, leveraging automation and AI to deliver faster, more efficient, data-driven customer experiences.
Today, Stagwell, the global marketing transformation company, chose the ServiceNow AI Platform to consolidate four service desks onto one governed platform across more than 70 agencies and 10,000 employees in over 40 countries. Each agency can maintain its independence, while integrating core operations across its global network.
In October, ServiceNow and Google Cloud announced new industry solutions for telecommunications, retail, sales and IT, integrated through ServiceNow Action Fabric workflows and skills headlessly into Gemini Enterprise, enabling employees to initiate and complete governed actions without leaving the AI assistant they use daily.
At NVIDIA GTC Berlin, ServiceNow announced the industry’s first personal enterprise agent and policy enforcement with NVIDIA, extending AI governance across software and silicon. ServiceNow Arc, a personal long-running AI agent that can take on everyday work, is now governed and secured by the ServiceNow Super Intelligence Control Tower and enforced with NVIDIA OpenShell, allowing it to work independently while the enterprise stays in control. Additionally, the NVIDIA OpenShell and NVIDIA BlueField data processing unit (DPU) enforcement layers will be able to read ServiceNow's recently announced AI Passport solution to validate what AI agents, including Arc, have permission to access or execute.
In October, ServiceNow and Thrive, a managed services provider to small and mid- sized businesses, announced Thrive’s deployment of ServiceNow’s CRM solution Technology Provider Service Management and AI agents to scale customer experience. Thrive now resolves 73 percent of issues at first contact and has cut time-to-resolution by 63 percent, returning more than 14,500 estimated engineer hours to customer-facing work.
INRY, a Cprime Company, announced that it deployed ServiceNow EmployeeWorks in just six weeks to replace its legacy portal with an AI front door, and is now rolling out the platform to clients as a leading implementation partner. INRY cut the median time it takes for employees to submit requests by 60 percent, now completing those requests with a 97 percent resolution rate.
Today, ServiceNow announced the Control Tower Alliance, a new ecosystem of leading companies in AI, cloud infrastructure, security, and governance, which will work with ServiceNow to help customers adopt trusted enterprise AI safely at scale. Founding members of the new program include Anthropic, Amazon Web Services (AWS), Cisco, HiddenLayer, Kong, NVIDIA, Okta, OpenAI, Stripe, WitnessAI, and Zenity.
In October, ServiceNow announced a new AI Passport solution to verify first- and third-party AI agents’ scopes in real-time. New Super Intelligence Control Tower capabilities build on ServiceNow’s autonomous remediation and kill switch capabilities to drive end-to-end AI governance with discovery, visibility, control, measurement, and compliance on one unified platform.
The company also announced advances to ServiceNow EmployeeWorks, giving employees the ability to build AI agents with no code required. ToolSmith, a new agentic developer environment, allows developers to quickly and securely vibe code enterprise AI tools.
Additionally in October, ServiceNow launched Flow, a new AI-native service desk that operates outside the ServiceNow AI Platform, deploys instantly, and is built for any sized team or enterprise where speed and
simplicity matter most. Teams can automate workflows in chat channels, providing a lightweight, conversational execution layer.
ServiceNow also unveiled Autonomous Security, the industry’s most complete security offering, with a suite of six unified solutions to help enterprises prevent and remediate cyber risk. New AI Specialists complete security workflows autonomously, while capabilities from Armis and Veza feed directly into the Super Intelligence Control Tower.
In October, Bundesliga, Germany’s top professional soccer league, named ServiceNow its Official CRM Partner, adding to ServiceNow's role as Official Workflow Partner. In just a few weeks, ServiceNow CRM helped the league consolidate fan services from seven digital channels to one and now resolves 89 percent of fan inquiries at first contact, driving caseloads down more than 50 percent since the season began.
ServiceNow and Aramco Digital established an agreement to standardize and govern digital workflows across Aramco's affiliates, subsidiaries, and joint ventures in more than 50 countries, helping Aramco Digital reduce fragmentation and modernize processes across its global network.
ServiceNow opened its first dedicated office in Brazil, located in São Paulo, and deepened academic partnerships with SENAI-SP, Porto Digital, and Inteli to bolster regional AI talent.
ServiceNow was recognized as a Leader and Customer Favorite in the Forrester Wave™: Configure, Price, Quote Solutions, Q4 2026 2 and as a Leader in the Forrester Wave: Conversational AI Platforms for Employee Services, Q3 2026 3 .
ServiceNow was also recognized as a Market Shaper in the 2026 Gartner® Emerging Market Quadrant for AI Agents in Human Resources - Established Vendors 4 and as a Leader across multiple Gartner ® Magic Quadrant™ reports, including the 2026 Gartner Magic Quadrant for AI Applications in IT Service Management 5 ,
(2) Forrester Wave™: Configure, Price, Quote Solutions, Q4 2026, Forrester Research, Inc.
(3) Forrester Wave: Conversational AI Platforms For Employee Services, Q3 2026, Forrester Research, Inc.
Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester’s objectivity at https://www.forrester.com/about- us/objectivity/.
(4) Gartner, Inc., Emerging Magic Quadrant for AI Agents in Human Resources, Ranadip Chandra, Eser Rizaoglu, September 23, 2026.
(5) Gartner, Inc., Magic Quadrant for AI Applications in IT Service Management, Chris Matchett, Luis Fernandez, Siddharth Shetty, August 17, 2026.
2026 Gartner Magic Quadrant for Business Orchestration and Automation Technologies 6 , and 2026 Gartner Magic Quadrant for AI-Augmented Low-Code Application Platforms 7 .
ServiceNow placed on the Fortune Best Workplaces in Technology ® list 8 and was named to the Forbes World’s Best Employers list, reflecting a culture built on employee trust, respect, satisfaction, and fairness.
(6) Gartner, Inc., Magic Quadrant for Business Orchestration and Automation Technologies, Saikat Ray, Arthur Villa, Sachin Joshi, Adam Briggs, September 14, 2026.
(7) Gartner, Inc., Magic Quadrant AI-Augmented Low-Code Application Platforms, Adrian Leow, Kyle Davis, Mukul Saha, Nitish Tyagi, September 28, 2026.
The Gartner content described herein, (the "Gartner Content") represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this earnings press release) and the opinions expressed in the Gartner Content are subject to change without notice.
Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner's research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
(8) From Fortune ©2026 Fortune Media IP Limited. All rights reserved. Used under license. Fortune and Fortune 500 are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse the products or services of, ServiceNow.
The following table summarizes our financial results for the third quarter 2026:
(1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures.
(2) Non-GAAP subscription revenues and total revenues are adjusted for constant currency by excluding effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts. Professional services and other revenues, cRPO, and RPO are adjusted only for constant currency. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures.
(3) Refer to the table entitled “GAAP to Non-GAAP Reconciliation” for a reconciliation of GAAP to non-GAAP measures.
Our guidance includes GAAP and non‑GAAP financial measures. The non‑GAAP growth rates for subscription revenues are adjusted for constant currency by excluding the effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts, and the non-GAAP growth rates for cRPO are adjusted only for constant currency to provide better visibility into the underlying business.
Fourth Fourth Quarter Quarter 2026 2026 GAAP Non-GAAP Guidan… Guidanc… Constant Amount Year/Ye… Currency ($ Growth Year/Ye… millio… (%)(2) Growth (%) Subsc… $4,245 22.5% - reven… - 23% 21.5 % $4,255 cRPO 18.5 % 18.5 % Margin (%)(3) Income from 32 % opera… Amount (billio… Weigh… shares used to compu… 1.05 dilut… net income per share
(1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures.
(2) Guidance for GAAP subscription revenues and GAAP subscription revenues and cRPO growth rates are based on the 30-day average of foreign exchange rates for September 2026 for entities reporting in currencies other than U.S. Dollars.
Full-Year Full-Ye… 2026 2026 GAAP Non-GAAP Guidance Guidanc… Constant Amount Year/Year Currency ($ Growth Year/Ye… millions… (%)(2) Growth (%) Subscri… $15,780 revenues - 22.5 % 21 % $15,790 Margin (%)(3) Subscri… gross 81 % profit Income from 31.5 % operati… Free cash 36 % flow Amount (billion… Weighte… shares used to compute diluted 1.04 net income per share
(1) We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of non-GAAP measures.
(2) GAAP subscription revenues and related growth rate for the future quarter included in our full-year 2026 guidance are based on the 30-day average of foreign exchange rates for September 2026 for entities reporting in currencies other than U.S. Dollars.
The conference call will begin at 2 p.m. Pacific Daylight Time (21:00 GMT) on October 28, 2026. Interested parties may listen to the call by dialing (833) 461‑5787 (Meeting ID: 657715831), or if outside North America, by dialing (585) 542‑9983 (Meeting ID: 657715831). Individuals may access the live teleconference from this webcast.
An audio replay of the conference call and webcast will be available two hours after its completion and will be accessible for 30 days. To hear the replay, interested parties may go to the investor relations section of the ServiceNow website or dial (833) 309‑1852 (Meeting ID: 657715831), or if outside North America, by dialing (929) 828‑5978 (Meeting ID: 657715831).
An investor presentation providing additional information, including forward- looking guidance, and analysis can be found at
ServiceNow today announced that it will attend and have executives present at four upcoming investor conferences.
ServiceNow Senior Vice President and General Manager Josh Kahn will participate in a fireside chat at the BMO Technology and Innovation Leaders Conference on Thursday, November 12, 2026, at 7:00 a.m. PT.
ServiceNow Senior Vice President and General Manager Josh Kahn will participate in a fireside chat at the RBC Global TIMT Conference on Tuesday, November 17, 2026, at 5:40 a.m. PT.
ServiceNow President and Chief Financial Officer Gina Mastantuono will participate in a fireside chat at the Wells Fargo TMT Summit on Tuesday, December 8, 2026, at 12:45 p.m. PT.
ServiceNow President and Chief Financial Officer Gina Mastantuono will participate in a keynote at the Barclays Global Technology Conference on Wednesday, December 9, 2026, at 11:40 a.m. PT.
The live webcast for each will be accessible on the investor relations section of the ServiceNow website at
and archived on the ServiceNow site for a period of 30 days. Statement Regarding Use of Non-GAAP Financial Measures We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Revenues. We adjust revenues and related growth rates for constant currency to provide a framework for assessing how our business performed excluding the effect of foreign curre ncy rate fluctuations and any gains or losses from foreign currency hedge contracts that are reported in the current and comparative period. To exclude the effect of foreign currency rate fluctuations, current period results for entities reporting in currencies other than U.S. Dollars (“USD”) are converted into USD at the average exchange rates in effect during the comparison per iod (for Q3 2025, the average exchange rates in effect for our major currencies were 1 USD to 0.86 Euros and 1 USD to 0.74 British Pound Sterling (“GBP”)), rather than the actual average exchange rates in effect during the current period (for Q3 2026, the average exchange rates in effect for our major currencies were 1 USD to 0.87 Euros and 1 USD to 0.74 GBP). Guidance for revenues related growth rates is derived by applying the average exchange rates in effect during the comparison period, rather than the exchange rates for the guidance period, adjusted for any foreign currency hedging effects. We believe the presentation of revenues and related growth rates adjusted for constant currency facilitates the comparison of revenues year-over-year.
Remaining performance obligations and current remaining performance obligations. We adjust cRPO and remaining performance obligations (“RPO”) and related growth rates for constant currency to provide a framework for assessing how our business performed. To present this information, current period results for entities reporting in currencies other than USD are converted into USD at the exchange rates in effect at the end of the comparison period (for Q3 2025, the end of the period exchange rates in effect for our major currencies were 1 USD to 0.85 Euros and 1 USD to 0.74 GBP), rather than the actual end of the period exchange rates in effect during the current period (for Q3 2026, the end of the period exchange rates in effect for our major currencies were 1 USD to 0.88 Euros and 1 USD to 0.76 GBP). Guidance for the related growth rate is derived by applying the end of period exchange rates in effect during the comparison period rather than the exchange rates in effect during the guidance period . We believe the presentation of cRPO and RPO and related growth rates adjusted for constant currency facilitates the comparison of cRPO and RPO year-over-year, respectively.
Gross profit, Income from operations, Net income and Net income per share - diluted. Our non-GAAP presentation of gross profit, income from operations, and net income measures exclude certain non-cash or non-recurring items, including stock-based compensation expense, amortization of purchased intangibles, legal settlements, impairment of assets, severance costs, contract termination costs, business combination and other related costs including compensation expense, gains and losses on strategic investments, net, income tax effects and adjustments, and the income tax benefit from the release of a valuation allowance on deferred tax assets. We believe these adjustments provide useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods.
Free cash flow. Free cash flow is defined as net cash provided by operating activities plus cash outflows for legal settlements and business combination and other related costs including compensation expense, reduced by purchases of property and equipment. Free cash flow margin is calculated as free cash flow as a percentage of total revenues. We believe information regarding free cash flow and free cash flow margin provides useful information to investors because it is an indicator of the strength and performance of our business operations.
Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP and non-GAAP results for gross profit, income from operations, net income, net income per share, and free cash flow. Our Rule of 57 guidance for 2026 and Rule of 60+ long-term target reflect a combination of subscription revenue growth rate on a constant currency basis and free cash flow margin. Subscription revenues adjusted for constant currency exclude the effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts. We have not provided a reconciliation of our forward- looking long-term free cash flow margin to the most comparable GAAP financial measure because we are unable to predict, without unreasonable efforts, the timing and amount of certain adjustments, which may be significant.
This release contains “forward-looking statements.” Those statements include, without limitation, our performance outlook, including the statements in the section entitled “Financial Outlook,” and other statements regarding capital and compute constraints and the expected benefits of our announced partnerships and acquisitions. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.
Factors that may cause actual results to differ materially from those in any forward-looking statements include, among others, experiencing an actual or perceived cyber-security event or weakness; our ability to comply with evolving privacy laws, data transfer restrictions, and other foreign and domestic standards related to data and the Internet; errors, interruptions, delays or security breaches in or of our service or data centers; our ability to maintain and attract key employees and manage workplace culture; alleged violations of laws and regulations, including those relating to anti-bribery and anti- corruption and those relating to public sector contracting
requirements; our ability to compete successfully against existing and new competitors; our ability to predict, prepare for and respond promptly to rapidly evolving technological, market and customer developments; our ability to grow our business, including converting remaining performance obligations into revenue, adding and retaining customers, selling additional subscriptions to existing customers, selling to larger enterprises, government and regulated organizations with complex sales cycles and certification processes, and entering new geographies and markets; our ability to develop and gain customer demand for and acceptance of existing, new and improved products and services, including products that incorporate AI technology; our ability to expand and maintain our partnerships and partner programs, including expected market opportunity from such relationships, and realize the anticipated benefits thereof; global macroeconomic and political conditions including tariffs, inflation and armed conflicts; fluctuations in the value of foreign currencies relative to the U.S. Dollar; fluctuations in interest rates; our ability to consummate and realize the benefits of any strategic transactions or acquisitions; our ability to execute share repurchases, including the timing, manner, price, and amount of any repurchase; and fluctuations and volatility in our stock price.
Further information on these and other factors that could affect our financial results are included in our Form 10-K for the year ended December 31, 2025, and in other filings we make with the Securities and Exchange Commission from time to time.
We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.
ServiceNow (NYSE: NOW) is the Super Intelligence Control Tower for business reinvention. The ServiceNow platform integrates with any model, any cloud, and any data source to orchestrate, govern, and secure work across the agentic enterprise. ServiceNow gives customers the enterprise context and control to build and scale confidently. With more than 100 billion workflows running on the platform each year, ServiceNow helps organizations turn fragmented operations into coordinated, autonomous work for IT, CRM, Security, Employee Experience, and more. Learn how ServiceNow puts AI to work for people at www.servicenow.com.
© 2026 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo, Now, and other ServiceNow marks are trademarks and/or registered trademarks of ServiceNow, Inc. in the United States and/or other countries. Other company names, product names, and logos may be trademarks of the respective companies with which they are associated. Media Contact: Emily Jeffers
(2) Prior period results have been retroactively adjusted to reflect the effects of the five-for-one stock split, which was effective December 17, 2025
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.
September 30, 2026 December 31, 2025 ────────────────────────────────────────────────────────────────────────────── -unaudited Assets Current assets: Cash and cash $ 2,393 $ 3,726 equivalents Marketable 2,214 2,558 securities Accounts 2,222 2,627 receivable, net Current portion of deferred 606 590 commissions Prepaid expenses and other current 1,042 970 assets Total current 8,477 10,471 assets Deferred commissions, less 1,158 1,114 current portion Long-term marketable 2,354 3,771 securities Strategic 2,050 1,542 investments Property and 2,145 2,289 equipment, net Operating lease right-of-use 779 806 assets Intangible 3,594 1,121 assets, net Goodwill 10,012 3,578 Deferred tax 804 1,056 assets Other assets 457 290 Total assets $ 31,830 $ 26,038 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 231 $ 204 Accrued expenses and other current 1,760 1,813 liabilities Current portion of deferred 7,600 8,314 revenue Current portion of operating 118 112 lease liabilities Short-term debt, 2,086 — net Total current 11,795 10,443 liabilities Deferred revenue, less current 133 120 portion Operating lease liabilities, less 773 800 current portion Long-term debt, 5,438 1,491 net Other long-term 595 220 liabilities Stockholders’ 13,096 12,964 equity Total liabilities and stockholders’ $ 31,830 $ 26,038 equity
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.
GAAP gross margin Stock-based compensation as % of total revenues Amortization of purchased intangibles as % of total revenues Severance costs as % of total revenues 70.5 % 77.5 % 72 % 78 % Non-GAAP gross 2.5 % 2.5 % 2.5 % 2.5 % margin 3.5 % 1 % 3.5 % 1 % Income from 0.5 % — % — % — % operations: 77.5 % 81 % 78 % 81.5 % ────────────────────────────────────────────────────────────────────────────── GAAP income from $ 385 $ 572 $ 1,050 $ 1,381 operations Stock-based 633 492 1,846 1,461 compensation Amortization of purchased 198 33 494 79 intangibles Business combination and 35 19 153 44 other related costs Impairment of — — — 30 assets Severance costs 87 24 167 53 Non-GAAP income $ 1,338 $ 1,140 $ 3,710 $ 3,048 from operations Operating margin: GAAP operating 9.5 % 17 % 9 % 14 % margin Stock-based compensation as 15.5 % 14.5 % 15.5 % 15 % % of total revenues Amortization of purchased intangibles as 5 % 1 % 4 % 1 % % of total revenues Business combination and other related 1 % 0.5 % 1.5 % 0.5 % costs as % of total revenues Impairment of assets as % of — % — % — % 0.5 % total revenues Severance costs as % of total 2 % 0.5 % 1.5 % 0.5 % revenues Non-GAAP 32.5 % 33.5 % 31.5 % 31.5 % operating margin Net income: GAAP net income $ 277 $ 502 $ 1,044 $ 1,347 Stock-based 633 492 1,846 1,461 compensation Amortization of purchased 198 33 494 79 intangibles Business combination and 35 19 153 44 other related costs Impairment of — — — 30 assets Severance costs 87 24 167 53 (Gains)/losses on strategic -7 -22 -367 -27 investments, net(3) Income tax effects and -184 -56 -305 -299 adjustments(1) (3) Discrete income tax benefit from the release of a — — -51 — valuation allowance on deferred tax assets(4) Non-GAAP net $ 1,039 $ 992 $ 2,981 $ 2,689 income(3) Net income per share - basic and diluted: GAAP net income per share - $ 0.27 $ 0.48 $ 1.01 $ 1.30 basic(2) GAAP net income per share - $ 0.27 $ 0.48 $ 1.01 $ 1.29 diluted(2) Non-GAAP net income per share $ 1.00 $ 0.96 $ 2.88 $ 2.59 - basic(2) (3) Non-GAAP net income per share $ 1.00 $ 0.95 $ 2.87 $ 2.57 - diluted(2)(3)
Weighted-av… shares used to compute net income per share - basic(2) Weighted-av… shares used to compute net income per share - diluted(2) Free cash 1,035 1,038 1,034 1,036 flow: 1,043 1,048 1,039 1,047 ────────────────────────────────────────────────────────────────────────────── GAAP net cash provided by $ 839 $ 813 $ 3,096 $ 3,206 operating activities Purchases of property and -91 -235 -346 -630 equipment Business combination and other 74 14 371 28 related costs Non-GAAP free cash $ 822 $ 592 $ 3,121 $ 2,604 flow Free cash flow margin: GAAP net cash provided by operating 20.5 % 24 % 26 % 33 % activities as % of total revenues Purchases of property and equipment as (2 %) (7 %) (3 %) (6.5 %) % of total revenues Business combination and other related 2 % 0.5 % 3 % 0.5 % costs as % of total revenues Non-GAAP free cash 20 % 17.5 % 26.5 % 27 % flow margin
(1) We use a non-GAAP effective tax rate for evaluating our operating results to provide consistency across reporting periods. Based on our long-term projections, we are using a non-GAAP tax rate of 21% for the three and nine months ended September 30, 2026 and 20% for the three and nine months ended September 30, 2025. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.
(2) Prior period results have been retroactively adjusted to reflect the effects of the five-for-one stock split, which was effective December 17, 2025.
(3) Prior period results have been retroactively adjusted to reflect the exclusion of gains and losses on strategic investments.
(4) GAAP net income for the nine months ended September 30, 2026 was impacted by a $51 million release of valuation allowance on our deferred tax assets as a discrete tax benefit.
Three Months Ending December 31, 2026 ──────────────────────────────────────────────────────────────────────── GAAP operating margin 12 % Stock-based compensation expense as % of 14 % total revenues Amortization of purchased intangibles as 5 % % of total revenues Business combination and other related 1 % costs as % of total revenues Severance costs as % of total revenues 1 % Non-GAAP operating margin 32 %
Twelve Months Ending December 31, 2026 ──────────────────────────────────────────────────────────────────────────── GAAP subscription gross margin 75 % Stock-based compensation expense as % of 2 % subscription revenues Amortization of purchased intangibles as 3 % % of subscription revenues Severance costs as % of subscription — % revenues Non-GAAP subscription margin 81 % GAAP operating margin 10 % Stock-based compensation expense as % of 15 % total revenues Amortization of purchased intangibles as 4 % % of total revenues Business combination and other related 1 % costs as % of total revenues Severance costs as % of total revenues 1 % Non-GAAP operating margin 31.5 % GAAP net cash provided by operating 37 % activities as % of total revenues Purchases of property and equipment as % (3 %) of total revenues Business combination and other related 2 % costs as % of total revenues Non-GAAP free cash flow margin 36 %
Full text with the tables
ServiceNow Reports Third Quarter 2026 Financial Results
•
ServiceNow beats high end of guidance across all Q3 2026 topline growth and
profitability metrics, raises full year subscription revenues and free cash flow
margin outlook
•
Subscription revenues of $3,988 million in Q3 2026, representing 21% year-over-
year growth, 20.5% in constant currency
•
Total revenues of $4,106 million in Q3 2026, representing 20.5% year-over-year
growth, 20% in constant currency
•
Current remaining performance obligations of $13.65 billion as of Q3 2026,
representing 20.5% year-over-year growth, 21% in constant currency
•
Remaining performance obligations of $29.7 billion as of Q3 2026, representing
22% year-over-year growth, 22.5% in constant currency
•
ServiceNow raises AI annual contract value target again for 2026 to $1.7
billion, up 70% from the beginning of the year
SANTA CLARA, Calif. - October 28, 2026 - ServiceNow (NYSE: NOW), the Super
Intelligence Control Tower for business reinvention, today announced financial
results for its third quarter ended September 30, 2026, with subscription
revenues of $3,988 million in Q3 2026, representing 21% year-over-year growth
and 20.5% in constant currency.
“This was more than another beat-and-raise quarter for ServiceNow, this was the
inflection point for ServiceNow as the Super Intelligence Control Tower,” said
ServiceNow Chairman and CEO Bill McDermott. “Our customers have validated our
strategic relevance as the single harness for enterprise intelligence and
security. The Control Tower is the elixir that simplifies tech debt, limits
token overload and manages unprecedented cybersecurity risk. That’s why AI
adoption is accelerating, surging our hybrid business model to $30 billion in
RPO, growing 23 percent. What other company at the forefront of the agentic
enterprise has no capital or compute constraints? This is a one-of-one, rule of
57 1 growth company firing on all cylinders.”
As of September 30, 2026, current remaining performance obligations (“cRPO”),
contract revenue that will be recognized as revenue in the next 12 months, was
$13.65 billion, representing 20.5% year-over-year growth and 21% in constant
currenc y. The company had 19 transactions over $5 million in net new annual
contract value (“ACV”) in Q3 2026, representing over 135% year-over-year growth
, and ended the quarter with 680 cu stomers with more than $5 million in ACV,
representing approximately 23% year-over-year growth.
"Our strong Q3 results reinforce how ServiceNow is perfectly positioned to help
customers put AI to work across their business, govern every agent and action,
and translate intelligence into secure, measurable outcomes,” said ServiceNow
President and CFO Gina Mastantuono. “Our AI momentum continues to build, with AI
net new ACV exceeding expectations and enabling us to raise our year-end target
for the second time this year, from $1 billion at the start of the year to $1.7
billion now. Customers are also rapidly increasing their use of agentic AI, with
year-to-date consumption in production up more than 13x year-over-year.
Importantly, we are capturing this significant opportunity with a capital-
efficient model, reducing capex and raising our full-year free cash flow margin
target by 100 basis points to 36 percent."
(1) The Rule of 57 reflects a combined subscription revenue growth rate on a
constant currency basis and free cash flow margin. See the section entitled
“Statement Regarding Use of Non-GAAP Financial Measures” for an explanation of
non-GAAP measures.
1
Recent Business Highlights
Partner and Customer Momentum
•
Today, ServiceNow announced an expanded partnership with OpenAI to help
enterprises move seamlessly from AI reasoning to governed action. The
partnership expansion starts with a new ServiceNow plugin for ChatGPT, enabled
by Action Fabric. The companies aim to develop Security and Risk solutions
powered by OpenAI cyber models, a Codex integration in AI Workflow Factory, and
voice-driven governance and risk assessment for ServiceNow’s Super Intelligence
Control Tower.
•
Today, ServiceNow announced that HPE has selected ServiceNow to help transform
customer support and field service for its Cloud & AI business, leveraging
automation and AI to deliver faster, more efficient, data-driven customer
experiences.
•
Today, Stagwell, the global marketing transformation company, chose the
ServiceNow AI Platform to consolidate four service desks onto one governed
platform across more than 70 agencies and 10,000 employees in over 40 countries.
Each agency can maintain its independence, while integrating core operations
across its global network.
•
In October, ServiceNow and Google Cloud announced new industry solutions for
telecommunications, retail, sales and IT, integrated through ServiceNow Action
Fabric workflows and skills headlessly into Gemini Enterprise, enabling
employees to initiate and complete governed actions without leaving the AI
assistant they use daily.
•
At NVIDIA GTC Berlin, ServiceNow announced the industry’s first personal
enterprise agent and policy enforcement with NVIDIA, extending AI governance
across software and silicon. ServiceNow Arc, a personal long-running AI agent
that can take on everyday work, is now governed and secured by the ServiceNow
Super Intelligence Control Tower and enforced with NVIDIA OpenShell, allowing it
to work independently while the enterprise stays in control. Additionally, the
NVIDIA OpenShell and NVIDIA BlueField data processing unit (DPU) enforcement
layers will be able to read ServiceNow's recently announced AI Passport solution
to validate what AI agents, including Arc, have permission to access or execute.
•
In October, ServiceNow and Thrive, a managed services provider to small and mid-
sized businesses, announced Thrive’s deployment of ServiceNow’s CRM solution
Technology Provider Service Management and AI agents to scale customer
experience. Thrive now resolves 73 percent of issues at first contact and has
cut time-to-resolution by 63 percent, returning more than 14,500 estimated
engineer hours to customer-facing work.
•
INRY, a Cprime Company, announced that it deployed ServiceNow EmployeeWorks in
just six weeks to replace its legacy portal with an AI front door, and is now
rolling out the platform to clients as a leading implementation partner. INRY
cut the median time it takes for employees to submit requests by 60 percent, now
completing those requests with a 97 percent resolution rate.
Innovation
•
Today, ServiceNow announced the Control Tower Alliance, a new ecosystem of
leading companies in AI, cloud infrastructure, security, and governance, which
will work with ServiceNow to help customers adopt trusted enterprise AI safely
at scale. Founding members of the new program include Anthropic, Amazon Web
Services (AWS), Cisco, HiddenLayer, Kong, NVIDIA, Okta, OpenAI, Stripe,
WitnessAI, and Zenity.
•
In October, ServiceNow announced a new AI Passport solution to verify first- and
third-party AI agents’ scopes in real-time. New Super Intelligence Control Tower
capabilities build on ServiceNow’s autonomous remediation and kill switch
capabilities to drive end-to-end AI governance with discovery, visibility,
control, measurement, and compliance on one unified platform.
•
The company also announced advances to ServiceNow EmployeeWorks, giving
employees the ability to build AI agents with no code required. ToolSmith, a new
agentic developer environment, allows developers to quickly and securely vibe
code enterprise AI tools.
•
Additionally in October, ServiceNow launched Flow, a new AI-native service desk
that operates outside the ServiceNow AI Platform, deploys instantly, and is
built for any sized team or enterprise where speed and
2
simplicity matter most. Teams can automate workflows in chat channels, providing
a lightweight, conversational execution layer.
•
ServiceNow also unveiled Autonomous Security, the industry’s most complete
security offering, with a suite of six unified solutions to help enterprises
prevent and remediate cyber risk. New AI Specialists complete security workflows
autonomously, while capabilities from Armis and Veza feed directly into the
Super Intelligence Control Tower.
Global Expansion
•
In October, Bundesliga, Germany’s top professional soccer league, named
ServiceNow its Official CRM Partner, adding to ServiceNow's role as Official
Workflow Partner. In just a few weeks, ServiceNow CRM helped the league
consolidate fan services from seven digital channels to one and now resolves 89
percent of fan inquiries at first contact, driving caseloads down more than 50
percent since the season began.
•
ServiceNow and Aramco Digital established an agreement to standardize and govern
digital workflows across Aramco's affiliates, subsidiaries, and joint ventures
in more than 50 countries, helping Aramco Digital reduce fragmentation and
modernize processes across its global network.
•
ServiceNow opened its first dedicated office in Brazil, located in São Paulo,
and deepened academic partnerships with SENAI-SP, Porto Digital, and Inteli to
bolster regional AI talent.
Recognition
•
ServiceNow was recognized as a Leader and Customer Favorite in the Forrester
Wave™: Configure, Price, Quote Solutions, Q4 2026 2 and as a Leader in the
Forrester Wave: Conversational AI Platforms for Employee Services, Q3 2026 3 .
•
ServiceNow was also recognized as a Market Shaper in the 2026 Gartner® Emerging
Market Quadrant for AI Agents in Human Resources - Established Vendors 4 and as
a Leader across multiple Gartner ® Magic Quadrant™ reports, including the 2026
Gartner Magic Quadrant for AI Applications in IT Service Management 5 ,
(2) Forrester Wave™: Configure, Price, Quote Solutions, Q4 2026, Forrester
Research, Inc.
(3) Forrester Wave: Conversational AI Platforms For Employee Services, Q3 2026,
Forrester Research, Inc.
Forrester Disclaimer
Forrester does not endorse any company, product, brand, or service included in
its research publications and does not advise any person to select the products
or services of any company or brand based on the ratings included in such
publications. Information is based on the best available resources. Opinions
reflect judgment at the time and are subject to change. For more information,
read about Forrester’s objectivity at https://www.forrester.com/about-
us/objectivity/.
(4) Gartner, Inc., Emerging Magic Quadrant for AI Agents in Human Resources,
Ranadip Chandra, Eser Rizaoglu, September 23, 2026.
(5) Gartner, Inc., Magic Quadrant for AI Applications in IT Service Management,
Chris Matchett, Luis Fernandez, Siddharth Shetty, August 17, 2026.
3
2026 Gartner Magic Quadrant for Business Orchestration and Automation
Technologies 6 , and 2026 Gartner Magic Quadrant for AI-Augmented Low-Code
Application Platforms 7 .
•
ServiceNow placed on the Fortune Best Workplaces in Technology ® list 8 and was
named to the Forbes World’s Best Employers list, reflecting a culture built on
employee trust, respect, satisfaction, and fairness.
(6) Gartner, Inc., Magic Quadrant for Business Orchestration and Automation
Technologies, Saikat Ray, Arthur Villa, Sachin Joshi, Adam Briggs, September 14,
2026.
(7) Gartner, Inc., Magic Quadrant AI-Augmented Low-Code Application Platforms,
Adrian Leow, Kyle Davis, Mukul Saha, Nitish Tyagi, September 28, 2026.
Gartner Disclaimer
The Gartner content described herein, (the "Gartner Content") represents
research opinion or viewpoints published, as part of a syndicated subscription
service, by Gartner, Inc. ("Gartner"), and is not representation of fact.
Gartner Content speaks as of its original publication date (and not as of the
date of this earnings press release) and the opinions expressed in the Gartner
Content are subject to change without notice.
Gartner does not endorse any vendor, product or service depicted in its research
publications, and does not advise technology users to select only those vendors
with the highest ratings or other designation. Gartner research publications
consist of the opinions of Gartner's research organization and should not be
construed as statements of fact. Gartner disclaims all warranties, expressed or
implied, with respect to this research, including any warranties of
merchantability or fitness for a particular purpose.
(8) From Fortune ©2026 Fortune Media IP Limited. All rights reserved. Used under
license. Fortune and Fortune 500 are registered trademarks of Fortune Media IP
Limited and are used under license. Fortune and Fortune Media IP Limited are not
affiliated with, and do not endorse the products or services of, ServiceNow.
4
Third Quarter 2026 GAAP and Non-GAAP Results:
The following table summarizes our financial results for the third quarter 2026:
Third Third
Quar… Quar…
2026 2026
GAAP Non-…
Resu… Resu…
Amou… Year… Amou… Year…
($ Grow… ($ Grow…
mill… (%) mill… (%)
──────────────────────────────────────────────────────────────────────────────
Sub… $ 3,988 21 % $ 3,9… 20.5 %
rev…
Pro…
ser…
and $ 118 10 % $ 117 9 %
oth…
rev…
Tot… $ 4,106 20.5 % $ 4,1… 20 %
rev…
Amou… Year… Amou… Year…
($ Grow… ($ Grow…
bill… (%) bill… (%)
cRPO $ 13.65 20.5 % $ 13.… 21 %
RPO $ 29.7 22 % $ 29.8 22.5 %
Amou… Marg… Amou… Marg…
($ (%) ($ (%)(…
mill… mill…
Sub…
gro… $ 2,934 73.5 % $ 3,1… 80 %
pro…
Pro…
ser…
and $ -39 (32.5 %) $ -23 (20 %)
oth…
gro…
loss
Tot…
gro… $ 2,895 70.5 % $ 3,1… 77.5 %
pro…
Inc…
from $ 385 9.5 % $ 1,3… 32.5 %
ope…
Net
cash
pro… $ 839 20.5 %
by
ope…
act…
Free
cash $ 822 20 %
flow
Earn… Earn…
Amou… per Amou… per
($ Basi… ($ Basi…
mill… Share mill… Share
($) ($)(…
Net $0.… $1.…
inc… $ 277 / $ 1,0… /
$0.… $1.…
(1) We report non-GAAP financial measures in addition to, and not as a
substitute for, or superior to, financial measures calculated in accordance with
GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial
Measures” for an explanation of non-GAAP measures.
(2) Non-GAAP subscription revenues and total revenues are adjusted for constant
currency by excluding effects of foreign currency rate fluctuations and any
gains or losses from foreign currency hedge contracts. Professional services and
other revenues, cRPO, and RPO are adjusted only for constant currency. See the
section entitled “Statement Regarding Use of Non-GAAP Financial Measures” for an
explanation of non-GAAP measures.
(3) Refer to the table entitled “GAAP to Non-GAAP Reconciliation” for a
reconciliation of GAAP to non-GAAP measures.
Note: Numbers rounded for presentation purposes and may not foot.
4
Financial Outlook
Our guidance includes GAAP and non‑GAAP financial measures. The non‑GAAP growth
rates for subscription revenues are adjusted for constant currency by excluding
the effects of foreign currency rate fluctuations and any gains or losses from
foreign currency hedge contracts, and the non-GAAP growth rates for cRPO are
adjusted only for constant currency to provide better visibility into the
underlying business.
The following table summarizes our guidance for the fourth quarter 2026:
Fourth Fourth
Quarter Quarter
2026 2026
GAAP Non-GAAP
Guidan… Guidanc…
Constant
Amount Year/Ye… Currency
($ Growth Year/Ye…
millio… (%)(2) Growth
(%)
Subsc… $4,245 22.5% -
reven… - 23% 21.5 %
$4,255
cRPO 18.5 % 18.5 %
Margin
(%)(3)
Income
from 32 %
opera…
Amount
(billio…
Weigh…
shares
used
to
compu… 1.05
dilut…
net
income
per
share
(1) We report non-GAAP financial measures in addition to, and not as a
substitute for, or superior to, financial measures calculated in accordance with
GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial
Measures” for an explanation of non-GAAP measures.
(2) Guidance for GAAP subscription revenues and GAAP subscription revenues and
cRPO growth rates are based on the 30-day average of foreign exchange rates for
September 2026 for entities reporting in currencies other than U.S. Dollars.
(3) Refer to the table entitled “Reconciliation of Non-GAAP Financial Guidance”
for a reconciliation of GAAP to non-GAAP measures.
5
The following table summarizes our guidance for the full-year 2026:
Full-Year Full-Ye…
2026 2026
GAAP Non-GAAP
Guidance Guidanc…
Constant
Amount Year/Year Currency
($ Growth Year/Ye…
millions… (%)(2) Growth
(%)
Subscri… $15,780
revenues - 22.5 % 21 %
$15,790
Margin
(%)(3)
Subscri…
gross 81 %
profit
Income
from 31.5 %
operati…
Free
cash 36 %
flow
Amount
(billion…
Weighte…
shares
used to
compute
diluted 1.04
net
income
per
share
(1) We report non-GAAP financial measures in addition to, and not as a
substitute for, or superior to, financial measures calculated in accordance with
GAAP. See the section entitled “Statement Regarding Use of Non-GAAP Financial
Measures” for an explanation of non-GAAP measures.
(2) GAAP subscription revenues and related growth rate for the future quarter
included in our full-year 2026 guidance are based on the 30-day average of
foreign exchange rates for September 2026 for entities reporting in currencies
other than U.S. Dollars.
(3) Refer to the table entitled “Reconciliation of Non-GAAP Financial Guidance”
for a reconciliation of GAAP to non-GAAP measures.
Note: Numbers are rounded for presentation purposes and may not foot.
6
Conference Call Details
The conference call will begin at 2 p.m. Pacific Daylight Time (21:00 GMT) on
October 28, 2026. Interested parties may listen to the call by dialing (833)
461‑5787 (Meeting ID: 657715831), or if outside North America, by dialing (585)
542‑9983 (Meeting ID: 657715831). Individuals may access the live teleconference
from this webcast.
https://events.q4inc.com/attendee/657715831
An audio replay of the conference call and webcast will be available two hours
after its completion and will be accessible for 30 days. To hear the replay,
interested parties may go to the investor relations section of the ServiceNow
website or dial (833) 309‑1852 (Meeting ID: 657715831), or if outside North
America, by dialing (929) 828‑5978 (Meeting ID: 657715831).
Investor Presentation Details
An investor presentation providing additional information, including forward-
looking guidance, and analysis can be found at
https://investors.servicenow.com
.
Upcoming Investor Conferences
ServiceNow today announced that it will attend and have executives present at
four upcoming investor conferences.
These include:
•
ServiceNow Senior Vice President and General Manager Josh Kahn will participate
in a fireside chat at the BMO Technology and Innovation Leaders Conference on
Thursday, November 12, 2026, at 7:00 a.m. PT.
•
ServiceNow Senior Vice President and General Manager Josh Kahn will participate
in a fireside chat at the RBC Global TIMT Conference on Tuesday, November 17,
2026, at 5:40 a.m. PT.
•
ServiceNow President and Chief Financial Officer Gina Mastantuono will
participate in a fireside chat at the Wells Fargo TMT Summit on Tuesday,
December 8, 2026, at 12:45 p.m. PT.
•
ServiceNow President and Chief Financial Officer Gina Mastantuono will
participate in a keynote at the Barclays Global Technology Conference on
Wednesday, December 9, 2026, at 11:40 a.m. PT.
The live webcast for each will be accessible on the investor relations section
of the ServiceNow website at
https://investors.servicenow.com
and archived on the ServiceNow site for a period of 30 days.
Statement Regarding Use of Non-GAAP Financial Measures
We use the following non-GAAP financial measures in addition to, and not as a
substitute for, or superior to, financial measures calculated in accordance with
GAAP.
•
Revenues. We adjust revenues and related growth rates for constant currency to
provide a framework for assessing how our business performed excluding the
effect of foreign curre ncy rate fluctuations and any gains or losses from
foreign currency hedge contracts that are reported in the current and
comparative period. To exclude the effect of foreign currency rate fluctuations,
current period results for entities reporting in currencies other than U.S.
Dollars (“USD”) are converted into USD at the average exchange rates in effect
during the comparison per iod (for Q3 2025, the average exchange rates in effect
for our major currencies were 1 USD to 0.86 Euros and 1 USD to 0.74 British
Pound Sterling (“GBP”)), rather than the actual average exchange rates in effect
during the current period (for Q3 2026, the average exchange rates in effect for
our major currencies were 1 USD to 0.87 Euros and 1 USD to 0.74 GBP). Guidance
for revenues related growth rates is derived by applying the average exchange
rates in effect during the comparison period, rather than the exchange rates for
the guidance period, adjusted for any foreign currency hedging effects. We
believe the presentation of revenues and related growth rates adjusted for
constant currency facilitates the comparison of revenues year-over-year.
7
•
Remaining performance obligations and current remaining performance obligations.
We adjust cRPO and remaining performance obligations (“RPO”) and related growth
rates for constant currency to provide a framework for assessing how our
business performed. To present this information, current period results for
entities reporting in currencies other than USD are converted into USD at the
exchange rates in effect at the end of the comparison period (for Q3 2025, the
end of the period exchange rates in effect for our major currencies were 1 USD
to 0.85 Euros and 1 USD to 0.74 GBP), rather than the actual end of the period
exchange rates in effect during the current period (for Q3 2026, the end of the
period exchange rates in effect for our major currencies were 1 USD to 0.88
Euros and 1 USD to 0.76 GBP). Guidance for the related growth rate is derived by
applying the end of period exchange rates in effect during the comparison period
rather than the exchange rates in effect during the guidance period . We believe
the presentation of cRPO and RPO and related growth rates adjusted for constant
currency facilitates the comparison of cRPO and RPO year-over-year,
respectively.
•
Gross profit, Income from operations, Net income and Net income per share -
diluted. Our non-GAAP presentation of gross profit, income from operations, and
net income measures exclude certain non-cash or non-recurring items, including
stock-based compensation expense, amortization of purchased intangibles, legal
settlements, impairment of assets, severance costs, contract termination costs,
business combination and other related costs including compensation expense,
gains and losses on strategic investments, net, income tax effects and
adjustments, and the income tax benefit from the release of a valuation
allowance on deferred tax assets. We believe these adjustments provide useful
supplemental information to investors and facilitates the analysis of our
operating results and comparison of operating results across reporting periods.
•
Free cash flow. Free cash flow is defined as net cash provided by operating
activities plus cash outflows for legal settlements and business combination and
other related costs including compensation expense, reduced by purchases of
property and equipment. Free cash flow margin is calculated as free cash flow as
a percentage of total revenues. We believe information regarding free cash flow
and free cash flow margin provides useful information to investors because it is
an indicator of the strength and performance of our business operations.
Our presentation of non-GAAP financial measures may not be comparable to similar
measures used by other companies. We encourage investors to carefully consider
our results under GAAP, as well as our supplemental non-GAAP information and the
reconciliation between these presentations, to more fully understand our
business. Please see the tables included at the end of this release for the
reconciliation of GAAP and non-GAAP results for gross profit, income from
operations, net income, net income per share, and free cash flow. Our Rule of 57
guidance for 2026 and Rule of 60+ long-term target reflect a combination of
subscription revenue growth rate on a constant currency basis and free cash flow
margin. Subscription revenues adjusted for constant currency exclude the effects
of foreign currency rate fluctuations and any gains or losses from foreign
currency hedge contracts. We have not provided a reconciliation of our forward-
looking long-term free cash flow margin to the most comparable GAAP financial
measure because we are unable to predict, without unreasonable efforts, the
timing and amount of certain adjustments, which may be significant.
Use of Forward-Looking Statements
This release contains “forward-looking statements.” Those statements include,
without limitation, our performance outlook, including the statements in the
section entitled “Financial Outlook,” and other statements regarding capital and
compute constraints and the expected benefits of our announced partnerships and
acquisitions. Forward-looking statements are subject to known and unknown risks
and uncertainties and are based on potentially inaccurate assumptions that could
cause actual results to differ materially from those expected or implied by the
forward-looking statements. If any such risks or uncertainties materialize or if
any of the assumptions prove incorrect, our results could differ materially from
the results expressed or implied by the forward-looking statements we make.
Factors that may cause actual results to differ materially from those in any
forward-looking statements include, among others, experiencing an actual or
perceived cyber-security event or weakness; our ability to comply with evolving
privacy laws, data transfer restrictions, and other foreign and domestic
standards related to data and the Internet; errors, interruptions, delays or
security breaches in or of our service or data centers; our ability to maintain
and attract key employees and manage workplace culture; alleged violations of
laws and regulations, including those relating to anti-bribery and anti-
corruption and those relating to public sector contracting
8
requirements; our ability to compete successfully against existing and new
competitors; our ability to predict, prepare for and respond promptly to rapidly
evolving technological, market and customer developments; our ability to grow
our business, including converting remaining performance obligations into
revenue, adding and retaining customers, selling additional subscriptions to
existing customers, selling to larger enterprises, government and regulated
organizations with complex sales cycles and certification processes, and
entering new geographies and markets; our ability to develop and gain customer
demand for and acceptance of existing, new and improved products and services,
including products that incorporate AI technology; our ability to expand and
maintain our partnerships and partner programs, including expected market
opportunity from such relationships, and realize the anticipated benefits
thereof; global macroeconomic and political conditions including tariffs,
inflation and armed conflicts; fluctuations in the value of foreign currencies
relative to the U.S. Dollar; fluctuations in interest rates; our ability to
consummate and realize the benefits of any strategic transactions or
acquisitions; our ability to execute share repurchases, including the timing,
manner, price, and amount of any repurchase; and fluctuations and volatility in
our stock price.
Further information on these and other factors that could affect our financial
results are included in our Form 10-K for the year ended December 31, 2025, and
in other filings we make with the Securities and Exchange Commission from time
to time.
We undertake no obligation, and do not intend, to update these forward-looking
statements, to review or confirm analysts’ expectations, or to provide interim
reports or updates on the progress of the current financial quarter.
About ServiceNow
ServiceNow (NYSE: NOW) is the Super Intelligence Control Tower for business
reinvention. The ServiceNow platform integrates with any model, any cloud, and
any data source to orchestrate, govern, and secure work across the agentic
enterprise. ServiceNow gives customers the enterprise context and control to
build and scale confidently. With more than 100 billion workflows running on the
platform each year, ServiceNow helps organizations turn fragmented operations
into coordinated, autonomous work for IT, CRM, Security, Employee Experience,
and more. Learn how ServiceNow puts AI to work for people at www.servicenow.com.
© 2026 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo,
Now, and other ServiceNow marks are trademarks and/or registered trademarks of
ServiceNow, Inc. in the United States and/or other countries. Other company
names, product names, and logos may be trademarks of the respective companies
with which they are associated.
Media Contact:
Emily Jeffers
press@servicenow.com
Investor Contact:
Darren Yip
(925) 388-7205
ir@servicenow.com
9
ServiceNow, Inc.
Condensed Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Septem… Septem… Nine Septem…
Months 30, 30, Months 30, Septemb…
Ended 2026 2025 Ended 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Reven…
Subsc… $ 3,988 $ 3,299 $ 11,536 $ 9,417
Profe…
servi… 118 108 327 293
and
other
Total 4,106 3,407 11,863 9,710
reven…
Cost
of
reven…
Subsc… 1,054 666 2,904 1,852
Profe…
servi… 157 108 416 297
and
other
Total
cost 1,211 774 3,320 2,149
of
reven…
Gross 2,895 2,633 8,543 7,561
profit
Opera…
expen…
Sales
and 1,271 1,056 3,859 3,238
marke…
Resea…
and 956 750 2,694 2,187
devel…
Gener…
and 283 255 940 755
admin…
Total
opera… 2,510 2,061 7,493 6,180
expen…
Income
from 385 572 1,050 1,381
opera…
Inter… 69 115 227 346
income
Inter… -81 -6 -153 -18
expen…
Other
income -3 13 357 11
(expe…
net
Income
before 370 694 1,481 1,720
income
taxes
Provi…
for 93 192 437 373
income
taxes
Net $ 277 $ 502 $ 1,044 $ 1,347
income
Net
income
per $ 0.27 $ 0.48 $ 1.01 $ 1.30
share
-
basic…
Net
income
per $ 0.27 $ 0.48 $ 1.01 $ 1.29
share
-
dilut…
Weigh…
shares
used
to
compu…
net 1,035 1,038 1,034 1,036
income
per
share
-
basic…
Weigh…
shares
used
to
compu…
net 1,043 1,048 1,039 1,047
income
per
share
-
dilut…
(1) Includes stock-based compensation as follows:
10
Three Septem… Septem… Nine Septem…
Months 30, 30, Months 30, Septemb…
Ended 2026 2025 Ended 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Cost
of
reven…
Subsc… $ 96 $ 78 $ 276 $ 222
Profe…
servi… 13 11 38 33
and
other
Opera…
expen…
Sales
and 175 141 504 444
marke…
Resea…
and 282 203 801 584
devel…
Gener…
and 67 59 227 178
admin…
(2) Prior period results have been retroactively adjusted to reflect the effects
of the five-for-one stock split, which was effective December 17, 2025
Note: Certain prior period amounts have been reclassified to conform to the
current period presentation.
11
ServiceNow, Inc.
Condensed Consolidated Balance Sheets
(in millions)
September 30, 2026 December 31, 2025
──────────────────────────────────────────────────────────────────────────────
-unaudited
Assets
Current assets:
Cash and cash $ 2,393 $ 3,726
equivalents
Marketable 2,214 2,558
securities
Accounts 2,222 2,627
receivable, net
Current portion
of deferred 606 590
commissions
Prepaid expenses
and other current 1,042 970
assets
Total current 8,477 10,471
assets
Deferred
commissions, less 1,158 1,114
current
portion
Long-term
marketable 2,354 3,771
securities
Strategic 2,050 1,542
investments
Property and 2,145 2,289
equipment, net
Operating lease
right-of-use 779 806
assets
Intangible 3,594 1,121
assets, net
Goodwill 10,012 3,578
Deferred tax 804 1,056
assets
Other assets 457 290
Total assets $ 31,830 $ 26,038
Liabilities and
stockholders’
equity
Current
liabilities:
Accounts payable $ 231 $ 204
Accrued expenses
and other current 1,760 1,813
liabilities
Current portion
of deferred 7,600 8,314
revenue
Current portion
of operating 118 112
lease
liabilities
Short-term debt, 2,086 —
net
Total current 11,795 10,443
liabilities
Deferred revenue,
less current 133 120
portion
Operating lease
liabilities, less 773 800
current portion
Long-term debt, 5,438 1,491
net
Other long-term 595 220
liabilities
Stockholders’ 13,096 12,964
equity
Total liabilities
and stockholders’ $ 31,830 $ 26,038
equity
12
ServiceNow, Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Septem… Septem… Nine Septem…
Months 30, 30, Months 30, Septemb…
Ended 2026 2025 Ended 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Cash
flows
from
opera…
activ…
Net $ 277 $ 502 $ 1,044 $ 1,347
income
Adjus…
to
recon…
net
income
to
net
cash
provi…
by
opera…
activ…
Depre…
and 390 194 1,055 526
amort…
Amort…
of 179 161 519 454
defer…
commi…
Stock… 630 492 1,829 1,461
compe…
Defer…
income 29 124 167 172
taxes
Unrea…
(gain…
losses -7 -22 -367 -27
on
strat…
inves…
Other 40 3 103 70
Chang…
in
opera…
assets
and
liabi…
net of
effect
of
busin…
combi…
Accou… -29 141 442 740
recei…
Defer… -213 -171 -589 -462
commi…
Prepa…
expen…
and -103 23 -221 -199
other
assets
Accou… 72 -85 81 48
payab…
Defer… -463 -449 -845 -713
reven…
Accru…
expen…
and 37 -100 -122 -211
other
liabi…
Net
cash
provi… $ 839 $ 813 $ 3,096 $ 3,206
by
opera…
activ…
Cash
flows
from
inves…
activ…
Purch…
of
prope… -91 -235 -346 -630
and
equip…
Busin…
combi…
net of -391 -139 -9,167 -215
cash
acqui…
Purch…
of — -9 — -43
other
intan…
Purch…
of -1,022 -397 -1,448 -2,719
marke…
secur…
Purch…
of -13 -882 -191 -1,020
strat…
inves…
Sales
and
matur… 632 1,129 3,160 3,410
of
marke…
secur…
Other 47 -18 49 26
Net
cash
used $ -838 $ -551 $ -7,943 $ -1,191
in
inves…
activ…
Cash
flows
from
finan…
activ…
Proce…
from
borro…
on
senior
notes, -1 — 3,943 —
net of
disco…
and
issua…
costs
Proce…
from
term
loan, — — 3,991 —
net of
issua…
costs
Repay…
of — — -4,000 —
term
loan
13
Three Septem… Septem… Nine Septem…
Months 30, 30, Months 30, Septemb…
Ended 2026 2025 Ended 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Proce…
from
issua…
of 995 — 4,529 —
comme…
paper,
net of
disco…
Repay…
of -1,012 — -2,484 —
comme…
paper
Proce…
from
emplo… 79 117 233 270
stock
plans
Repur…
of — -584 -2,225 -1,243
common
stock
Taxes
paid
relat…
to net
share -175 -190 -456 -628
settl…
of
equity
awards
Other — — -7 —
Net
cash
(used
in) $ -114 $ -657 $ 3,524 $ -1,601
provi…
by
finan…
activ…
Forei…
curre…
effect
on
cash, 1 -4 -4 10
cash
equiv…
and
restr…
cash
Net
change
in
cash,
cash -112 -399 -1,327 424
equiv…
and
restr…
cash
Cash,
cash
equiv…
and
restr… 2,517 3,133 3,732 2,310
cash
at
begin…
of
period
Cash,
cash
equiv…
and
restr… $ 2,405 $ 2,734 $ 2,405 $ 2,734
cash
at end
of
period
Note: Certain prior period amounts have been reclassified to conform to the
current period presentation.
14
ServiceNow, Inc.
GAAP to Non-GAAP Reconciliation
(in millions, except per share data)
(unaudited)
Three Sept… Sept… Nine Sept… Septe…
Mont… 30, 30, Mont… 30, 30,
Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Gro…
pro…
GAAP
sub… $ 2,934 $ 2,633 $ 8,632 $ 7,565
gro…
pro…
Sto… 96 78 276 222
com…
Amo…
of 152 32 390 75
pur…
int…
Sev… 16 1 20 4
cos…
Non…
sub… $ 3,198 $ 2,744 $ 9,318 $ 7,866
gro…
pro…
GAAP
pro…
ser…
and $ -39 $ — $ -89 $ -4
oth…
gro…
(lo…
pro…
Sto… 13 11 38 33
com…
Sev… 3 1 3 1
cos…
Non…
pro…
ser…
and $ -23 $ 12 $ -48 $ 30
oth…
gro…
(lo…
pro…
GAAP
gro… $ 2,895 $ 2,633 $ 8,543 $ 7,561
pro…
Sto… 109 89 314 255
com…
Amo…
of 152 32 390 75
pur…
int…
Sev… 19 2 23 5
cos…
Non…
gro… $ 3,175 $ 2,756 $ 9,270 $ 7,896
pro…
Gro…
mar…
GAAP
sub… 73.5 % 80 % 75 % 80.5 %
gro…
mar…
Sto…
com…
as % 2.5 % 2.5 % 2.5 % 2.5 %
of
sub…
rev…
Amo…
of
pur…
int… 4 % 1 % 3.5 % 1 %
as
% of
sub…
rev…
Sev…
cos…
as % 0.5 % — % — % — %
of
sub…
rev…
Non…
sub… 80 % 83 % 81 % 83.5 %
gro…
mar…
GAAP
pro…
ser…
and (32.5 %) 0.5 % (27 %) (1.5 %)
oth…
gro…
mar…
Sto…
com…
as %
of
pro… 11 % 10.5 % 11.5 % 11.5 %
ser…
and
oth…
rev…
Sev…
cos…
as %
of
pro… 2 % 0.5 % 1 % 0.5 %
ser…
and
oth…
rev…
Non…
pro…
ser…
and (20 %) 11 % (15 %) 10 %
oth…
gro…
mar…
15
GAAP gross
margin
Stock-based
compensation as
% of total
revenues
Amortization of
purchased
intangibles as %
of total
revenues
Severance costs
as % of total
revenues 70.5 % 77.5 % 72 % 78 %
Non-GAAP gross 2.5 % 2.5 % 2.5 % 2.5 %
margin 3.5 % 1 % 3.5 % 1 %
Income from 0.5 % — % — % — %
operations: 77.5 % 81 % 78 % 81.5 %
──────────────────────────────────────────────────────────────────────────────
GAAP income from $ 385 $ 572 $ 1,050 $ 1,381
operations
Stock-based 633 492 1,846 1,461
compensation
Amortization of
purchased 198 33 494 79
intangibles
Business
combination and 35 19 153 44
other related
costs
Impairment of — — — 30
assets
Severance costs 87 24 167 53
Non-GAAP income $ 1,338 $ 1,140 $ 3,710 $ 3,048
from operations
Operating
margin:
GAAP operating 9.5 % 17 % 9 % 14 %
margin
Stock-based
compensation as 15.5 % 14.5 % 15.5 % 15 %
% of total
revenues
Amortization of
purchased
intangibles as 5 % 1 % 4 % 1 %
% of total
revenues
Business
combination and
other related 1 % 0.5 % 1.5 % 0.5 %
costs as % of
total revenues
Impairment of
assets as % of — % — % — % 0.5 %
total
revenues
Severance costs
as % of total 2 % 0.5 % 1.5 % 0.5 %
revenues
Non-GAAP 32.5 % 33.5 % 31.5 % 31.5 %
operating margin
Net income:
GAAP net income $ 277 $ 502 $ 1,044 $ 1,347
Stock-based 633 492 1,846 1,461
compensation
Amortization of
purchased 198 33 494 79
intangibles
Business
combination and 35 19 153 44
other related
costs
Impairment of — — — 30
assets
Severance costs 87 24 167 53
(Gains)/losses
on strategic -7 -22 -367 -27
investments,
net(3)
Income tax
effects and -184 -56 -305 -299
adjustments(1)
(3)
Discrete income
tax benefit from
the
release of a — — -51 —
valuation
allowance on
deferred tax
assets(4)
Non-GAAP net $ 1,039 $ 992 $ 2,981 $ 2,689
income(3)
Net income per
share - basic
and
diluted:
GAAP net income
per share - $ 0.27 $ 0.48 $ 1.01 $ 1.30
basic(2)
GAAP net income
per share - $ 0.27 $ 0.48 $ 1.01 $ 1.29
diluted(2)
Non-GAAP net
income per share $ 1.00 $ 0.96 $ 2.88 $ 2.59
- basic(2)
(3)
Non-GAAP net
income per share $ 1.00 $ 0.95 $ 2.87 $ 2.57
-
diluted(2)(3)
16
Weighted-av…
shares used
to compute
net income
per share -
basic(2)
Weighted-av…
shares used
to compute
net income
per share -
diluted(2)
Free cash 1,035 1,038 1,034 1,036
flow: 1,043 1,048 1,039 1,047
──────────────────────────────────────────────────────────────────────────────
GAAP net
cash
provided by $ 839 $ 813 $ 3,096 $ 3,206
operating
activities
Purchases of
property and -91 -235 -346 -630
equipment
Business
combination
and other 74 14 371 28
related
costs
Non-GAAP
free cash $ 822 $ 592 $ 3,121 $ 2,604
flow
Free cash
flow margin:
GAAP net
cash
provided by
operating 20.5 % 24 % 26 % 33 %
activities
as % of
total
revenues
Purchases of
property and
equipment as (2 %) (7 %) (3 %) (6.5 %)
%
of total
revenues
Business
combination
and other
related 2 % 0.5 % 3 % 0.5 %
costs as %
of total
revenues
Non-GAAP
free cash 20 % 17.5 % 26.5 % 27 %
flow margin
(1) We use a non-GAAP effective tax rate for evaluating our operating results to
provide consistency across reporting periods. Based on our long-term
projections, we are using a non-GAAP tax rate of 21% for the three and nine
months ended September 30, 2026 and 20% for the three and nine months ended
September 30, 2025. This non-GAAP tax rate could change for various reasons
including significant changes in our geographic earnings mix or fundamental tax
law changes in major jurisdictions in which we operate.
(2) Prior period results have been retroactively adjusted to reflect the effects
of the five-for-one stock split, which was effective December 17, 2025.
(3) Prior period results have been retroactively adjusted to reflect the
exclusion of gains and losses on strategic investments.
(4) GAAP net income for the nine months ended September 30, 2026 was impacted by
a $51 million release of valuation allowance on our deferred tax assets as a
discrete tax benefit.
Note: Numbers are rounded for presentation purposes and may not foot.
17
ServiceNow, Inc.
Reconciliation of Non-GAAP Financial Guidance
Three Months Ending
December 31, 2026
────────────────────────────────────────────────────────────────────────
GAAP operating margin 12 %
Stock-based compensation expense as % of 14 %
total revenues
Amortization of purchased intangibles as 5 %
% of total revenues
Business combination and other related 1 %
costs as % of total revenues
Severance costs as % of total revenues 1 %
Non-GAAP operating margin 32 %
18
Twelve Months Ending
December 31, 2026
────────────────────────────────────────────────────────────────────────────
GAAP subscription gross margin 75 %
Stock-based compensation expense as % of 2 %
subscription revenues
Amortization of purchased intangibles as 3 %
% of subscription revenues
Severance costs as % of subscription — %
revenues
Non-GAAP subscription margin 81 %
GAAP operating margin 10 %
Stock-based compensation expense as % of 15 %
total revenues
Amortization of purchased intangibles as 4 %
% of total revenues
Business combination and other related 1 %
costs as % of total revenues
Severance costs as % of total revenues 1 %
Non-GAAP operating margin 31.5 %
GAAP net cash provided by operating 37 %
activities as % of total revenues
Purchases of property and equipment as % (3 %)
of total revenues
Business combination and other related 2 %
costs as % of total revenues
Non-GAAP free cash flow margin 36 %
Note: Numbers are rounded for presentation purposes and may not foot.
19