ServiceNow, Inc. (NOW) Earnings Call Transcripts
ServiceNow, Inc.'s Latest Earnings Call - Q2 FY2026
In the second quarter of fiscal year 2026, ServiceNow reported subscription revenues of $3.877 billion, reflecting a 23% year-over-year growth, which exceeded the high end of guidance by 150 basis points. The company also achieved an operating margin of 29.5%, surpassing guidance by 300 basis points. Management raised full-year guidance for subscription revenues by $15 million, now expecting $15.770 billion, driven by strong demand for AI and cybersecurity solutions. The results indicate robust momentum across the portfolio, particularly in AI adoption and customer retention, positioning ServiceNow favorably for continued growth.
Reported metrics
| Metric | Value |
|---|---|
| Subscription Revenue | $3.877 billion (beat) |
| Operating Margin | 29.5% (beat) |
| AI ACV | $1 billion (beat) |
| Current RPO | $13.2 billion (beat) |
| Renewal Rate | 98% (positive) |
| Full Year Revenue Guidance | $15.770 billion (positive) |
Guidance from management
Management raised full-year subscription revenue guidance to $15.770 billion, reflecting a 21% year-over-year growth on a constant currency basis. For Q3, they expect subscription revenues between $3.975 billion and $3.980 billion, representing 20% year-over-year growth.
What management said
And I'll just add, Gabriela, to the monetization question because it's so very important. I'll reiterate. We crossed $1 billion in AI ACV in the quarter, well on our way to the $1.5 billion. I also noted in my script that we're -- while early, we're already tracking ahead of our target for AI to reach 30% of ACV in 2030. And these L1 autonomous agents, if you think about the complex tasks that they're able to execute...
Yes. So thanks, Michael, for the question. So clearly, a strong Q2 in Fed is good news in general. And as we move into the big Q3 quarter for Fed, it's definitely a good indicator. We called it out specifically because we did have a little bit more on-prem in Q2, which is purely timing. But I want to be clear that the beat was not all just on-prem. We've had really strong net new ACV in the quarter as well, which all...
What analysts pressed on
Analysts expressed concerns regarding potential elongation of sales cycles due to a shift in focus towards AI and hardware spending. There is apprehension that this could impact future revenue growth and deal closures, though management reassured that they have not observed any negative trends.
Main topics on the call
- Strong Subscription Revenue Growth — ServiceNow's subscription revenue grew 23% year-over-year, exceeding guidance expectations. CEO Bill McDermott stated, "Subscription revenue growth was 23% in constant currency, 1.5 points above the high end of our guida...
- AI Adoption and Performance — AI-related annual contract value (ACV) surpassed $1 billion, with net new ACV growth accelerating over 40% quarter-over-quarter. Management noted, "The percentage of renewal customers purchasing Agentic AI for the first ...
- Cybersecurity Business Growth — ServiceNow's cybersecurity business is now a $1 billion-plus segment and is the fastest growing among top cybersecurity firms. McDermott emphasized, "We now have a 10-figure cybersecurity business that's growing faster t...
- Guidance Raise for Full Year — Management raised full-year subscription revenue guidance by $15 million, now targeting $15.770 billion. CFO Gina Mastantuono stated, "We expect subscription gross margin of 81%, reflecting more customers utilizing our h...
Read the full ServiceNow, Inc. transcript (Q2 FY2026) → Summary generated from the call transcript; every figure above is stated by management on the record.
About ServiceNow, Inc.
ServiceNow, Inc. (NOW) is a publicly listed company in the Software industry, within the Information Technology sector. It trades on NYSE and is based in US. EarningsCalls.dev maintains a free, full-text archive of its earnings call transcripts — 235 calls on record spanning January 29, 2020 to July 22, 2026. Every transcript is split into speaker-by-speaker segments with headline metrics, free to read or available through our REST API.
Earnings Call History
EarningsCalls.dev has 235 ServiceNow, Inc. earnings call transcripts on record, spanning January 29, 2020 to July 22, 2026. Based on this history, ServiceNow, Inc. reports quarterly. The most recent call on file is dated July 22, 2026. The full list is below — each row opens the complete, free-to-read transcript.
- Ticker
- NOW
- Exchange
- NYSE
- Country
- US
- Sector
- Information Technology
- Industry
- Software
- Calls on record
- 235
- First call
- January 29, 2020
- Most recent
- July 22, 2026
- Reporting cadence
- quarterly