ServiceNow Inc.

NOW
Financial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$3.8B
Q1 2026 · +22% YoY · Beat consensus by 1.1%
TTM ROIC
48%
FY2025 · ROIC ex-goodwill: Non-GAAP Operating Income / (Total Assets - Goodwill) · WACC ~11% · Moat spread +37pp
Margin Profile
Gross 84%
Operating 31.5%
FCF 33%
FY2025
Net Cash
$7.0B
Cash $8.5B · Debt $1.5B · FY2025

Business Overview

ticker: NOW step: 01 generated: 2026-05-12 source: quick-research

ServiceNow, Inc. (NOW) — Business Overview

Business Description

ServiceNow is the enterprise cloud workflow leader, providing a unified platform (the Now Platform) that automates IT, HR, customer service, and creator workflows across ~85% of the Fortune 500. By mid-2026, ServiceNow has pivoted from "workflow automation" to "AI Control Tower" — its agentic AI offerings (Now Assist, Autonomous Workforce) bundle AI specialists that can complete cross-departmental tasks without human intervention. CEO Bill McDermott raised the Now Assist 2026 target to $1.5B in net new ACV from $1B.

Revenue Model

  • Subscription revenue (~97% of revenue): Annual recurring SaaS contracts across workflow modules
  • Professional services (~3%): Implementation + consulting + training
  • AI monetization (rapidly growing): Pro Plus + Enterprise Plus SKUs with agentic AI bundled; Now Assist running >$500M ACV by FY25 end, targeting $1.5B in FY26

Products & Services

Technology Workflows (~53% of ACV)
  • IT Service Management (ITSM): Ticketing, incident, change, problem management
  • IT Operations Management (ITOM): AIOps, discovery, event management
  • Security Operations (SecOps): Threat intel + incident response
  • Strategic Portfolio Management: Project/portfolio governance
  • Hardware Asset Management: ITAM
Customer & Employee Workflows (~30% of ACV)
  • Customer Service Management (CSM): Customer support workflows
  • HR Service Delivery (HRSD): Employee experience + cases
  • Field Service Management (FSM): Mobile field workforce coordination
Creator Workflows (~17% of ACV)
  • App Engine: Low-code application development
  • Automation Engine: RPA + integrations
  • Workflow Studio: Citizen developer tools
AI Layer (Now Assist + Autonomous Workforce)
  • Now Assist: Generative AI bundled in Pro Plus + Enterprise Plus tiers
  • Autonomous Workforce (2026): AI specialists across IT, CRM, HR, finance, legal, procurement, security/risk
  • Workflow Data Fabric: Data unification across enterprise systems

Customer Base & Go-to-Market

  • Customers: Fortune 500 dominance (~85% penetration)
  • $1M+ ACV customers: 2,109 (+12% YoY)
  • $5M+ ACV customers: ~500 (+21% YoY)
  • Channel: Direct enterprise sales + global SI partners (Accenture, Deloitte, Cognizant, etc.)
  • Geographic mix: ~60% Americas, ~25% EMEA, ~15% APAC
  • Annual user conference: Knowledge — Major customer event in spring each year

Competitive Position

ServiceNow is the dominant enterprise workflow platform with ~85% Fortune 500 penetration and minimal direct platform competitor at scale. Moats: (1) deep enterprise mission-critical integration (ITSM is mission-critical for 85% of F500), (2) workflow data network effects (each customer adds template/integration value), (3) ~1,000+ implementation partners + ~$50B+ ecosystem services, (4) "AI Control Tower" positioning makes ServiceNow a meta-platform governing other AI agents. Competition: Salesforce Agentforce (CRM-centric), Microsoft (Power Platform + Copilot), Atlassian (developer-centric), Workday (HR-centric).

Key Facts

  • Founded: 2003 (Fred Luddy)
  • Headquarters: Santa Clara, CA
  • Employees: ~25,000
  • Exchange: NYSE
  • Sector / Industry: Technology / Application Software
  • Market Cap: ~$185B (May 2026) — down ~33% YTD on growth deceleration concerns
  • CEO: Bill McDermott (since 2019, ex-SAP CEO)
  • President + COO: Amit Zavery
  • $5B additional buyback authorized FY25

Financial Snapshot

ticker: NOW step: 04 generated: 2026-05-12 source: quick-research

ServiceNow, Inc. (NOW) — Financial Snapshot

Income Statement Summary

Metric FY2023 FY2024 FY2025 YoY
Revenue $8.97B $10.98B $13.30B +21%
Subscription Revenue $8.71B $10.65B $12.95B +22%
Non-GAAP Gross Margin 83.0% 83.5% 84.0% +50bps
Non-GAAP Operating Margin 29.4% 30.7% 31.5% +80bps
Non-GAAP Net Income $2.7B $3.5B $4.3B +23%
Non-GAAP EPS (diluted) $13.13 $16.62 $20.50 +23%
Free Cash Flow $2.7B $3.5B $4.4B +25%

Q1 2026 Highlights

Metric Q1 2026
Subscription Revenue $3.50B (+19% YoY constant currency)
Operating Margin 32%+
cRPO ~$11.5-12B (+23% YoY)

cRPO Growth Trajectory

Quarter cRPO YoY Growth
Q4 2024 $10.27B +19% (cc +22%)
Q2 2025 $10.92B +24.5% (cc +21.5%)
Q4 2025 ~$11.5B +21%

AI ACV Trajectory

Metric Value
Now Assist ACV (FY25 exit) >$500M
Now Assist FY26 target (raised) $1.5B (from $1B)
$1M+ Now Assist customers +130% YoY

Customer Metrics

Metric FY25 Year End
$1M+ ACV customers 2,109 (+12%)
$5M+ ACV customers ~500 (+21%)
Fortune 500 penetration ~85%

Cash Flow & Balance Sheet (FY2025)

Metric Value
Operating Cash Flow ~$5B
Capital Expenditures ~$600M
Free Cash Flow $4.4B (33% margin)
Cash & Investments ~$8.5B
Total Debt ~$1.5B
Net Cash Position ~$7B

Key Ratios (approximate, May 2026)

  • P/E (forward): ~38x | EV/Sales: ~13x | FCF Yield: ~2.4%
  • Net Cash Position: +$7B
  • Rule of 40: ~53 (21% growth + 32% non-GAAP margin)

Growth Profile

NOW is one of the few enterprise software companies sustaining 20%+ subscription growth at scale. FY25 revenue +21% to $13.3B; cRPO +21-24% provides strong forward visibility. Now Assist scaling rapidly: >$500M ACV (FY25 exit) → $1.5B target (FY26). Despite the strong growth, stock is -33% YTD 2026 on broader growth-deceleration concerns and concerns that AI may eventually compress base SKU prices. Q1 2026 was viewed as a potential "turning point" but market remained cautious.

Forward Estimates

  • FY2026E Revenue: ~$16B (+20%)
  • FY2026E Non-GAAP EPS: ~$24.50 (+20%)
  • FY2027E Revenue: ~$19B (+19%)
  • FY2027E EPS: ~$29 (+18%)
  • FY2026 cRPO target: mid-teens to high-teens growth

Capital Return

  • $5B additional buyback authorized FY25 (total $8.5B+ authorization)
  • No dividend
  • FY25 buybacks: ~$2B repurchased
  • Net cash position $7B provides flexibility

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $NOW.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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ServiceNow Inc. (NOW) — Financial Analysis | Margin of Insight