ServiceNow (NYSE:NOW) Announces Quarterly Earnings Results

ServiceNow (NYSE:NOW) posted its earnings results on Wednesday. The information technology services provider reported $0.97 EPS for the quarter, meeting analysts’ consensus estimates of $0.97, FiscalAI reports. The company had revenue of $3.77 billion for the quarter, compared to analysts’ expectations of $3.75 billion. ServiceNow had a net margin of 12.59% and a return on equity of 18.16%. ServiceNow’s revenue for the quarter was up 22.1% compared to the same quarter last year. During the same quarter in the prior year, the company posted $0.81 earnings per share.

Here are the key takeaways from ServiceNow’s conference call:

• ServiceNow beat the high end of Q1 guidance across key metrics — subscription revenue $3.671B (+19% CC), CRPO +21% CC, non‑GAAP operating margin 32%, and free cash flow margin 44%, with 16 deals over $5M (5 over $10M).
• Management says AI momentum is accelerating — Now Assist is tracking well above initial targets (management moved a $1B target to roughly $1.5B run rate), with large AI-inclusive deals and customers spending >$1M growing materially year‑over‑year.
• The early close of the Armis acquisition expands ServiceNow’s security TAM and contributed ~125 bps to 2026 subscription revenue guidance (midpoint uplift ~$205M), but management flagged near‑term margin headwinds (tens of basis points) that it expects to normalize by 2027.
• Management emphasized differentiation from competitors via an AI‑native platform stack — the Context Engine, Autonomous Workforce, EmployeeWorks (Moveworks integration), and Workflow Data Fabric provide bundled AI, data, security and governance rather than “sidecar” add‑ons.
• Geopolitical disruption in the Middle East caused timing delays on several on‑prem deals (about a ~75 bps headwind to Q1 subscription revenue), which pressured near‑term quarter timing and Q2 guidance despite the company maintaining full‑year targets.

ServiceNow Stock Performance

Shares of NOW stock opened at $86.10 on Friday. The company has a debt-to-equity ratio of 0.12, a quick ratio of 1.00 and a current ratio of 1.00. ServiceNow has a one year low of $81.24 and a one year high of $211.48. The company’s 50-day simple moving average is $105.18 and its 200-day simple moving average is $138.45. The stock has a market capitalization of $89.21 billion, a price-to-earnings ratio of 51.63, a PEG ratio of 1.73 and a beta of 1.01.

Insider Activity at ServiceNow

In other news, insider Paul Fipps sold 3,696 shares of the business’s stock in a transaction that occurred on Monday, February 23rd. The stock was sold at an average price of $101.77, for a total value of $376,141.92. Following the completion of the sale, the insider directly owned 8,061 shares in the company, valued at approximately $820,367.97. The trade was a 31.44% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Kevin Thomas Mcbride sold 1,400 shares of the company’s stock in a transaction that occurred on Friday, February 13th. The shares were sold at an average price of $105.71, for a total value of $147,994.00. Following the sale, the insider directly owned 26,314 shares in the company, valued at approximately $2,781,652.94. This represents a 5.05% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 16,237 shares of company stock valued at $1,697,162 over the last three months. 0.34% of the stock is owned by insiders.

Institutional Inflows and Outflows

Large investors have recently modified their holdings of the business. Florida Financial Advisors LLC raised its stake in ServiceNow by 5.4% during the second quarter. Florida Financial Advisors LLC now owns 273 shares of the information technology services provider’s stock worth $280,000 after acquiring an additional 14 shares during the period. Clark Capital Management Group Inc. boosted its stake in ServiceNow by 3.6% in the third quarter. Clark Capital Management Group Inc. now owns 514 shares of the information technology services provider’s stock valued at $473,000 after acquiring an additional 18 shares during the period. American Trust grew its holdings in shares of ServiceNow by 1.8% during the third quarter. American Trust now owns 1,029 shares of the information technology services provider’s stock valued at $947,000 after purchasing an additional 18 shares during the last quarter. Morse Asset Management Inc raised its position in shares of ServiceNow by 0.5% during the 2nd quarter. Morse Asset Management Inc now owns 3,488 shares of the information technology services provider’s stock worth $3,586,000 after purchasing an additional 19 shares during the period. Finally, CYBER HORNET ETFs LLC lifted its holdings in shares of ServiceNow by 3.7% in the 3rd quarter. CYBER HORNET ETFs LLC now owns 567 shares of the information technology services provider’s stock worth $522,000 after purchasing an additional 20 shares during the last quarter. 87.18% of the stock is currently owned by institutional investors.

Wall Street Analysts Forecast Growth

Several brokerages have issued reports on NOW. Cantor Fitzgerald dropped their price objective on ServiceNow to $122.00 and set an “overweight” rating on the stock in a report on Thursday. Jefferies Financial Group reissued a “buy” rating and issued a $135.00 price target (down from $175.00) on shares of ServiceNow in a research note on Thursday. Macquarie Infrastructure cut their price target on shares of ServiceNow from $172.00 to $140.00 and set a “neutral” rating on the stock in a research note on Thursday, January 29th. Piper Sandler dropped their price objective on ServiceNow from $200.00 to $140.00 and set an “overweight” rating for the company in a report on Thursday. Finally, The Goldman Sachs Group reduced their target price on ServiceNow from $188.00 to $163.00 and set a “buy” rating on the stock in a report on Thursday. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-four have given a Buy rating, six have issued a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, ServiceNow has a consensus rating of “Moderate Buy” and a consensus price target of $146.65.

Trending Headlines about ServiceNow

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Q1 revenue and subscription strength — ServiceNow beat revenue expectations and raised its annual subscription outlook, driven by AI product adoption (subscription revenue +22% y/y). ServiceNow Reports Q1 Results
• Positive Sentiment: AI momentum and partnerships — Management emphasized accelerating revenue from AI workflows and deepened a strategic partnership with Google Cloud to expand AI agents across industries — a key long-term growth driver. ServiceNow & Google Cloud AI Partnership
• Positive Sentiment: Strategic M&A completed — ServiceNow closed the Armis cyber-exposure acquisition, expanding security capabilities (strategic for cross-sell even as it temporarily pressures margins). Armis Acquisition Closed
• Neutral Sentiment: EPS roughly in line — Non-GAAP EPS matched expectations ($0.97), so the selloff is less about the quarter’s headline profit and more about forward-looking items. Earnings Details
• Negative Sentiment: Margin pressure from Armis and buy vs. integration costs — Management said the Armis deal will subtract from operating margins this year (management quantified a mid-single to low-double-digit bps headwind), raising near-term profitability concerns. Armis Margin Impact
• Negative Sentiment: Geopolitical deal delays — ServiceNow flagged that the Iran/Middle East conflict delayed several large deals, creating an estimated ~75 bps headwind to subscription revenue in Q1 and raising investor concern about near-term growth visibility. Deal Delays / Iran Impact
• Negative Sentiment: Analyst repricing and sell-side cuts — Multiple firms trimmed price targets and some modeled lower near-term growth/margins; that led to forced selling and sector contagion as software peers were marked down. Analyst Cuts & Market Reaction
• Negative Sentiment: Sector risk and AI-disruption fears — ServiceNow’s cautious near-term tone reignited broader concerns about AI disruption and margin recovery across the software group, amplifying the drop. Sector Reaction

About ServiceNow

ServiceNow (NYSE: NOW) is a cloud computing company that builds enterprise software to manage digital workflows and automate business processes. Its offerings are designed to replace manual work and legacy systems with cloud-based, service-oriented applications that support IT operations, customer service, human resources, security response and other enterprise functions.

The company’s flagship product family is the Now Platform, a suite of subscription software and platform services that includes IT Service Management (ITSM), IT Operations Management (ITOM), IT Business Management (ITBM), Customer Service Management (CSM), HR Service Delivery, Security Operations and Asset Management.