ServiceNow raises annual forecast as AI bookings surpass $1 billion

Jul 22, 2026

ServiceNow raised its annual forecast after reporting a 25% jump in Q2 subscription revenue to $3.88 billion, easing investor fears of an AI-driven "SaaSpocalypse." The enterprise software company's AI business surpassed $1 billion in annual contract value, with AI agent deployments increasing ninefold in nine months. The strong results, which beat estimates, caused the company's stock to rise over 4% in after-hours trading.

Q2 financial results

▪For the quarter ending June 30, 2026, ServiceNow's subscription revenue increased about 25% to $3.88 billion.
▪ServiceNow's total revenue for Q2 2026 was $3.99 billion, a 24% year-over-year increase.
▪The company reported adjusted earnings of 90 cents per diluted share for Q2 2026, exceeding analysts' estimates.
▪Current remaining performance obligations (cRPO), a measure of near-term bookings, grew 21% to $13.2 billion.

AI business milestone

▪Nearly all 50 U.S. states are now using ServiceNow's AI platform to modernize operations and improve citizen services.
▪The company reported that customer deployments of its AI agents have increased ninefold over the past nine months.
▪ServiceNow has expanded its AI capabilities by acquiring cybersecurity startup Armis and AI startup Moveworks.
▪ServiceNow's AI business surpassed $1 billion in annual contract value during the second quarter of 2026.

Customer growth metrics

▪In Q2 2026, ServiceNow closed 123 deals worth over $1 million in net new annual contract value, up nearly 40% from the previous year.
▪The company's outperformance in the second quarter was partly driven by strong demand from U.S. federal clients.
▪As of June 2026, ServiceNow had 658 customers paying more than $5 million annually.

Full-year guidance raise

▪The company's forecast for third-quarter subscription revenue of approximately $3.98 billion was below the average analyst estimate of $4 billion.
▪ServiceNow raised its full-year 2026 subscription revenue forecast to a range of $15.76 billion to $15.78 billion.

Stock market reaction

▪Prior to the report, ServiceNow's stock had fallen about 38% in 2026 amid concerns that new AI tools could disrupt its business.
▪ServiceNow's shares rose between 4% and 5% in after-hours trading following the earnings announcement.
▪The positive results eased investor concerns about a "SaaSpocalypse," where AI startups like OpenAI could threaten established software companies.