ServiceNow reported fourth-quarter revenue of $3.57 billion, up 20.5% year-over-year, and non-GAAP EPS of $0.92, exceeding consensus estimates of $3.53 billion and $0.88 respectively. Net income rose to $401 million (38 cents per share), compared with $384 million (37 cents) a year earlier. Subscription revenues grew over 20%, while current remaining performance obligations (CRPO) increased by more than 25%, providing visibility into 2026. The company issued guidance for first-quarter subscription revenue of $3.65–3.66 billion and full-year 2026 subscription revenue of $15.53–15.57 billion, underpinned by backlog and contributions from recent acquisitions.

Despite beating earnings estimates, ServiceNow’s shares fell sharply as investors focused on slowing organic growth—19% growth excluding acquisitions fell below the 20% threshold—and potential AI disruption to traditional workflows. Analysts warn that generative AI competitors and automation tools could erode long-term license revenue, prompting a re-rating of cloud software multiples. Concerns also center on integration risks and returns from the $2.85 billion Moveworks and $7.75 billion Armis acquisitions, with market participants questioning whether these deals will sustain the company’s historic revenue expansion.

To counter the sell-off, ServiceNow approved a $5 billion share repurchase program, with plans to deploy approximately $2 billion immediately. CEO Bill McDermott announced he has restructured his compensation to tie future pay to stock performance through 2030, signaling personal conviction in the long-term outlook. On the partnership front, ServiceNow has struck multi-year deals with AI leaders Anthropic and OpenAI to embed their models into its workflow platform, aiming to drive customer adoption of generative AI and differentiate its offerings in the enterprise software market.