ServiceNow Q4 EPS Tops Estimates with 20.5% Revenue Growth and $5B Buyback
ServiceNow posted Q4 adjusted EPS of $0.92 versus analysts’ $0.88 estimate and revenue of $3.57 billion, up 20.5% year-over-year. The board approved a $5 billion share repurchase and forecast subscription revenue of $15.53–$15.57 billion for fiscal 2026.
1. Q4 Earnings and Revenue Exceed Estimates
ServiceNow reported adjusted earnings per share of 0.92 for the quarter ended December 2025, surpassing analyst consensus of 0.87 and up from 0.73 a year earlier. Total revenue came in at 3.57 billion, outpacing estimates of 3.53 billion and marking 20.5% year-over-year growth. Net income rose to 401 million, or 38 cents per share, compared with 384 million, or 37 cents, in the year-ago period. Operating cash flow reached 813 million, while gross margins remained above 77%.
2. Subscription Revenue Guidance and Acquisition Impact
Management issued subscription revenue guidance for the first quarter between 3.65 and 3.66 billion, and full-year subscription revenue forecasts of 15.53 to 15.57 billion. The recent acquisition of AI specialist Moveworks is expected to contribute 100 basis points to both first-quarter and full-year subscription growth and backlog metrics. Current remaining performance obligations, a backlog indicator, are set to benefit from the integration of Moveworks into existing customer contracts.
3. Expansion of AI Partnerships to Drive Platform Adoption
ServiceNow deepened its AI ecosystem with three strategic partnerships. A multi-year agreement with Anthropic names Claude as the preferred model across ServiceNow’s AI-driven workflow products and default engine in its agent builder, while also deploying Claude to all 29,000 employees. A parallel integration with OpenAI opens the platform to that model family. Separately, an expanded commitment with Fiserv will scale use of Now Assist for Financial Services Operations and IT Service Management, embedding real-time insight and guided automation to boost resiliency and client satisfaction.
4. CEO Confidence and Shareholder Return Initiatives
Chief Executive Bill McDermott reaffirmed his commitment to lead through 2030 and restructured his compensation to tie future pay directly to stock performance. The board approved a 5 billion share repurchase program, with approximately 2 billion earmarked for buybacks in the coming weeks. McDermott emphasized strong net dollar retention and the durability of 20%-plus revenue growth, arguing that continued AI investment and execution will restore valuation multiples and investor confidence.