ServiceNow raises annual subscription revenue forecast again on AI-driven demand
NOW•AI adoption and public-sector growth
CEO Bill McDermott said he has not seen any change to sales cycles from increased hardware and AI spending.
ServiceNow said its AI platform has seen widespread adoption across the public sector, with nearly all 50 U.S. states now using it to improve citizen services and modernize operations. The company crossed $1 billion in annual contract value for its AI offerings.
CFO Gina Mastantuono said outperformance in the second quarter came from federal clients, but this was partly due to on-premises revenue pulled forward from the third quarter.
Full-year outlook and quarterly results
The company now expects 2026 subscription revenue of $15.760 billion to $15.780 billion, up from its earlier projection of $15.735 billion to $15.775 billion.
Second-quarter subscription revenue of $3.88 billion and adjusted profit per share of 90 cents exceeded LSEG-compiled analysts' average estimates of $3.82 billion and 85 cents, respectively.
