ServiceNow (NYSE:NOW) Posts Quarterly Earnings Results, Beats Expectations By $0.03 EPS

ServiceNow (NYSE:NOW) issued its quarterly earnings results on Wednesday. The information technology services provider reported $0.92 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.89 by $0.03, FiscalAI reports. The business had revenue of $3.57 billion for the quarter, compared to analyst estimates of $3.53 billion. ServiceNow had a net margin of 13.16% and a return on equity of 19.47%. The business’s revenue was up 20.7% compared to the same quarter last year. During the same period in the previous year, the business posted $0.73 earnings per share.

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

• ServiceNow beat Q4 guidance, reporting ~21% subscription growth (19.5% constant currency), CRPO growth of 25% (21% cc), and an operating margin of 31%, and it guided to ~20% subscription revenue growth for 2026.
• AI monetization is accelerating: Now Assist surpassed $600M ACV, more than doubled year‑over‑year in Q4 with many $1M+ deals and increased token consumption via “assist packs,” while workflows and transactions grew >33% YoY.
• The board authorized an incremental $5 billion share repurchase program with an immediate $2 billion accelerated share repurchase, signaling a material near‑term return of capital.
• Strategic M&A (Moveworks, Veza, Armis) is positioned to expand ServiceNow’s TAM around AI visibility, identity, and orchestration; management expects Armis to contribute roughly 1% to 2026 subscription revenue but noted modest near‑term integration impacts.
• Management acknowledged gross‑margin headwinds from increased hyperscaler and LLM/consumption costs and flagged up to ~50 basis points potential operating‑margin pressure from recent acquisitions in 2026, though they expect to offset much of this over time.

ServiceNow Price Performance

Shares of NYSE NOW traded up $0.18 on Friday, hitting $116.91. The company’s stock had a trading volume of 7,838,441 shares, compared to its average volume of 15,073,644. The stock has a 50 day moving average of $150.71 and a 200-day moving average of $171.41. The company has a market capitalization of $121.40 billion, a price-to-earnings ratio of 69.80, a price-to-earnings-growth ratio of 2.23 and a beta of 0.98. ServiceNow has a 12-month low of $113.13 and a 12-month high of $211.48. The company has a debt-to-equity ratio of 0.13, a current ratio of 1.06 and a quick ratio of 1.06.

Key ServiceNow News

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Q4 beat and solid AI traction — ServiceNow reported Q4 revenue and EPS above consensus and highlighted accelerating AI adoption (Now Assist growth, large enterprise wins), which underpins the company’s longer-term growth thesis. Read More.
• Positive Sentiment: Major AI partnerships — ServiceNow announced/expanded partnerships with Anthropic and OpenAI and embedded Anthropic Claude as a default Build Agent model, supporting AI monetization and product differentiation. Read More.
• Positive Sentiment: $5 billion buyback — The board authorized an additional $5B repurchase (including a $2B accelerated plan), which should be share‑supportive and reduce float over time. Read More.
• Positive Sentiment: Analyst buy/overweight reiterations — Several firms (DA Davidson, Cantor Fitzgerald, BTIG, Needham, UBS) reaffirmed buys/overweights with mid‑to‑high price targets, reflecting conviction in continued high‑teens growth and AI upside. Read More.
• Neutral Sentiment: CEO commitment/insider buy — CEO Bill McDermott publicly committed to staying through 2030 and bought shares, sending a governance/conviction signal; helpful but not a direct earnings catalyst. Read More.
• Neutral Sentiment: Unusually large options activity — Heavy call buying was noted around the print, indicating speculative positioning that can amplify intraday moves but doesn’t change fundamentals. Read More.
• Negative Sentiment: Guidance and subscription-growth caution — Management guided 2026 subscription‑revenue growth to ~19.5%–20.0%, slightly below some expectations and interpreted as a deceleration, which prompted investor concern about near‑term growth momentum. Read More.
• Negative Sentiment: Market reaction driven by AI/sector fear — Software peers and ETFs sold off amid fears that emerging AI players could disrupt incumbents; ServiceNow’s strong results were overshadowed by these macro/AI concerns, triggering a sharp post‑earnings drop. Read More.
• Negative Sentiment: Analyst price‑target cuts — Several firms trimmed targets (e.g., Macquarie lowered to $140, KeyCorp to $115, RBC lowered its target), reflecting renewed caution and helping justify near‑term downside pressure. Read More.

Insider Activity

In related news, Vice Chairman Nicholas Tzitzon sold 2,610 shares of the business’s stock in a transaction dated Tuesday, November 18th. The shares were sold at an average price of $165.42, for a total value of $431,735.76. Following the completion of the transaction, the insider owned 15,000 shares of the company’s stock, valued at approximately $2,481,240. The trade was a 14.82% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CFO Gina Mastantuono sold 2,085 shares of the firm’s stock in a transaction dated Friday, November 28th. The stock was sold at an average price of $161.60, for a total transaction of $336,936.00. Following the sale, the chief financial officer directly owned 63,215 shares in the company, valued at $10,215,544. This represents a 3.19% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders sold 15,310 shares of company stock worth $2,533,585. 0.34% of the stock is owned by corporate insiders.

Institutional Trading of ServiceNow

Hedge funds and other institutional investors have recently bought and sold shares of the company. Brighton Jones LLC lifted its stake in shares of ServiceNow by 1.1% during the 4th quarter. Brighton Jones LLC now owns 2,753 shares of the information technology services provider’s stock worth $2,919,000 after purchasing an additional 30 shares during the period. Sivia Capital Partners LLC increased its stake in ServiceNow by 4.2% in the second quarter. Sivia Capital Partners LLC now owns 837 shares of the information technology services provider’s stock valued at $861,000 after purchasing an additional 34 shares during the last quarter. United Bank lifted its position in ServiceNow by 15.5% during the second quarter. United Bank now owns 1,519 shares of the information technology services provider’s stock worth $1,562,000 after buying an additional 204 shares during the period. Riggs Asset Managment Co. Inc. boosted its stake in ServiceNow by 2.2% in the 2nd quarter. Riggs Asset Managment Co. Inc. now owns 1,922 shares of the information technology services provider’s stock worth $1,976,000 after buying an additional 42 shares during the last quarter. Finally, Nebula Research & Development LLC grew its holdings in ServiceNow by 205.1% in the 2nd quarter. Nebula Research & Development LLC now owns 906 shares of the information technology services provider’s stock valued at $931,000 after buying an additional 609 shares during the period. 87.18% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

A number of brokerages have recently issued reports on NOW. Sanford C. Bernstein reissued an “outperform” rating on shares of ServiceNow in a research note on Thursday. Wells Fargo & Company set a $225.00 price objective on ServiceNow and gave the stock an “overweight” rating in a research report on Thursday, January 8th. Stifel Nicolaus set a $180.00 target price on shares of ServiceNow and gave the stock a “buy” rating in a research report on Thursday. Arete Research set a $200.00 price target on shares of ServiceNow in a report on Tuesday, January 6th. Finally, BMO Capital Markets reduced their price objective on shares of ServiceNow from $175.00 to $170.00 and set an “outperform” rating for the company in a research note on Thursday. Two equities research analysts have rated the stock with a Strong Buy rating, thirty-two have given a Buy rating, six have issued a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average price target of $194.79.

ServiceNow Company Profile

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.