Key Highlights

  • EPS of $0.90 topped the $0.86 consensus estimate for the quarter ended June 30, 2026.
  • Subscription revenue grew 24.5% year‑over‑year to $3.877 billion, while total revenue rose 24% to $3.987 billion.
  • Current remaining performance obligations reached $13.20 billion, a 21% increase year‑over‑year, and total obligations hit $29.0 billion.

ServiceNow (NYSE: NOW) delivered earnings per share of $0.90 for the quarter ending June 30, 2026, comfortably above the $0.86 consensus forecast. The company’s subscription revenue surged 24.5% year‑over‑year to $3.877 billion, driving total revenue to $3.987 billion, a 24% increase. Shares rose in after‑hours trading, narrowing a broader decline and posting a modest gain over the past month.

Beat the Guidance

The earnings beat stemmed from strong topline momentum across the subscription base. Subscription revenue of $3.877 billion reflected a 23% rise on a constant‑currency basis, underscoring demand for the firm’s AI‑enabled workflow platform. Total revenue of $3.987 billion grew 22.5% in constant currency, confirming that growth extends beyond core subscriptions.

The company’s current remaining performance obligations (cRPO) totaled $13.20 billion, marking a 21% year‑over‑year uplift and indicating a healthy pipeline of contracts expected to be recognized within the next twelve months. These figures suggest the firm is on track to meet its longer‑term subscription revenue aspirations.

Mechanics of Growth

ServiceNow’s AI Control Tower crossed the $1 billion annual contract value milestone, reflecting heightened adoption of its AI solutions. The quarter recorded 123 transactions exceeding $1 million in annual contract value, a significant increase compared with the prior period, and the cohort of customers with contracts above $5 million expanded, representing approximately 23% year‑over‑year growth. Remaining performance obligations rose to $29.0 billion, a 21% increase year‑over‑year, indicating deeper and longer commitments from enterprise clients.

The firm also introduced several AI‑centric products, including the unified Otto experience and the Autonomous Security & Risk specialist, reinforcing its position as a leading AI governance platform.

Market Context

The stock moved higher in after‑hours trading, while peers such as Microsoft and Oracle posted mixed results on the same day. The broader technology sector continues to navigate varying performance trends, and ServiceNow’s results highlight its resilience amid these dynamics.

Next Catalyst

Investors will monitor the company’s progress toward its Rule of 60+ target, a strategic objective that aims for a combined subscription‑revenue growth rate and free‑cash‑flow margin exceeding 60% by 2030. The forthcoming milestones related to that goal, combined with the next earnings release slated for early October 2026, will provide further clarity on whether ServiceNow can sustain its accelerated growth trajectory.

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.