ServiceNow has surpassed both its own projections and market expectations with its fiscal 2025 results. The company’s strategic emphasis on artificial intelligence appears to be delivering tangible benefits, as a growing number of enterprises leverage its platform to automate workflows. This technological momentum raises the question of whether it can sustain the high investor confidence moving forward.
Profitability and Shareholder Returns
The company’s financial health is underscored by robust profitability metrics. ServiceNow reported an operating margin of 31% and an adjusted earnings per share of $0.92 for the fourth quarter, figures that exceeded consensus estimates. This strong cash generation has empowered management to initiate a new share repurchase program valued at $2 billion, directly returning capital to shareholders.
Subscription Engine Powers Growth
The core driver of ServiceNow’s expansion remains its subscription business. Fourth-quarter subscription revenue climbed 21% year-over-year. A significant highlight is the surge in large enterprise deals; the number of new contracts with an annual contract value exceeding $1 million increased by nearly 40%.
Should investors sell immediately? Or is it worth buying NOW?
Strategic Focus on Autonomous AI
A key pillar for future growth is the “Now Assist” platform, which is increasingly centered on agentic AI. These autonomous AI agents are designed to independently execute complex tasks across corporate systems. To solidify its lead in this area, ServiceNow recently expanded its strategic partnership with OpenAI.
Looking ahead to the current fiscal year 2026, management has outlined ambitious targets:
* Subscription revenue projected between $15.53 billion and $15.57 billion.
* An operating margin goal of 32%.
* A free-cash-flow margin target of 36%.
In European trading, ServiceNow shares (NOW) were recently quoted at €12.60. While this price sits approximately 25% below its 52-week high of €16.90, the stock has stabilized above its 50-day moving average. The market anticipates further details on the operational execution of its AI strategy in April 2026, when ServiceNow releases its first-quarter results.
Ad
NOW Stock: Buy or Sell?! New NOW Analysis from January 31 delivers the answer:
The latest NOW figures speak for themselves: Urgent action needed for NOW investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 31.
NOW: Buy or sell? Read more here...
