ServiceNow is positioning its platform as the essential command center for enterprise artificial intelligence, a strategic push underscored by its latest financial results. The workflow software specialist reported its strongest quarter to date, powered significantly by accelerating demand for its AI offerings. This performance arrives amid a period of broader pressure on the enterprise software sector, raising questions about the durability of its growth trajectory.
Leadership and Long-Term Vision Reinforced
Aligning with its strategic direction, ServiceNow’s board has extended the contract of Chief Executive Officer Bill McDermott through 2030. The company also communicated confidence through internal actions: CEO McDermott recently purchased shares worth $3 million, while other executives paused planned stock sales.
Furthermore, in late January, the board of directors expanded the existing share repurchase authorization by $5 billion. This includes an accelerated buyback of $2 billion, intended to immediately reduce the share count.
AI Drives Revenue Acceleration and Product Focus
The primary growth engine is clearly the company’s artificial intelligence segment. ServiceNow reported that revenue from its AI products more than doubled year-over-year. The company is aggressively expanding capabilities designed to centrally manage AI applications across business operations. Key initiatives include the “AI Agent Fabric” and “AI Control Tower,” which are built on the concept of coordinating various AI agents to complete tasks under human supervision, all managed through a unified dashboard.
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Subscription Revenue and Backlog Signal Sustained Demand
For the fourth quarter of 2025, subscription revenue reached $3.47 billion, a 21% increase that exceeded the company’s own guidance. Full-year 2025 subscription revenue totaled $12.88 billion, also reflecting 21% growth.
A critical forward-looking metric, Current Remaining Performance Obligations (cRPO), surged 25% to $12.85 billion. This figure, representing contracted revenue yet to be recognized, indicates robust future demand and provides strong visibility for upcoming quarters.
Looking Ahead to 2026
For the full year 2026, ServiceNow is targeting subscription revenue in the range of $15.53 billion to $15.57 billion. This guidance implies a growth rate of approximately 20% compared to the 2025 results. Despite the record quarter, ServiceNow shares have not been immune to the wider sell-off affecting the enterprise software sector, presenting a contrast between its operational strength and recent market sentiment.
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