ServiceNow Crushes Q2, Raises 2026 Outlook as AI ACV Tops $1B

summarizeSummary

ServiceNow reported Q2 2026 subscription revenue of $3.88B (+24.5% YoY), beating guidance, and raised its full-year outlook. AI annual contract value surpassed $1B, and the company set a long-term target of $30B+ in subscription revenue by 2030.

check_boxKey Events · Earnings and Guidance · NOW

• Q2 Beat Across All Metrics

  Subscription revenues of $3,877M grew 24.5% YoY, exceeding the high end of guidance by 150 bps. Non-GAAP diluted EPS of $0.90 beat estimates.

• AI ACV Surpasses $1B

  ServiceNow AI crossed $1 billion in annual contract value, with agentic deployments increasing ninefold in nine months, driving broad-based demand.

• Raised Full-Year 2026 Guidance

  Full-year subscription revenue guidance raised to $15,760M–$15,780M (22.5% YoY growth). Non-GAAP operating margin guidance of 31.5% and free cash flow margin of 35%.

• Record Remaining Performance Obligations

  cRPO of $13.20B (21% YoY growth) and total RPO of $29.0B (21% YoY growth), reflecting strong demand and longer customer commitments.

auto_awesomeAnalysis · NOW · Technology

A standout quarter saw ServiceNow beat the high end of its own guidance on every topline and profitability metric. Subscription revenue grew 24.5% to $3.88 billion, fueled by accelerating AI adoption—ServiceNow AI crossed $1 billion in annual contract value. The company raised its full-year subscription revenue forecast and issued Q3 guidance above consensus. With $29 billion in remaining performance obligations and a new long-term target of $30 billion+ in subscription revenue by 2030, the results reinforce ServiceNow's position as the fastest-growing major enterprise software company. The stock is likely to react positively to the beat-and-raise and the AI momentum.