Overview
- ServiceNow beat expectations in its quarter announced on July 22, with subscription revenue rising about 24.5% to roughly $3.9 billion and contracted revenue (cRPO) up about 21% to $13.2 billion.
- The company said AI annual contract value surpassed $1 billion and the number of customers running agentic AI in production rose ninefold over nine months, signaling rapid product adoption and higher-priced AI package upgrades.
- ServiceNow’s security and risk business, which crossed $1 billion in ACV organically in 2025 and was expanded by the Armis and Veza deals, now appears as a scaled growth engine in large deals.
- Gross margin fell to 77.9% from 81% a year earlier as increased AI compute costs, hyperscaler hosting spend, and acquisition integration weighed on profitability and prompted some analyst margin cuts.
- Nine days before the earnings call the company disclosed CVE-2026-6875, a critical AI Platform flaw that allowed unauthenticated code execution and was reported to have been actively exploited, a disclosure that raises questions about operational trust even as management says hosted instances show no evidence of compromise.