ServiceNow (NOW) Earnings Date & Reports

For the first quarter of fiscal 2026, ended March 31, ServiceNow posted total revenues of $3,770 million, surpassing the high end of prior guidance and consensus estimates around $3.75 billion. Subscription revenues, the core metric, totaled $3,671 million, reflecting 22% YoY growth (19% CC), ahead of expectations. Professional services added $99 million, up 18.5% YoY.

Profitability showed non-GAAP diluted EPS of $0.97, aligning with Wall Street's $0.97 forecast, while GAAP EPS was $0.45 on net income of $469 million. Key metrics shone: cRPO at $12.64 billion (+22.5% YoY, 21% CC) and total RPO (remaining performance obligations) at $27.7 billion (+25% YoY). The company logged 16 deals over $5 million in net new annual contract value (ACV), up nearly 80% YoY, and Now Assist customers spending over $1 million ACV surged over 130% YoY.

Guidance was raised: Q2 subscription revenues to $3,815-$3,820 million (+22.5% YoY); full-year to $15.735-$15.775 billion (+22%-22.5% YoY, or 20.5%-21% CC), incorporating 125 basis points from the recent Armis acquisition.

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Market Reaction and Investor Sentiment

Despite topping guidance and consensus on key topline metrics, ServiceNow shares plunged 14%-18% in after-hours trading following the April 22 release, extending a year-to-date decline of over 30%. Investors focused on a 75 basis point headwind from delayed large on-premise deals in the Middle East due to geopolitical tensions, softer margins from Armis integration, and questions around AI adoption pace. Analysts trimmed price targets but largely maintained Buy ratings, citing robust RPO and raised guidance as positives amid broader tech sector pressures.

Forward Outlook and Key Factors to Monitor

ServiceNow's raised full-year guidance underscores confidence in its AI platform, with subscription growth projected at 20.5%-21% CC despite near-term headwinds. The Armis acquisition, closed April 20, adds security capabilities and ~125 basis points to FY growth, though it pressures margins (25 bps on subscription gross margin, 75 bps on operating margin) until normalization in 2027.

Investors should track Q2 execution against $3.815-$3.820 billion subscription revenue guidance, as well as cRPO trends amid macro uncertainty. AI momentum remains key: Now Assist's explosive growth in high-value customers signals scaling potential, alongside 630 clients over $5 million ACV (up 22% YoY). Geopolitical recovery in the Middle East and large deal closures could alleviate drags.

Broader dynamics include enterprise demand for workflow orchestration, agentic AI, and data fabric integration. Free cash flow margin guidance of 35% supports share repurchases ($2.225 billion in Q1). Upcoming catalysts: Analyst Day on May 4 and quarterly progress on RPO conversion.

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