ServiceNow Inc
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +5.95%.
Did NOW Beat Earnings? Q1 2026 Results
ServiceNow kicked off fiscal 2026 with a clean beat across the board, posting adjusted diluted EPS of $0.97 against a consensus estimate of $0.97, a 0.35% beat that extended the company's streak of <a href="https://247wallst.com/investing/2026/04/22/live-will-servicenow-now-beat-q1-earnings-after-the-bell/">consecutive quarterly EPS beats</a> to four. Total revenue climbed 22.1% year-over-year to $3.77 billion, edging past the $3.75 billion consensus by 0.65%, with subscription revenues of $3.67 billion doing the heavy lifting. The primary engine was accelerating AI adoption, as Now Assist customers spending more than $1 million in annual contract value surged over 130% year-over-year, underscoring deepening enterprise commitment to the platform. Non-GAAP operating margin expanded to 32%, up from 31% a year ago, while current remaining performance obligations grew 22.5% to $12.64 billion. Looking ahead, ServiceNow raised its full-year 2026 subscription revenue guidance to $15.73 billion to $15.78 billion, though management flagged near-term margin pressure from integrating the recently closed Armis acquisition, with those headwinds expected to normalize by fiscal 2027.
- Now Assist customers spending over $1 million in ACV grew over 130% year-over-year
- 16 transactions over $5 million in net new ACV, representing nearly 80% YoY growth
- 630 customers with more than $5 million in ACV, approximately 22% YoY growth
- 22% YoY subscription revenue growth (19% constant currency)
- Non-GAAP operating margin expanded to 32% from 31% a year ago
- Non-GAAP free cash flow of $1,665 million with 44% margin
“ServiceNow's first quarter performance beat the high end of our guidance once again. Since our founding, we've built our platform around the work customers need to accomplish. Today, they rely on ServiceNow to be their AI control tower for business reinvention. Customers trust our platform because we integrate with any model, cloud, interface, data, and system they choose to deploy. As new technologies create both opportunity and risk, our two decades of engineering combined with deep business context enable us to orchestrate and secure the agentic enterprise. With this foundation, our AI growth is far exceeding even our own expectations, reinforcing our position as one of the fastest growing enterprise software companies ever.”
ServiceNow CEO, on the earnings call
Forward Guidance & Outlook
ServiceNow raised its full-year 2026 subscription revenue outlook to $15,735-$15,775 million, representing 22%-22.5% YoY growth (20.5%-21% constant currency). Q2 2026 subscription revenues are guided to $3,815-$3,820 million (22.5% YoY growth, 21%-21.5% constant currency). Q2 2026 cRPO growth is guided at 19% GAAP and 19.5% constant currency. Q2 non-GAAP operating margin is guided at 26.5%, reflecting approximately 125 basis points of Armis integration headwind. Full-year 2026 non-GAAP subscription gross margin is guided at 81.5%, non-GAAP operating margin at 31.5%, and non-GAAP free cash flow margin at 35%. Armis acquisition is expected to contribute approximately 125 basis points to Q2 and FY 2026 subscription revenue growth but create near-term margin headwinds that are expected to normalize in FY 2027. The company noted a prudent assessment of geopolitical headwinds from the Middle East conflict on deal timing for the remainder of FY 2026.
NOW YoY Financials
NOW Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.