ServiceNow Surges on AI Demand, Beats Revenue Forecast

ServiceNow has raised its annual subscription revenue forecast for the second time this year, following a strong second quarter that surpassed revenue and profit expectations. The company's performance is significantly boosted by increasing demand for its artificial intelligence-powered software solutions.

Expanding its AI capabilities, ServiceNow launched Otto, an AI experience designed to manage employee requests and complex workflows. Furthermore, the company enhanced its offerings through strategic acquisitions of cybersecurity startup Armis and AI startup Moveworks.

ServiceNow's AI platform is experiencing widespread adoption within the public sector, with nearly all 50 U.S. states now utilizing it. This adoption aids in improving citizen services and modernizing government operations.

The company now anticipates full-year 2026 subscription revenue to be between $15.760 billion and $15.780 billion. Second-quarter subscription revenue reached $3.88 billion, with adjusted profit per share at 90 cents, exceeding analyst estimates.

Despite a third-quarter subscription revenue forecast of $3.975 billion to $3.980 billion falling slightly below estimates, ServiceNow reported a 21% year-over-year increase in current remaining performance obligations, reaching $13.20 billion as of June 30.