ServiceNow 8-K
PositiveEarningsGuidance raised
Net new ACV strength lifts FY2026 subscription outlook; U.S. Federal demand and higher on-premise mix pull revenue from Q3 into Q2.
Filed 2026-07-22 16:11 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q2 2026 results with Q3 and FY2026 guidance. ServiceNow raised its FY2026 subscription revenue outlook on net new annual contract value strength. Strong U.S. Federal demand and a higher on-premise mix shifted some subscription revenue from Q3 into Q2.
Key Figures
| Metric | Q2 2026 | Q2 2025 | Y/Y |
|---|---|---|---|
| Subscription revenues | $3.88B | $3.11B | 24.5% |
| Total revenues | $3.99B | $3.22B | 24% |
| GAAP income from operations | $162M | $358M | -55% |
| Non-GAAP income from operations | $1.17B | $955M | 23% |
| GAAP net income | $298M | $385M | -23% |
| Non-GAAP net income | $930M | $851M | 9.3% |
| GAAP diluted EPS | $0.29 | $0.37 | -22% |
| Non-GAAP diluted EPS | $0.90 | $0.81 | 11% |
| Net cash provided by operating activities | $587M | $716M | -18% |
| Non-GAAP free cash flow | $634M | $535M | 18.5% |
- Remaining performance obligations were $29.0B (+21% Y/Y; +22% in constant currency), including $13.2B of current RPO (+21%; +21.5% in constant currency). ServiceNow AI exceeded $1B in annual contract value.
- Subscription revenue exceeded the high end of Q2 guidance by 150 bp, driven by net new ACV and on-premise revenue mix; the mix shift pulled some revenue forward from Q3. Q3 cRPO growth guidance also reflects an ≈$35M Y/Y foreign-exchange headwind.
- At 6/30/2026, cash and cash equivalents were $2.50B, versus $3.73B at 12/31/2025; short- and long-term debt, net, totaled $7.52B, versus $1.49B.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| GAAP subscription revenues | Q3 2026 | $3.975B-$3.98B; 20.5% Y/Y, 20% constant-currency Y/Y | — | — |
| cRPO growth (reported; constant currency) | Q3 2026 | 19.5%; 20% | — | — |
| Operating margin (GAAP; non-GAAP) | Q3 2026 | 8%; 31% | — | — |
| Weighted-average diluted shares | Q3 2026 | 1.05B | — | — |
| GAAP subscription revenues | FY2026 | $15.76B-$15.78B; 22.5% Y/Y, 21% constant-currency Y/Y | — | Raised |
| Subscription gross margin (GAAP; non-GAAP) | FY2026 | 75%; 81% | — | — |
| Operating margin (GAAP; non-GAAP) | FY2026 | 10%; 31.5% | — | — |
| Non-GAAP free cash flow margin | FY2026 | 35% | — | — |
| Weighted-average diluted shares | FY2026 | 1.04B | — | — |
| Rule of 56 (subscription revenue growth, constant currency, plus free cash flow margin) | FY2026 | 56 | — | — |
| Subscription revenues | By 2030 | $30B+ | — | — |
| AI share of annual contract value | By 2030 | 30% | — | — |
| Rule of 60+ (subscription revenue growth, constant currency, plus free cash flow margin) | By 2030 | 60+ | — | — |
| Stock-based compensation as a share of revenue | By 2029 | Less than 10% | — | — |
Investor Takeaways
- Watch Q3 subscription revenue and cRPO growth against guidance, including the impact of revenue pulled forward from Q3 and the stated foreign-exchange headwind.
- Track progress toward the raised FY2026 subscription revenue range and the longer-term AI and growth targets.
The summary is written by an AI model reading the filing.
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