Q4 Financial Highlights
ServiceNow reported earnings before stock‑based compensation of $0.92 per share, beating the consensus estimate of $0.88. Revenue rose 20% year‑over‑year to $3.57 billion, surpassing the $3.53 billion forecast. Subscription revenue, the core of the business, increased 21% to $3.47 billion, outpacing expectations of $3.42 billion. Net income climbed to $401 million from $384 million a year earlier.
Guidance and Investor Reaction
The company forecast subscription revenue of $3.65‑$3.66 billion for the current quarter, slightly below analysts’ range of $3.66‑$3.70 billion, which muted enthusiasm and sent the stock lower in after‑hours trading.
Strategic Acquisitions and AI Focus
ServiceNow is accelerating growth through a series of high‑profile acquisitions aimed at bolstering its AI and security capabilities:
- MoveWorks Inc. – $2.9 billion AI‑automation platform, expected to add 100 basis points to subscription revenue growth.
- Armis Inc. – $7.75 billion cybersecurity firm.
- Veza Inc. – Identity‑data security startup (terms undisclosed).
These deals are positioned as extensions of organic growth, providing new tools to act as an “AI control tower” for enterprises.
Future Outlook and Shareholder Returns
ServiceNow ended the quarter with $12.85 billion in remaining performance obligations, a 25% increase YoY, and the board authorized an additional $5 billion for share buybacks. Partnerships with Anthropic and OpenAI will embed leading large‑language models such as Claude and GPT into workflow automation, particularly in verticals like life sciences and healthcare.