ServiceNow, Inc. · Q2 2026 call

Whichever chip wins, whichever lab wins, whichever price per token regime prevails, the enterprise needs one governed layer of record for work, ServiceNow offers needed certainty in an uncertain stack. Our platform is optionality on all AI outcomes, not a bet on any one.

ServiceNow already was a $1 billion-plus cybersecurity business. Today, our risk and security business is the fastest-growing of the top 10 cyber companies in the enterprise. I'll make it very clear. We now have a 10-figure cybersecurity business that's growing faster than all the other top cybersecurity companies.

The percentage of renewal customers purchasing agentic AI for the first time doubled quarter-over-quarter and year-over-year. Customers that weren't already on the AI journey are signing up fast. Most customers are now completely allergic to anything that looks like a project. They only want deterministic. ServiceNow only does deterministic. That's a big reason why customers with agentic AI in production have grown 9x over the last nine months.

A large airline has gone all in running their customer service voice calls on ServiceNow's voice AI CRM agents. This is live in production and handling 5 million annual voice calls in year one alone.

we have a big announcement coming very shortly, a business model evolution that expands our TAM with AI-native products. This new offering will be a conversational service desk experience, no tickets, and AI-coded automation. In a new product-led motion, we're targeting the Fortune 500,000, many of whom we expect to replace their legacy offerings and bypass the startups.

Are we worried about seat compression? Not at all. Our addressable user base is growing and 50%, five zero, of our net new business is already non-seat based. We keep seat-based pricing because customers prefer it for predictability, particularly now, where a lot of pricing out there has been less than predictable.

One platform, one system of action, any cloud, any agent, any workflow, any model, governed, secured and accountable. This is the AI Control Tower enterprise leaders now know is mission-critical. […] This is the foundation for a re-rating of ServiceNow.

Q2 subscription revenues were $3.877 billion, growing 23% year-over-year in constant currency and 150 basis points above the high end of our guidance. RPO ended the quarter at approximately $29 billion, representing 22% year-over-year constant currency growth with an increase in average customer contract duration. Current RPO was $13.2 billion, representing 21.5% year-over-year constant currency growth. That's a 200 basis point beat versus our guidance.

Our renewal rate was a best-in-class 98% in Q2, underscoring the durability of our customer relationships. We ended the quarter with 658 customers generating over $5 million in ACV, with 32 more customers crossing the $20 million threshold since last year.

ServiceNow AI continued to outperform expectations in Q2, with ACV crossing over $1 billion and net new ACV growth accelerating sequentially, growing over 40% quarter-over-quarter. Deals including five or more ServiceNow AI products grew 5.5x year-over-year, which drove a tripling of million-dollar-plus deals.

We expect subscription gross margin of 81%, reflecting more customers utilizing our hyperscaler partnerships as well as accelerating AI adoption.

AI that only advises is a cost. AI that completes the work is a return. On our platform, agents don't just reason, they take action. […] Customers aren't paying us for tokens, they're paying for resolutions.

We have deployed level 1 support AI specialists, as well as 20 other AI specialists inside ServiceNow, and we're starting to do that with our customers. Today, our 40+ customers are using it already and getting a lot of good benefits. We're talking about closing down close to 80%-85% of the service requests without having any human interaction.

Our pricing uplift for our ProPlus SKUs continues to be above 30%, and for our new AI native SKUs that we just launched, those uplifts are in line with what we talked about at FAD at being 20%-30%.

We talked about the fact that about half of the beat is a pull forward of on-prem for a quarter, right? That won't impact Q3 versus Q2. From a full year revenue guide, we passed along all of the net new ACV over achievement.

We will complete this cycle of 2026 and start 2027 with the exact same headcount before we did the acquisitions. You're going to see the operating margins and the free cash flow margins of this corporation scale. You already saw the three-point operating margin improvement in the quarter, which was way beyond expectations.

as we ramp, the increasing hyperscaler is that we're ramping quicker than planned, which is a very good thing. As we continue to ramp and more and more goes to hyperscalers, the cost per comes down. We absolutely believe that midterm, there will be less pressure and even better pricing on the hyperscaler side of things

we've been talking about it for years that large language models are getting commoditized. There is no reason for using some of the most expensive ones. We're very smart about how we use and leverage some of these emerging technologies, where you use open-weight versions, where do we have our own, where we have domain-specific ones, and where we use some of these higher-end frontier models.

We have more than 500+ customers already live using AI Control Tower in the first six months when we launched this product.