NOW · Forward model · Subscription · Bull case
What has to happen in Subscription
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Subscription
One platform sold as multi-year subscriptions and recognised ratably, so a quarter's revenue is set by the contracted book rather than by that quarter's selling. ServiceNow publishes the book - cRPO was $13.20bn at 30 June 2026, up 21% - and it has converted into the following four quarters of subscription revenue at 1.25x to 1.33x across six observable windows. The renewal rate is 98%, so growth is almost entirely expansion inside a base that does not leave, plus about 125bp of acquired Armis revenue in FY2026.
Latest: $8.71B (2031Q2E)
| Period | Value |
|---|---|
| 2022Q4 | $1.86B |
| 2023Q1 | $2.02B |
| 2023Q2 | $2.08B |
| 2023Q3 | $2.22B |
| 2023Q4 | $2.37B |
| 2024Q1 | $2.52B |
| 2024Q2 | $2.54B |
| 2024Q3 | $2.71B |
| 2024Q4 | $2.87B |
| 2025Q1 | $3.00B |
| 2025Q2 | $3.11B |
| 2025Q3 | $3.30B |
| 2025Q4 | $3.47B |
| 2026Q1 | $3.67B |
| 2026Q2 | $3.88B |
| 2026Q3E | $4.05B |
| 2026Q4E | $4.23B |
| 2027Q1E | $4.42B |
| 2027Q2E | $4.61B |
| 2027Q3E | $4.81B |
| 2027Q4E | $5.02B |
| 2028Q1E | $5.23B |
| 2028Q2E | $5.44B |
| 2028Q3E | $5.67B |
| 2028Q4E | $5.90B |
| 2029Q1E | $6.14B |
| 2029Q2E | $6.39B |
| 2029Q3E | $6.64B |
| 2029Q4E | $6.91B |
| 2030Q1E | $7.18B |
| 2030Q2E | $7.47B |
| 2030Q3E | $7.76B |
| 2030Q4E | $8.07B |
| 2031Q1E | $8.38B |
| 2031Q2E | $8.71B |
Assumptions & reasoning
- Fifteen consecutive quarters of disclosed history, 2022 Q4 to 2026 Q2, each read from the three-month column of that quarter's own 8-K Exhibit 99.1. All fifteen sum exactly to reported total revenues.
- The driver is growth, not units times price, because ServiceNow discloses neither a total customer count nor an ARPU. cRPO is a backlog level rather than a capacity unit, and it is lumpy in a way ratably recognised revenue is not: cRPO fell from $12.85bn to $12.64bn between 2025 Q4 and 2026 Q1 while subscription revenue rose in all fourteen sequential steps of the window.
- The vertical is aseasonal on purpose. Ratio-to-centred-4Q-moving-average over twelve interior quarters gives factors of 1.013 / 0.986 / 0.998 / 1.003, and the within-quarter spread of 0.018 / 0.012 / 0.006 / 0.010 is wider than the signal in three of the four quarters. Bookings seasonality lives in cRPO; ratable recognition smooths it out before it reaches revenue.
- The margin here is subscription gross margin, guided at 81% non-GAAP for FY2026 and cut from 81.5% on hyperscaler use and customer AI adoption. Operating expenses are not split by revenue line, so all of them sit in corporate overhead instead.
- About 125bp of FY2026 subscription growth is acquired rather than organic and the disclosure does not let the model strip it out; the organic rate is not observable until the FY2026 10-K business-combination note.