Shares rebounded after earnings topped estimates, with AI products surpassing $1 billion in annual contract value and contracted revenue continuing to grow despite competition concerns around agentic AI.
ServiceNow raised its full-year 2026 subscription revenue forecast again after second-quarter results beat Wall Street estimates, helping the shares recover after a selloff tied to concerns that autonomous AI agents could disrupt traditional enterprise software. The company now expects 2026 subscription revenue of $15.760 billion to $15.780 billion, versus $15.735 billion to $15.775 billion previously. Second-quarter subscription revenue was $3.88 billion, up 24.5% year over year, while total revenue was just under $4 billion, up 24%, both above the high end of the company’s guidance. Adjusted earnings were 90 cents a share, ahead of analysts’ roughly 86-cent expectation. Shares had fallen 6.5% during Wednesday’s regular session after a report that OpenAI was planning an enterprise product called Presence, before rising as much as 7% in after-hours trading following the results. Current remaining performance obligations rose 21% to $13.2 billion, while total remaining performance obligations reached $29 billion, also up 21%. ServiceNow said its AI products exceeded $1 billion in annual contract value for the first time, agentic deployments grew ninefold in nine months, and it closed 123 deals worth more than $1 million in net new annual contract value, up nearly 40% from a year earlier. Management reiterated its long-term targets of more than $30 billion in subscription revenue and a Rule of 60 by 2030, while some analysts continued to flag valuation and pricing concerns.