ServiceNow reported first-quarter 2026 results that narrowly beat Wall Street expectations, with adjusted earnings per share of 97 cents versus the 96 cents expected, and revenue of $3.77 billion compared to the $3.74 billion anticipated by analysts [1]. Quarterly revenue grew 22% year over year, and net income reached $469 million, or 45 cents per share, up slightly from $460 million, or 44 cents per share, a year earlier [1]. Despite these positive results, the company’s stock sank 14% as subscription revenue growth faced a 75 basis point headwind due to delayed closings of several large on-premise deals in the Middle East, attributed to the ongoing conflict in the region [1].
Quarterly subscription revenues came in at $3.67 billion, slightly above the $3.65 billion expected by FactSet [1]. ServiceNow raised its fiscal 2026 subscription revenue guidance to a range of $15.74 billion to $15.78 billion, up from the previous forecast of $15.53 billion to $15.57 billion, citing a prudent approach to the geopolitical environment [1]. CFO Gina Mastantuono noted that the guidance incorporates incremental conservatism due to the potential impact of the Middle East conflict on deal timing [1].
The company reported $12.64 billion in current remaining performance obligations, surpassing estimates of $12.56 billion, and achieved 16 transactions over $5 million in new annual contract value in the first quarter, an increase of almost 80% year over year [1]. ServiceNow repurchased about 20 million shares in the first quarter, more than double the amount purchased in all of 2025, and previously announced an additional $5 billion in share buybacks [1].
ServiceNow has been investing heavily to position itself as an "AI control tower," and its AI product portfolio is on track to exceed the company’s $1 billion target for 2026 [1]. The company also expanded its partnership with Google Cloud and completed its $7.75 billion acquisition of cybersecurity startup Armis earlier this week, ahead of the expected closing timeline [1]. Despite these strategic moves, ServiceNow’s stock is down about 30% year to date, reflecting ongoing investor concerns [1].
CONCLUSION
ServiceNow delivered a solid first quarter, beating estimates and raising its full-year guidance, but the stock suffered a sharp decline due to concerns over the impact of the Middle East conflict on subscription revenue growth. The company’s continued investment in AI and strategic acquisitions signal confidence in long-term growth, but market sentiment remains cautious amid geopolitical uncertainties.