The automation sector, particularly robotic process automation (RPA), is on a rapid upward trajectory. Forecasts by market research firm Grand View Research highlight an impressive compounded annual growth rate (CAGR) of 43.9% for the RPA market stretching through 2030. The anticipated market valuation of approximately $30.85 billion by 2030 implies an extraordinary growth rate of 466% from 2026 levels. This expansive growth is expected to fuel increased investor interest and stock price gains across various companies involved in automation technology.
Among the emerging leaders, ServiceNow has garnered attention for its innovative application of generative artificial intelligence (AI) within its chatbot solutions. The company specializes in deploying AI-powered conversational bots designed to handle routine, repetitive tasks and address basic customer service inquiries autonomously. By automating these functions, ServiceNow’s technology helps streamline internal workflows and enhance overall productivity for enterprise clients.
Unlike traditional chatbots, which rely on predetermined scripted responses, generative AI models continuously learn from interactions, expanding their knowledge base without human intervention. This advancement enables the chatbots to provide increasingly sophisticated assistance, becoming valuable tools for employees and customers alike.
Financially, ServiceNow’s business model is heavily reliant on subscription services, which dominate the company's revenue streams. In the third quarter of fiscal year 2025, ServiceNow reported total revenues of $3.4 billion, marking a 22% increase compared to the prior year. Subscription revenue accounted for $3.3 billion, equating to 97% of total sales. Furthermore, the company has a substantial backlog, with remaining performance obligations totaling $11.35 billion, underscoring its revenue visibility in future periods.
The company’s ability to retain customers is a notable competitive advantage. Switching costs and integration complexities make migration from ServiceNow’s platform difficult and expensive for clients, contributing to a renewal rate of 97% among its enterprise customers. Excluding a recent closure of a major U.S. federal agency account, the renewal rate bumps slightly higher to 98%, illustrating strong ongoing customer loyalty.
ServiceNow’s extensive client roster comprises nearly 8,400 businesses, including approximately 85% of the Fortune 500. This wide-reaching presence underscores the company’s capacity to engage and secure contracts with some of the world’s largest and most competitive enterprises. Such a client base not only provides diversified revenue streams but also serves as social proof of the company’s capability and market reputation.
Deal activity remained vigorous in the third quarter of 2025, with ServiceNow closing 103 new transactions exceeding $1 million in net new annual contract value (ACV). In addition, the company ended the quarter with 553 contracts valued at more than $5 million ACV, reflecting an 18% year-over-year increase. This trend highlights ServiceNow’s continuing momentum in securing substantial business and suggests ongoing confidence among large enterprise customers.
Despite its robust position, ServiceNow’s shares have experienced some volatility, particularly following its announcement of a $7.75 billion acquisition of cybersecurity firm Armis. The deal’s reception was mixed among investors, as some questioned how closely cybersecurity aligns with ServiceNow’s core AI chatbot services. Concerns also arose regarding the significant cash and debt commitment required for this purchase, evidenced by an 11% share price decline on the announcement day.
The recent acquisition strategy reflects ServiceNow’s approach toward growth through strategic purchases, including its earlier acquisition of Moveworks, another costly transaction aimed at building synergy within its offerings. Nonetheless, the rate of ServiceNow’s underlying revenue growth has shown signs of deceleration, with a 22% year-over-year increase in Q3 2025 revenue slower in comparison to previous years. Furthermore, net income grew by 16% year-over-year in the same period, indicating potential constraints on further margin expansion.
Given these dynamics, the success of ServiceNow’s acquisitions and their integration into the company’s broader strategy will be pivotal in determining whether the enterprise can accelerate growth moving forward. If these investments contribute positively to revenue gains, ServiceNow may reinforce its status as a leading provider in the automation software market.
The sustained growth forecasts for AI-driven bots and robotic automation suggest increasing demand for advanced solutions capable of managing complex tasks. ServiceNow’s strong subscription model, combined with its high customer retention and significant contracts with major enterprises, position the company as a prominent participant in an evolving industry.
Overall, ServiceNow demonstrates considerable resilience and growth prospects within the robotic process automation arena, bolstered by both technological innovation and an established enterprise presence. However, ongoing scrutiny accompanies its acquisition-driven growth strategy amid a potentially slowing organic expansion pace.