ServiceNow Inc, a prominent player in the software solutions arena, disclosed its fourth-quarter financial results following market closure on Wednesday. The quarter’s performance marks a continuation of the company’s expansion trajectory, with total revenues and earnings exceeding Wall Street expectations.
For the period ending recently, ServiceNow reported revenues approximating $3.57 billion. This figure not only surpassed the consensus estimate of $3.53 billion but also represented a year-over-year increase of 20.5%. Notably, subscription revenue, a key driver for the business, grew 21% compared to the same quarter last year.
On profitability measures, adjusted earnings per share came in at $0.92, outpacing the anticipated $0.88 per share. The earnings beat underscores ServiceNow’s continued ability to scale profitably amidst rising demand for its platform services.
The company's backlog, reflected in remaining performance obligations, expanded significantly to $28.2 billion by the end of the quarter. This backlog increased 26.5% year-over-year, signaling robust visibility into future revenue streams. Within its customer base, contracts exceeding $5 million in annual value saw an uptick near 20% year-over-year, reflecting growing adoption among enterprise clients.
Bill McDermott, ServiceNow’s chairman and chief executive officer, emphasized strong traction across user engagement metrics, workflows, and transaction volume on the company’s platform. He highlighted ServiceNow’s strategic positioning within the artificial intelligence enterprise sector, stating, "With our consistent Rule of 55+ profile, there is no AI company in the enterprise better positioned for sustainable, profitable revenue growth than ServiceNow." McDermott further described the company’s vision of constructing an "AI control tower for business reinvention," enabling enterprises to navigate securely within an evolving, AI-driven operational environment.
Reflecting confidence in the firm’s financial health, ServiceNow repurchased approximately 3.6 million common shares during the quarter, investing $597 million into its own stock. After these transactions, the company retained $1.4 billion in buyback capacity. Additionally, the board authorized a fresh $5 billion allocation for future share repurchases, signaling sustained shareholder return initiatives.
Looking ahead, ServiceNow provided guidance for subscription revenue in the first quarter, estimating a range between $3.65 billion and $3.655 billion. For the full fiscal year 2026, subscription revenue is projected between $15.53 billion and $15.57 billion, corresponding to approximately 21% annual growth. This outlook suggests continued momentum fueled by the company’s expanding platform utility and market demand.
In tandem with earnings disclosures, ServiceNow announced strategic collaborations aimed at deepening AI capabilities within its platform. A notable partnership with Anthropic will integrate Anthropic Claude models more extensively into ServiceNow’s core workflows, particularly enhancing application development processes. Additionally, ServiceNow unveiled expanded strategic commitments with Fiserv and broadening its relationship with Panasonic Avionics Corporation, accentuating its focus on large-scale enterprise engagements.
Despite the upbeat earnings and growth outlook, ServiceNow’s stock traded lower by 4.33% in after-hours trading, with shares valued at $124.01 as of the last update. This stock movement occurred ahead of a scheduled earnings call at 5 p.m. Eastern Time on the same day, during which the company’s management will offer further commentary and address investor questions.
ServiceNow’s fourth-quarter results reinforce its position as a growing force in the AI-enabled enterprise software market. With solid revenue growth, increasing contractual commitments, and expansive technology partnerships, the company is poised to support evolving enterprise workflows underpinned by artificial intelligence innovations.