ServiceNow (NYSE:NOW) posted fourth-quarter earnings and revenue ahead of Wall Street expectations, supported by sustained demand for its AI-driven software platform, and also unveiled a further expansion of its share repurchase programme.
Despite the solid results, the stock fell roughly 6% in premarket trading on Thursday, a move analysts attributed to the company’s full-year outlook coming in only modestly above consensus expectations.
The Santa Clara, California-based group reported adjusted earnings of 92 cents per share, exceeding the average analyst forecast of 89 cents. Quarterly revenue reached $3.57bn, compared with market expectations of $3.53bn.
For the first quarter of fiscal 2026, ServiceNow forecast subscription revenue of $3.65bn to $3.66bn, implying year-on-year growth of around 21.5% at the midpoint, or approximately 18.5% to 19% on a constant-currency basis. Current remaining performance obligations are expected to increase by about 22.5%, or roughly 20% in constant currency, while EBIT margin is guided at 31.5%.
Looking at the full year, the company expects 2026 subscription revenue of between $15.53bn and $15.57bn, equating to roughly 20.75% growth at the midpoint, or about 19.75% on a constant-currency basis, compared with Street expectations of around 18.5%. The outlook assumes an estimated 100 basis point contribution from Moveworks. ServiceNow also guided to a subscription gross margin of 82%, an EBIT margin of 32% and a free cash flow margin of 36%.
“Despite some investor consternation over a slightly ahead 2026 guide sending shares lower in after-hours (AHs) trading (plus – it’s a software company), we view 4Q as another quarter of strong execution for NOW,” Piper Sandler analyst Rob Owens said in a note.
“We also view the initial 2026 organic outlook as a solid baseline, coming roughly slightly ahead of street expectations, leaving room for upside throughout the year in our view,” he added.
Separately, Jefferies analyst Samad Samana said ServiceNow “delivered >20% organic growth in 2025 and has a clear path to reach ~20% again in 2026 while delivering margin expansion. We cannot predict when, but we expect investors to reward it.”
Demand for ServiceNow’s AI-enabled offerings remains strong as enterprises continue to invest in automation tools to streamline workflows, boost productivity and manage increasingly complex IT environments. The company has been rolling out generative AI capabilities across its platform as competition intensifies from newer autonomous AI agents.
ServiceNow is also strengthening partnerships with major AI developers, including Anthropic and OpenAI. As part of an expanded collaboration with Anthropic, the company will embed Claude models more deeply into its products, following a similar agreement previously announced with ChatGPT-maker OpenAI. ServiceNow said Claude will become the default model for its Build Agent, which supports developers in creating automated workflows and applications, and that the integration could reduce customer implementation times by up to 50%.
In addition, ServiceNow said its board has approved an extra $5bn for share repurchases, with plans to carry out an accelerated $2bn buyback in the near term. Chief executive Bill McDermott said the partnership with Anthropic is designed to turn “intelligence into action through AI-native workflows” for large enterprise customers.