ServiceNow Q2 Earnings Call Highlights

ServiceNow beat Q2 expectations with subscription revenue up 23% in constant currency, cRPO up 21.5%, and a non-GAAP operating margin of 29.5%. The company also raised its full-year 2026 subscription revenue guidance slightly and maintained strong profitability targets. AI is becoming a major growth driver , with AI annual contract value already above $1 billion and on track toward a $1.5 billion target by the end of 2026. Management said agentic AI usage, multi-product deals, and AI Control Tower adoption are all accelerating rapidly. Cybersecurity and broader workflow demand are expanding , with ServiceNow now describing a $1 billion-plus cybersecurity business and highlighting momentum in CRM, employee workflows, and IT automation. Customer metrics also remained strong, including a 98% renewal rate and more than 650 customers generating over $5 million in ACV.

ServiceNow NYSE: NOW reported stronger-than-expected second-quarter 2026 results, with executives pointing to broad demand across artificial intelligence, cybersecurity, IT operations, customer relationship management and employee workflows. Chairman and Chief Executive Officer Bill McDermott said the company delivered “a stunning Q2 print,” citing subscription revenue growth of 23% in constant currency, current remaining performance obligations, or cRPO, growth of 21.5% in constant currency and a non-GAAP operating margin of 29.5%. He said each of those metrics exceeded the company’s guidance.

ServiceNow also reported 123 deals greater than $1 million in net new annual contract value, up 40% year over year. McDermott said ServiceNow AI annual contract value exceeded $1 billion and remains on pace to surpass the company’s target of $1.5 billion by the end of 2026. AI Demand Continues to Build McDermott and President and Chief Financial Officer Gina Mastantuono both emphasized that AI adoption is becoming a larger driver of ServiceNow’s business. Mastantuono said ServiceNow AI net new ACV growth accelerated sequentially and grew more than 40% quarter over quarter. She added that deals including five or more ServiceNow AI products increased 5.5 times year over year, helping drive a tripling of million-dollar-plus deals.

The company said the number of customers with agentic AI in production has increased ninefold over the last nine months. Mastantuono said ServiceNow is already tracking ahead of its target for AI to reach 30% of ACV by 2030. President, Chief Product Officer and Chief Operating Officer Amit Zavery discussed the company’s level 1 IT service management automation, saying more than 40 customers are already using the product. He said the AI specialists are closing about 80% to 85% of service requests without human interaction, reducing some request resolution times from two days to about 20 minutes. “It’s end-to-end service request completion, not just giving you the information, but actioning on those requests as well,” Zavery said.

McDermott repeatedly framed cybersecurity as a major growth area for ServiceNow, saying the company already has a “$1 billion-plus cybersecurity business” and is the “eighth-largest cybersecurity business in the enterprise.” He said ServiceNow is building what he described as an integrated end-to-end security platform spanning cyber risk and compliance, incident response, exposure management, identity and access security and vulnerability detection. Executives highlighted the company’s acquisitions of Armis and Veza as important additions to that strategy. Mc...