ServiceNow beats Q4 revenue estimates, sets additional $5 bln for share repurchase program

Overview

• AI platform's Q4 revenue grew 20.5%, beating analyst expectations

• Adjusted EPS for Q4 beat analyst expectations

• Company authorized additional $5 bln for share repurchase program; planned imminent $2 bln accelerated buyback

Outlook

• ServiceNow expects Q1 2026 subscription revenue of $3.650 bln to $3.655 bln

• Company forecasts full-year 2026 subscription revenue of $15.530 bln to $15.570 bln

• ServiceNow sees Q1 2026 cRPO growth at 22.5%

Result Drivers

• SUBSCRIPTION REVENUE GROWTH - ServiceNow reported a 21% year-over-year increase in subscription revenues, driven by growth in licensed users, workflows, and transactions on its platform

• AI PRODUCT PERFORMANCE - Emerging AI products like Now Assist and Workflow Data Fabric outperformed, contributing to strong Q4 results

• STRATEGIC ACQUISITIONS - Recent acquisitions are expected to create new market opportunities and enhance ServiceNow's AI capabilities

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 43 "strong buy" or "buy", 3 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for ServiceNow Inc is $210.00, about 59.3% above its January 27 closing price of $131.80

• The stock recently traded at 32 times the next 12-month earnings vs. a P/E of 48 three months ago

Press Release: ID:nBw3Xb3K1a

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