ServiceNow Reports Second Quarter 2026 Financial Results

____________________

¹ The Rule of 60+ reflects a combined subscription revenue growth rate on a constant currency basis and free cash flow margin exceeding 60%. See the section entitled "Statement Regarding Use of Non-GAAP Financial Measures" for an explanation of non-GAAP measures.

² Gartner, Inc., Magic Quadrant for AI Governance Platforms, Lauren Kornutick, Sumit Agarwal, Priya Sundararaman, Nader Henein, Brandon Medford, June 16, 2026.

³ Gartner, Inc., Magic Quadrant for Workplace Experience Applications by Sohail Majumdar, Christopher Trueman, April 6, 2026.

⁴ Gartner, Inc., Magic Quadrant for SaaS Management Platforms by Tom Cipolla, Todd Larivee, Lina AL Dana, June 18, 2026.

⁵ Gartner, Inc., Magic Quadrant for Analytics and Business Intelligence Platforms by Anirudh Ganeshan, Christopher Long, Edgar Macari, June 29, 2026.

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GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and MAGIC QUADRANT is a registered trademark of Gartner, Inc. And/or its affiliates and are used herein with permission. All rights reserved.

⁶ The Forrester Wave™: Strategic Portfolio Management Tools, Q2 2026, Forrester Research, Inc.

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⁷ IDC MarketScape: Worldwide Digital Employee Experience 2026 Vendor Assessment (doc #US53014625, June 2026).

⁸ From Fortune ©2026 Fortune Media IP Limited. All rights reserved. Used under license. Fortune and Fortune 500 are registered trademarks of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse the products or services of, ServiceNow.

Second Quarter 2026
GAAP Results

Second Quarter 2026
Non-GAAP Results⁽¹⁾

Amount
($ millions)

Year/Year
Growth (%)

Amount
($ millions)⁽²⁾

Year/Year
Growth (%)

Subscription revenues

$

3,877

24.5

%

$

3,848

23

%

Professional services and other revenues

$

110

8.5

%

$

109

7

%

Total revenues

$

3,987

24

%

$

3,957

22.5

%

Amount
($ billions)

Year/Year
Growth (%)

Amount
($ billions)⁽²⁾

Year/Year
Growth (%)

cRPO

$

13.20

21

%

$

13.28

21.5

%

RPO

$

29.0

21

%

$

29.2

22

%

Amount
($ millions)

Margin (%)

Amount
($ millions)⁽³⁾

Margin (%)⁽³⁾

Subscription gross profit

$

2,847

73.5

%

$

3,123

80.5

%

Professional services and other gross loss

$

(29

)

(26.5

%)

$

(16

)

(14

%)

Total gross profit

$

2,818

70.5

%

$

3,107

78

%

Income from operations

$

162

4

%

$

1,173

29.5

%

Net cash provided by operating activities

$

587

14.5

%

Free cash flow

$

634

16

%

Amount
($ millions)

Earnings per
Basic/Diluted
Share ($)

Amount
($ millions)⁽³⁾

Earnings per
Basic/Diluted
Share ($)⁽³⁾

Net income

$

298

$0.29 / $0.29

$

930

$0.90 / $0.90

(1)

We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled "Statement Regarding Use of Non-GAAP Financial Measures" for an explanation of non-GAAP measures.

(2)

Non-GAAP subscription revenues and total revenues are adjusted for constant currency by excluding effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts. Professional services and other revenues, cRPO, and RPO are adjusted only for constant currency. See the section entitled "Statement Regarding Use of Non-GAAP Financial Measures" for an explanation of non-GAAP measures.

(3)

Refer to the table entitled "GAAP to Non-GAAP Reconciliation" for a reconciliation of GAAP to non-GAAP measures.

Third Quarter 2026
GAAP Guidance

Third Quarter 2026
Non-GAAP Guidance⁽¹⁾

Amount
($ millions)⁽²⁾

Year/Year
Growth (%)⁽²⁾

Constant Currency
Year/Year Growth (%)

Subscription revenues

$3,975 - $3,980

20.5%

20%

cRPO

19.5%

20%

Margin (%)⁽³⁾

Income from operations

31%

Amount
(billions)

Weighted-average shares used to compute diluted net income per share

1.05

(1)

We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled "Statement Regarding Use of Non-GAAP Financial Measures" for an explanation of non-GAAP measures.

(2)

Guidance for GAAP subscription revenues and GAAP subscription revenues and cRPO growth rates are based on the 30-day average of foreign exchange rates for June 2026 for entities reporting in currencies other than U.S. Dollars.

(3)

Refer to the table entitled "Reconciliation of Non-GAAP Financial Guidance" for a reconciliation of GAAP to non-GAAP measures.

Full-Year 2026
GAAP Guidance

Full-Year 2026
Non-GAAP Guidance⁽¹⁾

Amount
($ millions)⁽²⁾

Year/Year
Growth (%)⁽²⁾

Constant Currency
Year/Year Growth (%)

Subscription revenues

$15,760 - $15,780

22.5%

21%

Margin (%)⁽³⁾

Subscription gross profit

81%

Income from operations

31.5%

Free cash flow

35%

Amount
(billions)

Weighted-average shares used to compute diluted net income per share

1.04

(1)

We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. See the section entitled "Statement Regarding Use of Non-GAAP Financial Measures" for an explanation of non-GAAP measures.

(2)

GAAP subscription revenues and related growth rate for the future quarter included in our full-year 2026 guidance are based on the 30-day average of foreign exchange rates for June 2026 for entities reporting in currencies other than U.S. Dollars.

(3)

Refer to the table entitled "Reconciliation of Non-GAAP Financial Guidance" for a reconciliation of GAAP to non-GAAP measures.

ServiceNow, Inc.

Condensed Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

Three Months Ended

Six Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Revenues:

Subscription

$

3,877

$

3,113

$

7,548

$

6,118

Professional services and other

110

102

209

185

Total revenues

3,987

3,215

7,757

6,303

Cost of revenues ⁽¹⁾:

Subscription

1,030

625

1,850

1,186

Professional services and other

139

99

259

189

Total cost of revenues

1,169

724

2,109

1,375

Gross profit

2,818

2,491

5,648

4,928

Operating expenses ⁽¹⁾:

Sales and marketing

1,372

1,128

2,588

2,182

Research and development

915

734

1,738

1,437

General and administrative

369

271

657

500

Total operating expenses

2,656

2,133

4,983

4,119

Income from operations

162

358

665

809

Interest income

70

116

158

231

Other income (expense), net

206

(3

)

288

(14

)

Income before income taxes

438

471

1,111

1,026

Provision for income taxes

140

86

344

181

Net income

$

298

$

385

$

767

$

845

Net income per share - basic⁽²⁾

$

0.29

$

0.37

$

0.74

$

0.82

Net income per share - diluted⁽²⁾

$

0.29

$

0.37

$

0.74

$

0.81

Weighted-average shares used to compute net income per share - basic⁽²⁾

1,031

1,036

1,033

1,035

Weighted-average shares used to compute net income per share - diluted⁽²⁾

1,034

1,047

1,037

1,047

Includes stock-based compensation as follows:

Three Months Ended

Six Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Cost of revenues:

Subscription

$

96

$

76

$

180

$

144

Professional services and other

13

11

25

22

Operating expenses:

Sales and marketing

179

155

329

303

Research and development

283

196

519

381

General and administrative

84

61

160

119

(2)

Prior period results have been retroactively adjusted to reflect the effects of the five-for-one stock split, which was effective December 17, 2025

ServiceNow, Inc.

Condensed Consolidated Balance Sheets

(in millions)

June 30, 2026

December 31, 2025

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

2,503

$

3,726

Marketable securities

2,161

2,558

Accounts receivable, net

2,201

2,627

Current portion of deferred commissions

594

590

Prepaid expenses and other current assets

1,055

970

Total current assets

8,514

10,471

Deferred commissions, less current portion

1,136

1,114

Long-term marketable securities

2,043

3,771

Strategic investments

2,073

1,542

Property and equipment, net

2,177

2,289

Operating lease right-of-use assets

836

806

Intangible assets, net

3,781

1,121

Goodwill

9,837

3,578

Deferred tax assets

890

1,056

Other assets

379

290

Total assets

$

31,666

$

26,038

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

162

$

204

Accrued expenses and other current liabilities

1,738

1,813

Current portion of deferred revenue

8,057

8,314

Current portion of operating lease liabilities

114

112

Short-term debt, net

2,082

-

Total current liabilities

12,153

10,443

Deferred revenue, less current portion

135

120

Operating lease liabilities, less current portion

822

800

Long-term debt, net

5,435

1,491

Other long-term liabilities

605

220

Stockholders' equity

12,516

12,964

Total liabilities and stockholders' equity

$

31,666

$

26,038

ServiceNow, Inc.

Condensed Consolidated Statements of Cash Flows

(in millions)

(unaudited)

Three Months Ended

Six Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Cash flows from operating activities:

Net income

$

298

$

385

$

767

$

845

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

407

172

665

332

Amortization of deferred commissions

172

148

340

293

Stock-based compensation

652

499

1,199

969

Deferred income taxes

36

16

138

48

Unrealized (gains) losses on strategic investments

(273

)

(5

)

(360

)

(5

)

Other

58

63

63

67

Changes in operating assets and liabilities, net of effect of business combinations:

Accounts receivable

(441

)

(302

)

471

599

Deferred commissions

(181

)

(136

)

(376

)

(291

)

Prepaid expenses and other assets

(76

)

(83

)

(118

)

(222

)

Accounts payable

(241

)

(101

)

9

133

Deferred revenue

(104

)

(116

)

(382

)

(264

)

Accrued expenses and other liabilities

280

176

(159

)

(111

)

Net cash provided by operating activities

$

587

$

716

$

2,257

$

2,393

Cash flows from investing activities:

Purchases of property and equipment

(114

)

(190

)

(255

)

(395

)

Business combinations, net of cash acquired

(7,451

)

(58

)

(8,776

)

(76

)

Purchases of other intangibles

-

-

-

(34

)

Purchases of marketable securities

(395

)

(1,182

)

(426

)

(2,322

)

Purchases of strategic investments

(57

)

(134

)

(178

)

(138

)

Sales and maturities of marketable securities

1,389

1,100

2,528

2,281

Other

(26

)

41

2

44

Net cash used in investing activities

$

(6,654

)

$

(423

)

$

(7,105

)

$

(640

)

Cash flows from financing activities:

Proceeds from borrowings on senior notes, net of discount and issuance costs

3,944

-

3,944

-

Proceeds from term loan, net of issuance costs

3,991

-

3,991

-

Repayments of term loan

(4,000

)

-

(4,000

)

-

Proceeds from issuance of commercial paper, net of discount

3,534

-

3,534

-

Repayments of commercial paper

(1,472

)

-

(1,472

)

-

Proceeds from employee stock plans

1

-

154

153

Repurchases of common stock

-

(361

)

(2,225

)

(659

)

Taxes paid related to net share settlement of equity awards

(117

)

(185

)

(281

)

(438

)

Other

(7

)

-

(7

)

-

Net cash provided by (used in) financing activities

$

5,874

$

(546

)

$

3,638

$

(944

)

Foreign currency effect on cash, cash equivalents and restricted cash

-

9

(5

)

14

Net change in cash, cash equivalents and restricted cash

(193

)

(244

)

(1,215

)

823

Cash, cash equivalents and restricted cash at beginning of period

2,710

3,377

3,732

2,310

Cash, cash equivalents and restricted cash at end of period

$

2,517

$

3,133

$

2,517

$

3,133

Note: Certain prior period amounts have been reclassified to conform to the current period presentation.

ServiceNow, Inc.

GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

(unaudited)

Three Months Ended

Six Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Gross profit:

GAAP subscription gross profit

$

2,847

$

2,488

$

5,698

$

4,932

Stock-based compensation

96

76

180

144

Amortization of purchased intangibles

177

23

238

43

Severance costs

3

3

4

3

Non-GAAP subscription gross profit

$

3,123

$

2,590

$

6,120

$

5,122

GAAP professional services and other gross (loss) profit

$

(29

)

$

3

$

(50

)

$

(4

)

Stock-based compensation

13

11

25

22

Severance costs

-

-

-

-

Non-GAAP professional services and other gross (loss) profit

$

(16

)

$

14

$

(25

)

$

18

GAAP gross profit

$

2,818

$

2,491

$

5,648

$

4,928

Stock-based compensation

109

87

205

166

Amortization of purchased intangibles

177

23

238

43

Severance costs

3

3

4

3

Non-GAAP gross profit

$

3,107

$

2,604

$

6,095

$

5,140

Gross margin:

GAAP subscription gross margin

73.5

%

80

%

75.5

%

80.5

%

Stock-based compensation as % of subscription revenues

2.5

%

2.5

%

2.5

%

2.5

%

Amortization of purchased intangibles as % of subscription revenues

4.5

%

0.5

%

3

%

0.5

%

Severance costs as % of subscription revenues

-

%

-

%

-

%

-

%

Non-GAAP subscription gross margin

80.5

%

83

%

81

%

83.5

%

GAAP professional services and other gross margin

(26.5

%)

3

%

(24

%)

(2.5

%)

Stock-based compensation as % of professional services and other revenues

12

%

11

%

12

%

12

%

Severance costs as % of professional services and other revenues

0.5

%

-

%

0.5

%

-

%

Non-GAAP professional services and other gross margin

(14

%)

14

%

(12

%)

9.5

%

GAAP gross margin

70.5

%

77.5

%

73

%

78

%

Stock-based compensation as % of total revenues

2.5

%

2.5

%

2.5

%

2.5

%

Amortization of purchased intangibles as % of total revenues

4.5

%

0.5

%

3

%

0.5

%

Severance costs as % of total revenues

-

%

-

%

-

%

-

%

Non-GAAP gross margin

78

%

81

%

78.5

%

81.5

%

Income from operations:

GAAP income from operations

$

162

$

358

$

665

$

809

Stock-based compensation

655

499

1,213

969

Amortization of purchased intangibles

219

25

296

46

Business combination and other related costs

75

14

118

25

Impairment of assets

-

30

-

30

Severance costs

62

29

80

29

Non-GAAP income from operations

$

1,173

$

955

$

2,372

$

1,908

Operating margin:

GAAP operating margin

4

%

11

%

8.5

%

13

%

Stock-based compensation as % of total revenues

16.5

%

15.5

%

15.5

%

15.5

%

Amortization of purchased intangibles as % of total revenues

5.5

%

1

%

4

%

0.5

%

Business combination and other related costs as % of total revenues

2

%

0.5

%

1.5

%

0.5

%

Impairment of assets as % of total revenues

-

%

1

%

-

%

0.5

%

Severance costs as % of total revenues

1.5

%

1

%

1

%

0.5

%

Non-GAAP operating margin

29.5

%

29.5

%

30.5

%

30.5

%

Net income:

GAAP net income

$

298

$

385

$

767

$

845

Stock-based compensation

655

499

1,213

969

Amortization of purchased intangibles

219

25

296

46

Business combination and other related costs

75

14

118

25

Impairment of assets

-

30

-

30

Severance costs

62

29

80

29

(Gains)/losses on strategic investments, net⁽³⁾

(273

)

(5

)

(360

)

(5

)

Income tax effects and adjustments^{(1) (3)}

(55

)

(127

)

(121

)

(243

)

Discrete income tax benefit from the release of a valuation allowance on deferred tax assets⁽⁴⁾

(51

)

-

(51

)

-

Non-GAAP net income⁽³⁾

$

930

$

851

$

1,942

$

1,697

Net income per share - basic and diluted:

GAAP net income per share - basic⁽²⁾

$

0.29

$

0.37

$

0.74

$

0.82

GAAP net income per share - diluted⁽²⁾

$

0.29

$

0.37

$

0.74

$

0.81

Non-GAAP net income per share - basic^{(2) (3)}

$

0.90

$

0.82

$

1.88

$

1.64

Non-GAAP net income per share - diluted⁽²⁾⁽³⁾

$

0.90

$

0.81

$

1.87

$

1.62

Weighted-average shares used to compute net income per share - basic⁽²⁾

1,031

1,036

1,033

1,035

Weighted-average shares used to compute net income per share - diluted⁽²⁾

1,034

1,047

1,037

1,047

Free cash flow:

GAAP net cash provided by operating activities

$

587

$

716

$

2,257

$

2,393

Purchases of property and equipment

(114

)

(190

)

(255

)

(395

)

Business combination and other related costs

161

9

297

14

Non-GAAP free cash flow

$

634

$

535

$

2,299

$

2,012

Free cash flow margin:

GAAP net cash provided by operating activities as % of total revenues

14.5

%

22.5

%

29

%

38

%

Purchases of property and equipment as % of total revenues

(3

%)

(6

%)

(3.5

%)

(6.5

%)

Business combination and other related costs as % of total revenues

4

%

0.5

%

4

%

-

%

Non-GAAP free cash flow margin

16

%

16.5

%

29.5

%

32

%

(1)

We use a non-GAAP effective tax rate for evaluating our operating results to provide consistency across reporting periods. Based on our long-term projections, we are using a non-GAAP tax rate of 21% for the three and six months ended June 30, 2026 and 20% for the three and six months ended June 30, 2025. This non-GAAP tax rate could change for various reasons including significant changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate.

(2)

Prior period results have been retroactively adjusted to reflect the effects of the five-for-one stock split, which was effective December 17, 2025.

(3)

Prior period results have been retroactively adjusted to reflect the exclusion of gains and losses on strategic investments.

(4)

GAAP net income for the three and six months ended June 30, 2026 was impacted by a $51 million release of valuation allowance on our deferred tax assets as a discrete tax benefit.

ServiceNow, Inc.

Reconciliation of Non-GAAP Financial Guidance

Three Months Ending

September 30, 2026

GAAP operating margin

8%

Stock-based compensation expense as % of total revenues

16%

Amortization of purchased intangibles as % of total revenues

5%

Business combination and other related costs as % of total revenues

1%

Severance costs as % of total revenues

1%

Non-GAAP operating margin

31%

Twelve Months Ending

December 31, 2026

GAAP subscription gross margin

75%

Stock-based compensation expense as % of subscription revenues

2%

Amortization of purchased intangibles as % of subscription revenues

3%

Severance costs as % of subscription revenues

-%

Non-GAAP subscription margin

81%

GAAP operating margin

10%

Stock-based compensation expense as % of total revenues

15%

Amortization of purchased intangibles as % of total revenues

4%

Business combination and other related costs as % of total revenues

1%

Severance costs as % of total revenues

1%

Non-GAAP operating margin

31.5%

GAAP net cash provided by operating activities as % of total revenues

37%

Purchases of property and equipment as % of total revenues

(4%)

Business combination and other related costs as % of total revenues

2%

Non-GAAP free cash flow margin

35%

Note: Numbers are rounded for presentation purposes and may not foot.