ServiceNow

ServiceNow’s Q3 results exceeded expectations, driven by AI platform adoption. Revenue reached $3.41 billion, with subscription revenue at $3.3 billion, up 22% year-over-year. EPS was $4.82 adjusted. The company raised full-year guidance and announced a 5-for-1 stock split. ServiceNow’s AI business is projected to generate over $500 million in annual contract value this year, aiming for $1 billion by 2026. Q4 subscription revenue is projected between $3.42 billion and $3.43 billion.

ServiceNow CEO Bill McDermott addresses concerns about AI potentially displacing enterprise software. He emphasizes ServiceNow’s integration with major AI hyperscalers, viewing it as a collaborative ecosystem rather than a threat. McDermott argues that AI models won’t replicate ServiceNow’s comprehensive solutions for business processes, especially in complex environments. He highlights the limitations of siloed AI deployments and stresses the importance of a cross-functional approach. Additionally, ServiceNow announced a five-for-one stock split to attract retail investors, following strong earnings that exceeded expectations.