ServiceNow Q3 Subscription Revenue Rises 21% to $3,988 Million

On October 28, 2026, ServiceNow (NOW ) reported financial results for its third quarter ended September 30, 2026, posting subscription revenues of $3,988 million, up 21% year over year and 20.5% in constant currency. Total revenues were $4,106 million, up 20.5% and 20% in constant currency, including professional services and other revenues of $118 million, up 10%. The company said it exceeded the high end of its guidance across all third-quarter topline growth and profitability metrics, and it raised its full-year subscription revenue and free cash flow margin outlook.

Current remaining performance obligations (cRPO), which ServiceNow defines as contract revenue that will be recognized as revenue over the next 12 months, were $13.65 billion as of September 30, 2026, up 20.5% year over year and 21% in constant currency. Remaining performance obligations were $29.7 billion, up 22% and 22.5% in constant currency. The company closed 19 transactions with more than $5 million in net new annual contract value (ACV) during the quarter, representing over 135% year-over-year growth, and ended the period with 680 customers generating more than $5 million in ACV, up approximately 23% year over year.

GAAP gross profit was $2,895 million, a 70.5% margin, consisting of subscription gross profit of $2,934 million, a 73.5% margin, and a professional services and other gross loss of $39 million. GAAP income from operations was $385 million, a 9.5% margin, compared with $572 million and a 17% margin in the third quarter of 2025. GAAP net income was $277 million, or $0.27 per basic and diluted share, versus $502 million, or $0.48 per basic and diluted share, a year earlier. Prior-period per-share amounts have been retroactively adjusted for a five-for-one stock split effective December 17, 2025.

On a non-GAAP basis, which excludes stock-based compensation, amortization of purchased intangibles, severance costs, business combination and other related costs, and certain other items, third-quarter income from operations was $1,338 million, a 32.5% margin, and net income was $1,039 million, or $1.00 per basic and diluted share. The quarter’s non-GAAP adjustments included $633 million of stock-based compensation, $198 million of amortization of purchased intangibles, and $87 million of severance costs. Net cash provided by operating activities was $839 million, compared with $813 million a year earlier, and non-GAAP free cash flow was $822 million, a 20% margin, compared with $592 million and a 17.5% margin in the prior-year quarter. ServiceNow defines free cash flow as net cash provided by operating activities, plus cash outflows for legal settlements and business combination and other related costs, reduced by purchases of property and equipment.

For the nine months ended September 30, 2026, total revenues were $11,863 million, including subscription revenues of $11,536 million, and GAAP net income was $1,044 million, or $1.01 per diluted share.

Chairman and CEO Bill McDermott called the quarter “the inflection point for ServiceNow as the Super Intelligence Control Tower.” President and CFO Gina Mastantuono said AI net new ACV exceeded the company’s expectations, enabling ServiceNow to raise its year-end AI ACV target for the second time in 2026, “from $1 billion at the start of the year to $1.7 billion now.” The company said the raised target is up 70% from the beginning of the year. Mastantuono said year-to-date agentic AI consumption in production rose more than 13x year over year and that the company reduced capital expenditures while raising its full-year free cash flow margin target by 100 basis points to 36%. Third-quarter purchases of property and equipment were $91 million, compared with $235 million a year earlier.

Fourth-Quarter and Full-Year 2026 Guidance

For the fourth quarter of 2026, ServiceNow guided to GAAP subscription revenues of $4,245 million to $4,255 million, representing year-over-year growth of 22.5% to 23% and 21.5% in constant currency. The company forecast fourth-quarter cRPO growth of 18.5% in both reported and constant-currency terms and a non-GAAP operating margin of 32%, with weighted-average diluted shares of 1.05 billion.

For the full year 2026, ServiceNow guided to GAAP subscription revenues of $15,780 million to $15,790 million, representing 22.5% growth and 21% in constant currency, a non-GAAP subscription gross margin of 81%, a non-GAAP operating margin of 31.5%, and a non-GAAP free cash flow margin of 36%, with weighted-average diluted shares of 1.04 billion. The guidance growth rates are based on the 30-day average of foreign exchange rates for September 2026 for entities reporting in currencies other than the U.S. dollar.

Balance Sheet and Financing Activity

Cash and cash equivalents were $2,393 million at September 30, 2026, compared with $3,726 million at December 31, 2025, and total assets were $31,830 million. Goodwill was $10,012 million, compared with $3,578 million at year-end 2025, and intangible assets, net, were $3,594 million, compared with $1,121 million. The balance sheet showed short-term debt of $2,086 million and long-term debt of $5,438 million; at December 31, 2025, the company had long-term debt of $1,491 million and no short-term debt.

The nine-month cash flow statement shows $9,167 million spent on business combinations, net of cash acquired, including $391 million in the third quarter. Financing activity for the nine months included $3,943 million in proceeds from senior notes, $3,991 million in term-loan proceeds, $4,000 million in term-loan repayments, $4,529 million in commercial paper issuance, $2,484 million in commercial paper repayments, and $2,225 million of common stock repurchases, with no repurchases recorded in the third quarter itself.

Alongside the results, ServiceNow announced an expanded partnership with OpenAI, beginning with a ServiceNow plugin for ChatGPT enabled by Action Fabric, and the companies said they aim to develop security and risk solutions powered by OpenAI cyber models, a Codex integration in AI Workflow Factory, and voice-driven governance and risk assessment for ServiceNow’s Super Intelligence Control Tower. Also on October 28, ServiceNow announced the Control Tower Alliance, an AI governance and security ecosystem whose founding members include Anthropic, Amazon Web Services, Cisco, HiddenLayer, Kong, NVIDIA, Okta, OpenAI, Stripe, WitnessAI, and Zenity, and said HPE selected ServiceNow to transform customer support and field service for HPE’s Cloud & AI business.

ServiceNow scheduled its earnings conference call for 2 p.m. Pacific Daylight Time (21:00 GMT) on October 28, 2026, with an audio replay available for 30 days. The company said executives will present at four upcoming investor conferences: Senior Vice President and General Manager Josh Kahn at the BMO Technology and Innovation Leaders Conference on November 12, 2026, and the RBC Global TIMT Conference on November 17, 2026, and Mastantuono at the Wells Fargo TMT Summit on December 8, 2026, and in a keynote at the Barclays Global Technology Conference on December 9, 2026.