Prime Highlights:
- ServiceNow exceeded Wall Street expectations in Q4, reporting revenue of $3.57 billion and adjusted EPS of 92 cents.
- The company is investing in acquisitions and partnerships to expand capabilities and provide greater value to customers.
Key Facts:
- Subscription revenues rose 21% year-over-year to $3.47 billion, contributing significantly to total sales.
- The board approved an additional $5 billion for share buybacks, reflecting strong financial performance and shareholder focus.
Background:
ServiceNow has reported stronger-than-expected results for the fourth quarter, exceeding Wall Street’s estimates and signaling continued growth in its enterprise software business.
The Santa Clara-based company posted adjusted earnings per share of 92 cents, surpassing analysts’ expectations of 88 cents. Revenue reached $3.57 billion, slightly above the projected $3.53 billion, representing a 20.5% increase from $2.96 billion in the same period last year. Net income rose modestly to $401 million, or 38 cents per share, up from $384 million, or 37 cents per share, a year ago.
Subscription revenues, which account for most of the company’s sales, grew 21% from last year to $3.47 billion, above the expected $3.42 billion. For the full year 2025, subscription revenues reached $12.88 billion, showing steady growth. Current remaining performance obligations, which reflect the company’s backlog, increased 25% from a year ago to $12.85 billion.
Finance chief Gina Mastantuono emphasized that the company’s recent acquisitions are designed to enhance growth rather than replace organic expansion. “These acquisitions represent an acceleration of growth,” she said. ServiceNow has recently completed a nearly $3 billion purchase of artificial intelligence firm Moveworks and announced plans to acquire cybersecurity startup Armis for $7.75 billion and identity security platform Veza.
Looking ahead, ServiceNow forecasts subscription revenues between $3.65 billion and $3.66 billion for the first quarter, and $15.53 billion to $15.57 billion for the full fiscal year 2026. The company also received board approval for an additional $5 billion in share buybacks.
In addition to acquisitions, ServiceNow is forming partnerships to enhance its enterprise services. The company recently partnered with Anthropic and earlier made a three-year agreement with OpenAI.
Mastantuono said these moves are intended to add important capabilities and provide more value for customers. With strong quarterly results, strategic acquisitions, and a growing subscription base, ServiceNow is well-positioned for continued growth in the enterprise software sector.