- ServiceNow reported Q2 revenue of $3.99 billion, up 24%, with subscription revenue up 24.5% to $3.88 billion; its AI product exceeded $1 billion in annual contract value and agentic deployments rose ninefold in nine months.
- Management raised FY26 subscription-revenue guidance to $15.76 billion-$15.78 billion, but Q3 subscription guidance implies 20.5% growth and follows U.S. Federal subscription revenue pulled forward from Q3, creating a near-term execution test.
- Tech Mahindra expanded its multiyear ServiceNow partnership to scale AI deployments, while valuation signals conflict: one cited DCF estimate values NOW at $266.01, versus a 78.6x P/E that exceeds the cited fair ratio and industry averages.
- NOW gained 29% over the past month to $127.23, ahead of IGV's 16% gain, but remained down 16% YTD through the cited Monday close.
Quotes
“operating to the Rule of 56, well on our way to the Rule of 60.”
“The pattern is uniform across the peer set: enterprise names monetizing AI in production are being re-rated ahead of the fall earnings cycle.”