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ServiceNow Reports Fourth Quarter and Full-Year 2025 Financial Results; Board of Directors Authorizes Additional $5B for Share Repurchase Program

January 28, 2026 4:10 PM

SANTA CLARA, Calif.--(BUSINESS WIRE)-- ServiceNow (NYSE: NOW), the AI control tower for business reinvention, today announced financial results for its fourth quarter ended December 31, 2025, with subscription revenues of $3,466 million in Q4 2025, representing 21% year-over-year growth and 19.5% in constant currency.

“ServiceNow significantly beat Q4 expectations, accelerated net new business, and issued exceptional guidance for 2026,” said ServiceNow Chairman and CEO Bill McDermott. “We had substantial growth in licensed users, workflows, and transactions on our platform. With our consistent Rule of 55+ profile, there is no AI company in the enterprise better positioned for sustainable profitable revenue growth than ServiceNow. We are building the AI control tower for business reinvention so enterprises can operate securely in an agentic AI world.”

As of December 31, 2025, current remaining performance obligations (“cRPO”), contract revenue that will be recognized as revenue in the next 12 months, was $12.85 billion, representing 25% year-over-year growth and 21% in constant currency. The company had 244 transactions over $1 million in net new annual contract value (“ACV”) in Q4 2025, representing nearly 40% year-over-year growth, and ended the quarter with 603 customers with more than $5 million in ACV, representing approximately 20% year-over-year growth.

“Q4 was another strong quarter, concluding a remarkable year of AI innovation, with emerging products like Now Assist, Workflow Data Fabric, Raptor, and CPQ all outperforming,” said ServiceNow President and CFO Gina Mastantuono. “Our recent strategic acquisitions create enormous new market opportunities and solidify our ability to put AI to work securely across every corner of the enterprise. Make no mistake, our strategy, complete with a disciplined focus on margin expansion, remains unchanged. But the ambition is higher, and our confidence in sustained high organic growth has never been greater.”

Recent Business Highlights

Partner Updates

Industry Expansion

Acquisitions

Investment

Recognition

______________________________________
1 The program does not have a fixed expiration date, may be suspended, or discontinued at any time, and does not obligate ServiceNow to acquire any amount of its common stock. The timing, manner, price, and amount of any repurchases will be determined by ServiceNow at its discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations.

2 Source: The Forrester Wave™: Enterprise Service Management Platforms, Q4 2025, Forrester Research, Inc., November 10, 2025

Forrester Disclaimer
Forrester does not endorse any company, product, brand, or service included in its research publications and does not advise any person to select the products or services of any company or brand based on the ratings included in such publications. Information is based on the best available resources. Opinions reflect judgment at the time and are subject to change. For more information, read about Forrester’s objectivity at https://www.forrester.com/about-us/objectivity/.

3 Source: IDC MarketScape: Worldwide AI-Enabled Asset-Intensive Enterprise Asset Management Applications 2025-2026 Vendor Assessment (doc #US52977525, December 2025)

4 From Fortune, ©2026 Fortune Media IP Limited. All rights reserved. Used under license.

5 From Fortune, ©2025 Fortune Media IP Limited. All rights reserved. Used under license.

Fourth Quarter 2025 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the fourth quarter 2025:

Fourth Quarter 2025 GAAP
Results

Fourth Quarter 2025 Non-GAAP
Results(1)

Amount
($ millions)

Year/Year
Growth (%)

Amount
($ millions)(2)

Year/Year
Growth (%)

Subscription revenues

$3,466

21%

$3,412

19.5%

Professional services and other revenues

$102

13%

$101

11%

Total revenues

$3,568

20.5%

$3,513

19.5%

Amount
($ billions)

Year/Year
Growth (%)(3)

Amount
($ billions)(2)

Year/Year
Growth (%)(3)

cRPO

$12.85

25%

$12.44

21%

RPO

$28.2

26.5%

$27.2

22.5%

Amount
($ millions)

Margin (%)

Amount
($ millions)(4)

Margin (%)(4)

Subscription gross profit

$2,749

79.5%

$2,867

82.5%

Professional services and other gross loss

($15)

(13.5%)

($2)

(2%)

Total gross profit

$2,734

76.5%

$2,865

80.5%

Income from operations

$443

12.5%

$1,101

31%

Net cash provided by operating activities

$2,238

62.5%

Free cash flow

$2,032

57%

Amount
($ millions)

Earnings per
Basic/Diluted
Share ($)

Amount
($ millions)(4)

Earnings per
Basic/Diluted
Share ($)(4)

Net income

$401

$0.39 / $0.38

$959

$0.92 / $0.92

(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)

Includes approximately 100bps of contribution from Moveworks.

(4)

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

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

Full-Year 2025 GAAP and Non-GAAP Results:

The following table summarizes our financial results for the full-year 2025:

Full-Year 2025 GAAP Results

Full-Year 2025 Non-GAAP Results(1)

Amount
($ millions)

Year/Year
Growth (%)

Amount
($ millions)(2)

Year/Year
Growth (%)

Subscription revenues

$12,883

21%

$12,797

20.5%

Professional services and other revenues

$395

17%

$392

16%

Total revenues

$13,278

21%

$13,189

20%

Amount
($ billions)

Year/Year
Growth (%)(3)

Amount
($ billions)(2)

Year/Year
Growth (%)(3)

cRPO

$12.85

25%

$12.44

21%

RPO

$28.2

26.5%

$27.2

22.5%

Amount
($ millions)

Margin (%)

Amount
($ millions)(4)

Margin (%)(4)

Subscription gross profit

$10,314

80%

$10,733

83.5%

Professional services and other gross (loss) profit

($19)

(4.5%)

$28

7%

Total gross profit

$10,295

77.5%

$10,761

81%

Income from operations

$1,824

13.5%

$4,149

31%

Net cash provided by operating activities

$5,444

41%

Free cash flow

$4,636

35%

Amount
($ millions)

Earnings per
Basic/Diluted
Share ($)

Amount
($ millions)(4)

Earnings per
Basic/Diluted
Share ($)(4)

Net income

$1,748

$1.69 / $1.67

$3,669

$3.54 / $3.51

(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)

Includes approximately 100bps of contribution from Moveworks.

(4)

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

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

Financial Outlook

Our guidance includes GAAP and non‑GAAP financial measures. The non‑GAAP growth rates for subscription revenues are adjusted for constant currency by excluding the effects of foreign currency rate fluctuations and any gains or losses from foreign currency hedge contracts, and the non-GAAP growth rates for cRPO are adjusted only for constant currency to provide better visibility into the underlying business trends.

Our Q1 2026 subscription revenue growth guidance includes an approximately 150bps headwind from a mix shift of self‑hosted revenue to hosted revenue, partially driven by strong adoption of our hyperscaler offerings.

Our Q1 2026 subscription revenue growth, Q1 2026 cRPO growth, and full-year 2026 subscription revenue growth guidance each include approximately 100bps of contribution from Moveworks.

The following table summarizes our guidance for the first quarter 2026:

First Quarter 2026
GAAP Guidance

First Quarter 2026
Non-GAAP Guidance(1)

Amount
($ millions)(2)

Year/Year
Growth (%)(2)

Constant Currency
Year/Year Growth (%)

Subscription revenues

$3,650 - $3,655

21.5%

18.5% - 19%

cRPO

22.5%

20%

Margin (%)(3)

Income from operations

31.5%

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 December 2025 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.

The following table summarizes our guidance for the full-year 2026:

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

$15,530 - $15,570

20.5% - 21%

19.5% - 20%

Margin (%)(3)

Subscription gross profit

82%

Income from operations

32%

Free cash flow

36%

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)

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 December 2025 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.

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

Conference Call Details

The conference call will begin at 2 p.m. Pacific Time (22:00 GMT) on January 28, 2026. Interested parties may listen to the call by dialing (888) 330‑2455 (Passcode: 8135305), or if outside North America, by dialing (240) 789‑2717 (Passcode: 8135305). Individuals may access the live teleconference from this webcast.

https://events.q4inc.com/attendee/220621032

An audio replay of the conference call and webcast will be available two hours after its completion and will be accessible for 30 days. To hear the replay, interested parties may go to the investor relations section of the ServiceNow website or dial (800) 770‑2030 (Passcode: 8135305), or if outside North America, by dialing (647) 362‑9199 (Passcode: 8135305).

Investor Presentation Details

An investor presentation providing additional information, including forward-looking guidance, and analysis can be found at https://investors.servicenow.com.

Upcoming Investor Conferences

ServiceNow today announced that it will attend and have executives present at two upcoming investor conferences.

These include:

The live webcast for each will be accessible on the investor relations section of the ServiceNow website at https://investors.servicenow.com and archived on the ServiceNow site for a period of 30 days.

Statement Regarding Use of Non-GAAP Financial Measures

We use the following non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Our presentation of non-GAAP financial measures may not be comparable to similar measures used by other companies. We encourage investors to carefully consider our results under GAAP, as well as our supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand our business. Please see the tables included at the end of this release for the reconciliation of GAAP and non-GAAP results for gross profit, income from operations, net income, net income per share, and free cash flow.

Use of Forward-Looking Statements

This release contains “forward-looking statements” regarding our performance, including but not limited to statements in the section entitled “Financial Outlook” and statements regarding the expected benefits of our announced partnerships, and statements concerning the terms and timing of the accelerated share repurchase program. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.

Factors that may cause actual results to differ materially from those in any forward-looking statements include, among others, experiencing an actual or perceived cyber-security event or weakness; our ability to comply with evolving privacy laws, data transfer restrictions, and other foreign and domestic standards related to data and the Internet; errors, interruptions, delays or security breaches in or of our service or data centers; our ability to maintain and attract key employees and manage workplace culture; alleged violations of laws and regulations, including those relating to anti-bribery and anti-corruption and those relating to public sector contracting requirements; our ability to compete successfully against existing and new competitors; our ability to predict, prepare for and respond promptly to rapidly evolving technological, market and customer developments; our ability to grow our business, including converting remaining performance obligations into revenue, adding and retaining customers, selling additional subscriptions to existing customers, selling to larger enterprises, government and regulated organizations with complex sales cycles and certification processes, and entering new geographies and markets; our ability to develop and gain customer demand for and acceptance of existing, new and improved products and services, including products that incorporate AI technology; our ability to expand and maintain our partnerships and partner programs, including expected market opportunity from such relationships, and realize the anticipated benefits thereof; global macroeconomic and political conditions including tariffs, inflation and armed conflicts; fluctuations in the value of foreign currencies relative to the U.S. Dollar; fluctuations in interest rates; our ability to consummate and realize the benefits of any strategic transactions or acquisitions; our ability to execute share repurchases, including the timing, manner, price, and amount of any repurchase, including the accelerated share repurchase program; and fluctuations and volatility in our stock price.

Further information on these and other factors that could affect our financial results are included in our Form 10-K for the year ended December 31, 2025, and in other filings we make with the Securities and Exchange Commission from time to time.

We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.

About ServiceNow

ServiceNow (NYSE: NOW) is putting AI to work for people. We move with the pace of innovation to help customers transform organizations across every industry while upholding a trustworthy, human centered approach to deploying our products and services at scale. Our AI platform for business transformation connects people, processes, data, and devices to increase productivity and maximize business outcomes. For more information, visit: www.servicenow.com.

© 2026 ServiceNow, Inc. All rights reserved. ServiceNow, the ServiceNow logo, Now, and other ServiceNow marks are trademarks and/or registered trademarks of ServiceNow, Inc. in the United States and/or other countries. Other company names, product names, and logos may be trademarks of the respective companies with which they are associated.

ServiceNow, Inc.
Condensed Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)

Three Months Ended

Year Ended

December 31,
2025

December 31,
2024

December 31,
2025

December 31,
2024

Revenues:

Subscription

$

3,466

$

2,866

$

12,883

$

10,646

Professional services and other

102

91

395

338

Total revenues

3,568

2,957

13,278

10,984

Cost of revenues (1):

Subscription

717

536

2,569

1,942

Professional services and other

117

95

414

345

Total cost of revenues

834

631

2,983

2,287

Gross profit

2,734

2,326

10,295

8,697

Operating expenses (1):

Sales and marketing

1,150

1,027

4,388

3,854

Research and development

773

668

2,960

2,543

General and administrative

368

257

1,123

936

Total operating expenses

2,291

1,952

8,471

7,333

Income from operations

443

374

1,824

1,364

Interest income

105

106

451

419

Other expense, net

(7

)

(17

)

(14

)

(45

)

Income before income taxes

541

463

2,261

1,738

Provision for income taxes

140

79

513

313

Net income

$

401

$

384

$

1,748

$

1,425

Net income per share - basic (2)

$

0.39

$

0.37

$

1.69

$

1.38

Net income per share - diluted (2)

$

0.38

$

0.37

$

1.67

$

1.37

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

1,039

1,032

1,037

1,029

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

1,047

1,047

1,047

1,042

(1)

Includes stock-based compensation as follows:

Three Months Ended

Year Ended

December 31,
2025

December 31,
2024

December 31,
2025

December 31,
2024

Cost of revenues:

Subscription

$

78

$

66

$

300

$

250

Professional services and other

11

11

44

46

Operating expenses:

Sales and marketing

142

146

586

565

Research and development

207

176

791

655

General and administrative

56

55

234

230

(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)

December 31, 2025

December 31, 2024

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

3,726

$

2,304

Marketable securities

2,558

3,458

Accounts receivable, net

2,627

2,240

Current portion of deferred commissions

590

517

Prepaid expenses and other current assets

970

668

Total current assets

10,471

9,187

Deferred commissions, less current portion

1,114

999

Long-term marketable securities

3,771

4,111

Strategic investments

1,542

472

Property and equipment, net

2,289

1,763

Operating lease right-of-use assets

806

693

Intangible assets, net

1,121

209

Goodwill

3,578

1,273

Deferred tax assets

1,056

1,385

Other assets

290

291

Total assets

$

26,038

$

20,383

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

204

$

68

Accrued expenses and other current liabilities

1,813

1,369

Current portion of deferred revenue

8,314

6,819

Current portion of operating lease liabilities

112

102

Total current liabilities

10,443

8,358

Deferred revenue, less current portion

120

95

Operating lease liabilities, less current portion

800

687

Long-term debt, net

1,491

1,489

Other long-term liabilities

220

145

Stockholders’ equity

12,964

9,609

Total liabilities and stockholders’ equity

$

26,038

$

20,383

ServiceNow, Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)

Three Months Ended

Year Ended

December 31,
2025

December 31,
2024

December 31,
2025

December 31,
2024

Cash flows from operating activities:

Net income

$

401

$

384

$

1,748

$

1,425

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

Depreciation and amortization

212

154

738

564

Amortization of deferred commissions

167

147

621

550

Stock-based compensation

494

454

1,955

1,746

Deferred income taxes

77

51

249

98

Other

61

(20

)

104

(51

)

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

Accounts receivable

(1,052

)

(981

)

(312

)

(254

)

Deferred commissions

(296

)

(252

)

(758

)

(713

)

Prepaid expenses and other assets

(185

)

(65

)

(384

)

(332

)

Accounts payable

7

(94

)

55

(52

)

Deferred revenue

1,892

1,534

1,179

1,179

Accrued expenses and other liabilities

460

323

249

107

Net cash provided by operating activities

$

2,238

$

1,635

$

5,444

$

4,267

Cash flows from investing activities:

Purchases of property and equipment

(238

)

(253

)

(868

)

(852

)

Business combinations, net of cash acquired

(869

)

(31

)

(1,084

)

(113

)

Purchases of other intangibles

—

(10

)

(43

)

(40

)

Purchases of marketable securities

(95

)

(1,079

)

(2,814

)

(5,031

)

Purchases of strategic investments

(36

)

(32

)

(1,056

)

(181

)

Sales and maturities of marketable securities

728

728

4,138

3,752

Other

12

(61

)

38

(36

)

Net cash used in investing activities

$

(498

)

$

(738

)

$

(1,689

)

$

(2,501

)

Cash flows from financing activities:

Proceeds from employee stock plans

—

—

270

237

Repurchases of common stock

(597

)

(296

)

(1,840

)

(696

)

Taxes paid related to net share settlement of equity awards

(142

)

(175

)

(770

)

(700

)

Business combination

—

—

—

(184

)

Net cash used in financing activities

$

(739

)

$

(471

)

$

(2,340

)

$

(1,343

)

Foreign currency effect on cash, cash equivalents and restricted cash

(3

)

(9

)

7

(17

)

Net change in cash, cash equivalents and restricted cash

998

417

1,422

406

Cash, cash equivalents and restricted cash at beginning of period

2,734

1,893

2,310

1,904

Cash, cash equivalents and restricted cash at end of period

$

3,732

$

2,310

$

3,732

$

2,310

ServiceNow, Inc.
GAAP to Non-GAAP Reconciliation
(in millions, except per share data)
(unaudited)

Three Months Ended

Year Ended

December 31,
2025

December 31,
2024

December 31,
2025

December 31,
2024

Gross profit:

GAAP subscription gross profit

$

2,749

$

2,330

$

10,314

$

8,704

Stock-based compensation

78

66

300

250

Amortization of purchased intangibles

39

20

114

84

Severance costs

1

—

5

—

Non-GAAP subscription gross profit

$

2,867

$

2,416

$

10,733

$

9,038

GAAP professional services and other gross loss

$

(15

)

$

(4

)

$

(19

)

$

(7

)

Stock-based compensation

11

11

44

46

Severance costs

2

—

3

—

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

$

(2

)

$

7

$

28

$

39

GAAP gross profit

$

2,734

$

2,326

$

10,295

$

8,697

Stock-based compensation

89

77

344

296

Amortization of purchased intangibles

39

20

114

84

Severance costs

3

—

8

—

Non-GAAP gross profit

$

2,865

$

2,423

$

10,761

$

9,077

Gross margin:

GAAP subscription gross margin

79.5

%

81.5

%

80

%

82

%

Stock-based compensation as % of subscription revenues

2.5

%

2.5

%

2.5

%

2.5

%

Amortization of purchased intangibles as % of subscription revenues

1

%

0.5

%

1

%

1

%

Severance costs as % of subscription revenues

—

%

—

%

—

%

—

%

Non-GAAP subscription gross margin

82.5

%

84.5

%

83.5

%

85

%

GAAP professional services and other gross margin

(13.5

%)

(4

%)

(4.5

%)

(2

%)

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

11

%

12.5

%

11

%

13.5

%

Severance costs as % of professional services and other revenues

0.5

%

—

%

0.5

%

—

%

Non-GAAP professional services and other gross margin

(2

%)

8.5

%

7

%

11.5

%

GAAP gross margin

76.5

%

78.5

%

77.5

%

79

%

Stock-based compensation as % of total revenues

2.5

%

2.5

%

2.5

%

2.5

%

Amortization of purchased intangibles as % of total revenues

1

%

0.5

%

1

%

1

%

Severance costs as % of total revenues

—

%

—

%

—

%

—

%

Non-GAAP gross margin

80.5

%

82

%

81

%

82.5

%

Income from operations:

GAAP income from operations

$

443

$

374

$

1,824

$

1,364

Stock-based compensation

494

454

1,955

1,746

Amortization of purchased intangibles

41

23

120

94

Business combination and other related costs

65

4

109

33

Impairment of assets

—

—

30

—

Severance costs

21

—

74

—

Legal settlements

—

17

—

17

Contract termination costs

37

—

37

—

Non-GAAP income from operations

$

1,101

$

872

$

4,149

$

3,254

Operating margin:

GAAP operating margin

12.5

%

12.5

%

13.5

%

12.5

%

Stock-based compensation as % of total revenues

14

%

15.5

%

14.5

%

16

%

Amortization of purchased intangibles as % of total revenues

1

%

1

%

1

%

1

%

Business combination and other related costs as % of total revenues

2

%

—

%

1

%

—

%

Impairment of assets as % of total revenues

—

%

—

%

—

%

—

%

Severance costs as % of total revenues

0.5

%

—

%

0.5

%

—

%

Legal settlements as % of total revenues

—

%

0.5

%

—

%

—

%

Contract termination costs as % of total revenues

1

%

—

%

0.5

%

—

%

Non-GAAP operating margin

31

%

29.5

%

31

%

29.5

%

Net income:

GAAP net income

$

401

$

384

$

1,748

$

1,425

Stock-based compensation

494

454

1,955

1,746

Amortization of purchased intangibles

41

23

120

94

Business combination and other related costs

65

4

109

33

Impairment of assets

—

—

30

—

Severance costs

21

—

74

—

Legal settlements

—

17

—

17

Contract termination costs

37

—

37

—

Income tax effects and adjustments(1)

(100

)

(113

)

(404

)

(413

)

Non-GAAP net income

$

959

$

769

$

3,669

$

2,902

Net income per share - basic and diluted:

GAAP net income per share - basic (2)

$

0.39

$

0.37

$

1.69

$

1.38

GAAP net income per share - diluted (2)

$

0.38

$

0.37

$

1.67

$

1.37

Non-GAAP net income per share - basic (2)

$

0.92

$

0.74

$

3.54

$

2.82

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

$

0.92

$

0.73

$

3.51

$

2.78

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

1,039

1,032

1,037

1,029

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

1,047

1,047

1,047

1,042

Free cash flow:

GAAP net cash provided by operating activities

$

2,238

$

1,635

$

5,444

$

4,267

Purchases of property and equipment

(238

)

(253

)

(868

)

(852

)

Business combination and other related costs

32

1

60

23

Cash paid for legal settlements

—

17

—

17

Non-GAAP free cash flow

$

2,032

$

1,400

$

4,636

$

3,455

Free cash flow margin:

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

62.5

%

55.5

%

41

%

39

%

Purchases of property and equipment as % of total revenues

(6.5

%)

(8.5

%)

(6.5

%)

(8

%)

Business combination and other related costs as % of total revenues

1

%

—

%

0.5

%

—

%

Cash paid for legal settlements as % of total revenues

—

%

0.5

%

—

%

—

%

Non-GAAP free cash flow margin

57

%

47.5

%

35

%

31.5

%

(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 20% for each of the three and twelve months ended December 31, 2025 and 2024. 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.

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

ServiceNow, Inc.
Reconciliation of Non-GAAP Financial Guidance

Three Months Ending

March 31, 2026

GAAP operating margin

14%

Stock-based compensation expense as % of total revenues

15%

Amortization of purchased intangibles as % of total revenues

2%

Business combination and other related costs as % of total revenues

—%

Severance costs as % of total revenues

1%

Non-GAAP operating margin

31.5%

Twelve Months Ending

December 31, 2026

GAAP subscription gross margin

78%

Stock-based compensation expense as % of subscription revenues

2%

Amortization of purchased intangibles as % of subscription revenues

1%

Severance costs as % of subscription revenues

— %

Non-GAAP subscription margin

82%

GAAP operating margin

15%

Stock-based compensation expense as % of total revenues

15%

Amortization of purchased intangibles as % of total revenues

2%

Business combination and other related costs as % of total revenues

—%

Severance costs as % of total revenues

—%

Non-GAAP operating margin

32%

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

41%

Purchases of property and equipment as % of total revenues

(6%)

Business combination and other related costs as % of total revenues

—%

Non-GAAP free cash flow margin

36%

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

Media Contact:

Johnna Hoff

(408) 250-8644

[email protected]

Investor Contact:

Darren Yip

(925) 388-7205

[email protected]

Source: ServiceNow

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