ServiceNow, Inc. (NOW.N): The Beat Was Real; The Raise Was Modest

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ServiceNow, Inc. (NOW.N): The Beat Was Real; The Raise Was Modest

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23 Jul 2026 00:40:46 ET │ 16 pages

ServiceNow, Inc. (NOW.N)

The Beat Was Real; The Raise Was Modest

CITI'S TAKE

Buy ServiceNow delivered a strong Q2, with subscription revenue and cRPO

ahead of expectations, AI ACV surpassing $1B, and momentum across Price (22 Jul 26 16:00) US$95.46

Security, IT Operations, and CRM. That said, the quarter was not flawless. Target price US$154.00↓

Subscription revenue benefited from Federal-related revenue timing and from US$156.00

cRPO likely benefited from some renewal timing dynamics, while FY26 cc Expected share price return 61.3%

subscription revenue guidance was raised by only $13M at the midpoint Expected dividend yield 0.0%

versus ~$60M of Q2 subscription revenue outperformance. While we

Expected total return 61.3% believe the modest raise reflects management conservatism over

Market Cap US$98,449M deteriorating fundamentals, 2H pipeline conversion and AI upsell

momentum will remain key areas of focus given more mixed partner

commentary heading into the quarter. Stepping back, we modestly raise

topline estimates and pare our FCF and TP slightly. We remain Buy-rated, Tyler RadkeAC

as viewing ServiceNow as a premier large-cap enterprise application +1-415-951-1660

software franchise, supported by a durable core business, strong organic tyler.radke@citi.com

innovation, accelerating AI monetization, and an increasingly meaningful

Andrew Girard, CFA Security growth opportunity.

andrew.girard@citi.com

Yitchuin WongStrong 2Q Beat with AI, Federal and Security Momentum — ServiceNow reported

strong 2Q results, with key cRPO growth of 21.5% y/y cc, beating consensus by yitchuin.wong@citi.com