ServiceNow stock rose nearly 7% in early premarket trading on Thursday after the software company reported second-quarter sales and profit higher than Wall Street's expectations and raised its forecast for annual subscription revenue. The results eased concerns of a 'SaaSpocalypse' after software stocks endured heavy selling for much of 2026 on fears of AI-driven disruption. ServiceNow's revenue rose 24% to $3.99 billion, boosted by subscription revenue growth and exceeding analysts' expectation of $3.93 billion from FactSet.
ServiceNow Reports $3.99 Billion Q2 Revenue, Raises Subscription Guidance
ServiceNow's second-quarter revenue reached $3.99 billion, representing a 24% increase driven by similar growth in subscription revenue. The company's backlog increased 21% to $13.20 billion as of June 30. ServiceNow earned $0.90 per share on an adjusted basis, surpassing the expected $0.86. The company raised its 2026 subscription revenue forecast to $15.760 billion to $15.780 billion, up from its earlier projection of $15.735 billion to $15.775 billion.
CEO McDermott Highlights 50% of New Business Uses Non-Seat-Based Pricing
ServiceNow CEO Bill McDermott told the Wall Street Journal that approximately 50% of the company's net new business is driven by non-seat-based pricing models, marking a shift from the traditional sales model used by software-as-a-service companies. McDermott stated that ServiceNow operates as a platform company spanning IT, employee experience, customer experience, and developer experience on one platform. He added that the company's expansion into customer relationship management and cybersecurity has increased its total addressable market to at least $600 billion from $90 billion when he joined.
ServiceNow Expands Experian Partnership for AI Platform Deployment
On Thursday, ServiceNow announced an expansion of its partnership with Experian, a data and tech firm. Experian is significantly expanding its deployment of the ServiceNow AI Platform to drive enterprise-wide AI-led operations, according to a press note from the company.
Stocktwits Sentiment Shifts to Extremely Bullish on NOW Stocks
ServiceNow was the second top trending stock on Stocktwits early Thursday, with retail sentiment shifting to 'extremely bullish' from 'bearish.' One trader stated that ServiceNow up 5% is a normal day move and should be up at least 10%. Another trader wrote that ServiceNow is legitimately going to 500 in the next 24 months. ServiceNow shares had dipped 38% year to date to close at $95.46 on Wednesday.
FAQ
What did ServiceNow report for Q2 earnings on Thursday?
ServiceNow reported second-quarter revenue of $3.99 billion, a 24% increase that exceeded analysts' expectation of $3.93 billion. The company earned $0.90 per share on an adjusted basis, higher than the expected $0.86, and raised its 2026 subscription revenue guidance to $15.760 billion to $15.780 billion.
Why did ServiceNow CEO highlight non-seat-based pricing models?
ServiceNow CEO Bill McDermott told the Wall Street Journal that approximately 50% of the company's net new business is driven by non-seat-based pricing models, representing a shift from traditional software-as-a-service sales approaches. He emphasized that ServiceNow functions as a platform company spanning multiple business functions rather than offering individual features or functions.
How did retail investors react to ServiceNow's earnings report?
Stocktwits sentiment for ServiceNow shifted to 'extremely bullish' from 'bearish' on Thursday, with the stock becoming the second top trending ticker on the platform. Retail traders expressed strong optimism following the earnings beat and guidance raise, despite the stock having declined 38% year to date to close at $95.46 on Wednesday.
