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Get filing alertsServiceNow beats Q2 guidance with 24.5% subscription growth, AI crosses $1B milestone
Filed July 22, 2026 · Period ending July 22, 2026 · ~1 min read
Key Changes
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high
AI products crossed $1 billion in annual contract value during Q2 2026, demonstrating strong customer adoption of the AI platform with net new ACV growth continuing to outpace expectations.
Exhibit 99.1 view on EDGAR → -
high
Q2 subscription revenues of $3,877M grew 24.5% year-over-year (23% constant currency), beating the high end of guidance by 150 basis points driven by net new ACV outperformance and stronger U.S. Federal demand.
Exhibit 99.1 view on EDGAR → -
high
Full-year 2026 subscription revenue guidance raised to $15,760-$15,780M (22.5% growth, 21% constant currency), reflecting Q2 net new ACV strength that exceeded expectations.
Exhibit 99.1 view on EDGAR → -
high
Current remaining performance obligations reached $13.20B (21% year-over-year growth, 21.5% constant currency), indicating strong near-term revenue visibility over the next 12 months.
Exhibit 99.1 view on EDGAR → -
medium
Q2 non-GAAP operating income of $1,173M (29.5% margin) beat guidance across all profitability metrics, with the company operating at a "Rule of 56" combining subscription growth and free cash flow margin.
Exhibit 99.1 view on EDGAR →
Summary
ServiceNow reported Q2 2026 results that exceeded guidance across revenue and profitability metrics, with subscription revenues of $3,877 million growing 24.5% year-over-year. The company beat the high end of its guidance by 150 basis points, driven by stronger-than-expected net new annual contract value and U.S. Federal demand.
The quarter's standout achievement was ServiceNow AI crossing $1 billion in annual contract value, a milestone that validates the company's AI platform strategy and demonstrates accelerating customer adoption. Management raised full-year 2026 subscription revenue guidance to $15,760-$15,780 million (22.5% growth) based on Q2's outperformance.
Current remaining performance obligations of $13.20 billion provide strong visibility into the next 12 months of revenue. The company is operating at a "Rule of 56," combining subscription revenue growth with free cash flow margin, while delivering non-GAAP operating margins of 29.5%. For retail investors, the AI milestone and raised guidance signal sustained momentum in both core platform adoption and newer AI products, with near-term revenue visibility supported by the growing backlog.
Section-by-Section Diff
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
Income from operations $ 162 4 % $ 1,173 29.5 %
ServiceNow reported Q2 2026 GAAP operating income of $162 million (4% margin) and non-GAAP operating income of $1,173 million (29.5% margin). The company beat the high end of guidance across all profitability metrics and is operating at a "Rule of 56" (subscription revenue growth plus free cash flow margin).
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 23, 2026 · How we verify