ServiceNow Q2 operating income falls 55% as $7.6B Armis deal drives margin compression

Filed July 23, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 24, 2025 · ~1 min read

Key Changes

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  Operating income fell 55% YoY to $162M (Q2) and 18% to $665M (H1) as acquisition-related intangible amortization surged $153M/$194M and cloud/personnel costs rose sharply.

  MD&A: Operating Income verify on EDGAR →
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  Subscription gross margin compressed 700bp to 73% (Q2) and 600bp to 75% (H1), driven by $153M/$194M intangible amortization increases, $63M/$104M cloud cost increases, and $63M/$123M depreciation/software expense increases.

  MD&A: Subscription Gross Margin verify on EDGAR →
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  Acquired Armis for $7.6B cash (April 2026) and Veza for $1.2B (March 2026), funded by $4B senior notes issuance and $2.2B in share repurchases via $2.2B ASR plus $225M open-market buys.

  Notes: Acquisitions & Financing view on EDGAR →