Bill McDermott, CEO of ServiceNow Inc., during the Allen & Company Media and Technology Conference on July 10, 2025 in Sun Valley, Idaho.
David Paul Morris | Bloomberg | getty images
service now First-quarter results on Wednesday beat Wall Street estimates as the software company said subscription revenue was hit by the conflict in the Middle East.
Here’s how the company performed against LSEG estimates:
- earnings per share: 97 cents adjusted vs. 96 cents expected
- Income: $3.77 billion vs. $3.74 billion expected
Revenue for the quarter increased 22% year over year. The company reported net income of $469 million, or 45 cents per share, a slight increase from $460 million, or 44 cents per share, a year earlier.
The company said in its release that subscription revenue growth during the quarter “saw a decline of approximately 75 basis points driven by the delayed closing of several large on-premises deals in the Middle East due to the ongoing conflict in the region.”
The company reported quarterly subscription revenue of $3.67 billion, slightly more than the $3.65 billion expected by FactSet.
ServiceNow raised its forecast for subscription revenue for fiscal 2026 to between $15.74 billion and $15.78 billion, up from last quarter’s forecast of $15.53 billion to $15.57 billion.
“Our full-year guidance reflects a prudent assessment of the geopolitical environment right now,” CFO Gina Mastantuono told CNBC. “I certainly adopted a little incremental conservatism because of the ongoing conflict in the Middle East and its potential impact on the timing of the deal.”
In the first quarter, ServiceNow repurchased nearly 20 million shares, more than double the amount it purchased in 2025. On its last earnings call, the company announced board approval for an additional $5 billion in share buybacks.
The Santa Clara, California-based company reported $12.64 billion in current remaining performance obligations for the quarter, beating estimates of $12.56 billion. It reported 16 transactions of more than $5 million in new annual contract value in the first quarter, an increase of nearly 80% year over year.
ServiceNow is on a spending spree as it tries to position itself as an “AI control tower.” The stock has had a bad start to 2026, down nearly 30% year to date.
Mastantuno told CNBC that the company’s AI product portfolio is performing well and is on track to exceed the company’s $1 billion target for 2026.
The company also announced that it is expanding its deal Google Cloud.
Earlier this week, ServiceNow completed its $7.75 billion acquisition Cyber ​​Security Startup ArmisWhich was expected to close in the second half of the year.
