• On July 23, 2025, ServiceNow reported second-quarter results that surpassed guidance across all metrics, with subscription revenues growing to US$3.22 billion and net income reaching US$385 million, alongside announcing new agentic workforce AI tools and a partnership to support digital transformation in U.S. manufacturing.
• ServiceNow's advancements in agentic workforce management have enabled substantial automation within IT and customer support, reportedly reducing service desk volume by nearly 40% and accelerating resolution times by 50% for complex support cases.
• We'll look at how ServiceNow's strong subscription revenue growth and AI innovation could shape its investment narrative moving forward.

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ServiceNow Investment Narrative Recap

To be a ServiceNow shareholder, you need to believe in the long-term value created by the company’s push into AI-powered workflows and recurring subscription revenues. The latest strong Q2 results and upbeat guidance reinforce the focus on subscription growth as a key catalyst, even as rapid expansion into new business areas and heightened competition in AI innovation remain the biggest risks. This quarter’s upbeat results do not materially alter those fundamental risks and catalysts.

Among the recent announcements, the launch of ServiceNow’s agentic workforce management is especially relevant. This new AI-powered solution promises to reshape operational efficiency, with early data showing substantial automation in IT and support functions. These kinds of advances align directly with ServiceNow’s aim to drive recurring revenue growth, but their success depends on continued adoption and seamless integration across customer organizations.

Yet, while results point to progress, the interplay between innovation and resources poses risks investors should be aware of, especially as ...

Read the full narrative on ServiceNow (it's free!)

ServiceNow's outlook forecasts $19.3 billion in revenue and $3.2 billion in earnings by 2028. This implies an 18.9% annual revenue growth rate and a $1.7 billion earnings increase from current earnings of $1.5 billion.

Uncover how ServiceNow's forecasts yield a $1099 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Contrast this with the most pessimistic analysts, who before this update projected ServiceNow’s annual revenue hitting about US$17.8 billion by 2028 but worried that the shift to hybrid pricing models could slow near-term growth. These lowest forecasts highlight how opinions can differ, urging you to consider several alternative viewpoints as the situation evolves.

Explore 14 other fair value estimates on ServiceNow - why the stock might be worth 41% less than the current price!

Build Your Own ServiceNow Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ServiceNow research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free ServiceNow research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ServiceNow's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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