ServiceNow Inc. continued its remarkable growth trajectory in the fourth quarter, delivering results that reinforced its status as one of enterprise software's most consistent performers while signaling aggressive ambitions for the AI-driven future of workplace automation.

The company reported subscription revenues of $3.47 billion, representing 21% year-over-year growth—beating its own guidance by 1.5 percentage points. Earnings per share of $0.92 crushed analyst expectations of $0.72 by nearly 28%.

Now Assist: The AI Engine Outperforms

The standout metric from ServiceNow's quarter was the performance of Now Assist, its generative AI platform that automates workflows across IT, HR, and customer service functions. The product surpassed $600 million in annual contract value (ACV), putting it well on track toward the company's $1 billion-plus target for 2026.

"Now Assist is not just a feature—it's becoming the reason customers choose ServiceNow," said CEO Bill McDermott. "Every major enterprise is looking for AI that actually works in production environments, not just demos. We're delivering that."

The platform's success reflects ServiceNow's strategy of embedding AI capabilities directly into existing workflows rather than offering AI as a standalone product. Customers can automate case resolution, generate knowledge articles, and summarize complex incidents without leaving the ServiceNow environment.

Acquisition Spree: Armis, Veza, and Moveworks

ServiceNow's confidence in its AI strategy was evident in its M&A announcements. The company revealed plans to acquire:

  • Armis: A leading cybersecurity platform specializing in asset visibility and threat detection, expected to close in the second half of 2026
  • Veza: An identity security company that will enhance ServiceNow's governance capabilities, expected to close in H1 2026
  • Moveworks (completed): An agentic AI company acquired in December 2025, combining capabilities in intelligent workflows and enterprise search

"We're assembling the most comprehensive AI platform for the enterprise. Armis, Veza, and Moveworks each bring capabilities that will make Now Assist more powerful and more secure."

— Bill McDermott, ServiceNow CEO

Strategic Partnerships Expand

Beyond acquisitions, ServiceNow announced expanded partnerships with both Anthropic and OpenAI to integrate their large language models into the ServiceNow AI Platform. This multi-model approach allows customers to choose the AI engine that best fits their specific use cases and compliance requirements.

Financial Strength Enables Capital Returns

ServiceNow's robust cash generation supported a $5 billion addition to its share repurchase program, signaling confidence in future growth. Key financial highlights included:

  • Full-year subscription revenues: $12.88 billion, up 21%
  • Current remaining performance obligations: $12.85 billion, up 25% year-over-year
  • Free cash flow margin: 35% for 2025, exceeding guidance by 1 point
  • Customer retention rate: 98% in Q4, reflecting exceptional customer satisfaction

2026 Guidance: Growth Moderates but Margins Expand

For 2026, ServiceNow guided to subscription revenue of $15.53-15.57 billion, representing 19.5-20% growth in constant currency—a slight moderation from 2025's pace but still exceptional for a company of its scale. Importantly, the company projected margin expansion, with operating margins reaching 32% (up 100 basis points) and free cash flow margins of 36%.

Stock Split Reflects Momentum

ServiceNow's 5-for-1 stock split, which became effective in December 2025, has made shares more accessible to retail investors while signaling management's confidence in sustained growth. The split came as the stock reached all-time highs on the strength of its AI momentum.

Investment Takeaway

ServiceNow's quarter demonstrates that the enterprise software market is bifurcating: companies with genuine AI capabilities are accelerating, while those struggling to integrate AI are facing customer scrutiny. With Now Assist gaining traction, strategic acquisitions bolstering its platform, and robust financial metrics providing stability, ServiceNow has positioned itself as a cornerstone holding for investors seeking AI exposure through established enterprise platforms.

The company's ability to maintain 20%+ subscription growth while expanding margins is a rare combination that justifies its premium valuation. For enterprises navigating the AI transition, ServiceNow is increasingly becoming not just a vendor but a strategic partner.