ServiceNow NYSE:NOW raised its full-year subscription revenue forecast after another strong quarter, as rapid adoption of its AI products helped the software company surpass $1 billion in annual contract value for its AI business.
The company now expects 2026 subscription revenue of $15.770 billion, up slightly from its previous forecast of $15.755 billion. Second-quarter subscription revenue rose to $3.877 billion, while non-GAAP operating margin reached 29.5%, comfortably above guidance. AI annual contract value also topped $1 billion, keeping ServiceNow on track to reach its $1.5 billion target by the end of 2026.
ServiceNow develops workflow software that helps businesses automate IT, customer service and back-office operations. It has increasingly embedded generative and agentic AI across its platform to automate more complex tasks.
Management also teased an upcoming AI-native service desk that could resolve requests without creating support tickets, while saying more than 500 customers are already using AI Control Tower. The company maintained its outlook for a 31.5% operating margin this year despite modest pressure from higher AI and hyperscaler usage.