ServiceNow NYSE:NOW heads into second-quarter earnings with a constructive setup, as conservative guidance, improving federal demand and positive reseller checks could support an upside surprise, according to BNP Paribas.
Analyst Stefan Slowinski kept an Outperform rating and $140 price target. He expects net-new annual contract value to accelerate in the second half, helping organic subscription growth finish near 19%, up from roughly 18% in Q1.
ServiceNow sells cloud software that helps companies automate IT, security, customer service and workplace workflows. Its platform is increasingly tied to AI and cybersecurity spending across large enterprises and government agencies.
For Q2, ServiceNow guided to 21% to 21.5% constant-currency subscription growth, with acquisitions adding about 225 basis points. BNP believes the Armis contribution may be understated, creating room for a revenue beat.
The bank also expects easier U.S. federal comparisons as ServiceNow moves past DOGE and shutdown-related pressure.