ServiceNow stock gains focus as AI contract target rises to $1.7 billion

ServiceNow raised its 2026 artificial intelligence contract target and cash-flow outlook after reporting third-quarter results on Wednesday, October 28. The company said subscription revenue rose 21 percent year over year to 3.988 billion US dollars, or 20.5 percent on a constant-currency basis.

The company reported total revenue of 4.106 billion US dollars, up 20.5 percent from the prior-year quarter. Current remaining performance obligations reached 13.65 billion US dollars, while total remaining performance obligations stood at 29.7 billion US dollars at September 30.

AI adoption drives revised targets

ServiceNow raised its year-end AI annual contract value target for the second time this year, from 1.5 billion to 1.7 billion US dollars. The company had started 2026 with a 1 billion US dollar target. President and Chief Financial Officer Gina Mastantuono said AI net new annual contract value exceeded expectations, while customers' year-to-date production consumption of agentic AI increased more than thirteenfold.

The company also lifted its full-year free cash flow margin target by one percentage point to 36 percent, citing lower capital expenditure. Non-GAAP free cash flow reached 822 million US dollars in the third quarter, compared with 592 million US dollars a year earlier. Non-GAAP operating margin was 32.5 percent, above the company's guidance.

ServiceNow guided for fourth-quarter subscription revenue of 4.245 billion to 4.255 billion US dollars and constant-currency growth of 21.5 percent. For the full year, subscription revenue is expected at 15.780 billion to 15.790 billion US dollars, with constant-currency growth of 21 percent. The company kept its full-year non-GAAP subscription gross-margin target at 81 percent and its operating-margin target at 31.5 percent.

The figures and outlook came from ServiceNow's investor-relations release, published on October 28. The release also highlighted 19 transactions above 5 million US dollars in net new annual contract value during the quarter, up more than 135 percent year over year, and 680 customers with more than 5 million US dollars in annual contract value.

Stock context for investors

ServiceNow stock traded at 98.78 euros on Lang & Schwarz at 15:03 CET on Wednesday, November 4, 2026. The quote reflects the European trading venue and is separate from the company's US-dollar financial reporting. Investors are weighing faster AI monetization against the need to convert that demand into sustained subscription growth and cash generation.

Investors can follow the real-time quote of ServiceNow stock for the latest European indication. The next scheduled company appearances include a BMO Technology and Innovation Leaders Conference fireside chat on November 12 and an RBC Global TIMT Conference fireside chat on November 17.

The broader US equity market remains the relevant reference environment for ServiceNow stock; see current S&P 500 market reports.

Further updates are available in more news and analyses on ServiceNow stock.