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1. Company Snapshot

1.a. Company Description

ServiceNow, Inc.provides enterprise cloud computing solutions that defines, structures, consolidates, manages, and automates services for enterprises worldwide.It operates the Now platform for workflow automation, artificial intelligence, machine learning, robotic process automation, performance analytics, electronic service catalogs and portals, configuration management systems, data benchmarking, encryption, and collaboration and development tools.


The company also provides information technology (IT) service management applications; IT service management product suite for enterprise's employees, customers, and partners; IT business management product suite; IT operations management product that connects a customer's physical and cloud-based IT infrastructure; IT Asset Management to automate IT asset lifecycles; and security operations that connects with internal and third party.In addition, it offers governance, risk, and compliance product to manage risk and resilience; human resources, legal, and workplace service delivery products; safe workplace applications; customer service management product; and field service management applications.Further, it provides App Engine product; IntegrationHub enables application to extend workflows; and professional, industry solutions, and customer support services.


It serves government, financial services, healthcare, telecommunications, manufacturing, IT services, technology, oil and gas, education, and consumer products through direct sales team and resale partners.It has a strategic partnership with Celonis to help customers identify and prioritize processes that are suitable for automation.The company was formerly known as Service-now.com and changed its name to ServiceNow, Inc.


in May 2012.The company was founded in 2004 and is headquartered in Santa Clara, California.

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1.b. Last Insights on NOW

ServiceNow's recent performance was negatively impacted by a 37% decline in stock value over three months, driven by concerns regarding AI disruption, a cautious outlook for FY26, and an aggressive acquisition strategy. The company's valuation multiples have compressed to near three-year lows, reflecting market skepticism about AI-driven growth acceleration. Despite delivering better-than-expected quarterly results and an upbeat outlook in its earnings, ServiceNow's stock tumbled, highlighting investor concerns about slowing growth amid the company's acquisition spree.

1.c. Company Highlights

2. ServiceNow's Q4 2025 Earnings: A Strong Finish to a Transformative Year

ServiceNow reported a robust Q4 2025, with subscription revenues reaching $3,466,000,000, growing 19.5% year over year in constant currency, exceeding guidance by 150 basis points. The company's operating margin stood at 31%, one point above guidance, while the free cash flow margin for the full year '25 was 35%, also one point above the already raised guidance. Earnings per share (EPS) came in at $0.92, beating estimates of $0.885.

Publication Date: Feb -02

📋 Highlights
  • Subscription Revenue Growth:: $3.466B in Q4, up 19.5% YoY in constant currency, exceeding guidance by 150 bps.
  • CRPO Expansion:: 25% YoY growth (21% constant currency), two points above guidance, driven by CRM and RaptorDB Pro.
  • Large Deal Momentum:: 244 deals >$1M NNACV (7 >$10M), with CRM achieving its largest Q4 revenue quarter in history.
  • AI-Driven Strategic Integration:: $5B share repurchase announced, plus deep partnerships with Microsoft (Copilots) and Anthropic (Claude) to enhance AI workflows.
  • Free Cash Flow Efficiency:: 35% margin in FY25, one point above guidance; 2026 guidance for 36% margin and 20% subscription growth.

Revenue Growth and Margin Expansion

The company's revenue growth was driven by strong demand for its AI-powered solutions, with 244 deals greater than $1,000,000 in net new ACV in the quarter. The growth was broad-based, with emerging product areas such as Now Assist, workflow data fabric, Raptor, and CPQ all outperforming in the quarter. The company's gross margin stood at 82%, with operating margin guidance raised by 100 basis points to 32% for 2026.

AI-Driven Growth and Partnerships

ServiceNow's AI-driven growth was a key highlight, with the company announcing deep AI integrations with Microsoft and an expanded partnership with Anthropic. The company's AI Control Tower product is gaining traction, providing customers with real-time monitoring, observability, and security. As Amit Zavery mentioned, "We've addressed these concerns with our AI Control Tower product, which provides real-time monitoring, observability, cost management, auditing, security, and kill switches."

Valuation and Outlook

With a P/E Ratio of 69.55 and an EV/EBITDA of 40.39, ServiceNow's valuation appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 18.7%, which is slightly below the company's guided growth rate of 19.5% to 20%. Given the company's strong track record of execution and its leadership position in the AI-powered enterprise software space, the current valuation may be justified.

Guidance and Conclusion

3. NewsRoom

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Why ServiceNow Stock Bumped Higher on Monday

00:09

Source: fool.com

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These software stocks could rise as much as 75%. But is now the time to buy?

Feb -02

Source: marketwatch.com

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ServiceNow: Becoming The Go-To Platform For AI

Feb -02

Source: seekingalpha.com

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ServiceNow Says AI Growth Is Being Overlooked

Feb -02

Source: gurufocus.com

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2 Unstoppable Stock-Split Growth Stocks That Could Soar 62% and 123% in 2026, According to Certain Wall Street Analysts

Feb -01

Source: fool.com

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The Time to Buy ServiceNow Is Now: Oversold and Ready for a Rebound

Jan -31

Source: marketbeat.com

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Software Stocks Are Getting Socked. Is It a Red Flag Or a Buying Opportunity?

Jan -31

Source: fool.com

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ServiceNow Stock Meltdown: Time To Panic?

Jan -30

Source: forbes.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (25.40%)

6. Segments

Internet Software & Services

Expected Growth: 25.4%

Growing adoption of digital transformation and hybrid IT environments fuels demand for ServiceNow's cloud-based solutions, driving growth in the enterprise IT management and operations segment.

7. Detailed Products

IT Service Management (ITSM)

A comprehensive platform for managing IT services, including incident, problem, and change management.

IT Operations Management (ITOM)

A suite of tools for monitoring, managing, and optimizing IT infrastructure and applications.

IT Business Management (ITBM)

A platform for managing IT projects, portfolios, and resources, enabling strategic IT planning and execution.

Customer Service Management (CSM)

A comprehensive platform for managing customer service requests, issues, and feedback.

Security Operations (SecOps)

A suite of tools for detecting, responding to, and preventing security threats and vulnerabilities.

GRC (Governance, Risk, and Compliance)

A platform for managing risk, compliance, and audit processes, ensuring organizational governance and regulatory adherence.

HR Service Delivery (HRSD)

A platform for managing HR services, including employee onboarding, case management, and knowledge management.

Field Service Management (FSM)

A platform for managing field service operations, including scheduling, dispatch, and work order management.

8. ServiceNow, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

ServiceNow's platform is highly customizable and integrated, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

While customers have some bargaining power due to the availability of alternative IT service management solutions, ServiceNow's strong brand and customer loyalty mitigate this power.

Bargaining Power Of Suppliers

ServiceNow has a diverse supplier base, and the company's scale and bargaining power reduce the influence of individual suppliers.

Threat Of New Entrants

While new entrants may emerge, ServiceNow's established brand, customer base, and high barriers to entry make it challenging for new competitors to gain traction.

Intensity Of Rivalry

The IT service management market is highly competitive, with established players like BMC, CA Technologies, and IBM, as well as newer entrants, contributing to a high level of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.04%
Debt Cost 3.95%
Equity Weight 76.96%
Equity Cost 8.81%
WACC 7.69%
Leverage 29.94%

11. Quality Control: ServiceNow, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Intuit

A-Score: 5.6/10

Value: 1.0

Growth: 8.1

Quality: 8.6

Yield: 1.0

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

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Salesforce

A-Score: 5.0/10

Value: 2.3

Growth: 8.9

Quality: 8.3

Yield: 1.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

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AppLovin

A-Score: 4.8/10

Value: 0.0

Growth: 9.7

Quality: 8.4

Yield: 0.0

Momentum: 9.0

Volatility: 1.7

1-Year Total Return ->

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Cadence Design Systems

A-Score: 4.6/10

Value: 0.0

Growth: 7.2

Quality: 8.5

Yield: 0.0

Momentum: 6.0

Volatility: 6.0

1-Year Total Return ->

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ServiceNow

A-Score: 4.4/10

Value: 0.3

Growth: 9.0

Quality: 7.8

Yield: 0.0

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

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FICO

A-Score: 4.2/10

Value: 2.0

Growth: 8.3

Quality: 7.4

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

118.0$

Current Price

118$

Potential

-0.00%

Expected Cash-Flows