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ServiceNow (NOW) explained: how it makes money, how it's doing, what protects it

A plain-English guide to the company whose software runs the work behind IT help desks, HR and customer service. See what it sells, where the money goes and why customers stay.

⚡What does ServiceNow do, in 30 seconds?

ServiceNow sells cloud software that big organisations use to run their work, from IT and HR to customer service and finance, on one AI platform 4 2 4. It sold $13.3bn ✓ in FY2025, and subscriptions made up 97% ✓ of that. Its renewal rate, measured by contract value, was 98% in 2025 17.

Revenue, FY2025
$13.3bn✓
Profit, FY2025
$1.7bn✓
Sales growth, 4 quarters to 30 Jun 2026
22.2%✓
Net cash (cash and investments minus borrowings; leases and stakes in other companies not counted), 30 Jun 2026
$1.3bn✓
Headquarters
Santa Clara, California 28
Founded
2004, by Fred Luddy 23
Employees
29,187 full-time at 31 December 2025 25
CEO
Bill McDermott, since November 2019 23
Customers
About 8,700 at 31 December 2025 4
Fiscal year ends
31 December 25
Stock exchange
New York Stock Exchange, symbol NOW 28

📱What does ServiceNow sell?

ServiceNow reports two kinds of revenue, and subscriptions are almost all of it. Here is what each one is and who pays for it.

☁️

Subscriptions

Access to ServiceNow's software, with support and updates 1. All its products run on one cloud platform, the ServiceNow AI Platform, in four groups 2. Technology products help IT teams manage systems and equipment, control IT costs, and find and fix security threats 2. CRM and Industry products handle customer service, field service and sales 2. Core Business products run HR, legal, finance and supply chain tasks 2, and Creator tools let people build workflows with little coding 2. Subscriptions brought in $12.9bn ✓ in FY2025.

👥 Mainly large organisations that use it across the whole company, in many industries, with a growing share of revenue from government customers 4. Fees are usually billed a year ahead, and contracts generally cannot be cancelled mid-term 1.

🛠️

Professional services and other

Help to design, set up and improve ServiceNow systems, mostly billed on time and materials; the other revenue is mainly customer training 51. In the first nine months of 2026, the cost of work done by contracted partners equalled 44% of this revenue, up from 33% a year earlier 1. This line brought in $0.4bn ✓ in FY2025.

👥 Customers putting ServiceNow to work, sold directly and through partners 51.

How the mix has shifted

Revenue mix by productFY2023Subscriptions: $8.7bn (97%)Subscriptions 97%Professional services and other: $0.3bn (3%)FY2024Subscriptions: $10.6bn (97%)Subscriptions 97%Professional services and other: $0.3bn (3%)FY2025Subscriptions: $12.9bn (97%)Subscriptions 97%Professional services and other: $0.4bn (3%)
Revenue mix by productFY23Subscriptions: $8.7bn (97%)97%Professional services and other: $0.3bn (3%)FY24Subscriptions: $10.6bn (97%)97%Professional services and other: $0.3bn (3%)FY25Subscriptions: $12.9bn (97%)97%Professional services and other: $0.4bn (3%)SubscriptionsProfessional services and other
Share of revenue by business line, by fiscal year. Source: ServiceNow, Inc. 10-K filed 2026-01-29.

Where the customers are

North America brings in most of ServiceNow's revenue, at 63% ✓ in FY2025. Europe, the Middle East and Africa added 26% ✓, and Asia Pacific and other regions 12% ✓. ServiceNow opened its first dedicated office in Brazil, in São Paulo, in October 2026 22.

Revenue by regionNorth America$8.3bn 63% of salesEurope, Middle East and Africa$3.4bn 26% of salesAsia Pacific and other$1.5bn 12% of sales
Revenue by regionNorth America$8.3bn 63%Europe, Middle East and Africa$3.4bn 26%Asia Pacific and other$1.5bn 12%
Revenue by region, FY2025. Source: ServiceNow, Inc. 10-K filed 2026-01-29.

💸How does ServiceNow make money?

Follow the money from left to rightfrom top to bottom: what customers pay for, what it costs to make, and what is left as profit.

Money map FY2025: how revenue turns into profitSubscriptions → Revenue: $12.9bnProfessional services and other → Revenue: $0.4bnRevenue → Gross profit: $10.3bnRevenue → Cost of sales: $3.0bnGross profit → Operating profit: $1.8bnGross profit → R&D: $3.0bnGross profit → Selling & admin: $5.5bnOperating profit → Net income: $1.3bnOperating profit → Income tax: $0.5bnOther income → Net income: $0.4bnSubscriptions$12.9bn · 97%Professional services and other$0.4bn · 3%Revenue$13.3bnGross profit$10.3bn · 78%Cost of sales$3.0bn · 22%Operating profit$1.8bn · 14%R&D$3.0bn · 22%Selling & admin$5.5bn · 42%Net income$1.7bn · 13%Income tax$0.5bn · 4%Other income$0.4bn · 3%
Money map FY2025: how revenue turns into profitSubscriptions: $12.9bnProfessional services and other: $0.4bnSubscriptions$12.9bn · 97%Professional services and other$0.4bn · 3%Revenue: $13.3bnRevenue$13.3bn · 100%Gross profit: $10.3bnCost of sales: $3.0bnGross profit$10.3bn · 78%Cost of sales$3.0bn · 22%Operating profit: $1.8bnR&D: $3.0bnSelling & admin: $5.5bnOperating profit$1.8bn · 14%R&D$3.0bn · 22%Selling & admin$5.5bn · 42%Net income: $1.7bnIncome tax: $0.5bnNet income$1.7bn · 13%Income tax$0.5bn · 4%
Money map (a Sankey diagram): band widths are to scale. Hover a band for the amount. Source: ServiceNow, Inc. 10-K filings.

ServiceNow sold $13.3bn ✓ of software and services in FY2025. Running those services cost $3.0bn ✓. What is left is gross profit, the money kept after paying for what was sold. That came to $10.3bn ✓.

Next come the costs of running the company. Sales, marketing and admin took the most, at $5.5bn ✓. Research and development took $3.0bn ✓. That left operating profit, the profit from the main business, of $1.8bn ✓. Other income of $0.4bn ✓ was added, and tax took $0.5bn ✓. Net income was $1.7bn ✓. Put simply, out of every hundred dollars of sales, ServiceNow kept about $13 ✓ as profit.

Out of every $100 customers paid in FY2025…

Making the products and services $22Research and development $22Selling and admin $42Income tax $4Profit kept $13Interest, investment gains and other income, added on top +$3

Interest, investment gains and other income added +$3 for every $100 of sales, so the slices above add up to a little more than $100.

💡
Selling costs more than building. Out of every $100 of sales in FY2025, $42 ✓ went on sales, marketing and admin. Research and development took $22 ✓, the same as running the service, at $22 ✓.

⏱️ ServiceNow by the clock

Spread the FY2025 totals evenly over its 365 days and you get this. Source: ServiceNow, Inc. 10-K [6].

🛒
$36m
in sales every day
⏱️
$55
of profit every second
🔬
$8m
on research every day
🎁
$5m
handed to shareholders every day

📈How is ServiceNow doing?

ServiceNow has grown fast every year for a decade, and it now makes a profit. From FY2015 to FY2025, sales grew 29.4% ✓ a year on average. They rose in 10 ✓ of those 10 ✓ years. Growth has slowed, from 39.0% ✓ in FY2017 to 20.9% ✓ in FY2025. Operating margin went from -16.5% ✓ in FY2015 to 13.7% ✓ in FY2025.

The latest four quarters, to 30 June 2026, show sales growing a little faster. Sales reached $14.7bn ✓, up 22.2% ✓ on the four quarters before. Operating margin slipped to 11.4% ✓, and free cash flow was $4.6bn ✓. In the first nine months of 2026, operating income fell 24%, while stock pay, amortization of bought intangible assets and severance costs all rose 1. Subscription revenue was $3,988 million in the third quarter of 2026, up 21% on a year earlier 19.

📝 The report card

ServiceNow earns top marks for growth, cash and its balance sheet, a good mark for steadiness and a middling mark for profit. Every company is graded on the same fixed scale, so an A means the same thing on every page. The strip shows where ServiceNow (orange) and its 3 peers land; further right is better.

A

Growth

Sales growth per year, last 3 fiscal years
22.4% · peer median 9.8%
#1 of 4 in the peer group
A ≥ 15.0%B ≥ 10.0%C ≥ 5.0%D ≥ 0.0%F below 0.0%

ServiceNow's sales grew 22.4% ✓ a year over its last three fiscal years, which earns an A ✓ on the fixed scale. That ranks it 1 ✓ of 4 ✓ in this group. Microsoft also earns an A ✓, at 16.1% ✓, while IBM grew 3.7% ✓, a D ✓.

Why this measure? (higher is better)

Growing sales is the engine of a business. Mature giants rarely grow fast, so 5% a year already earns a C.

C

Profitability

Operating margin, last 3 years combined
11.9% · peer median 18.0%
#4 of 4 in the peer group
A ≥ 30.0%B ≥ 20.0%C ≥ 10.0%D ≥ 5.0%F below 5.0%

Over the last three years combined, ServiceNow kept 11.9% ✓ of sales as operating profit, which earns a C ✓. That ranks it 4 ✓ of 4 ✓, below the 18.0% ✓ peer median. Microsoft kept 45.8% ✓ over its own last three years, an A ✓.

Why this measure? (higher is better)

Operating margin is the share of each sales dollar left after running the business. Software and platforms often clear 30%; hardware makers usually sit below 10%.

A

Cash generation

Free cash flow as a share of sales, last 3 years combined
32.2% · peer median 24.8%
#1 of 4 in the peer group
A ≥ 20.0%B ≥ 15.0%C ≥ 10.0%D ≥ 5.0%F below 5.0%

Over the last three years combined, ServiceNow turned 32.2% ✓ of sales into free cash flow, comfortably an A ✓. That ranks it 1 ✓ of 4 ✓, just ahead of Salesforce at 31.8% ✓.

Why this measure? (higher is better)

Free cash flow is the cash left after paying for factories, data centres and equipment. It funds dividends, buybacks and new bets.

A

Balance sheet

Net cash (cash and investments minus borrowings; leases and stakes in other companies not counted) as a share of a year's sales
64.5% · peer median -11.7%
#1 of 4 in the peer group
A ≥ 20.0%B ≥ 5.0%C ≥ -10.0%D ≥ -30.0%F below -30.0%

At the end of FY2025, ServiceNow's cash and investments minus its borrowings (leases and stakes in other companies not counted) equalled 64.5% ✓ of a year's sales. That earns an A ✓. In April 2026 it borrowed $4.0 billion to help pay for Armis, then repaid that loan in May 2026, mainly by selling $4.0 billion of senior notes 10. Those came on top of the $1.5bn ✓ it owed at the end of FY2025. At 30 June 2026, cash and investments of $6.7bn ✓ were $1.3bn ✓ more than borrowings of $5.4bn ✓. Borrowing grew again after that: at 30 September 2026 it had $5.5 billion of senior notes and $2.1 billion of commercial paper 10.

Why this measure? (higher is better)

More cash than debt gives a company room to ride out bad years. Some debt is normal; a lot of it makes a company fragile.

B

Steadiness

How much yearly sales growth swings (standard deviation, up to 10 years)
6.9% · peer median 4.2%
#3 of 4 in the peer group
A ≤ 5.0%B ≤ 8.0%C ≤ 12.0%D ≤ 18.0%F above 18.0%

ServiceNow's yearly growth swings a little, with a swing score (standard deviation) of 6.9% ✓. That earns a B ✓. Growth has eased from 38.3% ✓ in FY2016 to 20.9% ✓ in FY2025. IBM's figure is just 3.9% ✓, an A ✓.

Why this measure? (lower is better)

Steady growers are easier to plan around. Big swings mean sales depend on product cycles, the economy or one-off events.

🧑‍🏫 How the grades work
  1. Same scale for everyone. Each measure has fixed cut-offs (shown under each strip). Clear the A line and you get an A, whatever your peers do.
  2. Three years together. Profitability and cash generation add up the last three fiscal years before dividing, so one unusual year counts for less than it would on its own (a year much bigger than the others still weighs most).
  3. Peers for context. The rank shows how ServiceNow compares with the group. Companies within 0.1 percentage point share a rank.
  4. Same source. Every company's figures come from its own latest annual report (10-K), so fiscal years end in different months.
  5. Judgement, openly stated. The cut-offs are QuantVantage.ai's view of what good looks like for a large, established company. They are not a forecast or a recommendation.

11 years at a glance

Revenue
$13.3bn
FY2025
Revenue by fiscal yearFY2015: $1.0bnFY2016: $1.4bnFY2017: $1.9bnFY2018: $2.6bnFY2019: $3.5bnFY2020: $4.5bnFY2021: $5.9bnFY2022: $7.2bnFY2023: $9.0bnFY2024: $11.0bnFY2025: $13.3bnFY2015FY2025
Operating margin
13.7%
FY2025
Operating marginFY2015FY2025
Free cash flow
$4.6bn
FY2025
Free cash flow by fiscal yearFY2015: $0.2bnFY2016: $0.1bnFY2017: $0.5bnFY2018: $0.6bnFY2019: $1.0bnFY2020: $1.4bnFY2021: $1.8bnFY2022: $2.2bnFY2023: $2.7bnFY2024: $3.4bnFY2025: $4.6bnFY2015FY2025
Net cash
$8.6bn
end of FY2025
Net cash by fiscal yearFY2015: $0.7bnFY2016: $0.7bnFY2017: $1.5bnFY2018: $1.4bnFY2019: $2.0bnFY2020: $2.9bnFY2021: $3.5bnFY2022: $4.9bnFY2023: $6.6bnFY2024: $8.4bnFY2025: $8.6bnFY2015FY2025

Where the cash goes

Over the 11 fiscal years from FY2015 to FY2025, ServiceNow kept most of the cash it made. It made $18.4bn ✓ of free cash flow and spent $3.1bn ✓ on share buybacks. It does not plan to pay cash dividends for the foreseeable future 25. In FY2025, buybacks of $1.8bn ✓ equalled 40% ✓ of free cash flow. In January 2026 the board approved a further $5.0 billion of buybacks 30. ServiceNow then bought back $2.0 billion of stock in the first quarter of 2026 31.

Free cash flow vs cash returned to shareholders$0bnFY2016 free cash flow $0.1bnFY2016 buybacks + dividends $0.0bnFY16FY2017 free cash flow $0.5bnFY2017 buybacks + dividends $0.1bnFY17FY2018 free cash flow $0.6bnFY2018 buybacks + dividends $0.0bnFY18FY2019 free cash flow $1.0bnFY2019 buybacks + dividends $0.0bnFY19FY2020 free cash flow $1.4bnFY2020 buybacks + dividends $0.0bnFY20FY2021 free cash flow $1.8bnFY2021 buybacks + dividends $0.0bnFY21FY2022 free cash flow $2.2bnFY2022 buybacks + dividends $0.0bnFY22FY2023 free cash flow $2.7bnFY2023 buybacks + dividends $0.5bnFY23FY2024 free cash flow $3.4bnFY2024 buybacks + dividends $0.7bnFY24FY2025 free cash flow $4.6bnFY2025 buybacks + dividends $1.8bnFY25
Free cash flow vs cash returned to shareholders$0bnFY2020 free cash flow $1.4bnFY2020 buybacks + dividends $0.0bnFY20FY2021 free cash flow $1.8bnFY2021 buybacks + dividends $0.0bnFY21FY2022 free cash flow $2.2bnFY2022 buybacks + dividends $0.0bnFY22FY2023 free cash flow $2.7bnFY2023 buybacks + dividends $0.5bnFY23FY2024 free cash flow $3.4bnFY2024 buybacks + dividends $0.7bnFY24FY2025 free cash flow $4.6bnFY2025 buybacks + dividends $1.8bnFY25
■ Free cash flow   ■ Buybacks + dividends. Source: ServiceNow, Inc. 10-K filings.

🧮Ratios 101: what are ServiceNow's key financial ratios?

Ratios shrink ServiceNow's numbers into easy comparisons, and a few look odd until you know it pays staff partly in stock and usually bills customers a year ahead 1. A ratio divides one number by another so companies of any size can be compared. Each card shows the formula with ServiceNow's real FY2025 numbers, the peer median and the trend.

💰 Profitability: how much of each sale is kept?

Higher is better

Gross margin

77.5%
Gross profit$10.3bn$13.3bnSales=77.5%

What is left from each sale after paying to make the product or deliver the service.

👉 At 77.5% ✓, up from 67.2% ✓ in FY2015, ServiceNow sits well above the 67.9% ✓ peer median, level with Salesforce's 77.7% ✓. Its subscription gross margin was 80% in 2025, down from 82% in 2024, and it expects a slight further fall in 2026 17.

📏 Rule of thumb: Above 40% usually signals pricing power or a big software or services mix.

Peer median 67.9% (3 peers)FY2015 67.2%
Gross margin by fiscal yearFY2015FY2025
Higher is better

Operating margin

13.7%
Operating profit$1.8bn$13.3bnSales=13.7%

What is left after also paying for research, marketing and running the company.

👉 ServiceNow's 13.7% ✓ is far above the -16.5% ✓ of FY2015, but below the 20.1% ✓ peer median.

📏 Rule of thumb: Above 20% is strong for a large company.

Peer median 20.1% (3 peers)FY2015 -16.5%
Operating margin by fiscal yearFY2015FY2025
Higher is better

Net margin

13.2%
Net income$1.7bn$13.3bnSales=13.2%

The bottom line: profit after interest and taxes, per dollar of sales.

👉 ServiceNow keeps 13.2% ✓ of sales as final profit, against -19.7% ✓ in FY2015 and an 18.0% ✓ peer median.

📏 Rule of thumb: Above 15% is strong; one-off tax items can move it in a single year.

Peer median 18.0% (3 peers)FY2015 -19.7%
Net margin by fiscal yearFY2015FY2025
It depends

Return on equity (ROE)

13.5%
Net income$1.7bn$13.0bnShareholders' equity=13.5%

Profit earned for each dollar that shareholders have left in the company.

👉 ROE of 13.5% ✓ is less than half the 30.2% ✓ peer median. Shareholders' equity is large next to profit, at $13.0bn ✓.

📏 Rule of thumb: Around 15% or more is good, but buybacks shrink equity and can make ROE look huge.

Peer median 30.2% (3 peers)FY2015 -35.0%
Return on equity (ROE) by fiscal yearFY2015FY2025

⚙️ Efficiency: how hard do the assets work?

Higher is better

Return on assets (ROA)

6.7%
Net income$1.7bn$26.0bnTotal assets=6.7%

Profit earned from everything the company owns, however it was paid for.

👉 ROA of 6.7% ✓ is close to the 7.0% ✓ peer median, and far better than -11.0% ✓ in FY2015.

📏 Rule of thumb: Above 10% is strong; banks and factories usually earn less.

Peer median 7.0% (3 peers)FY2015 -11.0%
Return on assets (ROA) by fiscal yearFY2015FY2025
Higher is better

Asset turnover

0.5x
Sales$13.3bn$26.0bnTotal assets=0.5x

Dollars of sales squeezed out of each dollar of assets.

👉 ServiceNow's sales are 0.5x ✓ the value of what it owns, a little above the 0.4x ✓ peer median but below its own 0.6x ✓ in FY2015.

📏 Rule of thumb: Retailers often top 2x; asset-heavy businesses can sit below 0.5x.

Peer median 0.4x (3 peers)FY2015 0.6x
Asset turnover by fiscal yearFY2015FY2025

🛟 Safety: could it survive a bad year?

It depends

Current ratio

1.0x
Current assets$10.5bn$10.4bnCurrent liabilities=1.0x

Can short-term assets (cash, money owed by customers, stock) pay the bills due within a year?

👉 At 1.0x ✓, short-term assets of $10.5bn ✓ about match bills due within a year of $10.4bn ✓. ServiceNow usually invoices its fees a year in advance, but counts cloud subscription revenue evenly over the contract 1.

📏 Rule of thumb: Above 1.0x is the classic comfort line, but cash-rich giants can run below it on purpose.

Peer median 1.0x (3 peers)FY2015 1.5x
Current ratio by fiscal yearFY2015FY2025
Lower is better

Debt to equity

0.1x
Total debt$1.5bn$13.0bnShareholders' equity=0.1x

How much the company has borrowed for each dollar shareholders have in it.

👉 ServiceNow's FY2025 figure is 0.1x ✓, against a 0.2x ✓ peer median. Borrowing grew in 2026: at 30 September 2026 it had $5.5 billion of senior notes and $2.1 billion of commercial paper 10.

📏 Rule of thumb: Below 1.0x is conservative. Like ROE, it can rise when buybacks shrink equity, even if debt has not changed.

Peer median 0.2x (3 peers)FY2015 0.8x
Debt to equity by fiscal yearFY2015FY2025

💵 Cash and owners: where does the money end up?

Higher is better

Cash conversion

2.6x
Free cash flow$4.6bn$1.7bnNet income=2.6x

Does reported profit turn into real cash? Free cash flow is operating cash minus capital spending.

👉 ServiceNow turns profit into cash at 2.6x ✓, more than double the 1.1x ✓ peer median. Profit is cut by $2.0bn ✓ of stock pay, which uses no cash. ServiceNow also usually invoices its fees a year in advance, while it counts cloud subscription revenue evenly over the contract 1.

📏 Rule of thumb: Near or above 1.0x means profits are backed by cash.

Peer median 1.1x (3 peers)FY2019 1.5x
Cash conversion by fiscal yearFY2019FY2025
It depends

R&D intensity

22.3%
R&D$3.0bn$13.3bnSales=22.3%

How much of each sales dollar goes into inventing future products.

👉 ServiceNow spends 22.3% ✓ of sales on R&D, close to 21.6% ✓ in FY2015 and far above the 12.3% ✓ peer median.

📏 Rule of thumb: Tech companies often spend 10% to 20%; more is not always better if it does not pay off.

Peer median 12.3% (3 peers)FY2015 21.6%
R&D intensity by fiscal yearFY2015FY2025
Lower is better

Stock pay

14.7%
Share-based pay$2.0bn$13.3bnSales=14.7%

Pay given to staff in shares instead of cash. It is a real cost to owners because it adds shares.

👉 Stock pay is 14.7% ✓ of sales, down from 25.6% ✓ in FY2015 but far above the 3.7% ✓ peer median. ServiceNow has committed to bring it below 10% of revenue by 2029 21. It expects stock pay to keep rising in dollars in 2026 1.

📏 Rule of thumb: Under 5% of sales is modest for a tech company.

Peer median 3.7% (3 peers)FY2015 25.6%
Stock pay by fiscal yearFY2015FY2025
It depends

Shareholder payout

105.3%
Dividends + buybacks$1.8bn$1.7bnNet income=105.3%

How much of the year's profit was handed back to owners.

👉 ServiceNow spent 105.3% ✓ of FY2025 profit on buybacks, against a 59.0% ✓ peer median. Measured against its larger free cash flow, the payout was 40% ✓.

📏 Rule of thumb: Above 100% means it returned more than it earned, using cash savings or debt.

Peer median 59.0% (3 peers)FY2019 0.0%
Shareholder payout by fiscal yearFY2019FY2025

Ratios use fiscal-year-end balance sheet values. Inputs are shown rounded, so dividing them can differ from the result in the last digit. A peer median leaves out peers that do not report the inputs, or where the ratio means nothing (for example, negative shareholders' equity). Rules of thumb are general guides from QuantVantage.ai, not hard limits. No share-price ratios (like price-to-earnings) are shown on this page.

🥊Who are ServiceNow's competitors?

ServiceNow's 10-K names Microsoft, Oracle, SAP, Salesforce and Workday among its competitors, along with AI start-ups and in-house software 4. Salesforce meets it in customer service and sales software 1213. Microsoft sells business apps and low-code tools 414, and IBM's Automation software overlaps with ServiceNow's IT products 152.

Peer map: growth vs profitability, bubble size = revenue0%5%10%15%20%25%0%10%20%30%40%50%Sales growth per year, 3 years →Operating margin →Microsoft: revenue $331.8bn, growth 16.1%/yr, operating margin 46.8%MSFTIBM: revenue $67.5bn, growth 3.7%/yr, operating margin 17.8%IBMSalesforce: revenue $41.5bn, growth 9.8%/yr, operating margin 20.1%CRMServiceNow: revenue $13.3bn, growth 22.4%/yr, operating margin 13.7%NOW
Peer map: growth vs profitability, bubble size = revenue0%5%10%15%20%25%0%10%20%30%40%50%Sales growth per year, 3 years →Operating margin →Microsoft: revenue $331.8bn, growth 16.1%/yr, operating margin 46.8%MSFTIBM: revenue $67.5bn, growth 3.7%/yr, operating margin 17.8%IBMSalesforce: revenue $41.5bn, growth 9.8%/yr, operating margin 20.1%CRMServiceNow: revenue $13.3bn, growth 22.4%/yr, operating margin 13.7%NOW
Peer map from each company's latest 10-K. Bubble size = revenue. Source: SEC filings [6] [7] [8] [9].
CompanyWhere they competeRevenueGrowth/yr (3y)Op. marginFCF margin
ServiceNow (NOW, FY2025)One AI platform for IT, customer service, HR, finance and low-code workflows 2 4$13.3bn22.4%13.7%34.5%
Salesforce (CRM, FY2026)Customer service, field service and sales software; ServiceNow's 10-K names Salesforce as a rival 1213$41.5bn9.8%20.1%34.7%
Microsoft (MSFT, FY2026)Dynamics 365 business apps and Power Apps low-code tools; named by ServiceNow as both a rival and a partner 414$331.8bn16.1%46.8%20.2%
IBM (IBM, FY2025)Automation software for workflows and IT operations, overlapping ServiceNow's IT products; IBM also names ServiceNow as a strategic partner 152$67.5bn3.7%17.8%17.9%

Oracle, SAP and Workday also appear on ServiceNow's list of rivals, and its 10-K says the market is fragmented with low barriers to entry 4. Some rivals are partners too: ServiceNow lists Microsoft as both 414. In July 2026 ServiceNow said it and Microsoft had extended ServiceNow's AI Control Tower governance across Microsoft Agent 365 21.

🧭ServiceNow SWOT: strengths, weaknesses, opportunities and threats

💪 Strengths

  • Customers stay: ServiceNow's renewal rate by contract value was 98% in each of 2023, 2024 and 2025 17.
  • At 30 September 2026 it had $29.7 billion of contracted revenue still to recognise, up 22% 19.
  • Over the last three years combined, ServiceNow turned 32.2% ✓ of sales into free cash flow, an A ✓ on our report card.
  • It had 680 customers paying more than $5 million a year in annual contract value at 30 September 2026, up from 553 a year earlier 16.

🩹 Weaknesses

  • Over the last three years combined, operating margin was 11.9% ✓, below the 18.0% ✓ peer median.
  • Stock pay equalled 14.7% ✓ of sales in FY2025, against a 3.7% ✓ peer median.
  • Operating income fell 24% to $1,050 million in the first nine months of 2026 1.
  • ServiceNow relies more and more on partners to sell and set up its software, and warns there may not be enough qualified implementation partners to meet demand 20.

🚀 Opportunities

  • ServiceNow said its AI products passed $1 billion in annual contract value in the second quarter of 2026 21. It now targets $1.7 billion by the end of 2026 19.
  • In July 2026 it said nearly all 50 U.S. states use its AI Platform for citizen services and operations 21.
  • After buying Armis and Veza in 2026, it combines their security tools with its own Security Operations products 1.
  • On 28 October 2026 it widened its partnership with OpenAI, starting with a ServiceNow plugin for ChatGPT 22.

⚠️ Threats

  • ServiceNow's 10-K calls its market fragmented with low barriers to entry, and lists AI start-ups among its rivals 4.
  • It warns that AI laws, such as the EU AI Act, may force costly changes to how it handles data or limit how customers use its products 20.
  • It is moving more hosted customer systems to public cloud providers, and warns this depends on customers accepting the move and on demand meeting its commitments to those providers 20.
  • A growing share of its contracts is in foreign currencies, mainly the euro and British pound 1.

🏰Does ServiceNow have a moat?

Wide moatServiceNow's moat rests on one strong source: switching costs score 5 out of 5 ✓, and its renewal rate by contract value was 98% in 2025 17. Its other sources are modest, in a market its 10-K calls fragmented with low barriers to entry 4.
Brand 3/5
Why 3?

ServiceNow sells mainly to large organisations and had about 8,700 customers at 31 December 2025 4. It had 680 customers paying more than $5 million a year at 30 September 2026, up from 553 a year earlier 16. It markets itself mainly through customer referrals, digital ads, brand campaigns and events such as its yearly Knowledge conference 4. But its 10-K names rivals such as Microsoft, Oracle, SAP, Salesforce and Workday 4.

Switching costs 5/5
Why 5?

ServiceNow's renewal rate by contract value was 98% in each of 2023, 2024 and 2025, and its subscription contracts typically run three years 17. The rate was still 98% in the first nine months of 2026 16. Its platform links IT, HR, legal, finance and customer service work on a single data model 4. Subscriptions made up 97% of its revenue in 2025 17.

Network effects 2/5
Why 2?

Each ServiceNow customer gets its own application layer and database 4. Its partners include system integrators such as Accenture and Deloitte and tech firms such as AWS, Microsoft and NVIDIA 4. In 2025 it launched ServiceNow University, a free learning hub for employees, customers and partners 4.

Cost advantages and scale 3/5
Why 3?

ServiceNow kept 80% of subscription revenue as gross profit in 2025, down from 82% in 2024, and expects a slight further fall in 2026 as it uses more third-party cloud services 17. It runs its own data centers, set up in pairs, in North America, South America, Europe, Asia and Australia, and also uses public cloud providers 4. Its 10-K still describes a market with low barriers to entry 4.

Intangibles (patents, licences, regulation) 2/5
Why 2?

ServiceNow held over 2,000 issued patents at 31 December 2025, and says its business does not depend much on any single one 4. It says many rivals may hold bigger patent portfolios 18. Its 10-K describes a market with low barriers to entry 4.

A moat is what keeps rivals from taking a company's customers and profits. Scores are QuantVantage.ai's judgement (5 = strongest), set with the same rubric on every explainer (orange is ServiceNow; grey dots are peers).

🔭What should you watch next?

Quarter to 31 Dec 2026

Q4 2026 results against guidance

For the October to December 2026 quarter, ServiceNow guided subscription revenue of $4,245 million to $4,255 million, up 22.5% to 23% 19. Figures on this page run to FY2025 and the four quarters to 30 June 2026.

Year to 31 Dec 2026

Full-year 2026 guidance

ServiceNow guided 2026 subscription revenue of $15,780 million to $15,790 million, up 22.5%, with a free cash flow margin of 36% 19.

End of 2026

AI contract value

ServiceNow raised its year-end 2026 target for AI annual contract value to $1.7 billion, from $1 billion at the start of the year 19.

By April 2027

Armis and Veza accounting

The accounting for both 2026 purchases is provisional and must be finalised within a year of each deal closing, on 2 March and 20 April 2026 27.

2026 to 2029

Stock pay

ServiceNow expects stock pay to keep rising in dollars in 2026 1. It has committed to cut it below 10% of revenue by 2029 21.

By 2030

2030 targets

In May 2026 ServiceNow set 2030 targets of more than $30 billion of subscription revenue and 30% of annual contract value from AI 21.

📚Learn the words

Revenue (sales)All the money a company takes in from customers before paying any costs.
SubscriptionA regular fee to keep using a product or service, rather than buying it once.
WorkflowThe steps a piece of work goes through, such as a new worker getting a laptop, a badge and a payroll account.
Low-code toolsSoftware that lets people build simple apps by dragging and dropping parts, with little or no programming.
Annual contract valueHow much a customer's contract is worth over one year.
Renewal rateServiceNow's measure of how much contract value it keeps each year: 100% minus the value of customers who leave 1.
Remaining performance obligationsRevenue a company has signed contracts for but not yet counted as earned 1.
Gross marginThe share of each sales dollar left after paying to deliver the product or service.
Operating profitProfit from the main business after paying for products, research, marketing and admin, but before interest and tax.
Free cash flowThe cash a business has left after running itself and buying equipment.
Stock-based payPaying staff partly in company shares. It counts as a cost but uses no cash.
Economic moatA lasting advantage, like a strong brand or high switching costs, that keeps rivals from taking a company's customers.

❓Frequently asked questions about ServiceNow

How does ServiceNow make money?

ServiceNow makes almost all its money from software subscriptions. In FY2025, subscriptions brought in $12.9bn ✓ of its $13.3bn ✓ in revenue. The rest came from professional services, such as design and set-up work, and other revenue, mainly customer training 51.

Who founded ServiceNow, and when?

Fred Luddy founded ServiceNow in 2004 and was its president and CEO until 2011 23. He is still a director 23.

Who is ServiceNow's CEO?

Bill McDermott has been CEO since November 2019 and chairman since October 2022 23. He ran SAP before that 23. Under a December 2025 deal he will stay at ServiceNow through at least 2030, in a role the board decides 24.

What does a 98% renewal rate mean?

It means very little contract value walked out the door. ServiceNow counts its renewal rate as 100% minus its attrition rate, the yearly contract value of customers it lost 1. The rate does not reflect customers buying more or less 1.

Does ServiceNow pay a dividend?

No dividend is planned: ServiceNow does not expect to pay cash dividends for the foreseeable future 25. It does buy back shares, and spent $1.8bn ✓ on buybacks in FY2025.

Who are ServiceNow's biggest competitors?

ServiceNow's 10-K names Microsoft, Oracle, SAP, Salesforce and Workday among its rivals, along with AI start-ups 4. Salesforce competes with it in customer service and sales software 1213.

Did ServiceNow split its stock?

Yes, a 5-for-1 split of ServiceNow's stock took effect on 17 December 2025 26. Each old share became five new ones.

What companies has ServiceNow bought lately?

ServiceNow bought Moveworks, a maker of enterprise search and virtual agents, in December 2025 26. In 2026 it bought Veza, an AI identity security firm, in March 27. It bought Armis, a cyber security company, in April 2026 for a preliminary price of about $7.6 billion in cash 27.

🎮Play: higher or lower, then test yourself

Higher or lower · round 1 of 6

Figures come from each company's latest annual report (10-K); fiscal years end in different months. Sources: [6] [7] [8] [9].

Score: 0

🧠 Test yourself

5 quick questions. Score: 0 / 5

1. About how much of ServiceNow's revenue came from subscriptions in FY2025?

Subscriptions made up 97% ✓ of ServiceNow's revenue in FY2025.

2. What was ServiceNow's renewal rate, by contract value, in 2025?

ServiceNow's renewal rate was 98% in each of 2023, 2024 and 2025 17.

3. Who founded ServiceNow in 2004?

Fred Luddy founded ServiceNow in 2004 23.

4. Which cost took the biggest slice of each $100 of ServiceNow's sales in FY2025?

Sales, marketing and admin took $42 ✓ of every $100 of sales in FY2025.

5. What sports league named ServiceNow its Official CRM Partner in October 2026?

Germany's Bundesliga soccer league named ServiceNow its Official CRM Partner, adding to its role as Official Workflow Partner 22.

🔎Sources and method

Every figure comes from a source listed here or is calculated from those sources (marked ✓). Company financials are taken from SEC filings (10-K and 10-Q) as tagged in XBRL. Peer grades rank the same measures across the company and its peers. This page contains no share-price data and no valuation.

  1. ServiceNow, Inc. Form 10-Q for quarter ended September 30, 2026 (filed 2026-10-28) — Item 2 MD&A: overview, RPO and renewal-rate definitions, customer count method, revenue components, sales channels, seasonality, costs, operating income (accessed 2026-10-31)
  2. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Item 1 Our Products: four product areas, Technology, CRM and Industry, Core Business, Creator and Other, industry solutions, upgrade cadence (accessed 2026-10-31)
  3. ServiceNow (NOW) Form 10-K for fiscal year 2025, filed 2026-01-29 — revenue and cost of sales by product, segment and geography (accessed 2026-10-28)
  4. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Item 1 Business: platform, customers, marketing, partners, operations, patents, competition (accessed 2026-10-29)
  5. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Item 1 Customer success (professional services) and Sales and Marketing (direct sales, consumption pricing, partners) (accessed 2026-10-31)
  6. SEC EDGAR companyfacts: ServiceNow (NOW) — annual 10-K facts (accessed 2026-10-28)
  7. SEC EDGAR companyfacts: Salesforce, Inc. (CRM) — annual 10-K facts (accessed 2026-10-28)
  8. SEC EDGAR companyfacts: MICROSOFT CORP (MSFT) — annual 10-K facts (accessed 2026-10-28)
  9. SEC EDGAR companyfacts: INTERNATIONAL BUSINESS MACHINES CORP (IBM) — annual 10-K facts (accessed 2026-10-28)
  10. ServiceNow, Inc. Form 10-Q for quarter ended September 30, 2026 (filed 2026-10-28) — Note 11 Debt: senior notes, term loan, commercial paper (accessed 2026-10-31)
  11. SEC EDGAR companyfacts: ServiceNow (NOW) — balance sheet at 2026-06-30 (accessed 2026-10-28)
  12. ServiceNow Form 10-K for fiscal year 2025 — Item 1: CRM and Industry products; competitors named, including Salesforce (accessed 2026-10-29)
  13. Salesforce Form 10-K for fiscal year 2026 (ended January 31, 2026) — Item 1 overview and service offerings (Sales, Service, Platform, Data 360, Informatica, Slack, Agentforce, Marketing, Commerce, Integration, Analytics, Industries); principal office (accessed 2026-10-29)
  14. Microsoft Form 10-K FY2026 (year to 2026-06-30), filed 2026-07-29 — Item 1 Productivity and Business Processes: Dynamics 365 and its competition (accessed 2026-10-31)
  15. IBM 2025 Annual Report to Stockholders (Exhibit 13 to Form 10-K) — Software segment: Automation business area; strategic technology partners (accessed 2026-10-31)
  16. ServiceNow, Inc. Form 10-Q for quarter ended September 30, 2026 (filed 2026-10-28) — Item 2 MD&A key business metrics: customers above $5 million ACV, renewal rate (accessed 2026-10-29)
  17. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Item 7 MD&A: renewal rate, contract length, revenue mix, subscription gross profit (accessed 2026-10-29)
  18. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Item 1A Risk factors: intellectual property (accessed 2026-10-29)
  19. ServiceNow third quarter 2026 results press release (Form 8-K Exhibit 99.1, 2026-10-28) — Q3 2026 results, RPO and cRPO, large deals, AI contract value target, Q4 and full-year 2026 guidance (accessed 2026-10-31)
  20. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Item 1A Risk factors: partners, public cloud migration, AI laws (accessed 2026-10-31)
  21. ServiceNow second quarter 2026 results press release (Form 8-K Exhibit 99.1, 2026-07-22) — Q2 2026 highlights: AI contract value, long-term targets, partner and customer news (accessed 2026-10-31)
  22. ServiceNow third quarter 2026 results press release (Form 8-K Exhibit 99.1, 2026-10-28) — Recent business highlights: partnerships, alliance, customers, expansion (accessed 2026-10-31)
  23. ServiceNow, Inc. 2026 proxy statement (DEF 14A, filed 2026-04-06) — Director nominee biographies: William R. McDermott, Frederic B. Luddy (accessed 2026-10-31)
  24. ServiceNow, Inc. Form 8-K dated December 23, 2025 — Item 5.02: amendment to the CEO's employment agreement (accessed 2026-10-31)
  25. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Cover page fiscal year; Item 1 workforce metrics; Item 2 properties; Item 5 dividend policy (accessed 2026-10-31)
  26. ServiceNow, Inc. Form 10-K for fiscal year ended December 31, 2025 (filed 2026-01-29) — Notes 2 and 5: 5-for-1 stock split; Moveworks acquisition (accessed 2026-10-31)
  27. ServiceNow, Inc. Form 10-Q for quarter ended September 30, 2026 (filed 2026-10-28) — Note on business combinations: Armis and Veza acquisitions (accessed 2026-10-31)
  28. ServiceNow, Inc. Form 8-K dated October 28, 2026 — Cover page: state of incorporation, principal office, exchange listing (accessed 2026-10-31)
  29. SEC EDGAR companyfacts: ServiceNow (NOW) — quarterly 10-Q/10-K facts (accessed 2026-10-28)
  30. ServiceNow, Inc. Form 8-K dated January 28, 2026 — Item 8.01: additional share repurchase authorization (accessed 2026-10-31)
  31. ServiceNow, Inc. Form 10-Q for quarter ended September 30, 2026 (filed 2026-10-28) — Note on stockholders' equity: share repurchase program and accelerated repurchase (accessed 2026-10-31)