ServiceNow

ServiceNow topped the high end of its own targets on every headline number in the first quarter of 2026. Subscription revenue rose 22 percent to 3.67 billion dollars, and total revenue hit 3.77 billion. The company also raised its full year subscription outlook, which is what a business does when demand is stronger than it expected.

Customers spending over 1 million dollars a year on Now Assist, the AI product line, grew more than 130 percent from a year ago. Big deals are getting bigger too, with 16 deals worth over 5 million dollars in new yearly business, up nearly 80 percent. Future contracted revenue reached 27.7 billion dollars, up 25 percent.

Growing this fast costs money. Reported quarterly profit was 469 million dollars on 3.77 billion in revenue, giving a reported operating margin of just 13.5 percent. Much of the gap comes from stock paid to employees, so shareholders own a slightly smaller slice over time even when the business is doing well.

ServiceNow just closed two deals, Veza in March and Armis in April. Management expects Armis to knock about 200 basis points off free cash flow margin and 75 basis points off operating margin this year. Delayed deals in the Middle East also cost roughly 75 basis points of growth last quarter, a reminder that world events can push revenue around.