TLDR
- ServiceNow stock fell over 2% in after-hours trading Wednesday despite beating fourth-quarter revenue and earnings estimates.
- The company forecasted 2026 subscription revenue of $15.53-$15.57 billion, exceeding Wall Street’s $15.21 billion projection.
- New partnerships with Anthropic and OpenAI will deepen AI integration across ServiceNow’s platform to compete with autonomous agents.
- The board approved $5 billion in share buybacks with a $2 billion accelerated repurchase set to begin immediately.
- ServiceNow completed its largest-ever acquisition, buying cybersecurity company Armis for $7.75 billion.
ServiceNow stock dropped over 2% Wednesday evening. The decline happened even though the company delivered fourth-quarter numbers that beat expectations.
Fourth-quarter revenue reached $3.57 billion, up 20.5% year-over-year. Analysts had been expecting $3.53 billion.
The company posted adjusted earnings of 92 cents per share. That topped the 88 cents per share consensus estimate.
ServiceNow stock has struggled lately. Shares lost 28% during 2025 and remain down more than 15% year-to-date.
Analysts pointed to high valuation levels as the culprit. Technical weakness and increased options market volatility also contributed to the negative sentiment.
AI Deals and Revenue Growth
The company issued 2026 subscription revenue guidance between $15.53 billion and $15.57 billion. Wall Street had modeled $15.21 billion.
ServiceNow announced enhanced partnerships with both Anthropic and OpenAI. The deals will integrate Claude chatbot models deeper into the company’s software products.
These AI integrations aim to help ServiceNow compete against autonomous AI agents entering the market. The partnerships follow a broader industry push toward AI-powered automation.
The Moveworks acquisition added approximately 100 basis points to subscription revenue growth forecasts. ServiceNow also purchased security firm Veza and sales automation platform Logik.ai in recent months.
“With investments in industry workflows and customer relationship management, and security and risk, ServiceNow is growing both organically and by acquisition to expand its market opportunity,” said Rebecca Wettemann, CEO of Valoir.
Buyback Program and Armis Deal
ServiceNow’s board authorized another $5 billion for share repurchases. Management plans to launch a $2 billion accelerated buyback right away.
The company finalized its purchase of Armis for $7.75 billion. The cybersecurity startup acquisition represents ServiceNow’s biggest deal to date.
Heavy merger and acquisition spending has weighed on investor sentiment. The string of purchases has some market watchers questioning the near-term financial impact.
For the first quarter, ServiceNow expects subscription revenue between $3.65 billion and $3.66 billion. That compares to analyst estimates of $3.57 billion.
The company’s remaining performance obligations grew during the quarter. AI product adoption among enterprise customers continues to gain momentum.
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