ServiceNow shares jumped about 5.5% in mid-day trading, extending a post-earnings rebound after the company reported second-quarter 2026 results that outpaced Wall Street estimates on core metrics.
On an adjusted basis ServiceNow posted earnings of $0.90 per share versus the consensus of $0.86. Total revenue reached $3.99 billion, above the $3.93 billion estimate, while subscription revenue rose to $3.88 billion, an increase of 24.5% year-over-year.
Management highlighted a notable change in the composition of new business: half of net new business is now non-seat-based. That disclosure addresses a principal concern among investors that agentic AI tools could undermine per-seat licensing, which underpins many software-as-a-service revenue models. In addition, annual contract value related to AI offerings surpassed $1 billion, a milestone cited by company executives.
ServiceNow also raised its full-year subscription revenue guidance to a range of $15.755 billion to $15.77 billion. The updated guidance implies roughly 21% constant-currency growth for subscription revenue for the year.
Market participants and sell-side analysts responded positively. Piper Sandler reiterated an Overweight rating. Sanford C. Bernstein increased its price target to $248, while Jefferies lifted its target to $140. Those firms pointed to the robustness of the AI pipeline and the clearer revenue trajectory when explaining their moves.
The stock’s gain came despite weakness in the broader market. The Nasdaq was trading down about 0.6% and the S&P 500 was off roughly 0.3% as investors awaited the Federal Reserve’s policy decision scheduled for July 28-29, where rates were widely expected to be left on hold. That backdrop leaves ServiceNow’s advance as predominantly company-driven, in contrast with mixed performance across the technology sector.
Taken together, the decisive earnings beat, an upward revision to subscription guidance, evidence that AI-related offerings are expanding contract values rather than eroding them, and a cluster of supportive analyst actions combined to push the stock higher. The shares remain well below their 52-week high of $201.15, a fact that market observers say leaves room for further recovery in some outlooks.
Price snapshot
Real-time quote shown in the source material indicated: 104.23, up 5.45 or 5.52% at mid-day.
Context - The company-driven strength contrasts with broader softening in major equity benchmarks as investors await the Fed decision. Analyst endorsements and heightened visibility into AI-driven contract values are central to the bullish narrative for the shares.
Bottom line - Better-than-expected quarterly results, a raised subscription revenue outlook, and management commentary pointing to a structural shift in new business toward non-seat licensing anchored the stock’s mid-day rally, even as the macro environment remained cautious.