ServiceNow AI business reaches $1 billion in annual contract value

ServiceNow has reported that its artificial intelligence (AI) products have surpassed $1 billion in annual contract value (ACV). This growth is driven largely by its generative AI product line, Now Assist, which saw net new ACV more than double year-over-year in the fourth quarter of 2025. CEO Bill McDermott noted that agentic deployments of ServiceNow AI increased ninefold in a nine-month period.

The company's financial performance remains strong, with subscription revenue reaching approximately $3.9 billion in the second quarter, a 24.5% increase from the previous year. Management has raised its full-year subscription revenue guidance to between $15.76 billion and $15.78 billion.

Following positive momentum, ServiceNow shares saw a 7.5% increase during mid-day trading after Needham & Company LLC raised its price target from $115.00 to $155.00. Other financial institutions, including Morgan Stanley, Cantor Fitzgerald, and BTIG Research, have also issued favorable price targets and ratings for the company.