On this page of StockholderLetter.com we present the latest annual shareholder letter from ServiceNow, Inc. — ticker symbol NOW. Reading current and past NOW letters to shareholders can bring important insights into the investment thesis.
-ft Put Al to work for people Annual Report 2025 servicenow
Dear ServiceNow Shareholders, I wanted to offer my heartfelt thanks for your trust, partnership, and belief in what we are building at ServiceNow. ServiceNow was founded by Fred Luddy 22 years ago on the premise that there is no better experience than giving someone a piece of technology that lets them do something they never thought they could do. This hungry and humble passion for the customer remains our driving force. I had the honor of joining ServiceNow in 2019 with a clear vision to build the Defining Enterprise Software Company of the 21st Century. This foundation is what powers our performance. We have become the fastest growing enterprise software company to have ever reached $1 billion, $5 billion, and $10 billion in subscription revenues organically, soon to be more than $15 billion annually. This elite-level of success stems from being obsessed with customer satisfaction as evidenced by our world-class renewal rate of 98%. Reflecting on 2025, this was another defining year. We crossed $12.8 billion in subscription revenues, achieving 21% revenue growth year-over-year, with expanding free cash flow margins to 35%. In other words, we are in a league of our own, operating at the Rule of 56.1 The company we are today looks fundamentally different than the one we were just a few years ago. In 2019, we were a $3 billion company with one business over $1 billion. In 2026, we will be a $15 billion company with five businesses generating over $1 billion in annual contract value (ACV). More than 90% of our customers now use multiple workflows on our AI platform for business reinvention. What began as a system of record is now an end-to-end system of action across the enterprise. Our CRM and Industry Workflows are among the fastest-growing businesses in the company, with Q4 2025 being their largest quarter ever for net new annual contract value growth. ServiceNow is building the reference architecture of enterprise AI. That s why our Now Assist surpassed $600 million in ACV in 2025, well on its way to significantly exceeding our goal of $1 billion ACV in 2026. In our fourth quarter alone, we saw 10x year-over-year growth in deals with five or more Now Assist AI products. We are shattering the status quo of legacy enterprise software. And yet, as strong as this performance is, it is only the beginning. We are now entering the most consequential phase of our journey. AI is more than a technological transformation; it is the prevailing theme of this era. The impact is already pervasive, influencing our lives, our schools, businesses, and governments. Today, most AI agents are stuck in their own systems. A thousand points of dim light won t illuminate the power of AI. Only ServiceNow has the AI platform that goes east to west across the enterprise, and north to south up and down the technology stack. We have been building AI into our platform for the past 7+ years. What makes our AI workflow intelligence so compelling is the business context that comes from more than 85 billion production workflows and seven trillion transactions, powering the Fortune 500. Jensen Huang, the great founder of NVIDIA, calls ServiceNow the AI operating system for the enterprise, an identity we proudly embrace. For our customers, we help them move quickly from their legacy to their AI future. The operative word in ServiceNow s strategy has always been any : any cloud, any model, any data source, any agent, any tool. With so much speculation about the role of foundation models, we integrate with all of them. As intelligence commoditizes, the competitive differentiator is no longer the large language model (LLM); it s autonomous workflows that empower people to do their best work. That s why meeting this moment requires AI that Thinks and Workflows that Act. This is ServiceNow s superpower. Leaders are standardizing on ServiceNow as our open platform is expanding. ServiceNow is at the center of a competitive ecosystem where the network effect acts as a powerful force multiplier. Our collaborations with Amazon Web Services, Anthropic, Google Cloud, Microsoft, NVIDIA, and OpenAI expand what every customer can achieve. From NVIDIA to FedEx, AstraZeneca to Visa, PepsiCo to CVS Health, the most discerning brands are choosing ServiceNow. NVIDIA, the world s most valuable public company, is redefining 1 Enterprise software companies are often measured on a Rule of 40, defined as free cash flow margin plus subscription revenue growth rate. For information about how we calculate free cash flow margin, please refer to our Q4 2025 earnings release available at investors.servicenow.com.
employee support through ServiceNow, using intelligent AI agents that proactively resolve issues, deliver personalized help, and provide answers in milliseconds. Siemens unifies customer service, IT, HR, and operations on our AI platform, saving 1 million hours and deploying AI agents that handle request intake, routing, and resolution autonomously at scale. ServiceNow is our own best showcase we call this Now on Now. Our AI platform enables us to run the company using the same AI solutions we provide to our customers. The scorecard is clear: today AI agents perform 90% of our support requests and 89% of customer service requests autonomously. As machines take on more of the structured, repeatable work, it creates space for our people to do the high-judgment, high-value work that actually matters. The value from our Now on Now AI investments have already exceeded half a billion dollars, creating fuel for our innovation engine.2 This will also continue to expand the boundaries of our productivity and financial shareholder value creation. in the world. We earned the Platinum ranking on the inaugural American Opportunity Index Where You Work Matters list. Forbes named us one of America s Most Trusted Companies. Even as I m proud of how much we ve accomplished together, I m more driven than ever to capture the AI opportunity in front of us. The road ahead is bigger, by orders of magnitude, than what we have already achieved. You have my commitment to lead with passion, to be relentless in making this company the standard bearer of enterprise AI, and to go beyond expectations. Our entire team will chase these exponential opportunities with the audacity, tenacity, and courage of a defining company. You deserve nothing less than everything we have in us. Knowing this company, that s exactly what you ll get. Thank you for your time, your interest, and your enduring support. Respectfully yours, At the same time, we are expanding our market opportunity at an unprecedented pace. Our total addressable market has grown from $90 billion just a few years ago to $600 billion today driven by our expansion into CRM, industry workflows, data, and security. Moveworks creates a single intelligent front door for agentic business: one place for any employee to ask, act, and resolve, without switching between systems. We acquired Veza and announced our intent to acquire Armis, completing our vision to build the strategic defense shield for the enterprise. This is a company now pursuing an opportunity that is multiple times larger than the one we set out to capture just a few years ago. And we are doing it from a position of strength. Whether it s our market making brand, building innovative products, or delivering a great service, our culture makes everything in this report possible. 'Better than yesterday, not as good as tomorrow' is the standard we hold ourselves to every day. In 2026, Fortune named us one of the World s Most Admired Companies 3 for the seventh consecutive year. Glassdoor ranked us #2 in Tech & AI. Fast Company named us one of the Most Innovative Companies Now on Now value and productivity metrics are based on internal ServiceNow estimates. 3 From Fortune, 2026 Fortune Media IP Limited. All rights reserved. Used under license. 2 )hifX4 Bill McDermott Chairman & CEO ServiceNow
The World Works With ServiceNow m 16. wi I V r , wow I I 0 ,414 "1,40. 1 74 '._ i ii .. P;;;
 • shareholder letter icon 4/6/2026 Letter Continued (Full PDF)
 • stockholder letter icon 4/13/2023 NOW Stockholder Letter
 • stockholder letter icon 4/4/2024 NOW Stockholder Letter
 • stockholder letter icon 4/4/2025 NOW Stockholder Letter
 • stockholder letter icon More "Application Software" Category Stockholder Letters
 • Benford's Law Stocks icon NOW Benford's Law Stock Score = 94


NOW Shareholder/Stockholder Letter Transcript:

-ft
Put Al
to work
for people
Annual Report 2025
servicenow  

Dear
ServiceNow
Shareholders,
I wanted to offer my heartfelt thanks for your trust,
partnership, and belief in what we are building at
ServiceNow. ServiceNow was founded by Fred
Luddy 22 years ago on the premise that    there is no
better experience than giving someone a piece of
technology that lets them do something they never
thought they could do.    This hungry and humble
passion for the customer remains our driving force.
I had the honor of joining ServiceNow in 2019 with a
clear vision to build the Defining Enterprise Software
Company of the 21st Century.
This foundation is what powers our performance.
We have become the fastest growing enterprise
software company to have ever reached $1 billion,
$5 billion, and $10 billion in subscription revenues
organically, soon to be more than $15 billion annually.
This elite-level of success stems from being obsessed
with customer satisfaction as evidenced by our
world-class renewal rate of 98%.
Reflecting on 2025, this was another defining year.
We crossed $12.8 billion in subscription revenues,
achieving 21% revenue growth year-over-year, with
expanding free cash flow margins to 35%. In other
words, we are in a league of our own, operating at
the Rule of 56.1
The company we are today looks fundamentally
different than the one we were just a few years ago.
In 2019, we were a $3 billion company with one
business over $1 billion. In 2026, we will be a
$15 billion company with five businesses generating
over $1 billion in annual contract value (ACV).
More than 90% of our customers now use multiple
workflows on our AI platform for business reinvention.
What began as a system of record is now an
end-to-end system of action across the enterprise.
Our CRM and Industry Workflows are among the
fastest-growing businesses in the company, with
Q4 2025 being their largest quarter ever for net
new annual contract value growth. ServiceNow is
building the reference architecture of enterprise AI.
That   s why our Now Assist surpassed $600 million
in ACV in 2025, well on its way to significantly
exceeding our goal of $1 billion ACV in 2026.
In our fourth quarter alone, we saw 10x year-over-year
growth in deals with five or more Now Assist
AI products.
We are shattering the status quo of legacy enterprise
software. And yet, as strong as this performance is, it
is only the beginning. We are now entering the most
consequential phase of our journey.
AI is more than a technological transformation;
it is the prevailing theme of this era. The impact
is already pervasive, influencing our lives, our schools,
businesses, and governments. Today, most AI agents
are stuck in their own systems. A thousand points
of dim light won   t illuminate the power of AI. Only
ServiceNow has the AI platform that goes east to
west across the enterprise, and north to south up and
down the technology stack. We have been building
AI into our platform for the past 7+ years. What makes
our AI workflow intelligence so compelling is the
business context that comes from more than 85 billion
production workflows and seven trillion transactions,
powering the Fortune 500. Jensen Huang, the great
founder of NVIDIA, calls ServiceNow the AI
operating system for the enterprise, an identity
we proudly embrace.
For our customers, we help them move quickly from
their legacy to their AI future. The operative word
in ServiceNow   s strategy has always been    any   :
any cloud, any model, any data source, any agent,
any tool. With so much speculation about the role
of foundation models, we integrate with all of them.
As intelligence commoditizes, the competitive
differentiator is no longer the large language model
(LLM); it   s autonomous workflows that empower
people to do their best work. That   s why meeting this
moment requires    AI that Thinks and Workflows that
Act.    This is ServiceNow   s superpower.
Leaders are standardizing on ServiceNow as our open
platform is expanding. ServiceNow is at the center of
a competitive ecosystem where the network effect
acts as a powerful force multiplier. Our collaborations
with Amazon Web Services, Anthropic, Google Cloud,
Microsoft, NVIDIA, and OpenAI expand what every
customer can achieve.
From NVIDIA to FedEx, AstraZeneca to Visa,
PepsiCo to CVS Health, the most discerning brands
are choosing ServiceNow. NVIDIA, the world   s
most valuable public company, is redefining
1
Enterprise software companies are often measured on a    Rule of 40,    defined as free
cash flow margin plus subscription revenue growth rate. For information about how we
calculate free cash flow margin, please refer to our Q4 2025 earnings release available
at investors.servicenow.com.

employee support through ServiceNow, using
intelligent AI agents that proactively resolve issues,
deliver personalized help, and provide answers in
milliseconds. Siemens unifies customer service,
IT, HR, and operations on our AI platform, saving
1 million hours and deploying AI agents that
handle request intake, routing, and resolution
autonomously at scale.
ServiceNow is our own best showcase   we call this
Now on Now. Our AI platform enables us to run the
company using the same AI solutions we provide to
our customers. The scorecard is clear: today AI agents
perform 90% of our support requests and 89% of
customer service requests autonomously.
As machines take on more of the structured,
repeatable work, it creates space for our people
to do the high-judgment, high-value work that
actually matters. The value from our Now on Now AI
investments have already exceeded half a billion
dollars, creating fuel for our innovation engine.2 This
will also continue to expand the boundaries of our
productivity and financial shareholder value creation.
in the world. We earned the Platinum ranking on the
inaugural American Opportunity Index    Where You
Work Matters    list. Forbes named us one of America   s
Most Trusted Companies.
Even as I   m proud of how much we   ve accomplished
together, I   m more driven than ever to capture the
AI opportunity in front of us. The road ahead
is bigger, by orders of magnitude, than what we
have already achieved. You have my commitment
to lead with passion, to be relentless in making this
company the standard bearer of enterprise AI,
and to go beyond expectations.
Our entire team will chase these exponential
opportunities with the audacity, tenacity, and
courage of a defining company. You deserve nothing
less than everything we have in us. Knowing this
company, that   s exactly what you   ll get.
Thank you for your time, your interest, and
your enduring support.
Respectfully yours,
At the same time, we are expanding our market
opportunity at an unprecedented pace.
Our total addressable market has grown from $90
billion just a few years ago to $600 billion today   
driven by our expansion into CRM, industry workflows,
data, and security. Moveworks creates a single
intelligent front door for agentic business: one place
for any employee to ask, act, and resolve, without
switching between systems. We acquired Veza and
announced our intent to acquire Armis, completing
our vision to build the strategic defense shield for
the enterprise.
This is a company now pursuing an opportunity that
is multiple times larger than the one we set out to
capture just a few years ago. And we are doing it from
a position of strength.
Whether it   s our market making brand, building
innovative products, or delivering a great service,
our culture makes everything in this report possible.
'Better than yesterday, not as good as tomorrow' is
the standard we hold ourselves to every day. In 2026,
Fortune named us one of the World   s Most Admired
Companies   3 for the seventh consecutive year.
Glassdoor ranked us #2 in Tech & AI. Fast Company
named us one of the Most Innovative Companies
Now on Now value and productivity metrics are based on internal ServiceNow estimates.
3
From Fortune,   2026 Fortune Media IP Limited. All rights reserved. Used under license.
2
)hifX4  
Bill McDermott
Chairman & CEO
ServiceNow

The World
Works With
ServiceNow m
16.


wi    I
V
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"1,40. 1 74
   '._ i ii


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shareholder letter icon 4/6/2026 Letter Continued (Full PDF)
 

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