ServiceNow delivers strong Q4, expands Anthropic partnership

ServiceNow reported better-than-expected fourth quarter results and expanded a partnership with Anthropic to integrate Claude models more deeply into the ServiceNow AI Platform. ServiceNow recently announced a similar expanded partnership with OpenAI. 

The company delivered fourth quarter earnings of $401 million, or 38 cents a share, on revenue of $3.57 billion, up 20.5%. Non-GAAP earnings in the quarter were 92 cents a share. 

Wall Street was looking for ServiceNow to report fourth quarter non-GAAP earnings of 87 cents a share on revenue of $3.53 billion.

CEO Bill McDermott said ServiceNow "had substantial growth in licensed users, workflows, and transactions on our platform."

• ServiceNow expands OpenAI partnership
• ServiceNow makes its cybersecurity move, acquires Armis for $7.75 billion
• ServiceNow acquires Veza, will integrate into AI Control Tower

ServiceNow President and CFO Gina Mastantuono touted emerging products and recent acquisitions that expand the company's market. 

With the Anthropic deal, ServiceNow is following through with its plan to align with AI's heavy hitters. Claude will become the default model for ServiceNow Build Agent and be used in healthcare and life sciences deployments. ServiceNow will also deploy Claude and Claude Code to more than 29,000 employees. 

Key figures in the fourth quarter include:

• Current remaining performance obligations, which are revenue that'll be recognized over the next 12 months, was $12.85 billion. 
• ServiceNow had 244 transactions over $1 million in net new annual contract value. 
• 603 customers had ACV of more than $5 million. 

For 2025, ServiceNow reported net income of $1.67 a share on revenue of $13.28 billion, up 21%. The company also authorized another $5 billion to repurchase shares. 

As for the outlook, ServiceNow is projecting first quarter subscription revenue growth of 21.5% with a range of $3.65 billion to $3.655 billion. For 2026, ServiceNow is projecting subscription revenue between $15.53 billion to $15.57 billion, up 21%.   

On a conference call, McDermott's big mission was to convince Wall Street that ServiceNow shouldn't be part of that "AI will kill SaaS" storyline that has taken software stocks to the woodshed. McDermott was a bit wound up and said ServiceNow is a $1 trillion company. A few choice quotes (actually more than few):

• "The speculation that AI will eat software companies is out there. Let's clear it up with the facts: enterprise AI will be the largest driver of return on the multi trillion dollar super cycle of investment in AI infrastructure. The real payoff comes when trillions of tokens move beyond pilots to be embedded directly into the workflows where business decisions are made. ServiceNow is the gateway to this shift."
• "We are also the great consolidator of hundreds of feature and function specific software solutions into end-to-end business processes."
• "Many people ask why our valuation has not kept pace with our results. The short answer is that we have been viewed as a feature oriented SaaS company. We are not living in a SaaS neighborhood. We are a platform company executing a long term platform strategy where AI agents and workflows are harmonious and synonymous, creating sustained advantage, not short term wins."
• "We are one of the few companies totally in control of our own destiny. We are playing offense on our tippy toes."
• "The speculation out there is that M&A is the new playbook out of necessity. Here are the facts. ServiceNow has the fastest organic growth in the history of enterprise software. We have never acquired a single company for revenue alone. We use M&A to expand into an even larger TAM. Our announced plans to acquire Veza and Armis happened in rapid succession because they assemble three critical layers for enterprises to operate securely in an agentic AI world."
• "ServiceNow is a build or buy winner. We'll win with the builders because they want our data fabric, our agents, governance and security. We'll win for buyers because they want best of breed AI, native workflows and agents to reinvent their status quo in IT, HR, CRM, app development and beyond."
• "Operating plans exist to organize a business. Dreams exist to unleash the imagination. "Our dreams for ServiceNow are clear, and no operating plan will hold us back. The world works with ServiceNow isn't a tagline. It's a hard line."