ServiceNow AI Crosses $1 Bn ACV as Enterprise Demand Lifts Q2 Revenue

ServiceNow has revealed its AI platform ServiceNow AI has crossed $1 billion in annual contract value (ACV) during the June quarter, indicating the rapid monetisation of enterprise AI as the workflow software company posted stronger-than-expected second-quarter results and raised its full-year revenue outlook.

ServiceNow AI is the enterprise-wide AI platform embedded directly into the core ServiceNow infrastructure, rather than being a separate, standalone business entity.

The US-based enterprise software company reported subscription revenue of $3.88 billion, up 24.5% year-on-year, while total revenue rose 24% to $3.99 billion in the quarter ended June 30. 

Current remaining performance obligations (cRPO), contract revenue that will be recognised as revenue in the next 12 months, climbed 21% to $13.2 billion, while total remaining performance obligations reached $29 billion, also up 21% from a year earlier.

The company attributed much of the momentum to accelerating enterprise adoption of AI, particularly agentic AI applications.

“With our AI Control Tower as the market standard, agentic deployments of ServiceNow AI increased ninefold in just nine months. Our $29 billion in remaining performance obligations is fueled by longer customer commitments and skyrocketing demand from our partner ecosystem. We are who we said we were: a defining company that is only just getting started,” ServiceNow Chairman and CEO Bill McDermott said in a statement.

During the quarter, ServiceNow expanded its AI portfolio with the launch of Otto, a unified AI interface combining Now Assist and Moveworks capabilities, alongside new AI governance and measurement features under AI Control Tower. 

It also introduced AI specialists for IT, customer service, employee workflows and security, while making its Build Agent generally available across developer tools including Cursor, Claude Code, Windsurf and GitHub Copilot.

The company also unveiled Action Fabric, enabling third-party AI models to securely execute workflows through the ServiceNow platform, with Anthropic becoming its first design partner. It further strengthened AI partnerships with NVIDIA, Microsoft, AWS and Accenture during the quarter.

Notably, its collaboration with Accenture includes a forward-deployed engineering programme aimed at helping enterprises scale AI deployments from pilots to production.

Reflecting confidence in AI-led demand, ServiceNow raised its full-year 2026 subscription revenue guidance to $15.76 billion-$15.78 billion, representing about 22.5% reported growth. The company said stronger-than-expected AI-driven contract wins, along with robust US federal demand, supported the upgrade.

ServiceNow said it closed 123 transactions worth more than $1 million in net new ACV during the quarter, up nearly 40% year-on-year, and ended June with 658 customers generating over $5 million in ACV, reflecting continued expansion among large enterprises.

Earlier this year, at its Financial Analyst Day, the company outlined long-term goals of generating more than $30 billion in subscription revenue by 2030, with 30% of ACV expected to come from AI.