ServiceNow Chairman and CEO Bill McDermott calls out five specific hypergrowth areas, each of which have the potential to surpass the company’s current size and trajectory.
Recent acquisitions and multiple major deals point to ServiceNow’s growing AI strength and the company’s direction for future growth, ServiceNow Chairman and CEO Bill McDermott said.
McDermott, in his prepared remarks for ServiceNow’s first fiscal quarter 2026 quarterly financial analyst call, told analysts that, for his company, the quarter was characterized by a growth in major deals.
ServiceNow recorded 16 deals with over $5 million in net-new annual contract value and five deals of over $10 million in net-new annual contract value. The number of customers spending $1 million-plus grew over 130 percent year over year, while the total number of deals worth over $1 million grew more than 30 percent year on year, he said.
[Related: ServiceNow CEO: ‘The Destruction Of Time Is Like The Ultimate Enemy Of Humanity’]
ServiceNow’s March acquisition of Moveworks, a provider of front-end AI assistant and enterprise search technology, is already showing returns, McDermott said. During the first quarter, Moveworks closed seven-figure deals and closed more deals in the quarter than the company did the entire previous year, he said.
Moveworks’ conversational AI and enterprise search was also recently combined with ServiceNow’s unified portal in a new organization, ServiceNow EmployeeWorks, which is now run by Bhavin Shah, the former CEO of Moveworks, McDermott said. That business grew five times over the past year, he said.
ServiceNow’s CRM business net-new annual contract value also grew by more than five times year over year, with deal count growing by over 80 percent year over year, McDermott said.
“With a surface area so broad, our goals for ServiceNow are clear,” he said. “Here they are: Staff time-to-value for our customers, revenue growth acceleration, margin expansion, reduced stock-based compensation, and outperforming our own rule of 55-plus standard. … [ServiceNow] is on track for our best year ever.”
When anyone asks about the impact of enterprise AI, McDermott said his answer is always the same.
“There has never been a tailwind for ServiceNow like AI since Fred Luddy started the company,” he said. “We’ve always focused our platform on the jobs our customers needed done.”
McDermott called out five specific hypergrowth areas for ServiceNow.
The first is ServiceNow’s core IT business, which McDermott said is not just software but is instead an end-to-end operating system. He said the average Fortune 500 company has 100 million lines of custom code just to manage their business and billions of lines of code in total, an amount that could grow 20 times by 2030. At the same time, he said the number of tickets hitting an IT service management system will increase by 50 times compared with today. “ServiceNow’s relevance grows in direct correlation with the expansion of innovation across the AI ecosystem,” he said.
The second is AI security. ServiceNow has expanded its AI security capabilities through the acquisitions late last year of Armis and Veza, McDermott said. Armis enhances real-time visibility by discovering every asset—IT, OT, IoT and medical devices—without agents, providing a constantly updated map unmatched by traditional tools. Veza addresses identity governance, mapping access across people, machines and AI agents with dynamic, context-aware permissions. Together with ServiceNow’s business context, these solutions create a unified security stack that empowers CISOs to see, decide and act across their entire technology landscape. “Enterprises can’t afford experiments in today’s risk environment,” he said. “They need ServiceNow as their strategic defense shield for the enterprise.”
The third is AI-native CRM, and there’s no more immediate need for reinvention than legacy CRM, McDermott said. “It’s a little ironic that a category promising a 360-degree view of the customer has left most enterprises spinning around in circles,” he said. “Best-run businesses need a dramatically different and better way. … Agentic AI is scanning portfolios and auto-generating leads using propensity logic tied to their data lake because legacy CRM represents such a significant expense line for enterprises. The demand for an AI alternative is immediate. ServiceNow is not only bringing a technologically superior solution, we help customers swap out legacy SaaS vendors and go live fast with AI.”
The fourth area is the AI-native front door and the employee experience. McDermott said that while users get used to AI tools like ChatGPT, enterprise leaders urgently want employees to enjoy a clean conversational experience. “ServiceNow introduced EmployeeWorks, combining Moveworks, conversational AI and enterprise search with ServiceNow’s unified portal and autonomous agentic AI workflows. … As more employees converge on our conversational experience, ServiceNow will deliver intelligence from any source, putting AI to work for people,” he said.
The fifth area is ServiceNow’s Workflow Data Fabric, which McDermott said is needed as enterprises frantically organize and cleanse data from disparate sources. “Workflow Data Fabric connects data across systems,” he said. “It adds business context via a unified data catalog and applies policy-based governance controls. With ServiceNow, AI understands how an enterprise actually works so they can take trusted action.”
ServiceNow’s five hyper-growth areas have the potential to surpass the company’s current size and trajectory, McDermott said. Its unified platform architecture supports these areas and fosters enterprise AI, boasting thousands of system connections, a live Knowledge Graph and real business context.
“ServiceNow is auditable end to end,” he said. “Our platform delivers workflow execution across IT, HR, CRM and security. It’s not recommendations. It’s outcomes that matter.”
ServiceNow’s context engine learns from every decision, training on over 95 billion workflows and 7 trillion transactions, making the company smarter with each use, McDermott said. ServiceNow’s AI-native platform includes autonomous workforce teams, resolving IT requests faster than human agents, and BuildAgent, which expands developer openness and ecosystem integration. The company’s hybrid pricing model, combining seat licenses and usage-based scalability, accelerates customer adoption. Real-world examples highlight major gains, such as improved self-service and faster resolutions, yielding significant ROI and time savings, he said.
ServiceNow By The Numbers
For its first fiscal quarter 2026, which ended March 31, ServiceNow reported total revenue of $3.67 billion, up 22 percent over the $3.09 billion the company reported for its first fiscal quarter 2025.
This included subscription revenue of $3.67 billion, up from last year’s $3.01 billion. Only a tiny fraction of revenue came from professional services or other sources.
Total revenue beat analyst expectations by $20 million, according to Seeking Alpha.
ServiceNow also reported GAAP net income of $469 million, or 45 cents per share, up slightly over last year’s $460 million, or 44 cents per share. On a non-GAAP basis, the company reported net income of $1.01 billion, or 97 cents per share, up significantly from last year’s $846 million, or 81 cents per share.
That was in line with analyst expectation of 97 cents per share on a non-GAAP basis, according to Seeking Alpha.
Looking ahead, ServiceNow expects second fiscal quarter 2026 subscription revenue of $3.815 billion to $3.820 billion, or up around 22.5 percent over last year.
