ServiceNow Q2 FY2026: revenue up 24.0%, guidance raised
ServiceNow beat its own Q2 FY2026 guidance on revenue and beat the non-GAAP earnings consensus, then raised full-year subscription revenue guidance: that is a Bullish setup. The catch is that GAAP profit fell year over year and gross margin dropped to 70.7%, so read the numbers on two tracks — cash and bookings strength on one side, accounting charges and a slower Q3 guide on the other.
1 · Expected vs. Actual
Free preview belowNon-GAAP EPS was $0.90 against a $0.8625 consensus, while GAAP EPS was $0.29 — the gap between the two is roughly three times. GAAP net income of $298 million was down from $385 million a year ago even though revenue grew 24.0%, because stock-based compensation of $652 million, intangible amortization of $219 million, deal-related costs of $75 million and severance of $62 million all ran through the income statement. That gap is the single most important thing to understand in this report.
Total revenue was $3.987 billion, up 24.0% from $3.215 billion a year earlier, with subscription revenue of $3.877 billion up 24.5%. That cleared the high end of management's own guidance range by 150 basis points, and the company says the beat came from net new ACV plus U.S. Federal demand pulling some on-premise subscription revenue forward from Q3. The blemish: gross margin fell to 70.7% from 75.1% in the prior quarter and 77.5% a year ago, largely because $177 million of purchased-intangible amortization landed in subscription cost of revenue.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
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