ServiceNow Emerges as Enterprise AI Management Platform

CEO Bill McDermott extends contract through 2030 as ServiceNow positions itself as the operating system for a digital workforce.

Published on Feb. 21, 2026

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ServiceNow, the enterprise software company, just posted its strongest quarter ever with 21% growth in subscription revenue to $3.47 billion and more than doubling of its AI product revenue. However, the stock price has dropped 45% from its highs, swept up in the broader sell-off of enterprise software stocks. Analysts argue that ServiceNow is being mispriced, as its AI Agent Fabric and AI Control Tower products position it to be the management layer for companies deploying AI agents across their operations.

Why it matters

ServiceNow's platform is becoming essential as companies adopt AI agents to automate various workflows. Rather than replacing ServiceNow, companies are more likely to deploy AI agents within the ServiceNow ecosystem to leverage the rich data and processes already integrated into the platform. This "data gravity" is driving ServiceNow's industry-leading 98% customer retention rate, even as the market questions the viability of traditional enterprise software in the face of AI disruption.

The details

ServiceNow launched its AI Agent Fabric and AI Control Tower products last year, allowing AI agents from different vendors to communicate and coordinate tasks, while giving human managers a single dashboard to monitor and control the digital workforce. The company is rolling out premium pricing tiers that capture the value of AI productivity, rather than just charging per seat. ServiceNow has also made strategic acquisitions like Armis and Moveworks to expand its platform capabilities as an enterprise "control tower" for AI.

  • ServiceNow reported Q4 2025 subscription revenue of $3.47 billion, beating guidance.
  • ServiceNow's full-year 2025 subscription revenue hit $12.88 billion, up 21%.
  • ServiceNow's current remaining performance obligations, a measure of contracted revenue, grew 25% to $12.85 billion.

The players

ServiceNow

An enterprise software company that provides a cloud-based platform for digital workflows, IT service management, and operations management.

Bill McDermott

The CEO of ServiceNow who has extended his contract through at least 2030, signaling long-term commitment to the company's transition to becoming the operating system for enterprise AI.

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What they’re saying

“ServiceNow is "the gateway to this shift, serving as the semantic layer that makes AI ubiquitous in the enterprise.”

— Bill McDermott, CEO (Earnings call)

What’s next

ServiceNow is guiding for 2026 subscription revenue between $15.53 billion and $15.57 billion, representing roughly 20% growth.

The takeaway

ServiceNow is positioning itself as the essential platform for enterprises to manage and deploy AI agents across their operations, leveraging its deep data integrations and workflow automation capabilities. This strategy positions the company to thrive in the era of enterprise AI, despite the broader market concerns around the impact of AI on traditional software models.