ServiceNow’s growth slows but stays strong with AI and enterprise deals
ServiceNow has reported steady growth in its latest financial results, though at a slower pace than in previous years. The company, which serves nearly 8,400 businesses—including 85% of the Fortune 500—remains a dominant player in enterprise software. Its recent acquisition of cybersecurity firm Armis for $7.75 billion, however, led to an 11% drop in share value on the announcement day.
In Q3 2025, ServiceNow saw its net income rise by 16% compared to the same period last year. While this marks a deceleration from earlier growth rates, the company still closed 103 deals worth over $1 million in new annual contract value (ACV). By the quarter’s end, it held 553 customer contracts exceeding $5 million in ACV.
The firm’s business model relies heavily on subscriptions, which accounted for 97% of total sales in Q3. Its generative AI-powered chatbots, designed to automate routine tasks and improve efficiency, have become a key offering for enterprise clients. Customer loyalty remains strong, with a 97% renewal rate—rising to 98% when excluding the closure of a major U.S. federal agency. Beyond its financial performance, ServiceNow’s long-term prospects are tied to broader industry trends. The robotic process automation market, for example, is expected to grow at a 43.9% annual rate between 2026 and 2030, reaching a valuation of $30.85 billion. Over the past decade, ServiceNow’s own shares have surged by roughly 1,000%, reflecting its sustained expansion in enterprise software.
ServiceNow continues to expand its enterprise software footprint, supported by high customer retention and large-scale contracts. The Armis acquisition, though costly, aligns with its push into enterprise car rental. With subscription revenue dominating its sales and AI tools driving productivity, the company remains positioned for growth in a rapidly evolving market.
