Financial Data and Key Metrics Changes - Revenue for Q2 2026 was $10,250,000,000, representing a 10% increase year over year and a 9% increase in constant currency [7][44] - Non-GAAP operating margin was strong at 34.3%, with CRPO at $29,400,000,000, up 11% year over year [7][45] - Operating cash flow is expected to reach nearly $15,000,000,000, with a guidance increase for fiscal year 2026 revenue to $41,100,000,000 to $41,300,000, reflecting growth of approximately 8.5% to 9% year over year [7][53] Business Line Data and Key Metrics Changes - AI and data product line saw a remarkable 120% year-over-year growth [7] - Net new bookings from deals over $1,000,000 grew 26% year over year, indicating strong sales momentum [7] - Subscription and support revenue grew slightly above 9% in constant currency, driven by strong execution [44][45] Market Data and Key Metrics Changes - Strong new business growth was observed in the U.S. and pockets of EMEA, particularly in The Netherlands and Switzerland, while The UK and Japan faced constraints [46] - Technology and communications sectors performed well, while retail, consumer goods, and public sector remained measured [46] Company Strategy and Development Direction - The company is focusing on the concept of the "agentic enterprise," which emphasizes the integration of AI and human collaboration to transform business operations [8][12] - Strategic priorities include delivering customer success, accelerating data and AI adoption, and maintaining a responsible capital allocation strategy [47][51] - The company is expanding its offerings in the public sector and launching a new IT service platform, AgenTeq, to enhance operational efficiency [28][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative potential of AI and the agentic enterprise, stating that this is a pivotal moment in the industry [10][37] - The company anticipates a record year and is raising guidance based on strong performance and customer demand [7][53] - Management highlighted the importance of Data Cloud as a strategic asset for future growth, with significant customer adoption [25][24] Other Important Information - The company returned $2,600,000,000 to shareholders through buybacks and dividends in Q2, with a total of nearly $27,000,000,000 returned since the program began [52] - The company is actively pursuing acquisitions to enhance its capabilities, including recent deals with Convergence.ai and Bluebirds [51] Q&A Session Summary Question: How defensible is SaaS against disruption from AI-native apps? - Management acknowledged the transformation in the software industry driven by AI, emphasizing that Salesforce has been integrating AI for over a decade and is well-positioned to extend its SaaS offerings [60][66] Question: What caused the 60% increase in pilot to production conversions? - Management indicated that close collaboration with customers and enhancements in product features have facilitated faster transitions from pilot to production [74][76] Question: What does a production deal look like around AgentForce? - Management highlighted that successful production deals involve leveraging Data Cloud and integrating various systems to enhance customer interactions and operational efficiency [82][85]

Core Insights - ServiceNow's AI-powered platform is facilitating business transformation for enterprises by automating workflows across various sectors, including IT, customer service, and business operations [1] - The primary driver of ServiceNow's financial performance is the growth in subscription revenues [1] Financial Performance - In Q2 2025, subscription revenues rose by 22.5% year-over-year to $3.11 billion, exceeding Zacks Consensus Estimates by 2.66% [2][10] - Current Remaining Performance Obligations (RPO) increased by 21.5% year-over-year to $10.92 billion in the same quarter [2][10] - ServiceNow secured 89 net new Annual Contract Value (ACV) deals over $1 million, including 11 deals above $5 million, indicating strong enterprise demand [2] Product Adoption and Innovation - The growth in subscription business is bolstered by the rising adoption of ServiceNow's innovative product suite, particularly the AI-enhanced Pro Plus tiers of core products [3] - Tools like Workflow Data Fabric and RaptorDB Pro are unifying data and supporting high-performance AI applications, with AI Pro Plus deal count increasing by over 50% sequentially [3] - ServiceNow closed its largest Now Assist deal to date, exceeding $20 million, with 21 large transactions involving five or more Now Assist products [3] Future Outlook - ServiceNow anticipates subscription revenues of $12.785 billion for 2025, with the Zacks Consensus Estimate at $12.661 billion, indicating continued growth driven by platform adoption and AI-driven SKUs [4] Competitive Landscape - ServiceNow faces significant competition in the subscription-driven workflow automation space from Salesforce and Pegasystems [5] - Salesforce is experiencing strong demand for its Einstein AI platform, which enhances customer relationship management and automation capabilities [6] - Pegasystems is leveraging its GenAI Blueprint solution to accelerate application development and expand its subscription-based platform [7] Stock Performance and Valuation - ServiceNow's shares have declined by 6.3% year-to-date, underperforming the broader Zacks Computer & Technology sector's return of 11.4% [8] - The stock is trading at a premium, with a forward 12-month Price/Sales ratio of 14.19X compared to the sector's 6.72X [12] - The Zacks Consensus Estimate for ServiceNow's Q3 2025 earnings is $4.22 per share, reflecting a 13.44% year-over-year increase [15]