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ServiceNow reported strong Q4 2025 financial results, with revenue of $3.57 billion surpassing the consensus estimate of $3.53 billion and adjusted EPS of $0.92 exceeding the expected $0.88. Total revenue grew 20.5% year-over-year, while subscription revenue rose 21%. Remaining performance obligations (RPO) increased 26.5% year-over-year to $28.2 billion. However, the company projected subscription revenue growth of 19.5%-20.0% for 2026, signaling a slowdown compared to 2025's 20.5% growth. Analysts expressed concerns about this deceleration, with KeyBanc analyst Jackson Ader noting that achieving 20% organic growth would require significant performance improvements. Strategically, ServiceNow made a $7.75 billion acquisition of cybersecurity firm Armis to enhance its AI-powered security capabilities, with the deal expected to close in the second half of 2026. The company also announced a $5 billion share repurchase authorization and a $2 billion accelerated buyback program following a decline in its share price. Despite these initiatives, analysts raised concerns about risks tied to aggressive M&A strategies and challenges in AI monetization. Guggenheim Securities analyst John DiFucci and KeyBanc's Jackson Ader highlighted uncertainties surrounding the company's growth trajectory and strategic direction, leading to a stock rating downgrade and a lowered price target.
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Dan Ives Calls AI-Driven Software Selloff 'Most Disconnected Trade,' Says Salesforce And ServiceNow Are Historic Buys

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JPMorgan Flags 'AI-Resilient' Software Names After Selloff

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About NOW

ServiceNow Inc provides software solutions to structure and automate various business processes via a SaaS delivery model. The company primarily focuses on the IT function for enterprise customers. ServiceNow began with IT service management, ... Read more

Ways to trade options* on NOW

Bearish Option Strategy: Long Puts

Traders buy a single put option on a stock or ETF. This strategy can benefit from a price drop while risking more capital than a spread.

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