President & Chief Operating Officer, ServiceNow, Inc.
ServiceNow CEO on Earnings, COO Departure
ServiceNow shares jumped as much as 13% on Thursday, its biggest intraday rise since November 2022, after the software company boosted its subscription revenue forecast for the full year. The company also announced the departure of its President and COO CJ Desai after an investigation uncovered policy violations related to a government contract and the hiring of a former US Army official. ServiceNow CEO Bill McDermott joins Caroline Hyde on "Bloomberg Technology."
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About Chirantan Desai
Chirantan “CJ” Desai, President and Chief Operating Officer at ServiceNow, appeared on the Resilience Universe podcast with Sanjay Poonen on May 12, 2026, where he discussed his recent move to MongoDB as CEO six months prior. Desai described his vision for MongoDB as the default data platform for the agentic era, emphasizing that unstructured data is central to AI workloads. He noted that MongoDB has 65,200 customers, with banking and financial services using it for mission-critical workloads, and observed a shift where companies are moving workloads on-prem due to data sovereignty concerns. Desai outlined a four-bucket framework for AI: innovate faster in engineering, sell more, serve better in customer support, and run efficiently across HR and IT. He also expressed concern that CIOs may shift priority from innovation to cyber protection due to unknown AI-driven threats. On the ServiceNow Q3 2025 earnings call on October 22, 2025, Desai described ServiceNow as "one of the most durable, consistent, over-performing growth companies in the enterprise software industry" and proposed a new category called the "Super 8," which includes the Mag 7 plus ServiceNow. He highlighted the GSA One Gov agreement, stating it opens the door for broader federal and government adoption of ServiceNow and that the AI platform is estimated to boost efficiency by 30%, saving the federal government billions over five years. Desai also announced that the board of directors approved a five-for-one stock split to make shares more accessible to investors and provide employees with greater flexibility in managing equity.
Transcript (21 segments)
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Chirantan Desai0:10
There's an elite level of execution that exists in this culture. I've been blessed with 25,000 of the greatest women and men I've ever worked with, and they just every day come to work for our customers. And you know, we built this platform for business transformation. And in this moment in time, CEOs need to grow their businesses and they can't do it unless they simplify their organizations. They're very complex and you have to clean up the mess to serve your customers and your employees and your innovators better. And they're doing it on one common platform. With ServiceNow powered by Gen AI and the Gen AI revolution is real for ServiceNow, because we've built it into our platform and we have something we're releasing this innovation to the market. And that's why our Gen AI business is doubling quarter after quarter and we're beating and raising guidance and no one else is doing it. So it's just a real thrill.
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Interviewer1:29
How's it going ahead of itself elsewhere in the market then? If you are unique and there are only a few winners in this generative AI euphoria and has elsewhere become overvalued and toppy and hyped?
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Chirantan Desai1:44
Well, I don't really want to speak for the valuation of other companies. You know, you look at a great company like Microsoft, you look at a great company like NVIDIA. I mean, these are companies that are... And that's okay. They have data in their systems and we think of them as databases that feed the ServiceNow platform, as Jensen Huang would say. And he calls us the AI operating system for the enterprise, because all that data can be ingested into ServiceNow and then activated in our domain specific large language models. And this is how Gen AI helps people. And our whole brand image is putting AI to work for people, whether it's an employee, a customer, an innovator, or someone just trying to help you digitally transform your IT estate. It's all happening on ServiceNow.
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Interviewer2:53
Do you think the productivity gains are real when you deploy generative AI?
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Chirantan Desai3:11
Which is ServiceNow on ServiceNow. And we're realizing 55% productivity gains in engineering because we can take simple natural language text, pictures, soon videos — we call this multimodal LLM — and turn it into code. And that's liberating our engineers to do their best work. We take all of our employee activities that are total nonsense and we automate that so the computers do the nonsense work so the people can do the knowledge work. When it comes to customers, you got to meet them in any channel, just the way they want to do business with you, not just when you sell them something, but also when they have a return or they have a billing question or anything that might affect their satisfaction. And that I think is very unique. It's odd to say this, but I don't see any other software companies that actually do it that way. They ship and hope it works out well in the market. We tested at home before we put it in the market and that's why our customers love us.
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Interviewer4:24
Let's talk about — and I hate to name names — but some other enterprise software companies, I mean, so Salesforce, Workday, they're teaming up to be offering generative AI products. Are you worried about that?
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Chirantan Desai4:37
It's perfect. I mean, if you think about it as what I just said, they both have — let's call it departmental solutions. You know, one might be focused on the customer, one might be focused on HR. And they have an architecture that's been around decades now. So we use the data in those systems for... that deals with the customer from the product that you build to the product that you ship, and ultimately the product that the customer uses and gets satisfaction from. We take the whole value chain into account. If you take HR, you know, it's one thing to have a system of record where you know your employees and you pay them and you have benefits for them, but it's another thing to recruit them, hire them, onboard them, train them, give them every service that they need in real time and constantly evolve generative AI use cases on the mobile so they have a beautiful life. So we just do something different. They do something important to us and our job is to make sure that the customer wins.
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Interviewer5:54
Are you taking market share?
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Chirantan Desai6:13
Oh, obviously. I mean, if you look at the software industry, because we're the unicorn. No one's growing as fast as we are. You know, they say you're world-class when you grow at the rule of 40, that means your revenue growth plus your free cash flow margin adds up to 40. We're operating in the mid-fifties and we're not only beating quarters, but we're raising guidance as we beat quarters. And that's really because the Gen AI revolution was carefully thought through on our platform. Our brilliant engineers built the best products in the world, our go-to-market machine is unstoppable, and all the supporting functions in our company and our ecosystem are working for the customer. We come to work for the customer, whether you're in the private sector or you're in the public sector, we work for you. And I think people really appreciate that, which is why we have like a 99%...
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Interviewer6:56
A big portion of the recent business has come from federal government and the segment that will continue to be more scrutinized. Are you worried about any credibility hit?
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Chirantan Desai7:12
Well, I can tell you what I told the capital markets yesterday. Basically, we were served. We received an internal complaint. We take all complaints extremely seriously, especially when it comes to a public sector entity. We love our federal business and we care deeply about the citizens of the United States and also the service... that our policy was violated. And we openly reported this to all the entities that are the entities that should receive the reports in the government. And we were proactive with the whole situation. So we have that behind us, hopefully. And you know, it's one of those things where integrity and our abiding by strict adherence to our policies is just something that we care deeply about in our culture. And we don't grade that on a curve. You know, tough decisions have to be made when tough decisions have to be made.
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Interviewer8:50
What was the policy that was violated? Should you not have had so close to the inking of a deal?
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Chirantan Desai8:55
It was... you know, I think that I've said what I can say on the subject. We need consent from various organizations that may have people available to be hired by ServiceNow in the future. So that's really where I'll leave it. And you know, we're very open company, very transparent company, very compliant company. And we proved that once again by volunteering all of this openly.
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Interviewer9:39
Are you worried about any credibility hit?
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Chirantan Desai9:43
There was no issue related to the financial transaction. The customer in this case loves us. They get enormous value from our solution. They're extremely happy. And I know that this is a single-threaded event, and that's really all I'd like to comment on the matter.
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Interviewer10:11
We've had sort of a massive isolated incident that's just affected technology worldwide with a global outage due to CrowdStrike. How many of these issues, cyber incidents, CrowdStrike and Snowflake, have impacted your business at all or the conversations you're having with clients?
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Chirantan Desai10:27
That's a great question. Caroline: zero impact on customers systems, data integrity, financial systems integrity, zero. And a lot of people say how is that possible? The platform from ServiceNow is the critical success factor to running a great business. We have a customer master database that literally maps all the service usage in a company. We have instant visibility into the... This is an amazing platform and the companies that have been sending me thank-you notes because of how resilient the platform is and how we kept them going. And of course, no impact on our business because we run the whole company on the ServiceNow platform.
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Interviewer11:27
Is there any opportunity to make acquisitions at this moment? How else could you be beefing out your platform other than the organic side of things?
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Chirantan Desai11:39
Yeah, well, we've done some little tuck-ins, but we haven't done any big ones. Obviously, we're in a position with a very successful company where we could, but we have enormous, enormous organic growth and we're just getting started. We have Raptor DB, which allows companies to ingest massive amounts of data at scale, 12 times more than any other enterprise platform in the world, probably. And it processes analytic inquiries 27 times faster than any other database we've ever seen. And this is all going to facilitate our domain specific large language models. So think of it this way: your CEO is listening to this right now thinking to themselves, 'How do I unlock all the data in my various departments so I can automate the way workflows in my company and I can reinvent my business processes for the 21st century?' Raptor DB can get the data from any of the data sources, bring it into the ServiceNow platform, and then we automate through it. We have a Lighthouse program, and a year ago we did that for our Now Assist generative AI program and you see how well that's worked out. We're doubling quarter after quarter. So we're seeing new vectors of growth everywhere and we're doing it organically.
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Interviewer13:32
We got less than one minute, Bill. If I'm about to go and sit at a dinner table and be told AI is hype, what do I say back?
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Chirantan Desai13:40
Well, I think you have to say in some cases it is. And a lot of people are whitewashing a lie and pretending that they've got something. Ask to see the demo. Show me the product. Show me the use cases. Do you know my industry? Do you know my business? Is there a use case there? And how can I turn that into productivity?