ServiceNow Analyst Day 2026 | New $1.5B FY26 AI ACV Growth Target Unveiled At Las Vegas Forum

Wow. Nice turnout. Thank you.

Well, you should tell them the real story.

Just no place I'd rather be than right here right now with you, Nick, and all of you. Thank you very much for coming. We're going to give you a lot of insight on the company. The company's in great shape and we're ready to roll. So, let's get it started.

Well, Churchill said the further back you look, the further forward you can see. We came in in 2019 building on a great company, terrific founder, very good CEOs, excellent board, and good culture. And we said we want to be the defining enterprise software company of the 21st century and that we would be the first to get to five, to get to 10. And then many of you included weren't so sure we'd get to 15 in 2026. And we're blowing through 15 in 2026. So the first thing I'd like to say is promises made, promises kept. The fastest enterprise software company at scale to hit 15 billion in the time frame we did it and organically. Right now this is the hottest brand in the enterprise. We're pursuing a gigantic gem. We'll talk about that a little bit later. The tailwind is at our back. We have the products. You're going to see the products today and you're going to see the best team in the industry today. We have the revenue and scale matters because it builds ecosystems and networks. We have the users and the loyalty of them. Our attendance is up double digits. This is the biggest Knowledge ever. You'll feel it. I hope. Who's going to Knowledge tomorrow? Great. You're going to love it. And the ecosystem. I mean the show floor is just amazing. I encourage you to walk through it. You'll see the control tower. It's stunning and we'll talk about that today. I said we were the platform of platforms in 2019 and now I'm telling you we're the AI of the AIs. So this is a company that has the loyalty of its customers. It has the inspiration of the most satisfied workforce in our industry. And it's the trusted brand. And I'm not the only one to say it. Fortune says it, Forbes say it, the customer says it with their wallet and you actually know it. So, what better time has there ever been than right now for ServiceNow and ServiceNow shareholders?

Yeah, I mean, you know, you got a lead director, Sue Bostrom, Larry Quinlan, Paul Chamberlain. These are individuals that have been with me through thick and thin. So too is our founder. We still have our founder on the board, which is awesome. And our board is a really great board, very committed to the company, very inspired by what we're building and how we're executing. And hopefully you feel that the entry point you're getting in at today is just like never going to happen again.

Well, let's start with the AI control tower for business reinvention. So you know there's GPS signals that'll come from language models and other things but there is only one air traffic control tower for business software in the enterprise at ServiceNow. And so what you'll see today is you'll hear from our colleagues a lot about the agentic front door with Assist. So any channel you come into you now have one single agentic experience with ServiceNow. So if you enjoy ChatGPT or you enjoy Claude or other language models that same simplicity is being brought to you for the enterprise. If you think about industry we're in all the industries that are featured in this slide. Why that really matters is the moat in industry domain expertise is unmatched by ServiceNow in the enterprise. It also creates more loyalty and net new ACV opportunity particularly in CRM and we're going to talk quite a bit about that today. Autonomous workflows. This is super cool because now ServiceNow goes across the entire enterprise east to west. So years ago you knew us for IT. You know that's okay. We need to remind people that we are the ERP of IT. We are the system of record of IT and no place has greater permission to grow in this world of AI than IT and of course CRM on its way to being a couple of billion business. Oh, by the way, we have six of them. And security and risk, we're now in the biggest growth TAM I see in the next decade. Especially when you think about the world's third largest economy is actually cyber crime. So when we made our bold moves, we knew what we were doing and we'll cover that today. And naturally when you look at the autonomy of workflows to be able to coalesce all of the clouds, all of the language models, all of the systems of record and all of the data sources into an autonomous workflow that can close an action out, not give you a recommendation that's probabilistic, but a deterministic outcome achieved. That's where the world wants to go and you're going to see something today on employee experience that is second to none and also app development. You know, not only is it a big business, but we all know lots of code is getting written by us and by others. The more that AI is generated in the world, the more it has to come through the ServiceNow platform. We are the gateway to the enterprise. So more AI is great for shareholders. So we're going to sense and that's any data. We're going to decide that's any model. We love them all and we have deals with all of them to either build software together, put it in our software or help them get into the enterprise with our unique attributes and then obviously act on any workflow and it could be ours, it could be someone else's. It all comes through ServiceNow. So, we welcome everybody and to do this securely and I think you're going to hear today that we're in the security business and we think this is a gigantic opportunity for ServiceNow. You say, 'Well, why do you think that, Bill?' Well, it's already a billion and a half business and we weren't trying real hard. And now you can have it, IoT, any device, critical infrastructure, networks, devices, all coming from one platform that fuses it and OT, the only one in the world. And I really think that, you know, any system is just like so stunning because everybody else wants to, I'm reading articles say they want to shut the world out. They want to protect their moat. We're welcoming everybody in because we know we have the winning hand. So when you look at all the hyperscalers and all those systems of record that you know so well, they all integrate with ServiceNow. So we're still the platform of platforms. That is the foundation. And we're nice. There's no reason to waste time having skirmishes because we want everybody coming into ServiceNow with their AI. And we're going to grow, grow, grow. And we got a bold ambition for 2030. We'll lay out there today.

Well, I think, you know, FedEx to me is one that I'd really like to pull out. You know, Raj will be on stage with me tomorrow, the CEO of FedEx. And you think about FedEx, it's a great company. And Fred Smith was a great innovator, an unbelievable entrepreneur. And he used to talk about the package itself and how it moves throughout the world is as important as what's in the package. So to think about FedEx teaming up with ServiceNow and Raj coming here on stage knowing that they're moving 18 million packages a day through over 200 countries around the world and every key business process things that would sound like core ERP to you is now running on our agentic platform. I mean that's pretty stunning. And then if you want to take something just really interesting, Chipotle is doing great. Everybody likes Chipotle. I like Chipotle anyway. And now they can change in their 4,000 locations all their menus on the fly. They can be highly creative with their associates. And you're just changing everything to real time enterprises. And so whether it's rethinking CRM or whether it's driving a new approach to supply chains, everything now is real time business processes on the ServiceNow platform. So I think this control tower idea has now manifested itself into a complete portfolio of products.

Yeah. Well, trust is the ultimate human currency. It's the one thing you can't trade on. You can trade on just about everything else in life, but not trust. You earn it in drops and you lose it in buckets. So, we don't lose it. We want to win more and more every day. So I think we all know that the net present value of a loyal customer is every business's greatest asset which is why I think you should all be excited that we have the highest retention rate in the enterprise and we are continuing that push to make sure it stays that way and we're transforming our company to make sure of it more on adoption go lives and the use of AI and that's really where that hockey stick formation is going to kick in big time. We're open and when I say you know trust OpenAI, Anthropic, Google, Nvidia, Microsoft, Amazon, we have deals with every one of them. They like us. We make a lot of money together. The language models are coming to us because they know what they do is very important and so do we. But they also know the context that we bring to the unique data position that we have in the enterprise and the process position and the relationships and the ecosystem is going to be a gateway for them to prosper and grow and bring their amazing intelligence to the enterprise and we warmly welcome them. I also think you should know that we're getting really good at AI and now we're even going to make a guarantee, a total satisfaction guarantee on AI go lives in less than 100 days. Some of them could be a few days, but all of them going to be less than 100 days. And we're going to make that commitment on stage. You're getting the first preview. We're excited about it. We have the forward deployed engineers. We have the customer excellence group and we have partners that are lined up and ready to roll with us to make that happen. And so we're going to make that offer and make that offer tomorrow on center stage. I think customers are going to like it a lot because the pipeline is huge. And if they see we're going to now offer them something on the control tower that's a pretty special offering as well to get them started getting them using it, landing and expanding with it. Something you know we're good at. I think you'll know that we're well on our way to being a truly gigantic enterprise software company. We're not slipping, we're growing. And I also want to make it clear that we are also using our own platform. So if you think about the positioning that we have right now, we have our own AI running on Now on Now and we're achieving enormous productivity gains. What do I mean by that? Gina has already told you in earnings calls that it's been good for a half a billion in overachievement on the productivity curve. But I'm telling you that we took a couple of really smart moves with what I call tuck-ins based upon the size of our company and the fact that we never bought anything for revenue. If we did, we would have bought companies that you would have recognized a lot better with a lot more revenue. You know, we bought the future. And the beauty of that is we're going to leave this year with the exact headcount that we entered this year. And what you can take away from that is that our platform is resonating in the way we run our company. The fact that everybody has AI in their pocket to take care of customers, run their business, and run our company. That's why nine out of 10 customer cases are now managed by agents in our company. The same is true for HR. And all the questions around running a business that used to be done by people are now being done by agents with people still in the process only when it's absolutely necessary or when it's a high-touch minute where you have to really touch an employee and make the heart of a human come through or in the case of a customer a white glove treatment because they're exceptionally special. Other than that, the agents are doing the work.

When I started in my career at Xerox Corporation, it was a great CEO named David Kearns and he always said, 'I can absolutely handle and empathize the folks that are a little skeptical, but not the cynics.' And I think what's cool about people in this room and around the world, they like ServiceNow a lot and they're rooting for ServiceNow. So, you might have a certain skepticism. Let me take that away from you real quick so we can get back on the track that we belong on with the rules and rails of today's corporation. We have clarity around the TAM. I think we've taken you through this ride together from IT to multi-workflows to an enterprise platform obviously the AI platform and we brought in the Now Assist across the enterprise but now we took you someplace very very special and I empathize with you because we waited 9 months for Moveworks to close the regulatory process and then on the back of that Viz.ai came in okay and Armis came in like within 3 days so it's probably like, hey, what are they doing? Are they buying growth? What are they doing? No, we weren't. We were buying a ticket to a bright future. And so now you have an AI control tower for business reinvention where you have your agent front door and you have your identity management. Now, this is key. Does anybody here actually think that the working population of corporations around the world is going up? Well, it's not. It's flat. And the birth rates around the world are actually going down. And the good news is at that moment in time, here comes the agents and here comes the robots to make the lives of people better and to increase the productivity of every company around the world. 2.2 billion agents in the next few years. Robots. And we own the identity of not just our agents but the agents that come from other companies in the flow of work. They'll come through our control tower. And then ultimately we will coalesce all the clouds, all the language models, all the data and we'll do it all in a highly secure IT and OT environment. You never heard that before because there's only one company in the world that's built to do it and it's ServiceNow. 600 billion. TAM, we're going for it.

Maybe maybe have a robotic CEO.

Okay, very clear. This is a sub-revenue 30 billion plus commit between now and 2030. I want to be very clear. This is not the Bill ambitious number. They wouldn't let me put that up there. You know what I mean? That is the one that you can say okay like the whole management team bottoms up across the board believes in that number. 60 plus is the revenue growth plus the free cash flow margin is going to be a 60 plus number. Right now it's 56. It's going to 60 plus. And we're not taking our foot off the accelerator. We're going to grow the top line and you'll see the acceleration of that and we're going to expand the margin profile of the company and we're going to take down stock-based compensation down around the 10% mark in 2029. So you'll be dealing with a 50 plus GAAP company. GAAP, G-A-A-P. So I know what you want and we're going to give it to you. So bottom line, high level, we're going to double the company. We're going to be masterful on our execution across the world globally and through industry. The verticals are really good. We're actually also going to take the platform down market a bit because we have 90% of the Fortune 500 now. It's not a marketing slogan. I actually have people go through the math. Nine out of 10 Fortune 500 now. Fact. And so, we know that we're going to expand with the Global 2000, but we're also going to take it down a little bit where we can go into new markets in the upper mid-market and take care of business on folks that really aren't in our league. It's time for that now. And so, we're going to run a very efficient ship. And when I started telling these stories to you a while ago, we were climbing a mountain and it was tough. And we are climbing and climbing and climbing. And there's three things that stand out in the core values of this company. Number one, we're hungry and humble. And we're hungrier than ever. The chip on our shoulder is tougher than it's ever been. Yet, there's a humility and a kindness and an openness about us that never will be in question. We're here to wow our customers. Customer satisfaction and loyalty is job one at ServiceNow. And ultimately, you're going to see a team today. When I tell the board about this team, I tell them this is the absolute best team I've ever run with in my career. And I mean it. And so I don't have a second story. We got the best team in the business. So win as a team is the way we roll. And so what you're going to see today is unbelievable leadership. Amit our great engineering leader obviously the COO of the company as well has done some extraordinary things in architecting the product portfolio it's really amazing it's so exciting and Paul Fipps on the go-to-market side has engineered the AI control tower for business reinvention across the world and Gina obviously is going to give you what she always does right from the heart the truth and the belief in this franchise but I also want to call out, you know, the folks that report to these individuals and how great they are. Too many in name, but I do want to call out one in particular. When we acquired Moveworks, we also acquired a great management team. And instead of having a great leader like Bhavin report into somebody at ServiceNow, we actually said, 'We think you should be the boss and let the people at ServiceNow report into you.' So we're really making account giving big businesses to people we believe in and trust. So we wouldn't have acquired it if it wasn't a cultural fit in the first place or we didn't believe in the leaders and they believe in this mission as much as we do. So we now have a great team. We're going to win as a team and you're going to see the best days of ServiceNow are now and in the future.

Thank you very much everybody. Thank you. Thank you very much. This way, right?

Two foundational anchors that have enabled us to achieve the results that we've achieved. First, our IT asset data gravity. For 20 years, we've been the preeminent provider of IT asset insights and the workflows built on those assets that enable compounding in terms of the asset gravity that we have for a typical enterprise. You combine that with the east to west coverage that we have across so many buyer persona and user persona, back office, human resources, supply chain, source to pay. I promise I won't go through all of them, but essentially 10 primary persona that we address across the enterprise. And if you believe like I do that all enterprise data is ultimately security and risk data, you could see how that provides us with both the right and the responsibility to achieve the preeminence that we've already achieved. But what we realize is as we're building the next generation architecture for this platform shift that we're going through, the agentic AI platform shift, we needed to add to the IT asset data gravity that we already have. So over the course of the last two quarters, as you probably have heard, we've been a bit busy in organicity. So one of the first things we did was acquire Armis. In one sentence, what is Armis to a CISO? Armis is a cyber asset graph. It enables us to take our IT asset dominance and provide a comparable view of that same data to the CISO while adding incremental attributes and asset types that we previously did not cover exceedingly well. Code, unbelievably powerful in this age of AI, OT, IoT, medical devices, but all of that is our cyber asset graph. You combine that with what we did in March by closing on our transaction of VZA, and at its bare essence, VZA is an access graph. It's a way for a typical enterprise to gain insight into who and what has access to what, and then you build extremely high value applications on top of that, agentic or not, that is extracting insight from that data plane. And of course, the third dimension in the multi-dimensional core that ServiceNow risk and security is our knowledge graph, essentially the enterprise context that can take the exact same set of assets and access in Deutsche Bank and that will generate a different outcome from the exact same set of assets and access in Allianz because the context of those organizations are different: different policies, procedures, rules, regulatory frameworks, people, etc. So it's this combination. If you want to leave with anything from this presentation, our core in ServiceNow risk and security is powered by cyber assets, the things, access to those assets by humans and other things, and enterprise context. All of this furnished across all of the platform building blocks that my colleagues have been talking about. And this combination is already meeting at the customer. We're not the only bright folks that have this insight. As an example, a global international financial services leader, whom I might add has a representative in this room, is using ServiceNow risk and security today, has combined that with Armis for capturing connected asset information across the building management systems and able to extract potential vulnerabilities from those BMSs and essentially automatically remediate prior to any incident occurring. This same customer also uses VZA to enable visibility and intelligence by both humans, systems, and agents across the 50 or 60 AWS services that power a subset of the cloud estate. And it's a comparable story that we see across an international consumer package goods leader whose story I won't step through for brevity.

What are the growth drivers both current and future that are powering this business? There's four that I'd love to leave you with. As we become a full-blown workflow, to use the ServiceNow parlance, I expect my colleagues in finance to begin to share insights about this business over time. Here's three leading indicators that I want you to remember. One, how is this business doing organically? How are we growing usage as a key leading indicator to then growing ACV? That's one. Two, as many of you saw in our April 9th announcement around our AI native packaging, we did something super interesting. We enabled the entirety of our customer and our partner base with the rights to AI Control Tower, the delivery mechanism for all of this IP. So one of the additional leading indicators that you should watch for is our effectiveness in building net new IP and driving our existing IP to market as an attach to AI Control Tower. The third, I've been in the cyber industry directly and indirectly for about 26 years, was Brad, remember him from 25 years ago, and one of the dreams of the CISO ecosystem through this time is collective defense. Collective defense. The attackers are actually collaborating on the deep dark web. As you all know, the economic and the architectural prerequisites enabling the defenders to actually collaborate have been, shall we say, lacking. I believe that the machine speed by which agentic workloads can identify code defects, chain them into vulnerabilities, and do malfeasance with that requires a next generation architecture. And the action fabric that SIG talked about earlier is the enabler for collective defense in the enterprise. All of, and I'll describe why in a bit more detail in a minute. This is the architecture by which everything comes together. The data plane I described earlier, powered by assets, access, and knowledge, manifested through the context engine, and delivered through the action fabric to both ServiceNow risk and security workloads and third party workloads. So imagine a circumstance where even though we're now a fully-fledged provider of exposure management solutions post Armis, a customer is already using CrowdStrike for exposure management, they're using Microsoft for endpoint, but they want incremental value arising from that three-axis core that I described powered by ServiceNow. We can serve that up in action fabric, and CrowdStrike agents, Microsoft agents can take advantage of that derived insight for both decisioning and for action. That's the next generation architecture that we're making, with all of which spins meters for ServiceNow as we're delivering value to our customers. So to wrap, our enterprise data intelligence layer that's unparalleled in its coverage of buyer and user persona in a typical enterprise requires us, provides us with a responsibility to enter this market in a material way in the way that we have and to become a participant in the primary table by which the next generation architecture gets built. As this platform shift becomes increasingly mainstream, action fabric is the collaboration layer, the enabling architectural building block that enables all custom risk and security workloads, handset party ISV workloads to collaborate with ServiceNow workloads to reduce security, increase security outcomes, increase risk outcomes, and generate business outcomes as a result. And the last thing I'd like to wrap with, remember the role that zero trust played as an architectural north star of a cloud world. As workloads moved unmasked outside of the firewall, a comparable next generation architecture is needed for the agentic world. And I will posit that the notion of permanent access privileges in systems is going the way of the dodo. It just doesn't make any sense. And so we're going to play a role in making that vision a reality by taking the IP that we have, the IP that we've acquired, and the people that we've assembled to contribute to this zero privilege architecture becoming a reality. So to provide you with some insight into why I believe this claim continues to have credence, I'm going to have Nenshad Vitaliwala, our AI platform product leader, demonstrate this through a simple demo scenario.

Okay, welcome back. All the great innovation from Amit and the team. That was fantastic to see. Now the last time when we were together, we laid out a strategic thesis: platform, industry, and global scale. And today that thesis is working. First, AI platform: AI, data, workflow, all united on one enterprise platform. Not theory, but real execution. Customers are live, partners are building, and the platform is delivering. Now just as important, deeper industry relevance, solving complex mission-critical challenges across financial services, healthcare, manufacturing, retail, and public sector. And third, global expansion. We said we would invest with intention internationally and today Europe, APAC, and Latin America are proving that strategy right. We have made real progress. But the bigger signal is where the market is going next. Across every boardroom in every industry and every geography, the market is converging around three realities. Enterprises want to identify workflows. They don't just want to automate tasks. They want AI that can reason, that can decide, and that can act. Critically, they want speed. They don't want value in 18 months. They want value now. And to do that, they need orchestration and control. One platform to govern AI across every model, every workflow, and every function. This is no longer about experimenting with artificial intelligence. It is about operationalizing AI at scale securely. And at ServiceNow, we were made for this moment. So today I'm going to focus on four ways that we are driving agentic growth. One, workflow identification. Two, autonomous implementation. Three, AI powered ecosystem. And four, our strategic expansion. So let's get started with identification. Now let me show you what this looks like at one of the most advanced technology companies in the world, Nvidia. So, Nvidia didn't come to us with a single point solution or challenge. They came to us because scaling AI inside the enterprise requires orchestrating multiple complex systems simultaneously. So, let's take a look at all four areas. In field engineering, AI agents now triage and troubleshoot in minutes instead of hours. Configure, price, and quote: times for some of the world's most complex AI infrastructure quotes dropped from 5 days to 5 minutes. In customer success, AI is enabling proactive management at scale. And in knowledge management, authoring agents continuously create and maintain critical documents. So, here's the punch line. This is not isolated automation. This is platform level agentic AI. Multiple AI agents operating simultaneously across multiple business functions. And Nvidia isn't the only place this is happening. Across our customers, our four deployed engineers, our elite four deployed engineers that you saw before are powering the Now Next AI program that I spoke about last year. They are doing the work of business reinvention, identifying workflows on site inside customer production environments. I'll give you an example. NT Data, our four deployed engineers are shoulder-to-shoulder using AI to ensure 70,000 configuration items are fully under compliance. At PayPal, we're helping process trillions of payments faster. And at Robinhood, we're ensuring seamless onboarding as they scale headcount 26% year-over-year while integrating all of their acquisitions. Workflow identification. That is only what ServiceNow can do. Let's turn to agentic implementations. Deployment velocity is no longer a services differentiator. It is now a strategic growth lever. And we now have two paths. Self-implementation: AI guided deployment built directly into the platform. Or services-led implementation: AI and AI agents embedded in ServiceNow's delivery process. This dramatically compresses implementation timelines and time to value. So the result is some customers are going live up to 2x faster. Let's take the state of Hawaii. In one of the most regulated environments imaginable, we moved from workshops to go-live readiness in just 6 weeks. 6 weeks. Historically, this could take many months. Now, that's not incremental improvement. That's enterprise deployment velocity that's completely redefined. Now, let's talk about one of our most important stakeholders, our partners. Partners are no longer just extending reach. They are accelerating implementations. They are expanding category adoption and they are compounding platform value for ServiceNow. Here's some data points. Consulting and implementation: 34% year-over-year increase. Managed service providers: 43% year-over-year increase. Resellers: 35% year-over-year increase in sales certification growth. Why do I talk about that? Because it's a powerful increase in the number of sellers positioning ServiceNow with our customers across the globe. Our hyperscalers. This year we were partner of the year in five categories of the hyperscalers. Microsoft's partner of the year for ISV innovation. Google's partner of the year in not one, not two, not three, but four different categories. And the first one was agentic innovation. Second one, business applications platform, and then financial services. So, hyperscalers are important partners for us because they accelerate revenue across all segments, particularly net new logo acquisition. If you think about it, they give us access to millions of pre-committed cloud buyers, faster procurement cycles, and a co-sell motion that's at scale across the globe. And our tech partners and builders, we now have 2,500 applications in the app store for ServiceNow. These apps are built across CRM, risk and security, technology, and employee works. Okay, let's move to the fourth bullet and talk strategic expansion. This is not adjacency for adjacency's sake. This is disciplined category expansion from system of action to system of autonomous enterprise execution. Starting with ServiceNow Employee Works. You heard earlier from Bhavin the power of Moveworks and ServiceNow completely unified. Let me give you a customer example. At a customer I talked to recently, the CHRO told me, she said, look, I have mandated a 10% year-over-year reduction in operational cost through 2028. She said to get there I have to have AI handle routine HR inquiries, employee self-service, and ticket deflection. Now, ServiceNow Employee Works then became the conversational AI front door for that project with auto identifying the workflows in the background. Result: $55 million in projected annual cost savings, 3.5 million productivity hours returned annually. That's business reinvention. Now, the same is true for risk and security with VZA and Armis. Our customers now can see every asset, govern every identity, both human and non-human, and secure all assets and agents through one platform. The ServiceNow AI Control Tower is complete. Finally, our customers are no longer buying AI as separate solutions. And as many of you know, there's a lot of conversations in the marketplace around seat-based pricing versus consumption. But the future of enterprise monetization is not binary. It's hybrid. Customers want the predictability of platform commitments with the flexibility of consumption where agentic scales and creates asymmetric value for them. ServiceNow's new commercial model ensures AI is built in to every offering from day one. And this model is designed exactly like our platform: predictability where it needs to be, flexibility where it should be, and scalability where it matters. So when I back up and I just kind of take a step and look at the whole landscape, here's what I see. We help customers sense what's happening. We help customers decide with intelligence grounded in enterprise context. We help them act through agentic workflows. And we help them secure everything through AI Control Tower. So now I have the privilege and I'm super excited to bring out two fantastic customers who are visionaries in their industries. Michelle Talwar who is the EVP and CDIO at FedEx Corporation and the president of FedEx Data Works, and Oliver Dewald who is the head of ServiceNow COE for Hitachi.

All right. Well, thank you both for joining us. Oliver, I'm going to start with you. So, you're modernizing Hitachi's IT operations globally. Maybe you could just share with us, you know, what's so hard about deploying AI at the enterprise scale of Hitachi. I mean, it's a massive complex organization.

All that change management and basically the operational capabilities of the people on that scale. So Michelle, I mean, we all know FedEx. FedEx moves 18 million shipments per day across 220 countries and territories. I mean it's an amazing operation, amazing company. The operational complexity is extraordinary. But from your perspective, what's hard about deploying AI at scale?

It's a great point and you often refer to us as a digital backbone which I think is a really great analogy. So Oliver, Hitachi and ServiceNow have been collaborating for multiple years, particularly early on in the AI side. And together we've seen some incredible outcomes from strong user satisfaction to rapid adoption. But what do you think's made that success possible?

I would say you really drove a vision early on of a value-based almost zero-touch or zero-touch IT organization. So incredible partnership. It should be something that we could all strive towards and we're definitely not there yet. We're not finished. So Michelle, FedEx has a bold vision to make supply chain smarter with everyone. I mean, this is one of the most exciting things you and I have done, I would say, over the past year. But maybe you share with how your team's unlocking the new value with FedEx Data Works, which I know you run as well, and our strategic collaboration around AI powered automation across the enterprise.

It's super exciting. You'll see more of that tomorrow with you and Raj on stage. So very excited to see that. Okay. So I think we're going to get to probably one of the harder questions here. And one thing we constantly hear from boards and CFOs right now, I know you all hear it, is why can't we just build this ourselves? You know, the whole build versus buy, particularly with, you know, all of the large language models. So Michelle, I'll start with you. What's a build versus buy conversation look like on the inside of FedEx?

It's a great answer. Just because I can doesn't mean I should. So Oliver, how about you? I know I'm sure you've had these debates inside of Hitachi.

Fantastic. I know we could, I could probably keep asking you questions for the next 30 minutes, but I know you guys are both on a time table. So thank you for joining us. Thanks for coming and sharing how we collaborate together with ServiceNow and FedEx and Hitachi. And maybe everyone give a big round of applause for Michelle and for Oliver.

Please welcome to the stage, President and Chief Financial Officer Gina Mastantuono.

AI laid the foundation with each task consuming 1 to 10 assists. Agentic AI deepens the value curve by completing multi-step tasks consuming significantly more tokens. Autonomous AI specialists represent the next step change, purpose-built to perform specific job functions end to end. With the two layers combined, consuming over 15x the assists of generative AI. As AI solves more complex workflows, usage rates climb and so does the value we capture. This is just the beginning. Our autonomous workers will cover all corners of the enterprise as the platform scales.

DocuSign is a customer exemplifying this journey from Gen AI to their first agentic use case and now the zero-touch service desk, their first step towards autonomous workforce. Using ServiceNow, DocuSign has a target of autonomously handling 90% of all IT tickets so human agents can focus on the most critical work. They expect to save millions and the opportunity is massive. DocuSign is realizing their vision of true workflow transformation and creating a playbook that they can replicate across their entire business.

This is just one great customer example. You've already heard directly from FedEx and Hitachi earlier about their incredible AI journeys with ServiceNow. What does it mean for ServiceNow at a larger scale? Let's look at IT incident management. Just one use case within ITSM, we see over 100 million incidents per month on the ServiceNow platform today.

If 75% of those incidents can be processed by an autonomous workforce, this translates into a $3.5 billion ACV opportunity net of any seat licenses that go away. Multiply that across other ITSM use cases and then across the entirety of our platform, we power 100 billion workflows and 7 trillion transactions annually. And you can see the incredible opportunity in front of us.

How long does it take a customer to realize autonomous outcomes at scale? With all new technologies in the enterprise, it takes time. But as you heard from Paul and others, we're finding every possible way to help our customers accelerate that journey. Let's look at an example.

When a customer purchases Agent capabilities, they receive a generous assist allocation, meaning assist overage tends to be relatively more limited in the first couple of years. What starts as a strategic deployment across ITSM, CSM, HRSD becomes a foundation for enterprise-wide AI transformation. By year three, they're taking on more complex agentic use cases, inflecting consumption.

Year-over-year AI ACV compounds driven by the deepening adoption across the enterprise as the customer naturally graduates up the value chain to autonomous workflows. The result is a fundamentally different revenue model with fewer seats but far greater value. We anticipate by year five, this AI customer would be spending 4.5x the initial assist entitlement.

These journeys have already begun. As Bill teased at earnings, we're raising our 2026 AI ACV target from 1 billion to 1.5 billion. The demand we're seeing is real. These are not features bolted on to existing products. They are built-in solutions with strong adoption and measurable outcomes already.

When AI attaches to existing workflows, it doesn't just add revenue today. It makes the platform stickier and expands the ACV opportunity for each and every customer. This is a flywheel that's already spinning, not one just being built. And looking further out, by 2030, we expect 30% of our ACV from ServiceNow AI.

When the unit economics work, when trust builds, when complexity scales, this is what happens. And I really just love that map. Okay, that should give you a sense of our growth story and trajectory. Now, let's turn to profitability.

AI is structurally expanding ServiceNow's margins. I'm going to repeat that. AI is structurally expanding ServiceNow's margins. I'm often asked whether AI inference costs will compress our gross margins. That framing doesn't apply to us. AI reasoning is less than 10% of our cost to serve. If inference costs rise, the margin impact remains modest. Customers aren't paying us for tokens. They're paying for a resolved outcome. Reasoning is one input. Workflow orchestration, governance, context, cross-system action. That's where the other 90% of the value and cost sit. We're differentiated and our pricing reflects the full platform, the CMDB, the workflow engine, the governance layer, the business service map, 20 plus years of operational context.

That competitive positioning is what sets us apart from the standalone AI providers and why our gross margin profile holds. This allows ServiceNow AI to continue to ramp with subscription gross margins remaining above 80%. While our move to hyperscalers is impacting gross margins in the short term, the ROI on that strategy has paid off as net new ACV from public cloud partners nearly tripled year-over-year.

We're also not just selling AI solutions. We're using them ourselves. AI is driving meaningful year-over-year gains in output from our fully ramped reps. We're growing the top line while getting more efficient with every sales dollar invested.

We're also seeing an acceleration in the incremental savings from Agentic AI flattening the hiring curve. The $200 million in savings in 2026, that's on top of $100 million that we saw in 2025 for a total of $300 million in expected annualized cost savings from Agentic AI flowing to the bottom line in 2026. AI agents are doing 90% of the monotonous work. ServiceNow's own support and service operations have been rebuilt on our Agentic AI. This margin expansion is structural, not cyclical.

We are the proof of concept. Every customer is being shown what ServiceNow has already built at enterprise scale. All of this allows us to return to normalized margin expansion in 2027. We expect 100 basis points of non-GAAP operating margin expansion and 100 basis points of free cash flow margin expansion in 2027, inclusive of Armis.

We can commit to this because operational discipline is a core muscle and now AI is compounding that discipline with $300 million of hard savings flowing directly to the bottom line. The message is simple. We are not trading TAM expansion for margin expansion. The model enables both and you'll see that in our numbers in 2027 and beyond.

Turning to our long-term targets. I know you're all waiting for this all day. We keep you here for this part, right? Okay. Phil gave you a little preview, but I've got a little surprise. So, hold please. In 2021, we established a long-term target to achieve $15 billion in subscription revenue in 2026. Many were skeptical then. I see a few of you in the room. Fast forward to today, we're on track to beat that target by half a billion dollars organically. I know the guide is higher than $15.5 billion. Organically, we're beating that by half a billion dollars.

Not many executive teams can say that about their long-term targets. I know you all know that, too. Our momentum puts us on pace to double that target in 2030. That's $30 billion plus in subscription revenue and it's not a blue sky scenario. It's what a durable platform growth story delivers. As you heard from Amit though, we haven't been standing still. We've accelerated organic innovation to catch the tailwinds from emerging opportunities made possible by AI. We've expanded the TAM with recent acquisitions. And while we're not asking you to underwrite this upside today, we see a strong path to it.

A higher 20% CAGR from our current 2026 guidance and $32 billion of subscription revenue in 2030. Pretty impressed that I got to say that number, right? And he didn't take it. But this is not blue sky. There's a roadmap of real defensible growth engines and they are not heroic assumptions.

Security supercharged by our demand for AI Control Tower and the new TAM unlocked by our acquisitions of Armis and Viz. Data becomes even more critical as enterprises deepen their AI investments. You heard that from customers today. AI has upended the CRM market and we are taking share together. These three vectors compound at over 25% growth year-over-year through 2030.

Most importantly, cutting across all of it is AI, agentic workflows, autonomous workers, unlocking value in ways that simply did not exist two years ago. And I would note this does prudently bake in a deceleration in some of our more mature products. In this environment, it's a show-me story. I get that. We get that. That's why we're ensuring your topline growth option with a commitment to continued strong profitability.

Combining topline growth and profitability at a level few companies achieve at any size, let alone ours, puts us on a trajectory of achieving the goal of 60 plus by 2030. This is what we're building. A business that delivers accelerating value for customers and shareholders simultaneously, year after year.

That means focusing on GAAP profitability as well. Two years ago, we committed to getting stock-based comp below 15% of revenue by 2026. We did it in 2025. We also told you that sub 10% is the longer-term destination. Today, we're telling you when: 2029. It's the same playbook, revenue scale, discipline, equity practices, a comp philosophy that allows us to attract the best talent, but doesn't overindex on stock.

Let me put a finer point on how we're returning capital to shareholders. We doubled our share repurchases in 2025. In Q1 alone, the $2 billion ASR represented nearly double the shares we repurchased in 2025 all in one quarter. The result: we expect to be dilution net neutral for 2026. We still have $4.2 billion in authorization remaining. So we have plenty of capacity to keep managing dilution going forward.

We're always evaluating the best use of capital to maximize shareholder value. Our framework is clear. First, we reinvest in organic growth at high incremental returns. Products like AI Control Tower, Now Assist, Workflow Data Fabric. So strategic internal investments deliver. Second, we deploy capital into acquisitions of technology and talent with a focus on tuck-ins that open new TAMs or meaningfully accelerate our product roadmap. Third, we are committed to returning capital to shareholders balanced against the significant growth opportunities we see ahead. We will continue to be thoughtful about that trade-off. With the sizable free cash flow generation that will come with our significant margin expansion, we'll also have tremendous flexibility as we think about capital allocation in the future.

So let's end where we started. I know there's questions swirling in the software industry and it's easier for some people to put us in a box with others. The fact is we are in a category of one. ServiceNow is the orchestration and governance platform that AI requires more of, not less. The AI super cycle is a revenue tailwind for ServiceNow. We showed you the math today. It works. The margin expansion is structural and we are living proof. Our own AI transformation is the strongest customer reference we have. We bring growth and profitability. Two engines of shareholder value, both powered by AI. That's how you get to the rule of 60 plus at more than $30 billion in revenue. Thank you all for joining us today. And now we're going to welcome back Bill, Amit, and Paul.

You love that one.

Go ahead guys. Maybe I'll start Alex with that one. I think on the competitive side, some of those competitors have been loud in the marketplace. We just don't see them in the competitive stack. Now, it might be in a different segment that's, you know, much smaller than a ServiceNow customer, our target market. There might be some edge case areas, but I think for us, we're very focused on the segments that we serve and innovating and delivering great value for those segments. So I think, and you know, anytime that comes out we dive into the research and look at the data and figure out what's working. Are we missing something? So we're very cognizant of what they're talking about. I think on the security side just from a pure customer and go-to-market standpoint, you know, we really think about Viz as, I've never seen anything like it. I mean, well I shouldn't say that. I think CPQ was like it. I think when we bought Logic it just started to really take off because it actually filled out an entire part of the stack with CRM and John and the team have done an amazing job there. I think with Viz, just the identity, securing human and non-human agents and understanding the identity for us has given us an incredible extension of AI Control Tower. So I thought the AI Control Tower was complete and then with Armis, every customer that we talk to around operational technology, where we're discovering, managing and securing operational technology assets and bringing that back into the CMDB, it is just a very compelling story and whatever industry I tell that story in, they need it because they don't have it right now. So I think it's a really, it's a very close fit with ServiceNow SecOps vulnerability response. It's a beautiful extension like we talked about earlier.

I think it's probably also worth noting that nobody buys software from a major enterprise market leader because they have seats or consumption or based on the value. It's always based on the value and then it's how you back into the value in the way the customer is most interested in it. In our case, we have no problem with seats one way or the other because we have consumption, but it just so happens that our active users aren't going down because we go east to west. And so if you think about the 2019 ServiceNow around $3.5 billion, we pretty much add a new ServiceNow every year.

Since this is such a hot and important topic, I think Paul, you would agree that a lot of customers are getting a little bit surprised on the tokenization models and how that is surprising their budget landscape which is forcing them into more predictability with enterprise leaders like ourselves where they want the seats. They want to be able to predict their budgets and they're getting highly surprised in some cases. So, as Gina said, this hybrid model seems to be like the Goldilocks formula right now, but we're open to anything.

Exactly.

Brad, first of all thank you for your kind remarks. The team really put a lot into it and I'm glad you saw the innovation today. Thank you so much. I'll give my color on it and then of course Paul is very close to this each and every day. But we have a more complete story now than we've ever had before. And with AI, the autonomous implementation, because if you think about implementation risk and the time to get things off the shelf for mid-market customers who generally don't have the staffs of a large customer, if we can do that through autonomous implementation, all of a sudden that's a much more attractive conversation. And I'm not suggesting that we're going too far down because we want to be where the money is and we want to be where the retention is. So it's not just the number of new logos you get. It's being thoughtful in getting the right ones so they stay with you and you don't lose your retention leadership. But the offering can be lighter weight. It can be autonomously implemented. And when you think about all the things we have now, we have so many different ways to come into the mid-market customer that we didn't have in 2019 to let's say even 2024. So I think we're a new company. We're transforming even as we roll. Paul, anything you want to add?

If I just could finish just as one further comment there. We have built quite a network now in the ecosystem of resellers and partners that care a lot about the platform and some of them were born for the mid-market. We have one that's a $23 billion market cap company that actually serves the mid-market with great expertise. So if you talk to a large-scale account executive that's, you know, managing General Motors, the likelihood of them calling on a $300 million mid-market company is pretty low. They're going to spend that time at GM. So it's important to have the channel and the indirect partnerships both from an integration and a sales perspective to make a lighter weight implementation, especially if it's autonomous, really rock for the mid-market. And frankly, we're getting a little annoyed. You know, Alex brought up a question about the competition. I made a promise to myself this morning. I was only going to say nice things today, and I wasn't going to get into it, but I have to just tell you, we've had some people say some things. A lot of people say things, but then when we do the research on these things, we find out that it doesn't necessarily tie with what they said. So, please be advised that what they say in a certain way is a compliment because if we're the target, we must be the leader. The other thing is I want to thank some of you who sent me letters how you always know what's really going on and you sent me letters. Hey, Bill, can you believe this that or the other one is now copying Control Tower? Hey, Bill, can you believe... So, we're always like one step ahead of them anyway. And so we'll come up with a new idea next month and we'll always be one step ahead of them. But in the case of the smaller ones to have the loudest microphone, I think we've got some ideas for them. We want to meet them.

There are no options at ServiceNow that are not AI. It's just degrees of the offering and how advanced it becomes with the autonomous Prime, but everything is AI-enabled. So, there's only one ServiceNow and it's an AI ServiceNow. So, I think you probably already knew that, but just in case customers have asked that question, we only have AI.

You're lucky I didn't give you the real real upside numbers. That would have really confused you.

I'll let Bill start. I think we're being, we're trying to be respectful of this environment we're in. And I appreciate everything you guys got to deal with. But we're stronger than ever and feeling fantastic about the company. As it relates to M&A, first of all, I think you should know in the 30 and the 32 or however many 30s, we did not put large-scale M&A in there. So, you know, we typically do these little tuck-ins or acqui-hires in very small companies for us. I recognize it was new for you to think about, you know, the Moveworks and the Viz and the Armis, but believe me, if you had a management team that doesn't have the courage to do smart stuff, that's the ones you short. And when we did Armis, it was at a time when the market was most confused as to what was going on and our conviction never wavered then and it still isn't wavering now. We know we got our version of Instagram. So I want you to know like we put a lot of thought into all those things and all those leaders that were running those companies as independent companies and you saw Chris and the sensation he brings to us with CPQ or Babin on Moveworks or Terrun on Viz. All of these leaders you gave me on Armis are running big pieces of ServiceNow and they wanted to be here in this culture to build this masterpiece. So that's real important to us and it was never about the revenue and none of it hit the revenue line in our last report. So let's just make sure we square up on that. Right now our position is organic. It has always been organic. Those were very unique opportunities to get us to a $600 billion TAM. If you asked us, do we think we have what we need to achieve what we said we would today, the answer is absolutely. And I don't think there's anybody on this stage that does not believe that.

Thank you. Thanks everyone.