ServiceNow's AI business annual contract value exceeds $1 billion in the second quarter

Odaily reported that enterprise software company ServiceNow announced its results, with subscription revenue rising 25% year-on-year to $3.9 billion, exceeding TD Cowen’s forecast of about $3.8 billion. Current remaining performance obligations reached $13.2 billion, higher than TD Cowen’s estimate of $13.0 billion.

ServiceNow raised its full-year subscription revenue guidance to between $15.76 billion and $15.78 billion, with the upper range matching TD Cowen’s forecast. Its share price has dropped 50% over the past year, with the market focused on the potential impact of generative AI replacing some enterprise software services.

On Wednesday morning, OpenAI released Presence, a tool to help businesses set up and run AI agents for tasks such as automating customer service, sales, and employee IT service request processing. ServiceNow is integrating AI into its current products and launching new AI-driven offerings.

ServiceNow stated that the annual contract value of its AI business exceeded $1 billion in the second quarter, and the number of customers deploying production-ready AI agents grew by nine times over the past nine months. The company also signed 123 net new deals with annual contract values above $1 million, an increase of nearly 40% year-on-year.