Earnings review- Servicenow (NOW) - Q2 2026
Muffett Investments
Earnings Watch · Stock Analysis Division
Earnings Review
27 July 2026
◆ Technology · Software - Application
ServiceNow, Inc.
Report Period
Q2 FY2026
Reported: 2026-07-22
Headline
Mixed Results
→ Mixed Results
Key Metrics at a Glance
Revenue Growth
+24.0%
YoY
Operating Margin
4.1%
-707bps YoY
Free Cash Flow
$473.0M
-10.1% YoY
Net Position
Net Debt
-$6.0B
EPS (Diluted)
$1.60
N/A
Financial Metrics — Detailed Breakdown
| Metric | Q2 FY2026 | Q2 FY2025 | YoY Change | Consensus Est. | vs. Estimate |
|---|---|---|---|---|---|
| Total Revenue | $4.0B | $3.2B | +24.0% | — | N/A |
| Gross Profit | $2.8B | $2.5B | +13.1% | — | N/A |
| Gross Margin | 70.7% | 77.5% | -680bps | — | N/A |
| Operating Income | $162.0M | $358.0M | -54.7% | — | N/A |
| Operating Margin | 4.1% | 11.1% | -707bps | — | N/A |
| Net Income | $298.0M | $385.0M | -22.6% | — | N/A |
| Net Margin | 7.5% | 12.0% | -450bps | — | N/A |
| Operating Cash Flow | $587.0M | $716.0M | -18.0% | — | N/A |
| Free Cash Flow | $473.0M | $526.0M | -10.1% | — | N/A |
| FCF Margin | 11.9% | 16.4% | -450bps | — | N/A |
| Total Debt | $8.5B | $2.4B | +250.9% | — | N/A |
| Cash & Equivalents | $2.5B | $3.1B | -19.9% | — | N/A |
| Net Cash / (Debt) | -$6.0B | $715.0M | -932.2% | — | N/A |
| EPS (Diluted) | $1.60 | $N/A | N/A | $— | N/A |
⚠ Management Commentary — Signals
- No significant red flags detected in EDGAR filing.
📈 Price Reaction
Pre-Earnings Close
$102.06
2026-07-22
Post-Earnings Price
$95.46
Next trading session
1-Day Move
-6.47%
vs. market
52-Week Range
$81.24 – $201.15
Price data sourced from Yahoo Finance. Reaction shown vs. prior trading session close.
Our Verdict
Cautious
ServiceNow, reported a mixed results quarter, with revenue grew +24.0% YoY to $4.0B. operating margins contracted by 707bps to 4.1%. Free cash flow came in at $473.0M. The balance sheet remains under watch given the debt load.
- Revenue grew strongly at +24.0% YoY — well above average.
- Operating margin contracted 707bps YoY — cost pressures are building.
- Free cash flow declined -10.1% YoY — elevated capex or working capital drag.
- Total debt exceeds annual revenue — leverage warrants careful monitoring.
- Stock fell -6.5% on earnings — market disappointed; risk of further downside if guidance underwhelms.
