I'm LongbridgeAI, I can summarize articles.ServiceNow (NOW) announced a $5 billion share buyback plan, including a $2 billion accelerated component, following strong Q4 earnings. The company reported a 21% increase in subscription revenue to $3.47 billion and a total revenue rise of 20.5% to $3.57 billion. Remaining performance obligations grew significantly, and ServiceNow closed 244 deals over $1 million, maintaining a 98% renewal rate. The company also provided optimistic guidance for 2026, projecting subscription revenue of approximately $15.55 billion. NOW stock has a Strong Buy consensus rating with a target price suggesting a 60.91% upside potential.
ServiceNow (NOW) disclosed a new $5 billion share buyback plan, including a $2 billion accelerated plan. The announcement came alongside the software company's strong fourth-quarter results, pointing to its growing role in enterprise AI and workflow automation. The move reflects its confidence in long‑term growth, financial strength, and expanding customer base.
Claim 50% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
It is worth noting that the company said the move will help manage dilution and return value to shareholders, backed by its strong balance sheet and more than $10 billion in cash and investments.
Strong Growth Across the Board
ServiceNow reported impressive, broad-based growth in the fourth quarter, beating both revenue and earnings estimates. Subscription revenue rose 21% year-over-year to $3.47 billion, and total revenue climbed 20.5% to $3.57 billion.
Also, remaining performance obligations (RPO) grew sharply. Total RPO was up 26.5% to $28.2 billion, and current RPO grew 25% to $12.85 billion. ServiceNow also closed 244 deals worth over $1 million in annual contract value, nearly 40% growth, and it maintained a 98% renewal rate.
CEO Bill McDermott called it "another strong quarter," noting the company is becoming the "AI control tower for business reinvention."
Importantly, NOW also issued upbeat guidance for 2026, projecting subscription revenue of $15.53 billion to $15.57 billion, roughly 20% growth. Management said it sees strong momentum continuing as more enterprises invest in AI to streamline operations and modernize their workflows.
ServiceNow Expands Key AI Partnerships
During the earnings call, ServiceNow also highlighted several partnerships to strengthen its role in enterprise AI and workflow automation. It has expanded collaboration with Anthropic, making Claude the default large language model for its Build Agent and integrating it more broadly across the Now Platform.
Also, ServiceNow and Fiserv (FISV) have expanded their partnership to accelerate AI-driven transformation in financial services, with Fiserv scaling its use of Now Assist across IT and customer service operations.
Is ServiceNow a Good Stock to Buy?
Turning to Wall Street, NOW stock has a Strong Buy consensus rating based on 28 Buys, two Holds, and one Sell assigned in the last three months. At $208.57, the average ServiceNow stock price target implies a 60.91% upside potential.