ServiceNow booked subscription revenues of 3,877 million dollars on the 22 July 2026 8-K, a 150 basis-point beat of the high end of guidance. GAAP subscription printed 73.5 percent against 80 percent a year earlier. ServiceNow AI already has 1 billion dollars of annual contract value. Two consecutive 10-Qs, by the second quarter of fiscal 2027, that print GAAP subscription gross margin at or above 80 percent and omit ServiceNow AI annual contract value as a named line would mean the ticket was the product again.
A ticket waits. A workflow graph already acts.
A ticket is a record that waits for a person. Incident, request, change. That was the original product, and it is still a module. Mixing the module with the company is how a workflow graph gets graded as a help desk. The ticker is NOW. The object is not a queue.
The 22 July print already split the objects. Subscription revenues 3,877 million dollars, 24.5 percent year over year, 23 percent in constant currency. Total revenues 3,987 million. The beat of the high end of guidance was 150 basis points, net-new annual contract value plus an on-premise mix that ran ahead, US federal demand pulling some on-premise subscription from the third quarter into the second. That pull-forward is timing.
Knowledge 2026 in May was the demonstration, not the 10-Q. Otto as a unified AI experience that routes intent and executes inside guardrails. AI Control Tower over every agent and workflow, wherever it runs. Action Fabric so the platform and third-party AI can take action through ServiceNow workflows, with Anthropic named as the first design partner. Those are graph sentences. A graph has nodes, a policy, and an action. A ticket has a number and a queue.
Build Agent in Studio, Context Engine, Autonomous Data Analytics, autonomous specialists for IT, customer, employee, and security. The 8-K is listing a control plane. Adoption is the 1 billion dollars of ServiceNow AI annual contract value already crossed in the second quarter. It is also not the whole book.
GAAP subscription gross margin printed 73.5 percent in the quarter, against 80 percent a year earlier. Non-GAAP subscription gross margin printed 80.5 percent, against 83 percent. Full-year GAAP subscription gross margin is guided at 75 percent, non-GAAP at 81 percent. The company said the fiscal 2026 gross-margin guide reflects more customers utilizing hyperscaler partnerships and an acceleration of customer AI adoption. That is inference as cost of goods, some of it paid to Amazon, Microsoft, or Google. The non-GAAP 81 percent is the slide. The GAAP 75 percent is the number that has already moved.
Snowflake already printed product GAAP 71 percent, non-GAAP 75 percent, the 80 percent line given back in a name that is beating. Do not re-grade that print. ServiceNow is the seat-and-workflow incumbent on the same haircut. The middle of the software stack is still the other object: the seat-priced horizontal whose product is a nicer ticket.
ServiceNow already acts on a workflow graph. A ticket waits in a queue.