Bill McDermott has a habit of making promises that sound like boasts and then keeping them.
When he took the helm of ServiceNow in 2019, the company was doing $3.5 billion in annual subscription revenue. This year, it will finish at nearly $16 billion. “We are printing a new ServiceNow every year,” he told reporters at the company’s annual Knowledge conference in Las Vegas on Tuesday. It’s clearly more than a rehearsed punchline — just take a look at the math that he’s seeing.
At its Financial Analyst Day on Monday, ServiceNow told investors it intends to double the company again by 2030, reaching more than $30 billion in subscription revenue. What made analysts pay attention wasn’t the target itself — it was the framing. President and CFO Gina Mastantuono noted that in 2021, the company set a five-year target of $15 billion and is on track to beat it by half a billion dollars, organically. “Our momentum puts us on pace to double that target in 2030 — that’s $30 billion-plus in subscription revenue,” she said. “And it’s not a blue-sky scenario. It’s what a durable platform growth story delivers.”
The company’s pipeline supports the claim. ServiceNow currently holds $27.7 billion in remaining performance obligations — approximately double its annual revenue — a metric McDermott cited on CNBC Tuesday as evidence the company is “growing faster than any other enterprise software company at scale in the world. Ever.” A $32 billion upside scenario, requiring a 20% CAGR across its platform and AI consumption businesses, was also presented, though Mastantuono said the company isn’t yet asking investors to underwrite that.
The AI monetization story
The most closely watched number at the analyst day was the trajectory of Now Assist, ServiceNow’s AI product line. The company crossed $600 million in Now Assist annual contract value in 2025 — more than doubling year-over-year — and entered Q1 2026 at $750 million. On Monday, it raised its full-year AI ACV target from $1 billion to $1.5 billion. By 2030, Mastantuono said, ServiceNow expects AI to represent more than 30% of total ACV.
The pricing logic underpinning that projection is worth understanding. ServiceNow’s argument is that AI doesn’t compress its revenue — it compounds it. Mastantuono walked through the math: a team of 20 support analysts costs over $1 million annually, with roughly 90% of that in labor. ServiceNow’s autonomous agents, she said, can resolve 75% of that team’s work, cutting the customer’s total cost by 65% — while the freed-up seat licenses convert into AI agent consumption at 6.5 times the value. “Even after accounting for license reduction,” she said, “total ServiceNow spend grows over 5x.” The company calls this the flywheel, and says it’s already spinning: Now Assist customers who renewed in 2025 expanded their ACV by an average of 3x.
The margin question
One concern analysts have raised is whether AI — specifically, the cost of inference — will erode ServiceNow’s famously high gross margins. Mastantuono pushed back directly: AI reasoning accounts for less than 10% of the company’s cost to serve. “Customers aren’t paying us for tokens — they’re paying for a resolved outcome,” she said. Now Assist gross margins remain above 80% as AI scales, the company said.
The company also cited its internal AI deployment as a proof of concept. ServiceNow generated $500 million in annualized AI-driven value in 2025, including $100 million in OpEx savings. In 2026, it expects $200 million in incremental OpEx savings — for a total of $300 million in hard cost reductions flowing to the bottom line — while maintaining flat headcount for the full year.
12 businesses, one platform
McDermott used the media session to reframe how analysts should think about ServiceNow’s portfolio. “If you look at ServiceNow, you have 12 businesses over $100 million in annual contract value,” he said. “Several are over a billion, some two, some five.” Security and risk — turbocharged by Armis, Veza, and the AI Control Tower — crossed $1 billion in ACV in 2025 and grew 40% organically. CRM crossed $1.8 billion in ACV and is on track to cross $2 billion. The company’s data analytics product surpassed $100 million ACV in its first full year.
The underlying bet is that the agentic AI wave — which McDermott has taken to calling the pivot from “what AI can do for your business” to “what AI can do to your business if it’s ungoverned” — makes ServiceNow’s orchestration and governance layer more valuable, not less. On CNBC Tuesday, he put it bluntly: “AI thinks — but it doesn’t act.” The company’s platform, the argument goes, is where the acting happens. Whether the market agrees, at anything close to the scale McDermott is projecting, will define the second chapter of his tenure.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing. ServiceNow is a Fortune partner that provided materials for review.
