How does ServiceNow make money in 2027?
ServiceNow makes money mostly from annual subscriptions to its workflow platform, sold by a direct sales force and invoiced a year in advance. In its 10-K for the year ended December 31, 2025, it reported total revenues of $13,278 million, up 21%, of which $12,883 million was subscription revenue (97%) and $395 million was professional services and other (3%).
The latest quarter, Q3 2026, reported on October 28, 2026, shows the same shape: subscription revenues of $3,988 million, up 21%, and professional services and other of $118 million. Current remaining performance obligations (cRPO), the contract revenue due in the next 12 months, were $13.65 billion, up 20.5%.
Certain AI and data products add a consumption component that applies when usage goes beyond the service credits included in a subscription. ServiceNow raised its 2026 AI annual contract value target to $1.7 billion, a company target and not a reported result.
What ServiceNow reported for 2025
ServiceNow's 10-K for the year ended December 31, 2025, dated January 28, 2026, reports two revenue lines. Subscription revenues were $12,883 million, up 21% from $10,646 million. Professional services and other revenues were $395 million, up 17% from $338 million. Total revenues were $13,278 million, up 21% from $10,984 million.
Subscription made up 97% of revenues in both 2025 and 2024. The 10-K says subscription revenues include $492 million in 2025 and $409 million in 2024 recognized upfront from delivery of software in self-hosted offerings, where a customer runs the software itself or through a third party. The rest is recognized over the subscription term.
The 10-K gives gross profit percentages by line: 80% for subscription in 2025 against 82% in 2024, a loss of 5% for professional services and other against a loss of 2%, and 78% in total against 79%. Services are priced mainly on a time-and-materials basis and invoiced monthly in arrears.
The latest quarter: Q3 2026
In its Q3 2026 results, filed October 28, 2026, ServiceNow reported subscription revenues of $3,988 million, up 21% (20.5% in constant currency), professional services and other of $118 million, up 10%, and total revenues of $4,106 million, up 20.5%. For the nine months ended September 30, 2026, subscription revenues were $11,536 million against $9,417 million a year earlier, and total revenues were $11,863 million against $9,710 million.
- cRPO: current remaining performance obligations of $13.65 billion, up 20.5% (21% in constant currency). This is contracted revenue the company expects to recognize in the next 12 months.
- RPO: $29.7 billion, up 22%. The 10-K reported $28.2 billion at December 31, 2025, of which 46% was cRPO.
- Large customers: 680 customers with more than $5 million in annual contract value (ACV), up approximately 23% year over year, after 19 transactions over $5 million in net new ACV in the quarter. The 10-K counted 603 such customers at the end of 2025 and 502 a year earlier.
- Full-year 2026 guidance: subscription revenues of $15,780 to $15,790 million, up 22.5% (21% in constant currency), and a free cash flow margin of 36%. These are company targets, not results.
How the money is earned: annual contracts, direct sales, partners
The 10-K says ServiceNow sells subscriptions mainly through its global direct sales organization, which accounted for 78% of total revenues in both 2025 and 2024, and also through managed service providers and resale partners. It typically invoices customers annually in advance, with payment due within 30 days. It had approximately 8,700 customers at December 31, 2025, and revenues outside North America were 37% of the total.
Its products fall into four areas, per the 10-K: Technology (IT service, operations, asset and risk management), CRM and Industry, Core Business (HR, legal, finance, supply chain and facilities), and Creator and Other (low-code development tools). All run on the ServiceNow AI Platform. The filing does not report revenue by these areas, so this page does not either.
AI revenue and consumption pricing
The 10-K describes Now Assist as the platform's integrated AI offering and says certain AI and data solutions "include a consumption-based pricing component" that applies when customer usage exceeds the fixed number of service credits in the subscription agreement. In other words, AI is sold inside the subscription first, and extra usage can raise what a customer pays.
In the Q3 2026 release, ServiceNow raised its AI annual contract value target for 2026 to $1.7 billion, up 70% from the beginning of the year, from $1 billion at the start of 2026. It also said year-to-date consumption of agentic AI in production was up more than 13x year over year. Both are company statements. The filings read here do not break AI out of reported subscription revenue, so no AI revenue figure is reported on this page. Our page asking whether Now Assist is working looks at the evidence.
Partners that resell and implement
The Q3 2026 release names several partners and customers. Thrive, a managed services provider to small and mid-sized businesses, describes the Thrive Platform as "powered by ServiceNow" and lists 2,500+ customers and 180,000+ end users supported (vendor-stated). ServiceNow's release says Thrive resolves 73 percent of issues at first contact and cut time-to-resolution by 63 percent, returning more than 14,500 estimated engineer hours to customer-facing work. Those results come from the release, not an independent audit.
The same release says INRY, a Cprime Company, deployed ServiceNow EmployeeWorks in six weeks and is rolling it out to clients as an implementation partner. The 10-K counts revenues from systems integrators and managed services providers as part of the direct sales organization's 78% share.
Who competes for the same budgets
The 10-K's risk factors say "Cloud-based and AI native vendors may build more business applications or AI powered automation solutions that compete with our products and services." We cover that group on a separate page: how ServiceNow competes against AI-native workflow tools. Mid-size service management vendors publish prices that can be set beside the model above.
- Freshservice (Freshworks): lists Starter at $19 per agent per month, Growth at $49 and Pro at $99, all billed annually, an Enterprise plan with custom pricing and a Freddy AI Copilot add-on at $29 per agent per month. It says it is trusted by 74,000+ businesses (vendor-stated).
- HaloITSM: shows £66 per agent per month billed annually with the United Kingdom currency selected, requires an onboarding package at a bespoke cost, and offers an Enterprise Package with unlimited licenses and funded implementation for a fixed $1M per year.
Questions people ask
How does ServiceNow make most of its money?
From subscriptions: $12,883 million of its $13,278 million 2025 revenue was subscription revenue (97%), per its 10-K for the year ended December 31, 2025.
How much does ServiceNow make from professional services?
Professional services and other revenues were $395 million in 2025, up 17%, or 3% of total revenues. In Q3 2026 they were $118 million.
What is ServiceNow cRPO?
Current remaining performance obligations are contracted revenue the company expects to recognize in the next 12 months. They were $13.65 billion at September 30, 2026, up 20.5%.
How many ServiceNow customers pay more than $5 million a year?
ServiceNow reported 680 customers with more than $5 million in ACV at the end of Q3 2026, up approximately 23% year over year, against 603 at the end of 2025.
Does ServiceNow charge extra for AI?
The 10-K says certain AI and data solutions include a consumption-based pricing component that applies when usage exceeds the service credits in a subscription. ServiceNow also targets $1.7 billion of AI annual contract value for 2026.
Sources
- ServiceNow Form 10-K, year ended December 31, 2025 (SEC) · Revenue by line, margins, sales model, customers, RPO, pricing, competition
- ServiceNow Q3 2026 results (SEC 8-K, October 28, 2026) · Q3 revenue, cRPO, RPO, large customers, AI target, 2026 guidance, partner examples
- Thrive · Partner platform and customer counts (vendor-stated)
- Freshservice pricing · Plans and per-agent prices
- HaloITSM pricing · Per-agent price and enterprise package
Facts were read from the linked pages on November 2, 2026. ServiceNow reports its next quarter after that date, so figures may change. Vendor claims are labeled vendor-stated and no company is adjusted for. If a page here is out of date, tell us and we will correct it from a source.
Top photo: Barakpinch / CC BY-SA 4.0 via Wikimedia Commons