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**ServiceNow Stock Soars on Strong Q2 Results and Raised Guidance, Fueled by AI Adoption**

ServiceNow shares jumped 7% Wednesday after the enterprise technology company posted impressive second-quarter results, exceeding expectations and prompting an upward revision of its full-year revenue forecast. The strong performance is being attributed to increasing adoption of artificial intelligence within the company’s platform.

Subscription revenues, a key indicator of ServiceNow’s performance, reached $3.11 billion, surpassing analysts’ estimates of $3.03 billion. Driven by this success, ServiceNow has raised its full-year subscription revenue guidance to between $12.775 billion and $12.795 billion.

“Every business process in every industry is being refactored for agentic AI,” said ServiceNow CEO Bill McDermott, emphasizing the company’s focus on leveraging AI technologies.

Net income for the quarter surged by 47% to $385 million, or $1.84 per share, compared to $262 million, or $1.26 per share, in the same period last year. Overall revenue grew nearly 23% to $3.22 billion.

Looking ahead, ServiceNow anticipates a slight dip in current remaining performance obligations in the third quarter due to seasonal factors and a higher concentration of contract renewals in the fourth quarter. The company also acknowledged potential impacts from budget shifts within U.S. government agencies, with one federal customer accounting for 11% of revenues in 2024.

However, CFO Gina Mastantuono remains optimistic, stating, “While federal business is a bit uncertain today versus a year ago, we’re navigating it well, and we feel confident that our guidance reflects any potential changes that we’re seeing.” During the first quarter, its public sector business grew 30%.

For the third quarter, ServiceNow forecasts subscription revenues between $3.26 billion and $3.27 billion, exceeding the StreetAccount estimate of $3.21 billion. Current remaining performance obligations rose nearly 25% to $10.92 billion in the quarter.

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