ServiceNow, Inc. (NOW) Announced Q2 2026 Earnings on July 22, 2026, Reporting "Q2 subscription revenues were $3.877 billion"

During the Q2 2026 earnings call, President and Chief Financial Officer Gina Mastantuono reported that Q2 subscription revenues were $3.877 billion, representing 23% year-over-year growth in constant currency.Remaining performance obligations, or RPO, ended the quarter at approximately $29 billion, representing 22% year-over-year constant currency growth.Current RPO was $13.2 billion, representing 21.5% year-over-year constant currency growth.Mastantuono also stated that the non-GAAP operating margin was 29.5%, and the free cash flow margin was 16% for the quarter.The company's renewal rate was 98% in Q2, and ServiceNow AI ACV crossed over $1 billion.Chief Executive Officer Bill McDermott highlighted that ServiceNow is positioning itself as an enterprise and cybersecurity leader. McDermott noted that their risk and security business is a 10-figure cybersecurity business and is the fastest growing of the top 10 cyber companies in the enterprise. To strengthen this area, the company has integrated Armis, which tracks 7 billion devices in real time, and Veza, which maps access across human, machine and AI identities.Additionally, McDermott reported that 50% of net new business is already non-seat-based.The company also highlighted EmployeeWorks, which combines Moveworks conversational AI with ServiceNow workflows, noting that EmployeeWorks deal volume grew over 150% quarter-over-quarter.For the third quarter of 2026, the company expects subscription revenues between $3.975 billion and $3.980 billion, representing 20% year-over-year growth on a constant currency basis, with expected current RPO growth of 20% on a constant currency basis and an operating margin of 31%.For the full year 2026, Mastantuono raised subscription revenue guidance by $15 million at the midpoint to between $15.755 billion and $15.770 billion, representing 21% year-over-year growth on a constant currency basis.For the full year, the company expects a subscription gross margin of 81%, an operating margin of 31.5%, and a free cash flow margin of 35%.In product and partnership announcements, McDermott highlighted several developments, including the deeper integration of ServiceNow AI Control Tower and Microsoft Agent 365. He also noted extended Agentic AI governance from desktops to data centers with Project Arc, new agents secured by the NVIDIA OpenShell Runtime and governed by ServiceNow AI Control Tower, and enhanced collaboration between ServiceNow's AI native FDEs and industry-led Accenture FDEs. Furthermore, the company discussed an upcoming business model evolution featuring a conversational service desk experience with no tickets and AI-coded automation, which is currently in beta with several customers.