ServiceNow Gives Lackluster Outlook on Slower AI Sales Bump
- Company says it’s moving more to ‘pay as you go’ for AI tools
- Potential disruption to US spending also weighs on guidance
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ServiceNow Inc. gave a fiscal-year sales outlook that fell short of expectations, saying it is focused on fueling adoption of new generative artificial intelligence products rather than generating significant revenue for those tools in the near future. The shares dropped in premarket trading.
Subscription revenue in 2025 will be about $12.7 billion, the company said Wednesday in a statement. That’s shy of the roughly $12.9 billion anticipated by Wall Street analysts, according to data compiled by Bloomberg. Subscription revenue makes up the bulk of ServiceNow’s sales.