ServiceNow Reports Strong Q2 Earnings Amid AI Adoption Growth
ServiceNow (NYSE:NOW) reported strong second-quarter results, with revenue reaching $3.99 billion and non-GAAP earnings per share of $0.90, both exceeding market expectations. The company's growth was driven by increasing adoption of its generative AI services, particularly Now Assist. ServiceNow also raised its subscription revenue outlook due to robust enterprise AI momentum. The firm reported free cash flow of $634 million for the quarter, a 19% year-over-year increase, reflecting strong performance in AI-driven subscriptions. Despite recent valuation declines, analysts view NOW as undervalued at 19.7x forward earnings and believe it could re-rate to 25x P/E if its AI momentum continues.
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