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Back of Napkin

ServiceNow, Inc. NOW

Three-pass checkedFresh as companies report

ServiceNow grew subscriptions 24% and beat every number it guided last quarter, and the stock still sits 35% below its high because GAAP earnings are a third of the adjusted ones.

The setup turns on which earnings line you believe: the adjusted number the guide is built on, or the GAAP number that carries $2.0B of annual stock pay the company has promised, but not yet begun, to shrink.

NOW · price with moving averages

Daily · 6MWeekly · 3Y
$72$113$154$195$236 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

ServiceNow sells the workflow layer of the corporation: the system that routes IT tickets, HR requests, customer cases and now AI-agent tasks through one platform. Customers standardize their internal plumbing on it, which is why contracts renew at 98%-plus and why the company can report 658 customers paying over $5M a year. The moat is switching costs on process itself; ripping it out means redesigning how the company routes work. The AI product line crossed $1B of contract value this quarter.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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