SERVICENOW, INC. Deutsche Bank 2026 Technology Conference
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Okay. I think we're live. Welcome back, everybody. I'm still Brad Zelnick, Deutsche Bank Software Equity Research, and for this session, truly delighted to be joined by none other than the Chief Financial Officer of ServiceNow, Ms. Gina Mastantuono. Gina, thank you so much for being here.
Thanks so much for having me, Brad. Happy to be here. Good to see everyone.
Always good to see you. It's always good to see you in Southern California.
Yes. Although super hot down here right now.
Although super hot. I do not think you need really much of an introduction, but I want to jump in. When I think of ServiceNow, I often think back to the founding of the company. I think about your founder, Fred Luddy, and the platform nature of what he built and how it has endured the test of time. Can you just help us bridge from the past into the future? Why are you so confident that ServiceNow will continue to lead in the AI era?
Well, listen, I think first and foremost, Fred is just an incredible founder, incredible human being, and he built this incredible platform, one data model, one architecture, one platform. 20 years ago, people did not know what a platform was. So funny, right? They are like, "Platform? What is a platform? Give me a use case." He was an IT guy, so he gave the most important IT use case, solving the problems of the people that he worked with every day. From there, we built out, right? Because our customers saw that this incredible platform that was amazing for IT and had great workflow capabilities was able to do the same thing across the enterprise, whether you are an HR customer. We have been customer-focused even from the beginning, and AI just makes it even more important to have a platform that drives incredible scale and workflow.
We are really excited about continuing to build out this platform that he built for us. Fred is still on our board, and he is just an incredible human and leader. In an AI world, autonomous work is more important than ever. How do we automate this work? We have billions of workflows on our platform, trillions of transactions each and every year, and now how can we help our customers automate them even more in an AI world? We have the context, we have the data, we have the rules and rails to manage it all in one platform with ServiceNow. That is why I am so excited about the future, and AI just makes ServiceNow even more applicable.
Excellent. I just learned recently that Fred is a real tennis fan, which makes me like him even more because I am as well.
He is a huge, avid tennis player and tennis fan.
That is true. Awesome. A tip of the hat to Fred.
Maybe just turning to the exorbitant amounts that customers are spending on AI, headlines of enterprises blowing through token budgets. Investors have really been concerned about AI spend crowding out other spend.
Yep. To what extent do you think this is really happening, and is this something that we should think of as a net tailwind or headwind for ServiceNow, or perhaps neither?
Yeah, listen, I think the headlines are accurate. I talk to CFOs, my peers, every single day, and all of them are talking about how do they manage their token budgets going forward. So it's real. People are spending. Listen, Anthropic and OpenAI have huge revenue numbers, so we know that folks are spending. The question I get often is: Is it taking away from your budget? And are customers spending less elsewhere as a result? And I'd say there's probably some customers that are spending less in other areas because of their token spend.
What we're seeing, though, specifically in ServiceNow more directly, is that while they might be spending more in one area, if they're really seeing value from a product, even internally, I'm spending more on tokens, but I'm still leaning in with my software providers and spending more with the ones who are building incredible AI into their products. That's what we're seeing with our customers. What I'd say is when you're able to drive real time to value quickly in this market that we find ourselves in, we're not seeing a crowding out of spend. In fact, what we're seeing is a lot of companies seeing incredible productivity as a result of the AI that they've been investing in. They're able to tap into the labor pool much more broadly and really find dollars there. ServiceNow, great example. We're growing our top line.
Q2 was 23%, so above 20%. We're keeping our headcount flat this year, and this is after absorbing M&A. How are we able to do that? Because we're seeing $500 million worth this year alone of AI efficiencies, which allows us to not increase our headcount, right, but still growing at 23%. We're seeing a lot of customers lean into a labor pool dollar budget for spend, so it's why we've been able to continue to see great growth. You continue to see, we talked about our AI business crossing $1 billion in Q2, well on its way to the 1.5 guide we gave for the full year. That's not a business that's being crowded out. That's a business that's, I think, thriving.
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