ServiceNow (NOW, Financial) has announced its goal to surpass $1 billion in annual contract value for its flagship AI software product by next year. During the company's annual conference, CFO Gina Mastantuono revealed a new target for the generative AI product, Now Assist, set for 2026. Currently, the product's annual contract value exceeds $250 million, representing the amount customers commit to paying each year.
The company focuses on developing software applications to help businesses optimize human resources and IT operations, aiming for business automation. Over the past two years, ServiceNow has been integrating generative AI features deeply into its products, offering higher-tier subscriptions that allow users to perform various tasks through AI tools.
In April, ServiceNow reported quarterly sales growth forecasts exceeding analysts' expectations, leading to a 20% increase in its stock price since then. This growth indicates strong demand for its software products, even amid economic uncertainties due to escalating tariffs in the U.S.
Mastantuono noted that some customers have increased their spending on ServiceNow products by 60% after upgrading to access AI features, highlighting the attractiveness and significant benefits of these AI capabilities.
Analysts predict ServiceNow's annual revenue will surpass $13 billion this year.
