Can ServiceNow's Core Business Suite Launch Boost Subscriptions?

ServiceNow’s NOW enterprise workflow automation suite has been gaining traction as enterprises increasingly adopt digital tools to streamline operations across departments. Through the Now platform, ServiceNow supports diverse workflows, ranging from IT service management and customer service to HR, employee experience and app development.

NOW’s workflow engine, the Now platform, has been an important driver for workflow automation and cross-functional service delivery across its enterprise base. 

ServiceNow’s latest Core Business Suite extends the Now platform into finance and supply chain operations. The suite includes source-to-pay, invoice processing and supplier lifecycle management workflows, designed to automate back-office functions without replacing existing ERP systems. Core Business Suite workflows are powered by Now Assist, which uses AI to automate tasks such as document handling, issue resolution and service requests. The launch reflects ServiceNow’s continued investment in expanding workflow automation across critical enterprise functions.

ServiceNow’s expanding platform is driving enterprise adoption. In the first quarter of 2025, the company reached 508 customers, generating more than $5 million in ACV, representing 20% year-over-year growth. The company reported a 98% renewal rate, reflecting strong customer retention within its existing base.

Expanding customer base is driving subscription revenues, which hit $3.01 billion in the first quarter of 2025, reflecting a year-over-year growth of 20% in constant currency. The figure beat the Zacks Consensus Estimate by 0.28%. As demand grows for AI-enabled, cross-functional workflows across finance and supply chain operations, ServiceNow expects the Core Business Suite to contribute meaningfully to its subscription-based revenue growth.

ServiceNow Faces Competition in Workflow Automation

ServiceNow’s enterprise workflow automation suite faces intense competition from Oracle ORCL and Pegasystems PEGA, both of which are expanding their automation capabilities across finance and operations.

Oracle is strengthening its position through Fusion Cloud Applications, which offer AI-powered tools for finance, procurement and supply chain. Oracle’s platform integrates workflows across departments, using embedded AI to automate tasks like invoice processing and account reconciliation. Its unified cloud applications align with enterprise demand for scalable and intelligent back-office solutions.

Pegasystems is strengthening its position with the Pega Platform, a low-code automation solution that combines workflow orchestration with AI-powered decision making. The platform supports use cases across finance, customer service and operations, particularly in highly regulated industries. With recent innovations like GenAI Blueprint, Pegasystems is expanding its generative AI capabilities to help enterprises design and optimize complex workflows more efficiently.

NOW’s Share Price Performance, Valuation and Estimates

ServiceNow’s shares have declined 5.2% year to date, underperforming the broader Zacks Computer & Technology sector’s return of 2.4% but beating the Zacks Computer- IT services industry’s decline of 6.6%.

Now's Performance

ServiceNow stock is trading at a premium, with a forward 12-month Price/Sales of 14.77X compared with the industry’s 19.35X. NOW has a Value Score of F.

NOW Valuation
 

The Zacks Consensus Estimate for ServiceNow’s second-quarter 2025 earnings is pegged at $3.53 per share, unchanged over the past 30 days, indicating 12.78% year-over-year growth.

ServiceNow's Price and Consensus

ServiceNow, Inc. price-consensus-chart | ServiceNow, Inc. Quote

The consensus mark for NOW’s 2025 earnings is pegged at $16.51 per share, which has increased by 3 cents over the past 30 days. The figure indicates an 18.61% increase year over year.

ServiceNow currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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