ServiceNow just had their Q2 earnings call yesterday. Below were the key take-aways for us from AI to hiring.
On AI: “The AI hype cycle has not slowed for good reason. Enterprises in every industry and every region of the world have AI transformation as priority number one. IT budgets are highly resilient and increasingly focused on strategic mission-critical AI platforms….. AI is driving substantial productivity increases for our customers. People and AI together will create new businesses, new discoveries, and catalyze economic growth in every corner of the world.”
On the cost of AI: “we’ve heard from other vendors like SAP last night was talking about a higher level of, like, engineering in the customer necessary to get people up on AI. Salesforce talked about similar dynamics. Is the cost of sale for AI just higher?”
On tariffs: “I don’t think the demand environment changed dramatically. I think the demand environment is wide open for AI innovation. Obviously, the workflow data fabric and a change in CRM, those are transformative things that have remained very consistent here. And the customer’s wallet is wide open to that level of innovation. I don’t think it’s as much the demand environment changing as it is the same. In the sense that change geopolitical scenarios, economic tariff scenarios, all these things have become the new norm. And so companies in preparation for that need an agentic AI layer of technology to operate their companies.”
ServiceNow is raising guidance: “With that in mind, for 2025, we are raising our subscription revenue by $125 million at the midpoint, $12.775 billion to $12.795 billion, representing 20% year-over-year growth”
ServiceNow On hiring: “on the go-to-market perspective, and we will not be slowing down hiring, especially in those critical areas, especially on technical sellers as well. As we move into this AI agentic world that we’re living in. So we’re not slowing down there. We continue to hire, and what you’re seeing is a lot of the efficiency in the operation side of both the selling and marketing teams….. we’re definitely still investing for growth to meet demand for AI transformation. So think about hiring quota-bearing sales and engineers while leaning in very heavily from an R&D and technical selling perspective”
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