Preview|NOW 1Q26: Growth Largely In Line as Macro Stays Choppy; AI Control Tower Emerges as New Narrative

We spoke with three top ServiceNow (NOW) channel partners. 1Q26 performance came in largely in line with expectations — growth moderated from the 4Q25 budget-flush quarter, but full-year 2026 targets remain intact, with pipeline visibility broadly healthy. Overall, AI adoption remains soft, but we think the most notable incremental datapoint this quarter is the customer traction of AI Control Tower (AICT), which is showing up in the majority of new pipeline deals. Early anecdotes suggest that hardware pricing inflation is squeezing software budgets to some extent. Despite generally low expectations for results following the recent sell-off, we remain cautious about the positioning of application SaaS companies as LLMs become increasingly powerful.

1Q26 growth in line, full-year 2026 targets intact

North American Channel Partner A

• 1Q26 Growth: NOW practice achieved 20.7%–20.8% yoy (4Q: 21.2-21.3%, stronger than expected due to budget flush), slightly below internal target of 21.3%+. Macro softness in 1H led to a weaker-than-expected AI uplift.

• Vertical Mix: All modules tracked steadily; the shortfall was concentrated in the AI-related upside that did not materialize on pace.

• 1H26 Target: Maintained at 20.6%–21.5% yoy, unchanged from three months ago.