ServiceNow CFO says AI only matters if it 'drives real outcomes'

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While the usefulness of artificial intelligence for the average consumer might be up for debate, ServiceNow (NOW [https://seekingalpha.com/symbol/NOW]) Chief Financial Officer Gina Mastantuono said it is driving real change for enterprises and governments through efficiency gains, improved automation and faster workflows.

"AI matters only if it drives real outcomes," Mastantuono said in an interview with Seeking Alpha.

Indeed, internal AI initiatives have already generated $355M within ServiceNow, which has been reinvested back into the company. Externally, the company is on pace to reach its $1B goal in AI-related revenue in 2026.

A recent survey [https://images.sw.broadcom.com/Web/CAInc2/%7Bb4125b35-8708-41a6-a685-df9f22b8f04c%7D_State_of_AI_Transformation.pdf] of 250 IT leaders found that 76% are expanding AI use cases across business units. The vast majority, 73%, of those surveyed named increasing operational efficiency as the primary driver for adopting AI initiatives. Another 60% said the top metric for measuring the success of such initiatives was revenue growth. And 79% of those surveyed, who are adopting AI initiatives, have already recorded efficiency gains.

However, an enterprise or government agency adopting AI comes with a much higher level of scrutiny, security and governance than consumer AI.

"Enterprise AI is very different from consumer AI," Mastantuono said. "It has to be secure, properly governed, and accurate over a large system. We take processes, and we automate them. We connect any model to any data cloud, and this flexibility allows customers to move fast and stay in control. We are very well positioned in this new world of AI. We are really the only company with AI plus data plus workflow. AI is only as good as the workflow is, and workflow is complex, and we have more than 20 years of data to lean into."

ServiceNow's AI efforts are producing stronger operating margins and mounting annual recurring revenue. These results are evident in the company's latest earnings reports, which have demonstrated rising earnings per share numbers and revenue consistently increasing by more than 20% year over year.

"AI is augmenting work and accelerating growth," Mastantuono said. "Things that used to take hours now take seconds. Meeting prep time has been cut by 50%. We are seeing durable income. Quarter after quarter we are delivering fantastic results, and that is driving real shareholder value."

However, despite the impressive efforts, ServiceNow's share value has remained relatively static over the past year. The market has rallied around those powering the AI revolution, such as hyperscalers and semiconductor firms, rather than the software companies utilizing AI in their offerings. For example, the Philadelphia Semiconductor Index (SOX [https://seekingalpha.com/symbol/SOX]) has surged nearly 50% year to date. Meanwhile, the iShares Expanded Tech-Software Sector ETF (IGV [https://seekingalpha.com/symbol/IGV]) has only increased by 15% in 2025.

"Shareholder value is really important to us," Mastantuono said. "We can't control everything. The AI infrastructure hype is real, and it has drawn a lot of investor attention. But our platform is driving remarkable productivity, and as long as we keep investing and driving demand, we will continue to create value for shareholders."

Even though enterprise software companies are the ones delivering AI platforms at scale and driving up metrics such as annual recurring revenue through those efforts, many have failed to garner the same investor excitement as those providing the hardware for those tools.

For example, Atlassian (TEAM [https://seekingalpha.com/symbol/TEAM]) shares have dropped 30% year to date, Salesforce (CRM [https://seekingalpha.com/symbol/CRM]) has declined 23%, monday.com (MNDY [https://seekingalpha.com/symbol/MNDY]) has fallen 12% and Workday (WDAY [https://seekingalpha.com/symbol/WDAY]) has slid 8%.

Still, analysts peering into the numbers and noticing the real revenue growth stemming from enterprise AI software differentiate between ServiceNow and its peers.

"ServiceNow is growing at a different scale compared to peers," said Seeking Alpha contributor The Alpha Analyst [https://seekingalpha.com/article/4830901-servicenow-a-defensive-tech-play-with-ai-driven-growth-revival], in a recent report. "Salesforce clocked a sub-10% growth in Q2. Workday grew by ~12% in Q2. Salesforce and Workday do not show superior cash flow conversion. In fact, the revenue growth margin number is elite for ServiceNow, even in comparison with peers who barely cross the 40 mark."

MORE ON SERVICENOW

* ServiceNow, Inc. (NOW) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4835051-servicenow-inc-now-q3-2025-earnings-call-transcript]
* ServiceNow, Inc. 2025 Q3 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4835011-servicenow-inc-2025-q3-results-earnings-call-presentation]
* ServiceNow: A Defensive Tech Play With AI-Driven Growth Revival [https://seekingalpha.com/article/4830901-servicenow-a-defensive-tech-play-with-ai-driven-growth-revival]
* ServiceNow raises 2025 subscription revenue and margin targets amid AI-led growth and 5-for-1 stock split [https://seekingalpha.com/news/4510947-servicenow-raises-2025-subscription-revenue-and-margin-targets-amid-ai-led-growth-and-5]
* ServiceNow gains after Q3 results top estimates; board authorizes five-for-one stock split [https://seekingalpha.com/news/4510605-servicenow-gains-after-q3-results-top-estimates-board-authorizes-five-for-one-stock-split]