ServiceNow’s Dual Strategic Moves: Acquisition and Stock Split

ServiceNow US81762P1021

The enterprise software leader ServiceNow is advancing on two strategic fronts simultaneously. In a clear effort to bolster its long-term market position, the company is expanding its AI security capabilities through an acquisition while also moving forward with a stock split, aiming to support sustained growth.

Recent financial results provide the groundwork for these strategic initiatives. For the third quarter of 2025, ServiceNow exceeded its own forecasts, reporting subscription revenue growth of 21.5% year-over-year. This robust performance had already prompted management to raise its full-year 2025 guidance, creating a solid base from which to pursue further expansion.

The Strategic Acquisition: Bolstering AI Security

One key pillar of this strategy is the planned acquisition of identity security specialist Veza. The deal, reportedly valued at over one billion US dollars, is designed to significantly strengthen ServiceNow’s security and risk management portfolio, with a specific focus on identity and access governance.

This move addresses a critical need as businesses deploy more autonomous AI agents. Controlling permissions and safeguarding sensitive data is becoming paramount. Veza’s technology specializes in mapping and analyzing access relationships across human, machine, and AI identities. ServiceNow plans to integrate this capability seamlessly into its existing platform, enhancing its value proposition for customers navigating digital transformation.

The Stock Split: Enhancing Accessibility

Running parallel to the acquisition, ServiceNow shareholders have approved a 5-for-1 stock split in a special meeting. Investors holding shares on December 16 will receive four additional shares for each one owned. Trading on a split-adjusted basis is scheduled to commence on December 18.

A stock split of this nature primarily serves to make individual shares more accessible to a broader base of retail investors by reducing the nominal price per share. It is important to note that such an action does not alter the company’s fundamental market valuation or intrinsic worth.

Positioning and Near-Term Catalysts

Together, these steps reinforce ServiceNow’s strategic emphasis on AI-driven solutions, positioning the company more firmly as what it terms "the AI platform for business transformation." The Veza acquisition directly complements this vision by integrating advanced identity security into its core offerings.

For the market, attention now turns to two imminent events: the regulatory approval process for the Veza acquisition and the technical execution of the stock split in mid-December. These developments are expected to influence share price activity as the year concludes. Currently trading at approximately 737 euros, the stock has posted gains over the past week, though it remains under significant pressure for the year, down more than 28%. The company’s latest strategic offensive is fundamentally aimed at reversing this longer-term trend.