ServiceNow Defends Seat-Based Model as Pomerantz Probe and AI Deals Collide

ServiceNow is pushing back on investor anxiety over its move away from seat-based billing, telling the market on Thursday that management still expects licence seats to grow through 2027. The reassurance came alongside a striking operational datapoint: agentic AI usage has risen thirteenfold year over year.

More than half of revenue in a single quarter now derives from models that do not hinge on the number of licence seats, according to the company. Management also conceded that competition has intensified in the finance and procurement segments.

The comments landed against a busier backdrop than the pricing debate alone. Law firm Pomerantz announced on Wednesday that it is investigating potential investor claims tied to ServiceNow, examining possible securities fraud or other unlawful business practices involving the company and individual executives or board members. The firm had already flagged, on Tuesday, the outlook for growth in short-term remaining performance obligations in Q4 of 18.5%.

Quarterly Beat Overshadowed by Guidance Gap

On 28 October, ServiceNow reported 21% year-over-year growth in subscription revenue for Q3 2026. The forecast for growth in short-term remaining performance obligations fell short of expectations — the gap that appears to sit at the centre of Pomerantz's review. ServiceNow simultaneously raised its target for annual contract value in the AI business for 2026 to $1.7 billion. The stock is up 0.9% today. Pomerantz is examining possible claims; no wrongdoing has been established.

Customer Proof Points and Channel Build-Out

Concrete field results are emerging. ReSource Point of Sale now handles more than 11,000 support requests per month on ServiceNow's CRM platform, up from 5,000 to 6,000 previously. Average handling time has fallen from eight to ten hours down to three hours — a higher volume of requests processed in a fraction of the time.

On the partner front, Kyndryl said Monday that Kyndryl Autonomous Operations for ServiceNow, developed jointly with ServiceNow, is now available in the ServiceNow Store. The offering links data and AI agents from Kyndryl Bridge with ServiceNow's AI platform.

ServiceNow and LTM announced on 5 November a planned expansion of their partnership, aiming to broaden the deployment of autonomously acting AI systems and step up joint sales activities. The collaboration spans more than 700 shared customers. A day earlier, the National Basketball Association extended its partnership with ServiceNow, planning to deploy EmployeeWorks for onboarding new staff and for workplace-benefits enquiries.

The through-line for investors is whether these wins can scale into a repeatable pattern — and whether the seat-based transition, the RPO guidance miss and the Pomerantz review will weigh more heavily than the thirteenfold AI usage figure and the $1.7 billion ACV target.