ServiceNow, Inc. 10-Q

Item 1. Financial Statements ServiceNow, Inc. Condensed Consolidated Balance Sheets (in millions, except number of shares which are reflected in thousands and per share data) June 30, 2026 December 31, 2025 Assets (unaudited) Current assets: Cash and cash equivalents $ 2,503 $ 3,726 Marketable securities 2,161 2,558 Accounts receivable, net 2,201 2,627 Current portion of deferred commissions 594 590 Prepaid expenses and other current assets 1,055 970 Total current assets 8,514 10,471 Deferred commissions, less current portion 1,136 1,114 Long-term marketable securities 2,043 3,771 Strategic investments 2,073 1,542 Property and equipment, net 2,177 2,289 Operating lease right-of-use assets 836 806 Intangible assets, net 3,781 1,121 Goodwill 9,837 3,578 Deferred tax assets 890 1,056 Other assets 379 290 Total assets $ 31,666 $ 26,038 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 162 $ 204 Accrued expenses and other current liabilities 1,738 1,813 Current portion of deferred revenue 8,057 8,314 Current portion of operating lease liabilities 114 112 Short-term debt, net 2,082 — Total current liabilities 12,153 10,443 Deferred revenue, less current portion 135 120 Operating lease liabilities, less current portion 822 800 Long-term debt, net 5,435 1,491 Other long-term liabilities 605 220 Total liabilities 19,150 13,074 Commitments and contingencies (Note 17) Stockholders’ equity: Preferred stock, $ 0.001 par value; 10,000 shares authorized; no shares issued or outstanding — — Common stock, $ 0.001 par value; shares authorized: 3,000,000 ; shares issued: 1,072,455 and 1,065,776 ; shares outstanding: 1,033,862 and 1,047,278 1 1 Treasury stock, at cost (shares held: 38,593 and 18,498 ) ( 5,371 ) ( 3,045 ) Additional paid-in capital 11,921 10,747 Accumulated other comprehensive income (loss) ( 44 ) 19 Retained earnings 6,009 5,242 Total stockholders’ equity 12,516 12,964 Total liabilities and stockholders’ equity $ 31,666 $ 26,038 1 Table of Contents See accompanying notes to condensed consolidated financial statements 2 Table of Contents ServiceNow, Inc. Condensed Consolidated Statements of Comprehensive Income (in millions, except number of shares which are reflected in thousands and per share data) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Subscription $ 3,877 $ 3,113 $ 7,548 $ 6,118 Professional services and other 110 102 209 185 Total revenues 3,987 3,215 7,757 6,303 Cost of revenues (1) : Subscription 1,030 625 1,850 1,186 Professional services and other 139 99 259 189 Total cost of revenues 1,169 724 2,109 1,375 Gross profit 2,818 2,491 5,648 4,928 Operating expenses (1) : Sales and marketing 1,372 1,128 2,588 2,182 Research and development 915 734 1,738 1,437 General and administrative 369 271 657 500 Total operating expenses 2,656 2,133 4,983 4,119 Income from operations 162 358 665 809 Interest income 70 116 158 231 Other income (expense), net 206 ( 3 ) 288 ( 14 ) Income before income taxes 438 471 1,111 1,026 Provision for income taxes 140 86 344 181 Net income $ 298 $ 385 $ 767 $ 845 Net income per share - basic $ 0.29 $ 0.37 $ 0.74 $ 0.82 Net income per share - diluted $ 0.29 $ 0.37 $ 0.74 $ 0.81 Weighted-average shares used to compute net income per share - basic 1,031,351 1,035,819 1,033,234 1,034,963 Weighted-average shares used to compute net income per share - diluted 1,034,334 1,046,608 1,037,206 1,046,712 Other comprehensive income (loss): Foreign currency translation adjustments $ ( 42 ) $ 115 $ ( 77 ) $ 151 Unrealized (losses) gains on marketable securities, net of tax ( 9 ) 5 ( 29 ) 19 Unrealized gains (losses) on derivative instruments, net of tax 9 ( 99 ) 52 ( 151 ) Defined benefit plan, net of tax ( 9 ) — ( 9 ) — Other comprehensive income (loss) ( 51 ) 21 ( 63 ) 19 Comprehensive income $ 247 $ 406 $ 704 $ 864 (1) Includes stock-based compensation as follows: 3 Table of Contents Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenues: Subscription $ 96 $ 76 $ 180 $ 144 Professional services and other 13 11 25 22 Operating expenses: Sales and marketing 179 155 329 303 Research and development 283 196 519 381 General and administrative 84 61 160 119 See accompanying notes to condensed consolidated financial statements 4 Table of Contents ServiceNow, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in millions, except number of shares which are reflected in thousands) (unaudited) Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Shares Amount Shares Amount Shares Amount Balance at beginning of the period 1,069,934 $ 1 ( 38,626 ) $ ( 5,375 ) $ 11,384 $ 5,711 $ 7 $ 11,728 1,044,760 $ 1 ( 9,866 ) $ ( 1,513 ) $ 7,767 $ 3,954 $ ( 70 ) $ 10,139 Common stock and treasury stock issued under employee stock plans 2,521 — 33 4 ( 3 ) — — 1 2,235 — 28 3 ( 3 ) — — — Common stock repurchased — — — — — — — — — — ( 1,905 ) ( 361 ) — — — ( 361 ) Taxes paid related to net share settlement of equity awards — — — — ( 117 ) — — ( 117 ) — — — — ( 185 ) — — ( 185 ) Stock-based compensation — — — — 652 — — 652 — — — — 499 — — 499 Issuance of common stock for business combinations — — — — — — — — 2,343 — — — 434 — — 434 Equity awards assumed in business combinations — — — — 5 — — 5 — — — — — — — — Other comprehensive (loss) income, net of tax — — — — — — ( 51 ) ( 51 ) — — — — — — 21 21 Net income — — — — — 298 — 298 — — — — — 385 — 385 Balance at end of the period 1,072,455 $ 1 ( 38,593 ) $ ( 5,371 ) $ 11,921 $ 6,009 $ ( 44 ) $ 12,516 1,049,338 $ 1 ( 11,743 ) $ ( 1,871 ) $ 8,512 $ 4,339 $ ( 49 ) $ 10,932 5 Table of Contents Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Equity Shares Amount Shares Amount Shares Amount Shares Amount Balance at beginning of the period 1,065,776 $ 1 ( 18,498 ) $ ( 3,045 ) $ 10,747 $ 5,242 $ 19 $ 12,964 1,040,757 1 ( 8,320 ) ( 1,219 ) 7,401 3,494 ( 68 ) 9,609 Common stock and treasury stock issued under employee stock plans 6,679 — 59 7 147 — — 154 6,238 — 61 7 146 — — 153 Common stock repurchased — — ( 20,154 ) ( 2,333 ) 100 — — ( 2,233 ) — — ( 3,484 ) ( 659 ) — — — ( 659 ) Taxes paid related to net share settlement of equity awards — — — — ( 281 ) — — ( 281 ) — — — — ( 438 ) — — ( 438 ) Stock-based compensation — — — — 1,199 — — 1,199 — — — — 969 — — 969 Issuance of common stock for business combinations — — — — — — — — 2,343 — — — 434 — — 434 Equity awards assumed in business combinations — — — — 9 — — 9 — — — — — — — — Other comprehensive (loss) income, net of tax — — — — — — ( 63 ) ( 63 ) — — — — — — 19 19 Net income — — — — — 767 — 767 — — — — — 845 — 845 Balance at end of the period 1,072,455 $ 1 ( 38,593 ) $ ( 5,371 ) $ 11,921 $ 6,009 $ ( 44 ) $ 12,516 1,049,338 1 ( 11,743 ) ( 1,871 ) 8,512 4,339 ( 49 ) 10,932 See accompanying notes to condensed consolidated financial statements 6 Table of Contents ServiceNow, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income $ 767 $ 845 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 665 332 Amortization of deferred commissions 340 293 Stock-based compensation 1,199 969 Deferred income taxes 138 48 Unrealized (gains) losses on strategic investments ( 360 ) ( 5 ) Other 63 67 Changes in operating assets and liabilities, net of effect of business combinations: Accounts receivable 471 599 Deferred commissions ( 376 ) ( 291 ) Prepaid expenses and other assets ( 118 ) ( 222 ) Accounts payable 9 133 Deferred revenue ( 382 ) ( 264 ) Accrued expenses and other liabilities ( 159 ) ( 111 ) Net cash provided by operating activities $ 2,257 $ 2,393 Cash flows from investing activities: Purchases of property and equipment ( 255 ) ( 395 ) Business combinations, net of cash acquired ( 8,776 ) ( 76 ) Purchases of other intangibles — ( 34 ) Purchases of marketable securities ( 426 ) ( 2,322 ) Purchases of strategic investments ( 178 ) ( 138 ) Sales and maturities of marketable securities 2,528 2,281 Other 2 44 Net cash used in investing activities $ ( 7,105 ) $ ( 640 ) Cash flows from financing activities: Proceeds from borrowings on senior notes, net of discount and issuance costs 3,944 — Proceeds from term loan, net of issuance costs 3,991 — Repayment of term loan ( 4,000 ) — Proceeds from issuance of commercial paper, net of discount 3,534 — Repayments of commercial paper ( 1,472 ) — Proceeds from employee stock plans 154 153 Repurchases of common stock ( 2,225 ) ( 659 ) Taxes paid related to net share settlement of equity awards ( 281 ) ( 438 ) Other ( 7 ) — Net cash provided by (used in) financing activities $ 3,638 $ ( 944 ) Foreign currency effect on cash, cash equivalents and restricted cash ( 5 ) 14 Net change in cash, cash equivalents and restricted cash ( 1,215 ) 823 Cash, cash equivalents and restricted cash at beginning of period 3,732 2,310 Cash, cash equivalents and restricted cash at end of period $ 2,517 $ 3,133 Cash, cash equivalents and restricted cash at end of period: Cash and cash equivalents $ 2,503 $ 3,124 Restricted cash included in prepaid expenses and other current assets 9 9 Restricted cash included in other assets 5 — Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 2,517 $ 3,133 Supplemental disclosures of other cash flow information: Interest paid $ 29 $ 11 Income taxes paid, net of refunds $ 130 $ 129 Non-cash investing and financing activities: Property and equipment included in accounts payable, accrued expenses and other liabilities $ 58 $ 40 Fair value of common stock issued for business combinations $ — $ 434 See accompanying notes to condensed consolidated financial statements 7 Table of Contents ServiceNow, Inc. Notes to Condensed Consolidated Financial Statements (unaudited) Unless the context requires otherwise, references in this report to “ServiceNow,” the “Company,” “we,” “us,” and “our” refer to ServiceNow, Inc. and its consolidated subsidiaries. (1) Description of the Business ServiceNow delivers solutions that help public and private organizations govern, secure and manage artificial intelligence (“AI”) and digitalize and streamline workflows to drive collaboration, productivity and better experiences across the enterprise. At the core of these solutions is the ServiceNow AI Platform (“Platform”), a robust, cloud-based Platform that facilitates comprehensive delivery of seamless workflows and drives digital transformation across all departments and personas within an organization. Our Platform’s single data fabric and integrated data layer supports organizations’ operationalization of their AI strategy with speed, scale and security. Our workflow applications built on the Platform are grouped into four areas: Technology, CRM and Industry, Core Business, and Creator and Other. We offer an innovative suite of products, including AI-powered applications, and services designed to automate workflows, integrate systems and empower employees, regardless of existing systems, cloud environments or collaboration tools. The combination of ServiceNow's Security Operations with Armis' cyber asset intelligence and Veza's identity governance capabilities delivers end-to-end visibility, risk controls, and automated responses across the enterprise. Our one platform architecture provides the foundation for organizations to seamlessly integrate AI, data, and workflows and create intelligent processes across their enterprise. (2) Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements and condensed footnotes have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by United States (“U.S.”) generally accepted accounting principles (“GAAP”) for complete financial statements due to the permitted exclusion of certain disclosures for interim reporting. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary under GAAP for fair statement of results for the interim periods presented have been included. As a result of displaying amounts in millions, rounding differences may exist in the condensed consolidated financial statements and footnote tables. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for other interim periods or future years. The condensed consolidated balance sheet as of December 31, 2025 is derived from audited consolidated financial statements; however, it does not include all of the information and footnotes required by GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on January 29, 2026. Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP, and include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. 8 Table of Contents Common Stock Split On December 5, 2025, our board of directors approved and declared a 5 -for-1 split of our common stock (“Stock Split”), with a proportionate increase in the number of shares of authorized common stock. The Stock Split had a record date of December 16, 2025 and an effective date of December 17, 2025. The par value per share of our common stock remains unchanged at $ 0.001 per share after the Stock Split. Accordingly, an amount equal to the par value of the additional issued shares resulting from the Stock Split was reclassified from additional paid-in capital to common stock. All references made to common share, equity award and per share amounts in the accompanying condensed consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the Stock Split. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, as well as reported amounts of revenues and expenses during the reporting period. Such management estimates and assumptions include, but are not limited to, standalone selling price for each distinct performance obligation included in customer contracts with multiple performance obligations, the period of benefit for deferred commissions, valuation of intangible assets, the useful life of property and equipment and identifiable intangible assets, stock-based compensation expense and income taxes. Actual results could differ from those estimates. Significant Accounting Policies There were no significant changes to our significant accounting policies disclosed in Note 2 “Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on January 29, 2026. Concentration of Credit Risk and Significant Customers Credit risk arising from accounts receivable is mitigated to a certain extent due to our large number of customers and their dispersion across various industries and geographies. We had one customer, a U.S. federal channel partner and systems integrator, that represented 12 % and 11 % of our accounts receivable balance as of June 30, 2026 and December 31, 2025, respectively. This customer represented 13 % of our total revenues for each of the three and six months ended June 30, 2026 and 11 % of our total revenues for each of the three and six months ended June 30, 2025. Based on our periodic credit evaluations, there have been no historical collection concerns with this customer. For purposes of assessing concentration of credit risk and significant customers, a group of customers under common control or customers that are affiliates of each other are regarded as a single customer. Prior Period Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not result in a restatement of prior period condensed consolidated financial statements. 9 Table of Contents (3) Investments Marketable Securities The following is a summary of our available-for-sale debt securities recorded within marketable securities and long-term marketable securities on the condensed consolidated balance sheets (in millions): June 30, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale debt securities: Commercial paper $ 6 $ — $ — $ 6 Corporate notes and bonds 3,295 7 ( 1 ) 3,301 Certificates of deposit 8 — — 8 U.S. government and agency securities 799 — ( 1 ) 798 Mortgage-backed and asset-backed securities 105 — ( 14 ) 91 Total available-for-sale debt securities $ 4,213 $ 7 $ ( 16 ) $ 4,204 December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available-for-sale debt securities: Commercial paper $ 173 $ — $ — $ 173 Corporate notes and bonds 4,759 34 — 4,793 Certificates of deposit 11 — — 11 U.S. government and agency securities 1,257 6 — 1,263 Mortgage-backed and asset-backed securities 103 — ( 14 ) 89 Total available-for-sale debt securities $ 6,303 $ 40 $ ( 14 ) $ 6,329 As of June 30, 2026, the contractual maturities of our available-for-sale debt securities, excluding those securities classified within cash and cash equivalents on the condensed consolidated balance sheet and mortgage-backed and asset-backed securities that do not have a single maturity, did not exceed 37 months. The fair values of available-for-sale debt securities, by remaining contractual maturity, are as follows (in millions): June 30, 2026 Due within 1 year $ 2,161 Due in 1 year through 5 years 1,952 Instruments not due in single maturity 91 Total $ 4,204 As of both June 30, 2026 and December 31, 2025, unrealized losses of $ 14 million are from available-for-sale debt securities in a continuous unrealized loss position greater than 12 months. As of June 30, 2026, the fair value of available-for-sale debt securities in a continuous unrealized loss position totaled $ 1,097 million, the majority of which was in a continuous unrealized loss position for less than 12 months. As of December 31, 2025, the fair value of available-for-sale debt securities in a continuous unrealized loss position totaled $ 171 million, the majority of which was in a continuous unrealized loss position for greater than 12 months. 10 Table of Contents For all available-for-sale debt securities that were in unrealized loss positions, we have determined that it is more likely than not we will hold the securities until maturity or a recovery of the cost basis. Unrealized losses on available-for-sale debt securities were due primarily to changes in market interest rates, and credit-related impairment losses were immaterial as of June 30, 2026. Strategic Investments As of June 30, 2026 and December 31, 2025, the total amount of strategic investments in privately held companies included in our condensed consolidated balance sheets was $ 2,073 million and $ 1,542 million, respectively. Our strategic investments are predominantly comprised of non-marketable equity investments, which are primarily accounted for using the measurement alternative. Under this approach, the investments are measured at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes resulting from the issuance of similar or identical securities in an orderly transaction by the same issuer. Determining whether an observed transaction is similar to a security within our portfolio requires judgment based on the rights and preferences of the securities. Recording upward and downward adjustments to the carrying value of our non-marketable equity investments as a result of observable price changes requires quantitative assessments of the fair value of our non-marketable equity investments using various valuation methodologies and involves the use of estimates. The remaining strategic investments consist of privately held equity securities accounted for under the equity method of accounting and privately held debt securities classified as available-for-sale. During the three and six months ended June 30, 2026, we recorded net upward adjustments of $ 273 million and $ 360 million, respectively. The net adjustments made during the three and six months ended June 30, 2025 were immaterial . We classify these fair value measurements as Level 3 within the fair value hierarchy. (4) Fair Value Measurements The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of June 30, 2026 (in millions): Level 1 Level 2 Total Cash equivalents: Money market funds $ 1,424 $ — $ 1,424 Commercial paper — 3 3 Deposits 55 — 55 U.S. government and agency securities — 14 14 Marketable securities: Commercial paper — 6 6 Corporate notes and bonds — 3,301 3,301 Certificates of deposit — 8 8 U.S. government and agency securities — 798 798 Mortgage-backed and asset-backed securities — 91 91 Total $ 1,479 $ 4,221 $ 5,700 11 Table of Contents The following table presents our fair value hierarchy for our assets measured at fair value on a recurring basis as of December 31, 2025 (in millions): Level 1 Level 2 Total Cash equivalents: Money market funds $ 2,055 $ — $ 2,055 Commercial paper — 137 137 Corporate notes and bonds — 6 6 Deposits 219 — 219 U.S. government and agency securities — 515 515 Marketable securities: Commercial paper — 173 173 Corporate notes and bonds — 4,793 4,793 Certificates of deposit — 11 11 U.S. government and agency securities — 1,263 1,263 Mortgage-backed and asset-backed securities — 89 89 Total $ 2,274 $ 6,987 $ 9,261 We determine the fair value of our security holdings based on pricing from our service providers and market prices from industry-standard independent data providers. Such market prices may be quoted prices in active markets for identical assets (Level 1 inputs), pricing determined using inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) or using unobservable inputs that are supported by little or no market activity (Level 3 inputs). Our strategic investments are not included in the table above and are discussed in Note 3 “Investments.” Refer to Note 8 “Derivative Contracts” for the fair value measurement of our derivative contracts and Note 11 “Debt” for the fair value measurement of our short-term and long-term debt, which are also not included in the table above. (5) Business Combinations 2026 Business Combinations Armis Security Ltd. On April 20, 2026, we acquired all outstanding shares of Armis Security Ltd. (“Armis”), a cyber-exposure management and cyber-physical security solutions provider, for preliminary purchase price consideration of approximately $ 7.6 billion, settled in cash. The acquisition is intended to expand our security workflow offerings and advance AI-native, proactive cybersecurity and vulnerability response across all connected devices. Veza Technologies, Inc. On March 2, 2026, we acquired all outstanding shares of Veza Technologies, Inc. (“Veza”), a privately held AI identity security company that provides a unified access platform, with native products offering access capabilities across search, intelligence, monitoring and workflows, for approximately $ 1.2 billion, substantially in cash. The acquisition is intended to extend the capabilities of our security and risk portfolios to include identity security, which will enable organizations to understand and control who and what has access to their critical data, applications, systems, and AI artifacts. 12 Table of Contents The allocation of the total purchase price for Armis and Veza is summarized below (in millions): Armis Veza Current assets $ 273 $ 109 Intangible assets 2,530 356 Goodwill 5,323 826 Deferred tax assets, non-current 405 53 Other assets 77 1 Assets acquired $ 8,608 $ 1,345 Deferred revenue, current 137 18 Other liabilities 240 7 Deferred tax liabilities, non-current 594 83 Net assets acquired $ 7,637 $ 1,237 Identifiable intangible assets acquired in connection with the Armis and Veza acquisitions (in millions) and the weighted-average lives are as follows: Armis Veza Asset Life (years) Developed technology $ 1,950 $ 190 5 - 6 Customer relationships 473 150 5 - 6 Order backlog 54 16 2 Brand assets 53 — 4 Total $ 2,530 $ 356 Goodwill, which is not deductible for income tax purposes, is primarily attributed to the expected synergies from integrating Armis’ and Veza’s technologies into our product portfolio and expanded market opportunities. The fair values assigned to tangible and intangible assets acquired, liabilities assumed and income taxes payable and deferred taxes are based on management’s estimates and assumptions. The provisional measurements of fair value for certain assets and liabilities may be subject to change as additional information is received. The Company expects to finalize the valuations as soon as practicable, but not later than one year from the respective acquisition dates. Other Business Combinations During the six months ended June 30, 2026, we also completed other acquisitions that were not material to our condensed consolidated financial statements, either individually or in the aggregate. 2025 Business Combinations Moveworks, Inc. On December 15, 2025, we acquired all outstanding shares of Moveworks, Inc. (“Moveworks”), a privately held company that provides enterprise search and front-end virtual agent technology. The acquisition is intended to drive use of our Platform to accelerate enterprise adoption and innovation across key growth areas, including CRM. The aggregate purchase price consideration for Moveworks was $ 2.4 billion, which was comprised of the following (in millions): 13 Table of Contents Fair Value Fair value of common stock issued (1) $ 1,467 Cash 905 Settlement of pre-existing loan 31 Stock-based compensation awards attributable to pre-combination services 4 Total purchase consideration $ 2,407 (1) The fair value of the stock consideration is based on the December 15, 2025 closing price of ServiceNow common stock at $ 153.04 and approximately 9.6 million shares of ServiceNow common stock. The allocation of the total purchase price is summarized below (in millions): Purchase Price Allocation Current assets $ 48 Intangible assets 770 Goodwill 1,748 Other assets 124 Assets acquired $ 2,690 Current liabilities assumed 83 Long-term liabilities assumed 13 Deferred tax liabilities, non-current 187 Net assets acquired $ 2,407 Identifiable intangible assets acquired in connection with the Moveworks acquisition (in millions) and the weighted-average lives are as follows: Intangible Assets Asset Life (years) Developed technology $ 505 5 Customer relationships 220 5 Order backlog 25 2 Brand assets 20 4 Total $ 770 Goodwill, which is not deductible for income tax purposes, is primarily attributed to the value expected from synergies resulting from the business combination. The fair values assigned to tangible and intangible assets acquired, liabilities assumed and income taxes payable and deferred taxes are based on management’s estimates and assumptions. The provisional measurements of fair value for certain assets and liabilities may be subject to change as additional information is received. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. As contemplated by the terms of the merger agreement, in August 2025, the Company and Moveworks entered into a term loan credit agreement pursuant to which Moveworks drew $ 25 million. In December 2025, Moveworks drew an additional $ 5 million on the term loan credit agreement. The loan was settled on the closing date of the Moveworks acquisition. 14 Table of Contents Logik.io Inc. On May 30, 2025, we acquired all outstanding shares of Logik.io Inc., a provider of an AI-powered, composable Configure, Price, Quote (“CPQ”) solution for total purchase consideration of $ 506 million, which consists primarily of approximately 2.1 million shares of ServiceNow common stock with a value of approximately $ 434 million and $ 62 million in cash. The fair value of the stock consideration is based on the May 30, 2025 closing price of ServiceNow common stock at $ 202.22 . The acquisition is intended to expand our growing CRM footprint and accelerate our sales and order management capabilities with the acquired CPQ solutions technology. The purchase price was allocated based on the estimated fair value of the developed technology intangible asset of $ 85 million ( five-year estimated useful life), customer-related and backlog assets of $ 14 million ( three-year estimated useful life), net tangible assets of $ 25 million, deferred tax liabilities of $ 22 million and goodwill of $ 404 million, which is not deductible for income tax purposes. Goodwill is primarily attributed to the value expected from synergies resulting from the business combination. The fair values assigned to tangible and intangible assets acquired, liabilities assumed and income taxes payable and deferred taxes are based on management’s estimates and assumptions. Other Business Combinations During the year ended December 31, 2025, we also completed other acquisitions that were not material to our condensed consolidated financial statements, either individually or in the aggregate. We have included the financial results of all business combinations in the condensed consolidated financial statements from the respective dates of acquisition, which were not material. Pro forma financial results related to the 2026 acquisitions have not been presented for the three and six months ended June 30, 2026 and 2025 because the effects of these acquisitions were not material to our consolidated results of operations. Aggregate acquisition-related costs associated with business combinations were $ 101 million for the six months ended June 30, 2026 and immaterial for the three months ended June 30, 2026 and for the comparable prior periods. These costs were included in general and administrative expenses in our condensed consolidated statements of comprehensive income as incurred. In addition, aggregate deferred compensation for certain key employees associated with the 2026 acquisitions was $ 91 million and $ 162 million for the three and six months ended June 30, 2026, respectively, and immaterial for the comparable prior periods. The costs were included in prepaid and other current assets and other assets in our condensed consolidated balance sheets, with amortization recognized over the applicable service periods in research and development expenses in our condensed consolidated statements of comprehensive income. (6) Goodwill and Intangible Assets The changes in the carrying amounts of goodwill were as follows (in millions): Carrying Amount Balance as of December 31, 2025 $ 3,578 Goodwill acquired 6,300 Foreign currency translation adjustments ( 41 ) Balance as of June 30, 2026 $ 9,837 Intangible assets, net consists of the following (in millions): 15 Table of Contents June 30, 2026 December 31, 2025 Developed technology $ 3,515 $ 1,316 Customer relationships 871 238 Patents 83 83 Other 194 72 Intangible assets, gross $ 4,663 $ 1,709 Less: accumulated amortization ( 882 ) ( 588 ) Intangible assets, net $ 3,781 $ 1,121 The weighted-average useful life of the acquired developed technology for the six months ended June 30, 2026 and 2025 was approximately six years and five years , respectively. The weighted-average useful life of the acquired customer relationships for the six months ended June 30, 2026 and 2025 was approximately five years and three years , respectively. Amortization expense for intangible assets for the three months ended June 30, 2026 and 2025 was $ 219 million and $ 25 million, respectively, and for the six months ended June 30, 2026 and 2025 was $ 296 million and $ 46 million, respectively. The following table presents the estimated future amortization expense related to intangible assets held as of June 30, 2026 (in millions): Fiscal Period: Remainder of 2026 $ 391 2027 776 2028 726 2029 700 2030 648 Thereafter 540 Total future amortization expense $ 3,781 (7) Property and Equipment Property and equipment, net consists of the following (in millions): June 30, 2026 December 31, 2025 Computer equipment $ 3,399 $ 3,332 Computer software 130 126 Leasehold and other improvements 482 433 Furniture and fixtures 126 117 Construction in progress 128 117 Property and equipment, gross 4,265 4,125 Less: Accumulated depreciation ( 2,088 ) ( 1,836 ) Property and equipment, net $ 2,177 $ 2,289 Construction in progress consists of costs primarily related to leasehold and other improvements. Depreciation expense for the three months ended June 30, 2026 and 2025 was $ 155 million and $ 120 million, respectively, and for the six months ended June 30, 2026 and 2025 was $ 303 million and $ 232 million, respectively. 16 Table of Contents (8) Derivative Contracts Derivatives Designated as Hedging Instruments We enter into forward contracts to hedge a portion of our forecasted foreign currency denominated revenues, and beginning in the fourth quarter of 2025, we also entered into forward contracts to hedge a portion of our forecasted foreign currency denominated expenses. These forward contracts are recorded at fair value and have maturities of up to 34 months. We had outstanding cash flow hedges with total notional values of $ 2.3 billion and $ 2.2 billion as of June 30, 2026 and December 31, 2025, respectively. We classify cash flows related to our cash flow hedges as operating activities in our condensed consolidated statements of cash flows. The total gross fair values of derivatives designated as hedging instruments recorded within the condensed consolidated balance sheets were as follows (in millions): Condensed Consolidated Balance Sheets Location June 30, 2026 December 31, 2025 Prepaid expenses and other current assets $ 32 $ 11 Other assets $ 15 $ 3 Accrued expenses and other current liabilities $ ( 19 ) $ ( 49 ) Other long-term liabilities $ ( 3 ) $ ( 8 ) As of June 30, 2026, the net pre-tax derivative gains expected to be reclassified from accumulated other comprehensive income (loss) into subscription revenues, sales and marketing expenses and research and development expenses within the next 12 months are immaterial. All hedging relationships are formally documented at the inception of the hedge and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. We evaluate hedge effectiveness at the inception of the hedge prospectively, and on an ongoing basis both retrospectively and prospectively. We report changes in fair value of these cash flow hedges as a component of accumulated other comprehensive income (loss) and subsequently reclassify into earnings in the same period the forecasted transaction affects earnings. Amounts reclassified to subscription revenues were a loss of $ 2 million and $ 10 million for the three and six months ended June 30, 2026, respectively, and a loss of $ 17 million and $ 8 million for the three and six months ended June 30, 2025,respectively. Amounts reclassified to sales and marketing expenses and research and development expenses were immaterial for the three and six months ended June 30, 2026. There was no ineffectiveness in the Company’s cash flow hedging program for each of the three and six months ended June 30, 2026 and 2025. Derivatives not Designated as Hedging Instruments Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets and liabilities denominated in non-functional currencies. These foreign currency forward contracts are recorded at fair value and have maturities of 12 months or less. The changes in the fair value of these contracts are recorded in other income (expense), net on the condensed consolidated statements of comprehensive income. For the periods ended June 30, 2026 and December 31, 2025, we had foreign currency forward contracts with total notional values of $ 3.5 billion and $ 2.5 billion, respectively, which were not designated as hedging instruments. The gross fair value of these foreign currency forward contracts was immaterial as of June 30, 2026 and December 31, 2025. For each of the three and six months ended June 30, 2026, the gains (losses) recognized for foreign currency forward contracts from derivatives not designated as hedging instruments were immaterial . For the three and six months ended June 30, 2025, the gains recognized for foreign currency forward contracts from derivatives not designated as hedging instruments in other income (expense), net of $ 86 million and $ 120 million, offset the remeasurement losses of the related foreign currency 17 Table of Contents denominated assets and liabilities of $ 87 million and $ 125 million, respectively. Realized gains (losses) from settlement of the derivative assets and liabilities are classified as investing activities in the condensed consolidated statements of cash flows. All foreign currency forward contracts, both designated and not designated as hedging instruments, are classified within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments in active markets, such as currency spot and forward rates. (9) Supply Chain Finance Program Our supply chain finance (“SCF”) program provides suppliers with the opportunity to sell their receivables due from us to a global financial institution acting as our paying agent. A supplier’s election to receive early payment at a discounted amount from the financial institution does not change the amount that we must remit to the financial institution on our payment date, which is generally 90 days from the invoice date. Participating suppliers negotiate their sales of receivables directly with the financial institution at their sole discretion and we have no economic interest in a supplier’s decision to participate in the SCF program. We do not have pledged assets or other guarantees under our SCF program. Our outstanding payment obligations to suppliers participating in the SCF program totaled $ 28 million and $ 87 million as of June 30, 2026 and December 31, 2025, respectively. These obligations are included in accounts payable in our condensed consolidated balance sheets and all activity related to these obligations is presented within operating activities in our condensed consolidated statements of cash flows. (10) Deferred Revenue and Performance Obligations Revenues recognized from beginning period deferred revenue during the three months ended June 30, 2026 and 2025 were $ 3.4 billion and $ 2.8 billion, respectively, and $ 5.7 billion and $ 4.7 billion for the six months ended June 30, 2026 and 2025, respectively. Remaining Performance Obligations Transaction price allocated to remaining performance obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes deferred revenue and non-cancellable amounts that will be invoiced and recognized as revenues in future periods. RPO excludes contracts that are billed in arrears, such as certain time and materials contracts, as we apply the “right to invoice” practical expedient under relevant accounting guidance. As of June 30, 2026, the total non-cancellable RPO under our contracts with customers was $ 29.0 billion and we expect to recognize revenues on approximately 46 % of these RPO over the following 12 months. The majority of the non-current RPO will be recognized over the next 13 to 36 months. 18 Table of Contents (11) Debt The following table summarizes the carrying value of our outstanding debt (in millions, except percentages): Effective Interest Rate June 30, 2026 December 31, 2025 Long-Term Debt Senior notes issued August 2020: 1.40 % notes due September 2030 1.53 % $ 1,500 $ 1,500 Senior notes issued May 2026: 4.25 % notes due May 2028 4.68 % 750 — 4.70 % notes due August 2031 5.00 % 600 — 5.05 % notes due May 2033 5.36 % 650 — 5.40 % notes due May 2036 5.68 % 1,250 — 6.30 % notes due May 2056 6.57 % 750 — Total senior notes $ 5,500 $ 1,500 Unamortized debt discount and issuance costs ( 65 ) ( 9 ) Total carrying value of long-term debt $ 5,435 $ 1,491 Short-Term Debt Commercial paper $ 2,100 $ — Unamortized debt discount ( 18 ) — Total carrying value of short-term debt $ 2,082 $ — Total interest expense recognized related to our outstanding debt was $ 66 million and $ 6 million for the three months ended June 30, 2026 and 2025, respectively, and $ 72 million and $ 12 million for the six months ended June 30, 2026 and 2025, respectively. Senior Notes In May 2026, we issued five series of fixed-rate senior unsecured notes for an aggregate principal amount of $ 4.0 billion (collectively, the “Notes”). The proceeds from the issuance were $ 3.9 billion, net of debt discount and issuance costs of $ 57 million. The debt discount and issuance costs are amortized to interest expense using the effective interest rate method over the term of the Notes. The net proceeds from the Notes were used to fund the repayment of outstanding borrowings under the Term Loan (as defined below). Interest is payable semi-annually in arrears on May 15 and November 15 of each year, except for our senior notes due in August 2031, for which interest is payable semi-annually in arrears on February 15 and August 15 of each year. The Notes are unsecured obligations and rank equally with all existing and future unsecured and unsubordinated indebtedness of the Company. We may redeem any series of the Notes, in whole or in part, at any time or from time to time, at specified redemption dates and prices. In addition, upon the occurrence of certain change of control triggering events, at the option of the holders, the Company will be required to make an offer to repurchase all or any part of such holders’ Notes at a price equal to 101 % of the aggregate principal amount of the notes repurchased, plus accrued and unpaid interest up to, but not including, the date of repurchase. The indentures governing the Notes contain customary events of default and covenants that, among others and subject to exceptions, restrict our ability to incur or guarantee debt secured by liens on specified assets or enter into sale and lease-back transactions with respect to specified properties. In August 2020, we issued 1.40 % fixed-rate ten-year notes with an aggregate principal amount of $ 1.5 billion due on September 1, 2030 (the “2030 Notes” and together with the Notes, the “Senior Notes”). The 2030 Notes were 19 Table of Contents issued at 99.63 % of principal and we incurred $ 13 million for debt issuance costs. The effective interest rate for the 2030 Notes was 1.53 % and included interest payable, amortization of debt issuance cost and amortization of debt discount. Interest is payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2021, and the entire outstanding principal amount is due at maturity on September 1, 2030. The 2030 Notes are unsecured obligations and the indentures governing the 2030 Notes contain customary events of default and covenants that, among others and subject to exceptions, restrict our ability to incur or guarantee debt secured by liens on specified assets or enter into sale and lease-back transactions with respect to specified properties. We consider the fair value of the Senior Notes at June 30, 2026 and December 31, 2025 to be a Level 2 measurement. The estimated fair value of the Senior Notes based on the closing trading price per $ 100 , was $ 5,320 million and $ 1,324 million at June 30, 2026 and December 31, 2025, respectively. Term Loan In April 2026, we borrowed an aggregate principal amount of $ 4.0 billion under a senior unsecured term loan (the “Term Loan”) to fund a portion of the cash consideration for our acquisition of Armis. In May 2026, we repaid the outstanding balance on the Term Loan primarily through issuance of the Notes. Commercial Paper In April 2026, we established a commercial paper program pursuant to which we may issue short-term, unsecured commercial paper notes up to a total of $ 3.0 billion outstanding at any time, with maturities not to exceed 397 days from the date of issuance. The notes are sold at a discount from par or at par and bear interest at rates determined at the time of issuance. Net proceeds from this program are expected to be used for general corporate purposes. Commercial paper is carried at amortized cost, which approximates its fair value due to the short-term nature of these instruments. As of June 30, 2026 we have $ 2.1 billion of commercial paper outstanding, with a weighted-average interest rate of 3.98 % and a weighted-average remaining term of 81 days. Revolving Credit Facility In April 2026, we entered into a credit agreement with certain institutional lenders that provides for a $ 3.0 billion unsecured revolving credit facility (the "Credit Facility"), with an option to increase the amount of the Credit Facility by up to $ 2.0 billion, subject to certain conditions, including board approval. The Credit Facility matures on April 1, 2031. Any borrowings under our Credit Facility bear interest, at our option, either at a base rate, or at an adjusted benchmark rate plus a spread of 0.60 % to 1.00 % with such spread being determined based on our credit rating. We are also obligated to pay an ongoing commitment fee on undrawn amounts. The Credit Facility contains customary affirmative and negative covenants, including restrictions on indebtedness, liens, asset dispositions, dividends, and acquisitions, subject to certain permitted exceptions. Funds borrowed under the Credit Facility may be used for general corporate purposes. As of June 30, 2026, there were no outstanding borrowings under the Credit Facility, and we were in compliance with all covenants governing the Credit Facility. 20 Table of Contents (12) Accumulated Other Comprehensive Income (Loss) The following tables show the components of accumulated other comprehensive income (loss), net of tax, in the stockholders’ equity section of our condensed consolidated balance sheets (in millions): Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains (Losses) on Marketable Securities Defined Benefit Plan (1) Foreign Currency Translation Adjustment Total Balance as of December 31, 2025 $ ( 38 ) $ — $ — $ 57 $ 19 Other comprehensive income (loss) before reclassifications 39 ( 29 ) ( 9 ) ( 77 ) ( 76 ) Amounts reclassified from accumulated other comprehensive income 13 — — — 13 Net current period other comprehensive income (loss) 52 ( 29 ) ( 9 ) ( 77 ) ( 63 ) Balance as of June 30, 2026 $ 14 $ ( 29 ) $ ( 9 ) $ ( 20 ) $ ( 44 ) Unrealized Gains (Losses) on Derivative Instruments Unrealized Gains (Losses) on Marketable Securities Defined Benefit Plan (1) Foreign Currency Translation Adjustment Total Balance as of December 31, 2024 $ 50 $ ( 27 ) $ — $ ( 91 ) $ ( 68 ) Other comprehensive income (loss) before reclassifications ( 159 ) 19 — 151 11 Amounts reclassified from accumulated other comprehensive loss 8 — — — 8 Net current period other comprehensive income (loss) ( 151 ) 19 — 151 19 Balance as of June 30, 2025 $ ( 101 ) $ ( 8 ) $ — $ 60 $ ( 49 ) (1) Relates to our defined benefit plan for an international subsidiary. (13) Stockholders' Equity Common Stock We are authorized to issue a total of 3.0 billion shares of common stock as of June 30, 2026. Holders of our common stock are not entitled to receive dividends unless declared by our board of directors. As of June 30, 2026, we had 1,034 million shares of common stock, net of treasury stock, outstanding and had reserved shares of common stock for future issuance as follows (in thousands): 21 Table of Contents June 30, 2026 Stock plans: Options outstanding 7,339 RSUs (1) 46,824 Shares of common stock available for future grants: Amended and Restated 2021 Equity Incentive Plan (2) 53,352 Amended and Restated 2012 Employee Stock Purchase Plan (2) 37,355 Total shares of common stock reserved for future issuance 144,870 (1) Represents the number of shares issuable upon settlement of outstanding restricted stock units (“RSUs”) and performance-based RSUs (“PRSUs”), as discussed in Note 14 “Equity Awards.” (2) Refer to Note 14 “Equity Awards” for a description of these plans. During the six months ended June 30, 2026 and 2025, we issued a total of 6.7 million and 6.2 million shares, respectively, from stock option exercises, vesting of RSUs, net of employee payroll taxes, and purchases from the employee stock purchase plan (“ESPP”). Treasury Stock In May 2023, our board of directors authorized a program to repurchase up to $ 1.5 billion of our common stock (the “Share Repurchase Program”). In January 2025 and January 2026, our board of directors authorized an additional $ 3.0 billion and $ 5.0 billion, respectively, in repurchases under the Share Repurchase Program. Under the program, we may repurchase our common stock from time to time through open market purchases, accelerated share repurchase ("ASR") transactions, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The Share Repurchase Program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate us to acquire any amount of common stock. The timing, manner, price, and amount of any repurchases will be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. On January 30, 2026, we entered into an ASR agreement with a financial institution under which we purchased an aggregate of $ 2.0 billion of our common stock as part of the Share Repurchase Program. During the three months ended March 31, 2026, the Company completed the ASR transaction with 18.5 million shares of common stock repurchased at an average price of $ 107.97 per share. The total number of shares delivered and the average purchase price paid per share were determined upon final settlement based on the volume weighted-average price over the term of the ASR, less an agreed upon discount. The total price of the ASR transaction is reflected as an increase to treasury stock and additional paid-in capital on our condensed consolidated balance sheet. During the six months ended June 30, 2026, the Company repurchased an additional 1.6 million shares of its common stock for $ 225 million in open market transactions. There were no share repurchases during the three months ended June 30, 2026. During the three and six months ended June 30, 2025, the Company repurchased 1.9 million and 3.5 million shares of its common stock for $ 361 million and $ 659 million, respectively, in open market transactions. Repurchases of common stock are recognized as treasury stock and held for future issuance. As of June 30, 2026, approximately $ 4.2 billion of the authorized amount under the Share Repurchase Program remained available for future repurchases. 22 Table of Contents (14) Equity Awards We have three equity incentive plans: 2012 Equity Incentive Plan (the “2012 Plan”), amended and restated 2021 Equity Incentive Plan (the “2021 Plan”) and 2022 New-Hire Equity Incentive Plan (the “2022 Plan”). The 2012 Plan was terminated in connection with the initial approval of the 2021 Plan on June 7, 2021 but continues to govern the terms of outstanding equity awards that were granted prior to the termination of the 2012 Plan. As of June 7, 2021, we no longer grant equity awards pursuant to the 2012 Plan. The 2021 Plan, as amended and restated, was approved by the shareholders on June 1, 2023 and May 21, 2026 to increase shares available for future grants by approximately 50 million and 38 million shares, respectively. The 2022 Plan was terminated in June 2023 and no additional awards were granted thereafter under the 2022 Plan. Outstanding equity awards under the 2022 Plan continue to be subject to the terms and conditions of the 2022 Plan. The 2021 Plan and the 2012 Plan provide for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, RSUs, performance-based stock awards and other forms of equity compensation (collectively, “equity awards”). The 2022 Plan permits the grant of any of the foregoing awards with the exception of incentive stock options. In addition, the 2022 Plan, the 2021 Plan and the 2012 Plan provide for the grant of performance cash awards. Incentive stock options may be granted only to employees. All other equity awards may be granted to employees, including officers, as well as directors and consultants. Our Amended and Restated 2012 Employee Stock Purchase Plan (the “2012 ESPP”) authorizes the issuance of shares of common stock pursuant to purchase rights granted to our employees. The price at which common stock is purchased under the 2012 ESPP is equal to 85 % of the fair market value of our common stock on the first or last day of the offering period, whichever is lower. Offering periods are six months long and begin on February 1 and August 1 of each year. The number of shares of common stock reserved for issuance will not be increased without shareholder approval. Stock Options A summary of stock option activity for the six months ended June 30, 2026 was as follows: Number of Shares Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) (in years) (in millions) Outstanding as of December 31, 2025 4,829 $ 114.78 Granted (1) 2,675 $ 13.14 Exercised ( 65 ) $ 19.91 $ 5 Forfeited ( 100 ) $ 19.56 Outstanding as of June 30, 2026 7,339 $ 79.87 6.3 $ 284 Vested and expected to vest as of June 30, 2026 7,078 $ 81.44 6.2 $ 266 Vested and exercisable as of June 30, 2026 2,864 $ 102.94 5.1 $ 60 (1) Stock options related to business combinations include 2.3 million shares from the Armis acquisition. Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options. The total fair value of stock options vested during the six months ended June 30, 2026 was $ 38 million. The weighted-average grant-date fair value of stock options granted was $ 88.79 for the six months ended June 30, 2026. 23 Table of Contents During the year ended December 31, 2021, a one-time long-term performance-based option award was granted to the Chief Executive Officer (“2021 CEO Performance Award”) and to certain executives (collectively “2021 Performance Awards”) under the 2021 Plan at a total grant-date fair value of $ 232 million. The 2021 Performance Awards will vest in eight equal tranches based on service and achievement of both performance and market conditions, subject to continued employment and specifically for the 2021 CEO Performance Award, as CEO or Executive Chairman of the Company, through each vesting date. The performance and market conditions for a particular tranche may be achieved at different points in time and in any order but will become eligible to vest only when all service, performance and market conditions for the respective tranche are met but no earlier than two years from date of grant. The performance and market conditions must be achieved by September 30, 2026 (the “Performance Period”). The stock price metric will be achieved when both the 180-day volume weighted-average price (“VWAP”) and the 30-day VWAP equal or exceed the respective tranche stock price metric on any day during the Performance Period. The performance metric is achieved when the trailing four-quarter cumulative GAAP subscription revenues equal or exceed the respective tranche performance target. Shares acquired upon exercise of the options cannot be sold, transferred or disposed until after the end of the Performance Period and the 2021 Performance Awards will expire ten years from the respective date of grant. As of June 30, 2026, the first four tranches were vested based on achievement of both the performance and market conditions. The fair value of the 2021 Performance Awards and the corresponding derived service periods were estimated using the Monte Carlo simulation. Stock-based compensation expense is recognized on a graded vesting basis over the requisite service period for each respective tranche, but not shorter than the two-year minimum service period, and includes an assessment of when it is probable the performance condition will be achieved, which involves a subjective assessment of our future financial projections. As of June 30, 2026, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock options was approximately $ 210 million. The weighted-average remaining vesting period of unvested stock options at June 30, 2026 was approximately two years . RSUs A summary of RSU activity for the six months ended June 30, 2026 was as follows: Number of Shares Weighted-Average Grant-Date Fair Value Per Share (in thousands) Outstanding as of December 31, 2025 26,011 $ 158.53 Granted (1) 31,339 $ 104.97 Vested ( 7,956 ) $ 135.04 Forfeited ( 2,570 ) $ 142.78 Outstanding as of June 30, 2026 46,824 $ 127.55 Expected to vest as of June 30, 2026 41,150 (1) Includes RSUs related to business combinations, of which 5.9 million shares relate to the Armis acquisition. RSUs outstanding as of June 30, 2026 were comprised of 44.1 million RSUs with only service conditions and 2.7 million RSUs with both service and performance conditions, including certain RSUs with additional market conditions. The total intrinsic value of the RSUs vested was $ 0.8 billion for the six months ended June 30, 2026. As of June 30, 2026, the aggregate intrinsic value of RSUs outstanding was $ 4.6 billion and RSUs expected to vest was $ 4.1 billion. PRSUs have service, performance and market vesting conditions. The ultimate number of shares eligible to vest range from 0 % to 250 %, subject to our board of directors compensation committee’s approval of performance metrics achievement and, for certain PRSUs, total shareholder return relative to that of the S&P 500 index. 24 Table of Contents The eligible shares subject to PRSUs granted during the six months ended June 30, 2026 will vest in one to three years contingent on each holder’s continuous status as an employee on the applicable vesting dates. The number of PRSUs granted included in the table above reflects the shares that could be eligible to vest at 100 % of target for PRSUs and includes adjustments for over or under achievement for PRSUs granted in the prior years, as applicable. We recognized $ 112 million and $ 90 million of stock-based compensation expense, net of actual and estimated forfeitures, associated with PRSUs on a graded vesting basis during the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, total unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested RSUs was $ 4.9 billion, and the weighted-average remaining vesting period was approximately three years . (15) Net Income Per Share Basic net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for the effects of dilutive shares of common stock, which are comprised of outstanding stock options, RSUs and ESPP obligations. Stock awards with performance or market conditions are included in dilutive shares to the extent all conditions are met. The potentially dilutive shares of common stock are computed using the treasury stock method or the as-if converted method, as applicable. The effects of outstanding stock options, RSUs and ESPP obligations are excluded from the computation of diluted net income per share in periods in which the effect would be antidilutive. The following table presents the calculation of basic and diluted net income per share attributable to common stockholders (in millions, except for number of shares reflected in thousands and per share data): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Numerator: Net income $ 298 $ 385 $ 767 $ 845 Denominator: Weighted-average shares outstanding - basic 1,031,351 1,035,819 1,033,234 1,034,963 Weighted-average effect of potentially dilutive securities: Common stock options, RSUs and ESPP obligations 2,983 10,789 3,972 11,749 Weighted-average shares outstanding - diluted 1,034,334 1,046,608 1,037,206 1,046,712 Net income per share - basic $ 0.29 $ 0.37 $ 0.74 $ 0.82 Net income per share - diluted $ 0.29 $ 0.37 $ 0.74 $ 0.81 Common stock options, RSUs and ESPP obligations excluded from diluted net income per share because their effect would have been anti-dilutive 46,730 11,937 22,483 11,939 (16) Provision for Income Taxes We compute our provision for income taxes by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjust the provision for discrete tax items recorded in the period. Our income tax provision was $ 140 million and $ 344 million for the three and six months ended June 30, 2026, respectively, and was primarily attributable to the mix of earnings and losses in countries with differing statutory 25 Table of Contents tax rates and stock-based compensation shortfalls, offset by the release of a valuation allowance on certain California deferred tax assets. Our income tax provision was $ 86 million and $ 181 million for the three and six months ended June 30, 2025, respectively, and was primarily attributable to the mix of earnings and losses in countries with differing statutory tax rates, offset by excess tax benefits of stock-based compensation. We are subject to taxation in the United States and foreign jurisdictions. As of June 30, 2026, our tax years 2004 to 2025 remain subject to examination in most jurisdictions. Due to differing interpretations of tax laws and regulations, tax authorities may dispute our tax filing positions. We periodically evaluate our exposures associated with our tax filing positions and believe that adequate amounts have been reserved for adjustments that may result from tax examinations. On July 4, 2025, H.R. 1, the "One Big Beautiful Bill Act," was enacted into law, bringing significant amendments to the U.S. tax code. This legislation extends and modifies provisions from the 2017 Tax Cuts and Jobs Act and introduces new tax measures affecting both businesses and individuals. The enacted legislation had an immaterial impact on the Company’s effective tax rate for the three and six months ended June 30, 2026. (17) Commitments and Contingencies Operating Leases For some of our offices and data centers, we have entered into non-cancellable operating lease agreements with various expiration dates through 2036. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into our determination of lease payments. Total operating lease costs were $ 43 million and $ 85 million for the three and six months ended June 30, 2026, respectively, and $ 36 million and $ 72 million for the three and six months ended June 30, 2025, respectively. For the six months ended June 30, 2026 and 2025, total cash paid for amounts included in the measurement of operating lease liabilities was $ 72 million and $ 53 million, respectively. Operating lease liabilities arising from obtaining operating right-of-use assets totaled $ 100 million and $ 173 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the weighted-average remaining lease term is approximately seven years , and the weighted-average discount rate is 4 %. Maturities of operating lease liabilities as of June 30, 2026 are presented in the table below (in millions): Fiscal Period: Remainder of 2026 $ 68 2027 162 2028 159 2029 151 2030 136 Thereafter 409 Total operating lease payments 1,085 Less: imputed interest ( 149 ) Present value of operating lease liabilities $ 936 In addition to the amounts above, as of June 30, 2026, we have leases, primarily for offices, that have not yet commenced with minimum undiscounted cash flows of $ 328 million. These leases are expected to commence between 2026 and 2027 with lease terms of seven to sixteen years . 26 Table of Contents Other Commitments Other contractual commitments primarily consist of data center and IT operations, cloud services and sales and marketing activities related to our daily business operations. There were no material contractual obligations that were entered into during the six months ended June 30, 2026 that were outside the ordinary course of business. We have entered into various non-cancellable agreements with cloud service providers, and as of June 30, 2026, we have remaining payments under these agreements of approximately $ 324 million for the remainder of fiscal 2026, $ 401 million in fiscal 2027, $ 573 million in fiscal 2028, $ 704 million in fiscal 2029 and $ 2.9 billion in 2030. Payment schedules vary from the timing of actual service consumption. In addition, we have entered into a non-cancellable agreement with an information technology equipment provider, under which we have remaining payments of approximately $ 1.4 billion due by fiscal 2028. In addition to the amounts above, our Senior Notes have an aggregate principal amount of $ 5.5 billion, with maturities ranging from May 2028 through May 2056. We also have $ 2.1 billion of commercial paper outstanding as of June 30, 2026, which has a weighted-average remaining term of 81 days. Refer to Note 11 “Debt” for further information. Further, $ 180 million of unrecognized tax benefits have been recorded as liabilities as of June 30, 2026. Legal Proceedings We are party to certain litigation and other legal proceedings. While legal proceedings are inherently unpredictable and subject to uncertainties, we do not believe the ultimate resolution of any such proceedings is likely to result in a material loss. We accrue for loss contingencies when it is both probable that we will incur the loss and when we can reasonably estimate the amount of the loss or range of loss. Other As previously disclosed, through its internal processes, the Company received a complaint that raised potential compliance issues related to one of its government contracts. The Company initiated an internal investigation, with the assistance of outside legal counsel, into the validity of these claims that concern the hiring of the Chief Information Officer of the U.S. Army as the Company’s Head of Global Public Sector in March 2023. As a result of the investigation, the Company’s board of directors determined that the Company’s President and Chief Operating Officer and the hired individual violated Company policy regarding a possible conflict relating to such individual’s hiring. On July 24, 2024, the Company and its President and Chief Operating Officer came to a mutual agreement that he would resign from all positions with the Company, effective immediately. The other individual also has departed the Company. The Company has informed the Department of Justice, the Department of Defense Office of Inspector General and the Army Suspension and Debarment Office of the investigation and is continuing to cooperate with the Department of Justice, which has commenced its own investigation and required the Company to deliver certain documents in connection with these matters. The Company cannot predict the timing, outcome or possible impact of the investigation. Indemnification Provisions Our agreements include provisions indemnifying customers against intellectual property and other third-party claims. In addition, we have entered into indemnification agreements with our directors, executive officers and certain other officers that will require us, among other things, to indemnify them against certain liabilities that may arise as a result of their affiliation with us. We have not incurred any material costs as a result of such indemnification obligations and have not recorded any material liabilities related to such obligations in the condensed consolidated financial statements . 27 Table of Contents (18) Segment and Geographic Information Segment Information Our chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s business activities as a single operating and reportable segment at the consolidated level. Accordingly, our CODM uses consolidated net income to measure segment profit or loss, allocate resources and assess performance. Further, the CODM reviews and utilizes functional expenses (cost of revenues, sales and marketing, research and development, and general and administrative) at the consolidated level to manage the Company’s operations. Other segment items included in consolidated net income are interest income, other income (expense), net and the provision for income taxes, which are reflected in the condensed consolidated statements of comprehensive income. 28 Table of Contents Geographic Information Revenues by geographic area, based on the location of our users, were as follows (in millions): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 North America (1) $ 2,522 $ 2,006 $ 4,881 $ 3,969 EMEA (2) 997 834 1,976 1,616 Asia Pacific and other 468 375 900 718 Total revenues $ 3,987 $ 3,215 $ 7,757 $ 6,303 Property and equipment, net by geographic area were as follows (in millions): June 30, 2026 December 31, 2025 North America (3) $ 1,411 $ 1,437 EMEA (2) 501 563 Asia Pacific and other 265 289 Total property and equipment, net $ 2,177 $ 2,289 (1) Revenues attributed to the United States were 95 % of North America revenues for each of the three and six months ended June 30, 2026 and 94 % for each of the three and six months ended June 30, 2025. (2) Europe, the Middle East and Africa (“EMEA”). (3) Property and equipment, net attributed to the United States were 83 % and 82 % of property and equipment, net attributable to North America as of June 30, 2026 and December 31, 2025, respectively . 29 Table of Contents