1Q26结果：尽管面临ST地缘政治和盈利空间逆风，AI业务势头依然强劲

intact despite ST geopoliticaland margin headwinds 1Q26 results: AI business momentum intactdespiteST geopolitical and margin headwinds Target PriceUS$160.00(Previous TPUS$215.00)Up/Downside88.7%Current PriceUS$84.78 ServiceNow announced 1Q26 results: total revenue grew by 22% YoY toUS$3.77bn, in line withBloombergconsensus estimate; non-GAAP operatingincome was up by 26% YoY to US$1.20bn, also in line with the consensus.ManagementhasliftedFY26subscriptionrevenuegrowthguidanceto +20.5-21% YoY (previous: +19.5-20% YoY), mainly reflecting the 125bps contributionfromthe early close ofthe acquisition of Armis;but also expectstheacquisitionwill lead to 75bps/200bpsheadwind to FY26 operating/FCF margin,thuslowering FY26 operating/FCF margin guidance to 31.5%/35%(previous:32%/36%). Nonetheless,managementexpectsthe strong AIefficiencygainswillnormalize the company’s margin expansion trajectories from FY27Eonwards.We slightly trim our FY26-28E non-GAAP operating income forecastby 0-1%, in view of the short-term margin headwinds. We lower our target price China Internet Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Ye TAO, CFA(852) 3850 5226franktao@cmbi.com.hk Shuyin GUO(852) 3916 3716guoshuyin@cmbi.com.hkStock Data Prudent2Q26 guidance on geopolitical headwinds.Subscriptionrevenue was up by 19% YoY in constant currency to US$3.67bn in 1Q26,including75bps headwind from delayed closings of several large on-premise deals in the Middle Eastdue to thegeopolitical headwinds. cRPOgrew by 21% YoY in constantcurrency to US$12.64bn in 1Q26, 100bpsabove the company guidance. The companyclosed 16 deals greater thanUS$5mnin net new ACV in1Q26, including five deals overUS$10mn. For AIACV target raised.Now Assist ACV continues to outperformmanagement’sexpectations,and the company has raised Now AssistFY26-end ACV target to US$1.5bn from US$1.0bn.Now Assist customersspendingover US$1mn in ACV grew by over 130%YoY in 1Q26.EmployeeWorks,a unified AI front door launched in Feb 2026, alreadyclosed6deals aboveUS$1mnin net new ACV;AI Control Towersaw its Expect margin to face short-term headwind.Non-GAAPOPM improvedby0.9ppt YoY to 31.8% in 1Q26, mainly thanks to theAIefficiency gains.The company’s internal AI deploymentis resolving 90% ofemployee ITrequests. The integration of new businesses likeArmismay leadto short- Source: FactSet Valuation We value ServiceNow at US$160.0per share based on30x 2026E EV/EBITDA. Our targetEV/EBITDA is at a premium to the sector average (20x),which is justified by ServiceNow’sstrong earnings growth outlookover 2026-2028E and its free cash flow generation Disclosures& Disclaimers Analyst Certification The research analyst who is primary responsible for thecontent of this research report, in whole or in part, certifies that with respect to the securities or issuerthat the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securitiesor issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (asdefined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3) serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listedcompanies covered in this report. CMBIGM Ratings BUY: Stock with potential return of over 15% over next 12 monthsHOLD: Stock with potential return of +15% to-10% over next 12 monthsSELL: Stock with potential loss of over 10% over next 12monthsNOT RATED: Stock is not rated byCMBIGM Address: 45/F, Champion Tower, 3 Garden Road,Hong Kong, Tel: (852) 3900 0888 Fax: (852) 3900 0800CMB InternationalGlobal MarketsLimited (“CMBIGM”) is a wholly owned subsidiary of CMB International Capital Corporation Limited (a wholly ownedsubsidiary of China Merchants Bank) ImportantDisclosures There are risks involved in transacting in any securities. The information contained in this report may not be suitable forthe purposes of all investors.CMBIGMdoes not provide individually tailored investment advice. This report has been prepared without regard to the individual investment objectives, financial positionor special requirements. Past performance has no indication of future performance, and actual events may differ materially from that which is contained in thereport.Thevalue of, and returns from, any investments are uncertain and are not guaranteed and may fluctuate as a result of their dependence on the or its affi