ServiceNow puts Armis at the center of its enterprise security push

ServiceNow is positioning its $7.75 billion acquisition of Israeli cybersecurity company Armis as a central pillar of its AI strategy, not just an expansion into security. CEO Bill McDermott described cybersecurity as one of the company’s main growth engines alongside workflow automation and AI orchestration, saying enterprises need one platform to govern AI models, identities and connected devices.

The company reported second-quarter subscription revenue of $3.88 billion, above analysts’ expectations of $3.82 billion, and adjusted earnings per share of 90 cents. ServiceNow now expects 2026 subscription revenue of $15.76 billion to $15.78 billion. Shares rose nearly 4% in after-hours trading, though the stock remains down about 38% this year.

McDermott said AI is expanding the enterprise attack surface, with 2.2 billion agents entering businesses globally and 40 billion connected devices expected in the world in the next four years. He said Armis already tracks 7 billion of those devices in real time, giving ServiceNow greater visibility for threat detection and response.

ServiceNow said its AI business surpassed $1 billion in annual contract value and remains on track to exceed its target of $1.5 billion by the end of next year. Adoption of agentic AI products is also growing, with customers running AI agents in production increasing ninefold over the past nine months.