Many CEOs have used their quarterly earnings calls to warn that the Trump administration’s tariff policy, and the ensuing economic uncertainty, is going to be bad for business. But not ServiceNow CEO Bill McDermott.
McDermott says the current macroeconomic upheaval caused by Trump’s policies could actually provide an additional boost to ServiceNow’s business.
The reason? To better control costs, companies are looking to consolidate their technology stack, turning to just a handful of platforms that can be used across an organization, rather than purchasing multiple niche software solutions, McDermott told Fortune Wednesday in an interview just ahead of the company’s quarterly earnings announcement.
“Companies have uncertainty in the global economy, which is why they’re looking at their OPEX, they’re looking at their margin profile, and they’re very focused on efficiency and effectiveness,” he said. “They can consolidate so much cost and take so much cost out with ServiceNow and implement so quickly and get a [return on investment] so quickly, they love that.”
Still, McDermott said the guidance ServiceNow gave the market yesterday about its future earnings reflects uncertainty about exactly what impact Trump’s policies may have. “While our business remains strong, we are only flowing though part of those benefits into our full year outlook. This allows us to factor in potential risks as they pertain to the current geopolitical environment,” the company said in its earnings release.
The company has told the market to expect revenues to grow 18.5% to 19% for the full year to $12.6 billion, meaning the company would essentially maintain the same 18.5% year over year sales growth it saw in the first quarter. ServiceNow investors have had a tough 2025 so far, with concerns about the effect of Trump’s policies, including cuts to government spending on software, helping to push the company’s shares down more than 20% from an all-time high of $1,170.39 reached on January 28.
McDermott told Fortune he expects ServiceNow’s customers will continue to implement digital transformation projects, and in particular will continue investing in artificial intelligence going forward. “We have a $4 trillion [forecast total market size in terms of business spend] market with AI between now and 2030 and ServiceNow has proven, based on this quarter alone, where we literally quadrupled AI revenues year over year, that we’re becoming the standard for enterprise grade AI and enterprise software.”
The CEO said that ServiceNow, which was originally known for automating the handling and resolution of companies’ IT support requests, has increasingly been winning marketshare in customer relationship management (CRM) solutions from rival Salesforce. He said 16 of ServiceNow’s 20 largest deals for the quarter were for CRM solutions.
Both ServiceNow and Salesforce have been making a big push into selling AI “agents” that automate workflows for customers. ServiceNow announced plans to acquire Moveworks a company that has developed AI agents to help resolve IT and human resource tasks and questions, for $2.85 billion to help bolster its agentic AI offerings. It also acquired Logik.ai, a company that uses AI to help salespeople quote for complex product offerings, to add to its CRM capabilities.
McDermott says that ServiceNow’s ability to offer a single platform across all of a customer’s functional areas, rather than offering siloed products for sales, human resources, IT, and operations, meant companies could more easily implement AI agents with ServiceNow than with its rival. “Talk to a big company, pick any one, they’ll tell you they have 50 to 100 instances of Salesforce. How are you going to apply agents to 50 instances that aren’t integrated? Good luck. So they want a clean platform with a pure play AI capability to order fulfill and service on one common architecture, and we give them that, and we do it at a much lower cost.”
In a separate interview with Business Insider, McDermott said that the company has so far not been impacted by cuts to government contracts mandated by the Department of Government Efficiency (DOGE), which has been targeting software licenses as an area for cutting federal spending.
For now, ServiceNow’s business momentum looks strong. For the first quarter, the company announced earnings per share that topped analysts’ consensus forecasts by 5% and topped market expectations for both sales and profits. For the three months ended March 31st, the company made $460 million in net income on total revenues of $3.09 billion, using standard GAAP accounting. The company also reported that it has more than $22 billion in sales already booked in its pipeline and 508 customers with more than $5 million in annual contract value, an increase of more than 20% year over year. ServiceNow’s shares rose 11% in after hours trading on Wednesday night following the announcement.
