ServiceNow’s stock has lost 8.3% of its value in the week ending March 12, according to Google Finance. However, the company’s shares have recovered some ground — rising about 7.3% since ServiceNow’s March 10 announcement of a $2.85 billion cash and stock acquisition of 500-employee Mountain View, Calif.-based Moveworks — which uses artificial intelligence to understand and resolve employee issues through chat, reported Reuters.
ServiceNow stock’s future trajectory will likely depend in part on whether the company exceeds expectations and raises guidance in its April 2025 first quarter report. Here are two factors that could contribute to stronger results:
- An unexpected boost in revenues resulting from the rapid growth of ServiceNow’s agentic AI services.
- A weaker dollar which could tamp down the foreign exchange headwinds that led ServiceNow to lower its 2025 subscription revenue forecast.
ServiceNow is optimistic. “Moveworks attracted five million employee users in 18 months and at 90% of their enterprise customers, 100% of the employees use the product,” according to my March 11 interview with ServiceNow President and Chief Financial Officer Gina Mastantuono. “We have 250 overlapping customers” and the company aims to sell Moveworks service to ServiceNow’s 8,500 customers, she added.
How Moveworks Fits Within ServiceNow’s Agentic AI Product Line
Agentic AI currently occupies a small proportion of ServiceNow’s nearly $11 billion in total 2024 revenue. However, demand for such services is growing fast and Moveworks – which generated $100 million in 2024 annual recurring revenue, according to a company release – could add meaningfully to ServiceNow’s revenue.
Why ServiceNow Will Benefit From Moveworks Acquisition
Moveworks will add to ServiceNow’s ProPlus service — which uses generative AI to automate repetitive tasks and deliver service effectively.
“We will be better together,” said Mastantuono. “Customers are excited about 1+1=4. Our ProPlus SKU is the fastest growing new product in our history — generating $200 million in annual contract value by the end of 2024,” she added.
The Moveworks deal is consistent with previous ServiceNow acquisitions. “ServiceNow has prided itself on growing organically,” Mastantuono told me. “We make tuck-in acquisitions to add technology and talent.”
Moveworks counts Broadcom, Hearst, Siemens, Toyota, Unilever, Palo Alto Networks, Pinterest, and Instacart among its more than 300 enterprise customers.
Moveworks’ “elegant agentic AI front-end and search capability will help ServiceNow extend its agentic AI market leadership and improve our customers’ employee experience. Any employee can ask a question with a ChatGPT-like interface. With our strength in automating complex workflows, we will figure out what’s going on and fix it,” she added.
Agentic AI yields significant productivity improvements for ServiceNow which uses its agentic AI services — dubbed Now on Now — internally. “We are customer zero for AI,” Mastantuono said.
“Now on Now has 500,000 agentic AI workflows. We get a 20% productivity increase in customer service – adding three million hours of capacity for people. It enables us to automate 84% of customer support. The number of issues we deflect has increased by 80%. Developer productivity in writing code has increased 20%.”
How Much Revenue Moveworks Acquisition Could Add To ServiceNow
The acquisition could bring revenue growth. That’s because Moveworks has grown rapidly in recent years – sporting 77% average annual growth in ARR between 2021 and 2024, according to PitchBook.
If two-thirds of ServiceNow customers — or 5,600 companies — adopted Moveworks’ service, ServiceNow’s ARR could increase by $1.6 billion over the next year or two. This assumes Moveworks has 350 customers, about $286,000 in ARR per customer, and those 5,600 ServiceNow customers pay that amount for the Moveworks service within two years of the acquisition closing.
Although ServiceNow is optimistic about the benefits of acquiring Moveworks, the company declined to comment on when its $2.85 billion investment would pay off. “We have 1,000 agentic AI customers already,” she said. “We believe our AI business will grow and supercharge our business.”
Economic Uncertainty In The U.S. Could Drive Down Dollar
The combination of on-and-off again tariffs and government job cuts is generating economic uncertainty which affects ServiceNow’s strategy and outlook. “Due to recent economic uncertainty we are staying close to our customers and looking for ways we can offer them value as they adapt,” Mastantuono told me.
The economic uncertainty could also help ServiceNow outperform its 2025 revenue forecast. That’s because in January, “a strong U.S. dollar created a $175 million hit to 2025 subscription revenue forecasts, further contributing to the weaker-than-expected guidance,” according to xtype.
While foreign exchange fluctuations are outside ServiceNow’s control, they make investors uncomfortable. However, the economic uncertainty has also weakened the U.S. dollar since the beginning of 2025.
For example, the value of the dollar has declined nearly 6% relative to the Euro since the start of January — which could weaken the FX headwind that lowered the company’s revenue forecast.
What Analysts Are Saying About ServiceNow’s Moveworks Acquisition
Analysts have mixed views about the deal — some say the acquisition will enhance ServiceNow’s competitive position while others are concerned that implementation difficulties must be overcome to realize this bullish outcome.
- Strengthens ServiceNow’s position against Salesforce. “The Moveworks acquisition significantly enhances and accelerates ServiceNow’s agentic AI capabilities, strengthening its competitive positioning against established market incumbents,” VP of Cybermedia Research industry research group Prabhu Ram told CIO.
- Simply because the companies share clients does not mean customers will be better off. “Successfully embedding agentic AI into an enterprise platform requires careful alignment with security, governance, and compliance standards,” Everest Group practice director Abhivyakti Sengar told CIO. “Additionally, ServiceNow must ensure Moveworks’ AI enhances, rather than disrupts, existing customer workflows,” Sengar added.
If customers are happy with the agentic AI services emerging from the integration of the two companies’ products, ServiceNow could exceed expectations and its shares could rise.
Read the full article here
