ServiceNow Launches Autonomous Workforce with Moveworks Integration, Highlighting AI Push Amid Margin Concerns

What happened

ServiceNow is advancing its AI strategy by launching an Autonomous Workforce that incorporates Moveworks, a $2.4B acquisition closed in December 2025, into its ServiceNow AI Platform. This move aims to enhance automated workflow solutions and boost AI attach rates, as part of a broader effort to monetize AI-driven demand and sustain growth. However, the integration adds to existing operational complexity and margin pressures, with filings showing subscription gross margin declining to 80% in 2025 and guided to decrease slightly in 2026 due to third-party cloud costs and acquisition amortization. The launch does not fundamentally alter the investment thesis, which remains dependent on cRPO growth above 20% constant currency and Now Assist net-new ACV acceleration without eroding profitability. Investors should view this as a logical but high-stakes step, with the next 1-2 quarters critical for validating demand signals and margin resilience.

Implication

The Autonomous Workforce could accelerate Now Assist net-new ACV, potentially supporting the bull case for AI-driven growth and large-deal throughput. However, it exacerbates margin pressures from third-party cloud usage and Moveworks amortization, threatening the base case if costs outpace revenue gains. Success hinges on maintaining cRPO growth above 20% constant currency and renewal rates near 98% to avoid customer pushback from pricing model changes. Investors must watch for tangible bookings growth in the next earnings reports, as integration stumbles could validate bearish concerns about acquisition fatigue and execution risks. Overall, this strategic move underscores the delicate balance between innovation and financial discipline, making near-term results pivotal for confidence in the POTENTIAL BUY thesis.

Thesis delta

The thesis remains a POTENTIAL BUY contingent on cRPO strength and AI monetization, with no material shift from this news. It reinforces the strategic direction but highlights execution risks, such as margin compression and integration challenges. If the launch drives measurable ACV without worsening margins, it could strengthen the bull case; otherwise, it may accelerate downside if demand falters.