ServiceNow vs. Workday: Here's What Revenue Growth Trends Between These Software Companies Tell Investors
Key Points
ServiceNow demonstrates stronger overall revenue generation than Workday, leading the comparison in every consecutive quarter over the last two years.
Both companies show steady quarter-over-quarter revenue growth over the last eight periods, although ServiceNow maintains a steeper upward trajectory overall.
Investors should watch whether the revenue gap between the two companies continues to widen or if the growth trend starts to narrow in upcoming quarters.
ServiceNow: Maintaining Consistent Revenue Expansion
ServiceNow (NYSE:NOW) primarily generates its revenue by selling comprehensive cloud-based workflow automation software that helps large enterprises globally streamline their internal information technology, human resources, and customer service operations.
It entered a multi-year technology agreement with TeamViewer to integrate digital employee experience tools, and it reduced its global workforce by roughly 1,000 employees during a recent corporate restructuring effort.
Workday: Delivering Gradual Revenue Growth
Workday (NASDAQ:WDAY) earns its revenue by providing cloud-hosted human capital management and financial software applications that empower large organizations to efficiently oversee their comprehensive employee life cycles and accounting workflows.
While dealing with an active class action lawsuit regarding algorithmic bias in its hiring tools, it launched operations in the United Arab Emirates and opened a new corporate office in Dubai.
Why Revenue Matters for Investors
Revenue matters because it clearly shows the total money a business brings in before deducting any operating expenses. Closely tracking this top-line financial figure helps investors understand the total scale and growth trajectory of a business.
ServiceNow vs. Workday Revenue over the last 8 quarters.
Quarterly Revenue for ServiceNow and Workday
| Calendar quarter | ServiceNow Revenue | Workday Revenue |
|---|---|---|
| Q3 2024 | $2.8 billion (quarter ended Sept. 30, 2024) | $2.2 billion (quarter ended Oct. 31, 2024) |
| Q4 2024 | $3.0 billion (quarter ended Dec. 31, 2024) | $2.2 billion (quarter ended Jan. 31, 2025) |
| Q1 2025 | $3.1 billion (quarter ended March 31, 2025) | $2.2 billion (quarter ended April 30, 2025) |
| Q2 2025 | $3.2 billion (quarter ended June 30, 2025) | $2.3 billion (quarter ended July 31, 2025) |
| Q3 2025 | $3.4 billion (quarter ended Sept. 30, 2025) | $2.4 billion (quarter ended Oct. 31, 2025) |
| Q4 2025 | $3.6 billion (quarter ended Dec. 31, 2025) | $2.5 billion (quarter ended Jan. 31, 2026) |
| Q1 2026 | $3.8 billion (quarter ended March 31, 2026) | $2.5 billion (quarter ended April 30, 2026) |
| Q2 2026 | $4.0 billion (quarter ended June 30, 2026) | $2.7 billion (quarter ended July 31, 2026) |
Data source: Financial Modeling Prep. Data as of Oct. 12, 2026.
Foolish Take
A look at the revenue trends between ServiceNow and Workday reveals a clear narrative about enterprise software demand. Both are experiencing steady sales growth, demonstrating the stickiness of their digital platforms. However, ServiceNow's revenue is rising faster, illustrating its superior pricing power and ability to capture customers.
For example, ServiceNow's second quarter sales of $4 billion represented a 24% year-over-year increase compared to Workday's 13% growth. ServiceNow's success was helped by the artificial intelligence boom, as its AI offerings crossed the $1 billion mark in annual contract value (ACV) during Q2. Moreover, the company expanded the number of customers with more than $5 million in ACV by 23% year over year in the quarter, showing that the software giant is able to grow its base of high-spending clients.
Workday is also experiencing customer adoption of its platform's AI capabilities, which drove more than 25% of the company's new ACV in fiscal Q2. This and its steady sales growth illustrates Workday's market position as a highly durable back-office software provider with high recurring revenue.
Robert Izquierdo has positions in ServiceNow. The Motley Fool has positions in and recommends ServiceNow and Workday. The Motley Fool has a disclosure policy.