Dive Brief:
- Enterprise software firm ServiceNow reported Wednesday that it saw delays in several large Middle East deals during the first quarter amid the U.S.-Israel led conflict with Iran.
- During the company’s first-quarter 2026 earnings call, CFO Gina Mastantuono said subscription revenue included “about a 75 basis point headwind from delayed closings of several large on-premise deals in the Middle East due to the ongoing conflict in the region.”
- The finance chief later added that ServiceNow’s outlook takes “a prudent view of the geopolitical environment, particularly the conflict in the Middle East and its potential impacts to deal timing.”
Dive Insight:
The disclosure comes amid growing attention to geopolitical risk on corporate earnings calls. The term “Iran” has been cited on 26 earnings calls conducted by S&P 500 companies from March 1 through April 22, while “Middle East” has been mentioned on 58 such calls over the same period, according to FactSet data shared with CFO Dive.
ServiceNow’s Wednesday call highlighted the spillover effects of regional instability on enterprise software vendors, even those with limited direct exposure to physical supply chains.
“When you're dealing with a sovereign cloud in the Middle East, everything that happens in the Middle East is recognized as on-premise revenue,” CEO Bill McDermott said during the call. “It's not linear or ratable. It happens all at once.”
Executives indicated they expect the transactions to close later in the year, though timing remains uncertain.
Despite the delayed deals, ServiceNow reported results above its own guidance. The company posted total revenues of $3.8 billion in the first quarter, up 22% from the same period a year earlier.
Also, the company has kept its full-year guidance, Mastantuono said. “We didn't reduce it for any potential conflicts,” she said. “It was a few on-prem deals that slipped in the quarter, and you know on-prem has a larger impact to revenue.”
