ServiceNow CEO: “The Armis acquisition is a major accelerator of growth”
Bill McDermott frames the $7.75 billion acquisition as a growth bet shaped by rising AI-driven cyber risk.
ServiceNow’s agreement to acquire cybersecurity company Armis for $7.75 billion marks the enterprise software maker’s largest acquisition to date, and, according to CEO Bill McDermott, a defining strategic move in an era increasingly shaped by AI-driven risk.
“This is about making a strategic move to accelerate growth, and we see the opportunity for our customers,” McDermott said Tuesday in an interview with CNBC’s Squawk on the Street. “In this AI world, especially with the agents, you’re going to need to protect these enterprises [because] every intrusion is a multimillion-dollar problem.”
The deal, announced Tuesday, comes as companies face a growing wave of sophisticated cyberattacks, fueled in part by the rapid adoption of artificial intelligence across enterprise systems. ServiceNow said it plans to integrate Armis’s security capabilities, including device scanning and threat detection, into its platform, positioning security as a core component of enterprise workflow and governance rather than a standalone function.
McDermott described the acquisition in expansive terms, calling it “a major accelerator of growth for ServiceNow,” and tying it directly to his long-term view of the company’s scale. “We see a trillion dollar company with ServiceNow,” he said.
That ambition sits alongside a broader push to position ServiceNow as a central coordinating layer across enterprise environments. “ServiceNow will have the only AI control tower that drives workflow, action and business outcomes across all of these environments,” McDermott said, underscoring the company’s emphasis on orchestration and control as AI systems proliferate inside large organizations.
Investors, however, reacted cautiously. ServiceNow shares fell about 1.5% following the announcement, reflecting concern over the company’s recent run of large acquisitions. In recent months, ServiceNow, which has a market cap of around $160 billion has acquired security firm Veza, AI company Moveworks, and sales automation platform Logik.ai, and it closed its $2.85 billion purchase of Moveworks earlier this month.
Chief Financial Officer Gina Mastantuono sought to reassure markets, telling Reuters that “our security stack, with the acquisition of Armis, is very well positioned, so we won’t need to do any more M&A in [the] security space.” She added that the company expects the Armis deal, which is scheduled to close in the second half of 2026, to triple the market opportunity for ServiceNow’s security and risk business.
Armis, founded in 2015, had been preparing for an initial public offering before agreeing to the sale. The company was valued at $6.1 billion in a funding round in November, led by the alternative investment platform of Goldman Sachs, with participation from existing investor CapitalG, Alphabet’s venture capital arm. Last month, Armis outlined a three-year plan to reach $1 billion in annual recurring revenue after surpassing the $300 million mark in August.
ServiceNow said Armis has now topped $340 million in annual recurring revenue, with 50% year-over-year growth.
