ServiceNow's $2.85bn Acquisition of Moveworks
- katerinageorgiou5
- May 5
- 6 min read
By Kevin Xu, Ngoc Nguyen, Cooper Thompson (University of Melbourne); Amin Ouamar, Jules Bedrossian, Maximilien Kender (HEC Paris)
Photo: Nasa (Unsplash)
Overview of the deal
Acquirer: ServiceNow
Target: Moveworks
Total Transaction Size: $2.85bn
Expected Closed Date: H2 2025
Target Advisor: Qatalyst Partners (Financial); O'Melveny & Myers (Legal)
Acquirer Advisors: J.P. Morgan and Tidal Partners (Financial); Skadden, Arps, Slate, Meagher & Flom (Legal)
On March 10th 2025, ServiceNow, a software maker specialized in AI for business transformation, revealed it was going to acquire Moveworks in a deal valued at $2.85bn. Moveworks is an AI company focused on enhancing employee productivity by automating workplace support tasks.
This deal could create a major leader in the ever growing business-enhancing AI sector. Indeed, since 2019 CEO Bill McDermott has put a lot of effort into diversifying ServiceNow’s offer and integrating breakthrough AI technologies. This strategy reaches its climax with the acquisition of the powerful AI assistant models developed by Movework, which already support more than 5 million employees worldwide.
This deal will strengthen ServiceNow's position in “front office” customer service management products. Although ServiceNow’s stock price declined by 5.5% following the announcement, due to investor concerns over Moveworks being overvalued, the acquisition could provide a head start to the company in the race for the transition from copilot software to fully autonomous AI agents.
"With the acquisition of Moveworks, ServiceNow will take another giant leap forward in agentic AI‑powered business transformation. [...] Moveworks’ talented team and elegant AI‑first experience, combined with ServiceNow’s powerful AI‑driven workflow automation, will supercharge enterprise‑wide AI adoption and deliver game‑changing outcomes for employees and their customers.” - Amit Zavery, President, COO, and Chief Product Officer (ServiceNow)
Company Details (Acquirer - ServiceNow)
ServiceNow is an American multinational software company that provides cloud-based platforms and solutions for enterprise operations. The company is renowned for its cloud-based workflow automation platform, which helps organizations automate and optimize their IT service management (ITSM), IT operations, and other business processes. Founded in 2004 and headquartered in Santa Clara, California, ServiceNow operates globally, providing solutions for a broad range of industries, including IT, customer service, human resources, security operations, and software development.
ServiceNow serves customers, including many Fortune 500 companies, providing solutions that help automate processes, improve productivity, and drive digital transformation. The company operates in more than 50 countries, employing over 20,000 people worldwide.
The company's revenue growth has been strong, with an increasing number of organizations adopting its cloud-based solutions for enterprise-wide workflow automation.
Founded in 2004, headquartered in Santa Clara, San Francisco, USA
CEO: Bill McDermott
Number of employees: 26,000+
Stock Exchange: NYSE (Ticker: NOW)
Market Cap: $195.67bn USD as of 27/04/2025
LTM Revenue: $10.98bn
LTM EBITDA: $2.5bn
LTM P/E: 128.2x
LTM EV/EBITDA: 83.4x
Recent Transactions: Acquisition of Cuein (Jan 2025), $460m acquisition of G2K (Jul 2023), $57m acquisition of Hitch Works (Jun 2022)
Company Details (Target - Moveworks)
Moveworks automates employee support by offering an agentic AI platform across enterprise systems like Slack, Microsoft Teams, and ServiceNow. The platform utilizes machine learning and natural language understanding to resolve IT, HR and other workplace requests to enhance productivity and streamline operations.
Founded in 2016, headquartered in Mountain View, California, USA.
CEO: Bhavin Shah
Number of employees: 500+
Market cap: N/A
EV: $2.85bn
LTM Revenue: $100mn
LTM EBITDA: N/A
LTM EV/Revenue: 28.5x
LTM EV/EBITDA: N/A
Projections and Assumptions
Short-Term Consequences
Under the finalized agreement, ServiceNow acquired Moveworks for $2.85 billion, marking its largest transaction to date. The acquisition is structured through a mix of cash and equity, and ServiceNow expects to incur integration costs ranging from $150 million to $300 million over the next 12 months. Following the announcement, ServiceNow’s share price declined by approximately 5.5%, reflecting investor concerns over the high multiple paid and the near-term dilution.
In a statement accompanying the deal, ServiceNow highlighted the strategic benefits, emphasising that Moveworks’ leading AI-driven employee support solutions would materially enhance ServiceNow’s workflow automation and generative AI capabilities. The acquisition aims to accelerate ServiceNow’s AI roadmap, particularly in the areas of conversational AI and enterprise search. Management indicated that while the transaction will be accretive to revenue, it will be modestly dilutive to operating margins and EPS over the next 12 to 18 months due to upfront integration and investment costs.
Despite the strong strategic fit, market concerns persist regarding the premium valuation of over 20x revenue, reflecting heightened competition for AI assets. Analysts have flagged potential execution risks around fully integrating Moveworks’ technology stack and achieving cross-sell targets within ServiceNow’s Now Platform. Overall, if ServiceNow executes the acquisition effectively, it could significantly strengthen its competitive positioning in enterprise AI, although near-term financial headwinds are expected.
Long-Term Upsides
ServiceNow, via its acquisition of Moveworks, continues its bet on AI integration within businesses. The $2.85 billion acquisition of Moveworks aims to address key flaws within ServiceNow’s existing AI agents and demonstrates its adaptation to the rise of generative AI.
ServiceNow’s AI agents have previously been susceptible to critical flaws, which threatened its competitiveness against rivals Salesforce and Microsoft’s Dynamics. These flaws include poor data retrieval and limited front-end capabilities. The acquisition of Moveworks aims to amend these flaws via the integration of Moveworks’ AI models. Moveworks’ model utilises Natural Language Processing technology, which allows it to receive conversational inputs, unlike ServiceNow’s rule-based model. Moveworks’ model also utilises ‘enterprise search technology’ to excel at data retrieval, while delivering powerful capabilities to manage and automate front-end duties such as customer service and sales.. Thus, ServiceNow’s acquisition of Moveworks will significantly improve the capabilities of ServiceNow’s AI agents, which could improve performance within the rapidly growing market of AI assistants.
Moreover, ServiceNow’s acquisition of Moveworks will have a significant impact on revenue growth. ServiceNow’s existing AI solution is the fastest‑growing product introduction in the company’s history. ServiceNow has nearly 1,000 AI customers and has surpassed $200 million in annual contract value for its Pro Plus AI solution as of Dec. 31, 2024. If the synergies are realised through the combination of both models, ServiceNow expects this growth to continue at a rapid rate.
Finally, ServiceNow has a long history of employing a tuck-in strategy in regards to acquisitions, with this acquisition being their 34th. Thus, ServiceNow has the experience to realise the synergies present in this transaction and has the employee infrastructure to continue to organically grow its AI-powered offerings.
Risks and Uncertainties
ServiceNow's acquisition of Moveworks, while promising substantial long-term benefits, presents significant risks and uncertainties. A primary concern is the integration of the two platforms, given the differences in their data models —ServiceNow's structured data versus Moveworks' unstructured analysis. This disparity could complicate seamless interoperability and user experience, especially in areas such as enterprise search and knowledge management. Additionally, the overlapping features might lead to temporary gaps or loss of functionality during the consolidation process, posing challenges to achieving a unified platform.
The acquisition also faces substantial talent and innovation risks as Moveworks transitions from an agile startup to part of a large enterprise. Moveworks' rapid development cycles may slow under ServiceNow's enterprise release schedule, potentially hampering innovation momentum. Retaining key AI talent is crucial, as personnel losses could significantly impede integration success. Additionally, the premium valuation, reportedly exceeding 20× Moveworks' annual revenue, places immense pressure on ServiceNow to deliver substantial growth or synergies to justify the investment, with potential "ServiceNow tax" concerns if Moveworks becomes an expensive add-on for customers.
ServiceNow faces intense competitive pressure in an increasingly crowded AI enterprise market. Tech giants like Microsoft, Salesforce, and Google are aggressively embedding AI capabilities into their platforms, forcing ServiceNow to not only execute flawless integration but also differentiate its combined offering. Additionally, Moveworks lacks industry-specific AI solutions for highly regulated sectors, for example, healthcare and government, leaving ServiceNow with capability gaps in these lucrative markets. Success hinges on ServiceNow's ability to maintain security, governance, and flexibility while leveraging Moveworks' capabilities to establish a strong foothold in the crowded AI enterprise space.
"Becoming part of ServiceNow presents an incredible opportunity to accelerate our innovation and deliver on our promise through their AI agent-fueled platform to redefine the user experience for employees and customer service teams.” Bhavin Shah - CEO (Moveworks)