Key Highlights

  • Shares are trading 25.35% lower at $112.07 on Thursday, October 29, 2026, from an implied prior close near $150.14 (calculated).
  • Third-quarter subscription revenue came to $3.988 billion, up 21%, versus about $3.98 billion expected.
  • Current remaining performance obligations reached $13.65 billion, up 20.5%, with fourth-quarter growth guided to 18.5%.
  • Adjusted EPS was $1.00 against consensus estimates of $1.02 to $1.03, while GAAP net income dropped to $277 million from $502 million.
  • Full-year subscription revenue guidance was lifted to $15.78 billion to $15.79 billion.

ServiceNow Share Plunge: Why Did a Revenue Beat Push the Stock Down 25.35%?

ServiceNow (NYSE:NOW) shares are trading 25.35% lower at $112.07 on Thursday, October 29, 2026, after the company posted third-quarter results following the close on Wednesday, October 28. The implied prior close was roughly $150.14 (calculated). Shares had already slipped about 14% in extended trading on Wednesday, and the intraday fall of as much as 25% is described in market reports as the biggest since the 2012 IPO.

The drop comes after a 36% gain over the previous three months. The trigger was not the quarter itself, which matched subscription expectations, but a fourth-quarter outlook for current remaining performance obligations (cRPO) growth of 18.5% in constant currency, versus about 19% expected and 21% in the third quarter.

ServiceNow Third-Quarter Numbers: How Did Results and Guidance Stack Up Against Expectations?

Subscription revenue totaled $3.988 billion, up 21%, and total revenue reached $4.106 billion, up 20.5%. Adjusted EPS was $1.00 versus estimates of $1.02 to $1.03, with one explanation pointing to higher financing costs tied to the Armis acquisition. GAAP net income was $277 million, down from $502 million a year earlier.

cRPO came in at $13.65 billion, up 20.5%, ahead of about $13.56 billion expected. Total remaining performance obligations were $29.7 billion, up 22%. In May the company arranged a $4 billion bond sale to refinance debt linked to Armis.

Fourth-quarter subscription revenue is guided to $4.245 billion to $4.255 billion, up 22.5% to 23%, broadly in line with estimates. Full-year subscription revenue guidance moved up to $15.78 billion to $15.79 billion, and the full-year free cash flow margin target rose by one point to 36%.

ServiceNow Analyst Concerns: Do Early Renewals and AI Demand Account for the Slowdown?

The company lifted its 2026 AI annual contract value target to $1.7 billion from $1.5 billion three months earlier. Management said production consumption of agentic AI has grown more than 13 times so far this year.

William Blair said early renewals boosted the September quarter at the expense of December, and pointed to public-sector customers moving to on-premises deals and a rise in termination-for-convenience clauses. BMO said the outlook still points to deceleration, and TD Cowen cautioned that it could revive worries about AI disrupting software.

The company widened its OpenAI partnership and started a Control Tower Alliance for AI governance, whose founding members include Anthropic, Amazon Web Services, Nvidia (NASDAQ:NVDA), Okta (NASDAQ:OKTA) and OpenAI.

What to Watch Next: Fourth-Quarter cRPO Delivery and the Year-End AI Target

Next checkpoints are the fourth-quarter report in early 2027 (last year's arrived on January 28, 2026), whether cRPO growth lands close to the 18.5% guide, and whether AI annual contract value hits the $1.7 billion year-end target.