ServiceNow shares sink on earnings miss, weak Q4 revenue outlook

ServiceNow Inc. shares fell more than 14% in after-hours trading Wednesday after the company issued fourth-quarter revenue guidance below Wall Street expectations.

The enterprise software company reported third-quarter earnings per share of $1.00, missing the analyst estimate of $1.02. Revenue reached $4.11 billion, slightly above the $4.09 billion consensus.

ServiceNow projected fourth-quarter 2026 revenue between $4.25 billion and $4.26 billion. Analysts had expected $4.36 billion.

The company reported subscription revenues of $3.99 billion in the third quarter, up 21% year-over-year and 20.5% in constant currency. Total revenues grew 20.5% year-over-year and 20% in constant currency.

Current remaining performance obligations reached $13.65 billion, up 20.5% year-over-year and 21% in constant currency. Remaining performance obligations totaled $29.7 billion, representing 22% year-over-year growth and 22.5% in constant currency.

ServiceNow raised its AI annual contract value target for 2026 to $1.7 billion, up 70% from the beginning of the year.

“This was more than another beat-and-raise quarter for ServiceNow, this was the inflection point for ServiceNow as the Super Intelligence Control Tower,” said ServiceNow Chairman and CEO Bill McDermott. “Our customers have validated our strategic relevance as the single harness for enterprise intelligence and security.”

The company also announced three partnerships late Wednesday:

• ServiceNow and OpenAI expanded their partnership to integrate OpenAI’s AI models into ServiceNow’s enterprise workflows. A new ServiceNow plugin for ChatGPT is now available in the OpenAI marketplace.
• Hewlett Packard Enterprise selected ServiceNow as the foundation for support services across its Cloud & AI business under a five-year agreement.
• ServiceNow also launched the Control Tower Alliance, a partner ecosystem with founding members including Anthropic, Amazon Web Services, Cisco, Nvidia, Okta, and OpenAI.