ServiceNow falls despite higher sales outlook as contract growth is set to slow
Earnings results
- EPS comparison not verified
Actual: $1 (adjusted)
- Revenue beat +0.4%
Actual: $4.106B · Cons.: $4.09B (Total reported revenue)
- Guidance
Raised full-year subscription revenue outlook to $15.780–$15.790 billion and adjusted free-cash-flow margin to 36%.
Earnings and the stock move
ServiceNow reported faster subscription sales and raised its annual outlook, but the shares fell sharply after the release. The fourth-quarter forecast for 18.5% growth in contracted revenue due over the next year is below the third quarter’s 21% growth excluding currency changes. Investors now need to weigh that slowdown and rising costs against stronger AI adoption and the higher cash-flow target.
Q3 2026 earnings recap
ServiceNow fell about 15% after hours on October 28, 2026 despite raising its annual outlook. Its forecast points to slower growth in contracted revenue due over the next year.
- The company sells software subscriptions that automate work across IT, customer service and employee operations. Renewals and wider adoption support recurring sales.
- Third-quarter revenue rose 20.5% to $4.11 billion, slightly above the $4.09 billion expected. Subscription revenue rose 21% to $3.99 billion.
- Adjusted EPS, or profit per share, was $1. Reported GAAP EPS fell to $0.27 from $0.48 a year earlier as operating costs increased.
- Revenue already under contract for the next 12 months reached $13.65 billion. Its growth was 21% excluding currency changes, versus 18.5% forecast for the fourth quarter; that slowdown is a key risk to watch.
- Management raised its annual AI contract-value target to $1.7 billion and its adjusted free-cash-flow margin target to 36%. Turning AI adoption into profitable renewals remains the next test.
- Annual subscription revenue is now forecast at $15.78–$15.79 billion. Acquisition costs, competition and slower customer spending could still pressure profit.
The after-hours decline tests September lows around $126–$129. Holding that area and reclaiming $133–$136 would improve the chart; a close below $126 would weaken it.
Financials and technicals
Charts through Oct 28, 2026. The session move above may reflect later news.
Technical setup and risks
Completed October 28 regular-session charts precede the earnings selloff. After-hours trading tests the September $126–$129 lows. Reclaiming $133–$136 would improve the setup, while a close below $126 weakens it. The recent $153–$159 area is farther overhead.
After-hours move is measured versus the same-day regular close AI-assisted research with source and calculation checks. Prices may be delayed. Technical charts use the stated completed session, which can precede the quoted intraday move. Educational information; investing involves risk.