ServiceNow: Q3 Earnings Snapshot

ServiceNow (NOW) reported Q3 2026 results, highlighting accelerating AI performance and a shift to a consumption-based hybrid business model. The company aims to achieve over $1.7B in AI ACV by year-end and raised its 2026 free cash flow margin goal to 36%, according to Chairman & CEO William McDermott.

ServiceNow (NOW) reported Q3 2026 revenue of $4.11B, up 21% YoY, but missed EPS estimates, causing a 17.11% after-hours drop. Subscription revenue grew 20.5% YoY, while margins compressed due to AI investments and the Armis acquisition. The company maintained a 98% renewal rate and expanded its enterprise customer base.

ServiceNow reported 3Q 2026 revenue of $4.11B, up 20.5% YoY, but net income fell 44.8% to $277M. Subscription revenue grew 21%, with 680 customers spending over $5M annually. The company is investing in AI and expanding cloud capacity, expecting continued subscription revenue growth.

ServiceNow (NOW) shares fell 15% in after-hours trading to $127.08 after reporting Q3 results. Revenue was slightly above estimates, but earnings missed. Subscription revenue rose 21% to $3.99B, while GAAP EPS dropped to $0.27 from $0.48. Margins narrowed, and guidance was mixed, with cRPO growth at 18.5% for Q4. The stock had risen 63% since July.

ServiceNow (NOW) shares dropped 16% after hours. The company raised its 2026 AI target to $1.7B but showed slowing backlog growth. Q4 cRPO growth expected at 18.5%, down from 21%. Q3 subscription revenue hit $4B, beating estimates. Adjusted EPS missed slightly, but margins beat. AI products gained traction, but cloud costs raised concerns.

ServiceNow (NOW) shares dropped 14% after reporting Q3 EPS of $1.00, missing estimates of $1.02, and Q4 revenue guidance of $4.25-4.26B, below expectations of $4.36B. Revenue grew 20.5% YoY to $4.11B, and subscription revenue increased 21% YoY to $3.99B. The company raised its AI ACV target for 2026 to $1.7B, up 70% from the start of the year.