ServiceNow posts Q3 2026 revenue beat but earnings miss, raises AI contract target and sees sharp stock decline
ServiceNow reported Q3 2026 revenue of $4.11 billion, up 20.5% year‑on‑year, and subscription revenue of $3.988 billion, up 21% YoY. GAAP earnings were $0.27 per share, while non‑GAAP earnings were $1.00 per share, both missing consensus. The company raised its 2026 AI annual contract value target to $1.7 billion, a 70% increase from the start of the year, and announced higher free‑cash‑flow margin guidance. After the release, the stock fell about 16% in after‑hours trading.
Why it matters
The earnings miss and narrower guidance triggered a 16% after‑hours drop, hurting investors’ short‑term returns (the company reports, “stock slid 16% in after‑hours trading”). The raised AI ACV target signals continued investment in AI, but the miss suggests near‑term profitability pressure (the company said, “raised AI annual contract value target to $1.7 billion”).
Key facts
- 1Q3 2026 revenue was $4.11 billion, a 20.5% year‑on‑year increase (reported basis). finance.yahoo.com
- 2Subscription revenue was $3.988 billion, up 21% year‑on‑year (reported basis) and 20.5% in constant currency. stocktitan.net
- 3GAAP earnings per share were $0.27, missing consensus estimates. finance.yahoo.com
- 4Non‑GAAP earnings per share were $1.00, missing consensus estimates by $0.02. seekingalpha.com
- 5AI annual contract value target for 2026 was raised to $1.7 billion, a 70% increase from the start of the year. stocktitan.net
- 6Current remaining performance obligations (cRPO) were $13.65 billion, up 21% year‑on‑year (reported basis). stocktitan.net
Summary written by AlphAI AI Desk from 14 of 14 sources. Not investment advice. Figures are as stated by the linked sources.