ServiceNow shares experienced their worst trading day on record, dropping 27% in response to the company’s third-quarter financial results. The enterprise software firm reported revenue of $4.11 billion, which aligned closely with analyst expectations of $4.10 billion and represented growth exceeding 20% during the period. However, adjusted earnings of $1.00 per share missed the forecasted $1.02 per share, disappointing investors.
The underwhelming results revived broader market anxieties about disruption to traditional software business models from advancing artificial intelligence capabilities, sometimes referred to as “SaaSpocalypse” concerns. Despite the stock decline, ServiceNow made adjustments to its outlook, slightly raising the full-year 2026 subscription revenue guidance to a range between $15.78 billion and $15.79 billion. Additionally, the company reported that net new artificial intelligence average contract value increased by 65%.
Analysts attributed some of the market’s negative reaction to investor impatience regarding returns on the company’s strategic investments. ServiceNow recently established a forward-deployed engineering team designed to embed within enterprise clients and develop customized artificial intelligence solutions. Market observers noted that investors had hoped to see more immediate financial benefits from this initiative. According to commentary from financial analysts, the market may need to await results from the following year before recognizing a significant inflection point in the company’s artificial intelligence revenue generation.
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