ServiceNow Stock Plunges 15% After Q3 Earnings Miss and Soft Q4 Revenue Outlook

ServiceNow shares fell roughly 15% after the enterprise software company reported third-quarter 2026 results that missed earnings expectations and paired the report with a weaker-than-expected fourth-quarter revenue outlook, rekindling concerns about the pace of AI-driven software spending. Revenue for the quarter came in at $4.1 billion, edging past the analyst estimate of $4.09 billion, but earnings per share of $0.27 fell well short of the $0.35 consensus, with acquisition costs cited as a contributing drag on the bottom line.

The company's remaining performance obligations, a closely watched backlog metric, reached $13.65 billion in the third quarter, representing 20.5% year-over-year growth. ServiceNow did raise its full-year 2026 subscription revenue forecast to a range of $15.78 billion to $15.79 billion, and CEO Bill McDermott pointed to a ninefold increase in agentic AI deployments and growing multi-million-dollar AI deals as evidence of platform momentum. McDermott framed the quarter as "the inflection point for ServiceNow as the Super Intelligence Control Tower."

Despite those signals, the soft Q4 revenue guidance was enough to unsettle investors who had been watching enterprise software names for signs that AI demand was translating reliably into revenue. The miss and the stock's sharp decline rippled across the sector, with analysts noting that longer enterprise spending cycles and rising operating expenses remain headwinds even as AI adoption accelerates.