ServiceNow shares fell 27% on Thursday, their worst day on record, after third-quarter results underwhelmed investors. The drop revived concerns that artificial intelligence could disrupt traditional software business models, according to CNBC.
Revenue rose more than 20% to $4.11 billion, roughly in line with a $4.10 billion estimate from analysts polled by LSEG. Adjusted earnings were $1.00 per share, short of a $1.02 forecast.
The company slightly raised its full-year 2026 subscription revenue outlook to between $15.78 billion and $15.79 billion. Net new AI average contract value rose 65%.
Citi's Tyler Radke told CNBC the results were "a little bit uncharacteristic for ServiceNow standards, just in terms of the lack of upside." He said investors are weighing the lack of an immediate payoff from the company's newly formed forward-deployed engineering team, which embeds in enterprises to build AI solutions. "I think you got to wait until next year to really see that inflection," Radke said.