ServiceNow sinks 25% after Q3 miss revives AI payoff doubts
What's new: Revenue rose to $4.11 billion and the company slightly raised its 2026 subscription outlook, but earnings missed estimates.
ServiceNow shares fell 25% Thursday, putting the enterprise software company on track for its worst day on record after third-quarter results failed to reassure investors about returns from heavy AI spending. Revenue increased more than 20% to $4.11 billion, roughly matching analyst estimates compiled by LSEG, while adjusted earnings of $1.00 a share came in below the $1.02 forecast. The company also nudged up its full-year 2026 subscription revenue outlook to $15.78 billion to $15.79 billion. Even so, investors focused on slower-than-hoped evidence that AI investments, including a forward-deployed engineering team building enterprise AI tools, will translate into near-term gains. Net new AI average contract value rose 65% in the quarter.