ServiceNow shares sank 27% on Thursday and recorded their worst day on record, CNBC reported in an update after the 4 PM ET close. CNBC said the enterprise software company’s third-quarter results underwhelmed and reignited concerns about AI disruption. It said the results did little to overturn recent “SaaSpocalypse” fears, which it described as concerns that new AI capabilities will upend traditional software business models.
CNBC reported that revenue grew 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 against a forecast of $1.02. CNBC said ServiceNow slightly raised its 2026 subscription revenue outlook to between $15.78 billion and $15.79 billion, and that net new AI average contract value rose 65%.
ServiceNow’s earnings release, dated Wednesday (Oct. 28), raised its year-end AI annual contract value target to $1.7 billion, the second raise this year, from $1 billion at the start of the year. For the fourth quarter, it guided to subscription revenue of $4.245 billion to $4.255 billion and current remaining performance obligations growth of 18.5% in constant currency. Third-quarter cRPO was $13.65 billion, up 20.5%, or 21% in constant currency.
Reuters reported at 6:19 AM ET that ServiceNow had slid 23% and was set for its biggest one-day drop on record. It said a third-quarter profit miss overshadowed a raise to the full-year subscription revenue and cash flow margin outlook. Reuters said at least 12 brokerages lowered price targets, and that Raymond James pointed to lagging subscription revenue and backlog growth while AI initiatives have yet to materialize.
Citi analyst Tyler Radke told CNBC the quarter was “a little bit uncharacteristic for ServiceNow standards, just in terms of the lack of upside.” He said one factor was the lack of an immediate payoff from the company’s newly formed forward-deployed engineering team. “I think you got to wait until next year to really see that inflection,” Radke said.
Reuters reported at 6:19 AM ET that Fortinet fell 26% to a five-month low after reporting slower product revenue growth in the third quarter and lowering its full-year service revenue forecast. It said Fortinet was the top decliner on the S&P 500, that BofA Global Research downgraded the stock to “neutral” from “buy,” and that at least 15 other brokerages cut price targets.
Reuters said the results weighed on other software stocks and that the S&P 500 Software & Services Index had risen only 5% this year, less than half the gain in the S&P 500. Market data on the Globe and Mail page carrying the Reuters report, as of 11:14 AM ET Thursday, showed Fortinet down 22.68%, Salesforce down 4.93%, Palo Alto Networks down 5.46% and Zscaler down 4.4%.
Sources
- CNBC (Samantha Subin): ServiceNow shares plunge 27% to worst day ever after earnings revive AI disruption fears (October 29, 2026, 10:58 AM EDT; updated after the close)
- Reuters (Johann M Cherian) via StreetInsider: Software stocks slide as Fortinet, ServiceNow fail to meet lofty investor expectations (October 29, 2026, 6:19 AM EDT; peer quotes from the page’s market data as of 11:14 AM EDT)
- Reuters via The Globe and Mail (same story; market data as of 11:14 AM EDT)
- ServiceNow: ServiceNow Reports Third Quarter 2026 Financial Results (October 28, 2026)