ServiceNow (NYSE:NOW) Issues Quarterly Earnings Results

ServiceNow (NYSE:NOW) announced its quarterly earnings data on Wednesday. The information technology services provider reported $1.00 earnings per share for the quarter, missing analysts’ consensus estimates of $1.02 by ($0.02), FiscalAI reports. ServiceNow had a net margin of 11.34% and a return on equity of 16.45%. The firm had revenue of $4.11 billion during the quarter, compared to analyst estimates of $4.09 billion. During the same period in the prior year, the company posted $4.82 earnings per share. The firm’s revenue for the quarter was up 20.5% on a year-over-year basis.

Here are the key takeaways from ServiceNow’s conference call:

• Q3 exceeded guidance across key metrics: subscription revenue grew 20.5% in constant currency, cRPO grew 21%, operating margin reached 32.5%, and free-cash-flow margin was 20%. The company also reported 19 deals with more than $5 million in net-new ACV, up 135% year over year.
• AI monetization accelerated materially. AI net-new ACV grew 65% year over year, $1 million-plus AI deals increased 4.5 times, agentic AI consumption in production rose 13 times, and ServiceNow raised its 2026 AI ACV target to at least $1.7 billion.
• ServiceNow is increasingly positioning its Control Tower and Action Fabric as the governance and execution layer for enterprise AI, supported by expanded partnerships with OpenAI, Google, NVIDIA, Okta, and other ecosystem providers. Management said consumption-based usage is growing rapidly while customers retain predictable subscription pricing.
• The company raised its full-year free-cash-flow margin target by 100 basis points to 36% and expects 21% constant-currency subscription-revenue growth for 2026. Internal AI usage is generating more than $1 billion in annualized value, helping offset hiring needs while allowing continued investment in AI engineering and quota-bearing sales personnel.
• Q4 cRPO growth is expected to slow to 18.5% in constant currency, reflecting early renewals pulled into Q3, a higher mix of on-premise public-sector deals, and the accounting treatment of deployment services and T4C backlog. Management argued these factors should still contribute to revenue, but the softer cRPO outlook contributed to investor concerns.

ServiceNow Stock Performance

NYSE NOW opened at $114.89 on Thursday. The stock has a market capitalization of $118.79 billion, a price-to-earnings ratio of 71.80, a PEG ratio of 2.92 and a beta of 0.99. ServiceNow has a twelve month low of $81.24 and a twelve month high of $192.97. The company has a current ratio of 0.70, a quick ratio of 0.70 and a debt-to-equity ratio of 0.43. The stock has a 50-day moving average of $139.55 and a 200 day moving average of $115.79.

Insiders Place Their Bets

In other ServiceNow news, insider Paul Fipps sold 2,034 shares of the firm’s stock in a transaction that occurred on Monday, August 31st. The stock was sold at an average price of $147.87, for a total value of $300,767.58. Following the sale, the insider directly owned 18,305 shares of the company’s stock, valued at approximately $2,706,760.35. This trade represents a 10.00% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Paul Chamberlain sold 2,700 shares of the business’s stock in a transaction that occurred on Thursday, August 27th. The shares were sold at an average price of $135.50, for a total value of $365,850.00. Following the completion of the sale, the director owned 43,990 shares of the company’s stock, valued at $5,960,645. This trade represents a 5.78% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders have sold 14,081 shares of company stock worth $1,937,904. 0.34% of the stock is owned by corporate insiders.

Wall Street Analyst Weigh In

A number of equities research analysts recently commented on NOW shares. Mizuho set a $165.00 target price on ServiceNow in a report on Thursday. Morgan Stanley reiterated an “overweight” rating and issued a $160.00 price target on shares of ServiceNow in a report on Thursday. Yorkville Ives initiated coverage on shares of ServiceNow in a report on Monday, October 5th. They issued an “outperform” rating and a $160.00 price target on the stock. Royal Bank Of Canada raised their price target on shares of ServiceNow from $130.00 to $176.00 and gave the stock an “outperform” rating in a research report on Monday, October 12th. Finally, Robert W. Baird set a $185.00 price objective on shares of ServiceNow in a research note on Thursday. One research analyst has rated the stock with a Strong Buy rating, thirty-six have issued a Buy rating, two have assigned a Hold rating and four have issued a Sell rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average target price of $155.90.

ServiceNow News Roundup

Here are the key news stories impacting ServiceNow this week:

• Positive Sentiment: Revenue and subscription growth remained strong. Third-quarter revenue rose 20.5% year over year to $4.11 billion, exceeding the $4.09 billion consensus estimate. Subscription revenue increased 21% to $3.99 billion. ServiceNow Reports Third Quarter 2026 Financial Results
• Positive Sentiment: AI partnerships and customer adoption support the long-term story. ServiceNow expanded its partnership with OpenAI to connect AI reasoning with governed enterprise workflows, cybersecurity and agentic development. HPE also selected ServiceNow for a five-year, AI-powered support-services agreement. ServiceNow and OpenAI Partnership
• Positive Sentiment: Some analysts see substantial upside. Piper Sandler reaffirmed its overweight rating with a $175 price target, while JPMorgan and another prominent Wall Street firm reportedly see meaningful appreciation potential if ServiceNow’s AI monetization accelerates. MarketWatch Analyst Commentary
• Neutral Sentiment: New AI initiatives have not yet resolved investor skepticism. ServiceNow launched a Control Tower Alliance with companies including Anthropic, AWS and Cisco to help enterprises deploy AI safely, but investors remain focused on measurable revenue and backlog acceleration. ServiceNow Control Tower Alliance
• Negative Sentiment: Earnings and guidance disappointed. Adjusted earnings of $1.00 per share missed the $1.02 consensus estimate, ending a six-quarter earnings-beat streak. Fourth-quarter revenue guidance reportedly came in below Wall Street expectations, intensifying concerns about slowing demand and backlog growth. ServiceNow Shares Sink on Earnings Miss and Weak Outlook
• Negative Sentiment: Valuation and sector fears amplify the reaction. With ServiceNow trading at a high earnings multiple, investors are demanding stronger evidence that AI will accelerate—not cannibalize—software revenue. The selloff also pressured software-focused ETFs and other technology stocks. ServiceNow Weak Forecast and Wall Street Reaction

About ServiceNow

ServiceNow, Inc provides cloud-based software designed to help organizations digitize, automate and manage enterprise workflows. Its Now Platform connects people, processes and systems across departments, enabling customers to manage work through a centralized technology environment.

The company’s products and services address a range of business needs, including information technology service management, IT operations management, customer service management, human resources service delivery, security operations, risk and compliance, and application development.