Record drop on weak guidance

ServiceNow shares fell as much as twenty five percent to one hundred twelve dollars thirty seven cents after markets opened in New York on Thursday, the biggest intraday drop since the company went public in…

Revenue beat, but earnings missed

Subscription revenue rose twenty one percent to three point nine eight eight billion dollars in the quarter to September thirtieth.Analysts had expected three point nine eight billion dollars.

The cRPO problem

Current remaining performance obligations rose twenty point five percent to thirteen point six five billion dollars.Analysts had expected thirteen point five six billion dollars.

Fourth quarter forecast disappoints

ServiceNow forecast cRPO growth of eighteen point five percent in the December quarter. Analysts had projected nineteen percent on average. The company expects subscription revenue growth of twenty two point five to twenty three percent.

AI target raised but concerns linger

ServiceNow raised its target for annual contract value from AI products to one point seven billion dollars by the end of two thousand twenty six, up from one point five billion dollars three months ago.

“I think you got to wait until next year to really see that inflection.”

Analysts cite multiple headwinds

William Blair analyst Arjun Bhatia wrote that early contract renewals likely lifted the September quarter at the expense of the December quarter.

AI disruption fears resurface

TD Cowen analyst Derrick Wood wrote that while there are mechanical caveats to explain aspects of the forecast, the results could re-raise AI disruption fears about whether artificial intelligence will upend traditional software business models.

“But we think it could re-raise AI disruption fears.”