What happened
ServiceNow's latest print failed to deliver the usual beat, and the stock paid for it. The report revived talk of a "SaaSpocalypse," or the risk that new AI tools could upend how traditional software makes money.
"This was a little bit uncharacteristic for ServiceNow standards, just in terms of the lack of upside," Citi's Tyler Radke told CNBC. He also flagged investor nerves around how soon the company's AI bets will show up in results.
The numbers investors saw
Revenue increased more than 20% to $4.11 billion, roughly matching the $4.10 billion analysts surveyed by LSEG expected. Adjusted earnings landed at $1.00 per share, a touch below the $1.02 estimate.
Management slightly raised its full-year 2026 subscription revenue target to a range of $15.78 billion to $15.79 billion. And inside the AI push, net new AI average contract value rose 65%.
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Why investors reacted and what comes next
One sticking point was timing. Radke said the market wanted quicker proof that investments in ServiceNow's new forward-deployed engineering team - which embeds inside enterprises to build AI solutions - will pay off. "It's just going to be a little bit longer of a waiting game," he said, adding, "I think you got to wait until next year to really see that inflection."
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