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ServiceNow Stock Falls 27% as Q4 Contract Outlook Slows

Steven Levine, Founder of TickerPosts and OpenClassActions.com1 min read
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Illustrative photo by Mike Bird on Pexels

ServiceNow shares (NYSE: NOW) fell about 27% on Thursday, October 29, after the software company reported third-quarter results and gave a slower growth outlook for contracted revenue. The drop followed results released after Wednesday's close and was among the day's largest moves for a widely followed U.S. stock.

ServiceNow's quarter continued to grow at a double-digit rate. The concern in market coverage centered on whether growth in near-term contracted work would slow more than analysts expected.

Current results remained strong

ServiceNow reported total third-quarter revenue of $4.106 billion, up 20.5% year over year. Subscription revenue reached $3.988 billion, up 21%. Current remaining performance obligations, or cRPO, were $13.65 billion, up 20.5% in U.S. dollars and 21% in constant currency, according to the company's release.

cRPO measures contracted revenue expected to be recognized over roughly the next twelve months. It gives investors a forward-looking view of demand, but it is not revenue already earned.

Guidance fell short of the cited estimate

ServiceNow forecast fourth-quarter cRPO growth of 18.5% in constant currency. Reuters reported that the market expected 19.4%. The company also projected fourth-quarter subscription revenue of $4.245 billion to $4.255 billion. In the same release, ServiceNow raised its full-year subscription-revenue and free-cash-flow-margin outlook and lifted its AI annual-contract-value target to $1.7 billion.

The stock reaction shows that investors were focused on the pace of near-term contracted growth despite those other measures. It does not mean the company reported a contraction: the forecast still implies growth, just at a slower rate than the market had expected.

For NOW investors, the next reports will show whether cRPO growth stabilizes and how much of it converts into subscription revenue. The current share-price drop is not, by itself, a measure of future customer demand.

Published October 29, 2026. This article is informational and is not investment advice.

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