ServiceNow Q3 2026: Revenue beats but acquisition costs snap a six-quarter EPS win streak
As seen on the 24/7 Wall St. homepage on October 28, 2026.
The first adjusted EPS miss in six quarters came as acquisition costs compressed GAAP operating margin to 9.5% from 17%. Revenue still edged past consensus and management raised its 2026 AI net new ACV target to $1.70 billion.
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Q3 2026 revenue of $4.11 billion rose 20.5% year over year, beating expectations, yet acquisition-related charges compressed GAAP operating margin to 9.5% from 17% a year ago.
Adjusted EPS of $1.00 came in missing expectations, ending a streak of six consecutive quarters of beating EPS estimates. Profitability has now trailed expectations two quarters running.
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Management raised its 2026 AI net new ACV target to $1.70 billion, the second increase this year, and contracted remaining performance obligations, a key forward-demand indicator, grew 20.5%.
For Q4 2026, management guided to a non-GAAP operating margin of 32% and raised the full-year free cash flow margin outlook to 36%, signaling the acquisition cost pressure eases as integration proceeds. The number to track is whether GAAP operating margin recovers toward 17%.
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