ServiceNow delivered several encouraging results in its Q3 2026 earnings report, even as shares plunged 16% following the announcement.
One of the biggest highlights was management raising its 2026 AI annual contract value (ACV) target to $1.7 billion, up from just $1 billion at the beginning of the year.
The company also reported that agentic AI production consumption surged more than 13x year over year, suggesting enterprise customers are increasingly putting AI tools to work.
Meanwhile, ServiceNow’s underlying business continues to expand:
Management also raised its full-year free cash flow margin outlook to 36%, suggesting profitability remains strong despite continued AI investments.
However, investors may be concerned about the company’s forward outlook. ServiceNow expects 18.5% current RPO growth in Q4, compared with 20.5% growth in Q3.
Bottom Line: ServiceNow’s AI business is accelerating, enterprise contracts are expanding, and profitability remains strong. However, the stock’s sharp decline suggests investors are focusing on the company’s premium valuation and whether future growth can justify it.
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That wraps up our initial coverage of ServiceNow’s Q3 results. Thank you for stopping by!
Q3 2026
4:14pm ET
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.
Tracked 13F positioning
4:10pm ET
$280M+0.7%
$221M+141%
$87M-0.4%
$84M-0.8%
$79M—
$66M—
$63MNew
$15M+0.5%
+ 5 more tracked holders
As of Jun 30, 2026 quarter end · 13F disclosures lag ~45 days — long positions only, tracked filers only.
Across 12 filers, positioning disclosed as of June 30 (roughly 45 days stale by the time it hit) leaned constructive into tonight: five added, four trimmed, and Balyasny more than doubled its share count while Bridgewater opened a fresh position.
ServiceNow just reported its Q3 2026 earnings, with shares initially down 14% following the report. Here are the key numbers:
Quick Read:
Options positioning
3:25pm ET
ATM implied volatility of 143.9% at the $155 strike prices in a large move on Friday expiration around tonight's earnings report. The 1.06 put/call ratio sits above parity, indicating defensive positioning. Open interest of 3,510 calls at $160 marks the heaviest upside strike.
414 / 366
1.1k / 1.6k
339 / 934
664 / 1.3k
514 / 963
637 / 3.5k
Regular session
3:10pm ET
$155$152$148
A 3.76% slide to $148.96 takes roughly $6 billion off a $154 billion enterprise-software heavyweight in a single session. Moves this size are rare for a megacap on no confirmed trigger, so keep an eye on whether it holds into the close.
Last quarter — Q2 2026
3:20pm ET
Q2 showed ServiceNow exceeding expectations on both lines, and the stock recovered from the initial selloff and moved higher through the summer, which is exactly why the bar into tonight is so high. With federal on-premise revenue pulled into the prior quarter, subscription revenue against management's own guidance range is the number that decides whether that run holds.
$164$125$87
Reported Wed, Jul 22 · next print Wed, Oct 28
Call preview · Q3 2026
3:15pm ET
Analysts have pressed management on Now Assist ACV, AI pricing versus seat-based licensing, and M&A integration on all four of the last four calls, so the AI-monetization thread is the one most likely to set the tone after the 4:10 PM ET report. With cRPO growth and guidance prudence back in the questioning the past two quarters, and federal demand resurfacing after the on-premise timing shift flagged earlier today, the Q&A matters as much as the headline numbers.
ServiceNow is scheduled to report its Q3 2026 earnings today at 4:10 PM ET, with investors looking for evidence that its growing AI business can support its premium valuation.
Management previously guided for $3.975-$3.980 billion in subscription revenue, although comparisons could be complicated by federal on-premise revenue shifting into the previous quarter.
ServiceNow’s AI business recently surpassed $1 billion in annual contract value, making continued adoption of its agentic AI products a major focus tonight.
Another important metric will be current remaining performance obligations (cRPO), with management guiding for 19.5% growth, compared to 21% last quarter.
With NOW trading at around 99x earnings, expectations remain high. Strong subscription growth and AI adoption could reinforce the company’s ambitious long-term targets, while disappointing contract growth could raise fresh concerns about the software industry.
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