Will McDermott, CEO of ServiceNow speaks with CNBC on May 5, 2026.
CNBC
ServiceNow Shares fell 24% on Thursday and were headed for their worst day ever after the business software maker’s third-quarter results were disappointing, reigniting concerns over artificial intelligence disruption.
“It was a little unusual for ServiceNow standards, just in terms of the lack of benefits,” Citi’s Tyler Radke told CNBC on Thursday.
Revenue rose more than 20% in the period to $4.11 billion, roughly matching the $4.10 billion estimate of analysts surveyed by LSEG. Adjusted earnings came in at less than $1.00 per share, compared to a forecast of $1.02.
The results failed to overturn recent fears of the “SaaSpocalypse” or fears that new AI capabilities would upend traditional software business models.
The stock’s decline came even after the company slightly raised its full-year 2026 subscription revenue forecast to between $15.78 billion and $15.79 billion. The average net worth of new AI contracts jumped 65%.
One factor spooking investors is the lack of immediate return on the company’s investments in its new forward-deployed engineering team, which integrates into companies to create AI solutions, Radke said.
“It’s just going to be a little bit of a longer waiting game, and so I think the market, you know, wanted to see something a little bit sooner,” he said. “I think we will have to wait until next year to really see this inflection.”
WATCH: ServiceNow shares fall in extended trading following mixed third-quarter results
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