{"id":660151,"date":"2026-10-29T01:40:24","date_gmt":"2026-10-29T01:40:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/660151\/"},"modified":"2026-10-29T01:40:24","modified_gmt":"2026-10-29T01:40:24","slug":"servicenow-shares-slide-as-investors-weigh-slowing-backlog-growth-against-ai-ambitions","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/660151\/","title":{"rendered":"ServiceNow shares slide as investors weigh slowing backlog growth against AI ambitions"},"content":{"rendered":"

\"ServiceNow<\/a> ServiceNow shares slide as investors weigh slowing backlog growth against AI ambitions Proactive uses images sourced from Shutterstock <\/p>\n

ServiceNow Inc (NYSE:NOW<\/a>, XETRA:4S0<\/a>) shares fell more than 16% in after-hours trading on Wednesday as investors weighed the enterprise software company’s higher artificial intelligence targets against signs of slowing backlog growth and pressure on margins. <\/p>\n

The company raised its 2026 AI annual contract value (ACV) target to $1.7 billion from $1.5 billion last quarter, marking the second increase this year. <\/p>\n

However, its fourth-quarter outlook pointed to a further slowdown in current remaining performance obligations (cRPO), a measure of contracted revenue expected to be recognised over the next 12 months. <\/p>\n

ServiceNow expects cRPO growth of 18.5% in the fourth quarter, down from 21% in the third quarter on a constant-currency basis. <\/p>\n

The forward-looking metric is closely watched by investors for signs of future subscription revenue growth, making the projected deceleration a potential concern despite the company’s stronger AI performance. <\/p>\n

Third-quarter subscription revenue rose 20.5% in constant currency to $4 billion, ahead of analyst expectations of $3.98 billion. Total revenue reached $4.1 billion, slightly above the $4.09 billion consensus estimate. <\/p>\n

Adjusted earnings per share of $1.00 narrowly missed the $1.02 forecast, although adjusted operating margin of 32.5% beat expectations of 31.2%. <\/p>\n

ServiceNow also raised its full-year subscription revenue outlook by $15 million to between $15.78 billion and $15.79 billion. <\/p>\n

The company’s AI products continue to gain traction, with production consumption of agentic AI increasing more than 13-fold from a year earlier. It also reported 19 transactions worth more than $5 million in annual contract value, up 135% year over year. <\/p>\n

However, concerns about cloud-hosting costs and their potential effect on margins may have added to investor caution as the company expands its AI offerings. <\/p>\n

ServiceNow raised its full-year free cash flow margin target by 100 basis points to 36%, citing a capital-efficient approach to AI investment. <\/p>\n

The sharp share-price decline suggests investors were looking beyond the revenue beat and higher AI target to assess the pace of future growth and the profitability of the company’s AI expansion. <\/p>\n","protected":false},"excerpt":{"rendered":"ServiceNow shares slide as investors weigh slowing backlog growth against AI ambitions Proactive uses images sourced from Shutterstock…\n","protected":false},"author":2,"featured_media":660152,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[6638,345,343,344,114,357,184,268,13368,85,4141,13516,9445,46,2450,8553,9331,266,13517,4861,688,5615,13369,13370,5268,13518,270,125,13519],"class_list":["post-660151","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-401k","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-business","tag-business-news","tag-economy","tag-finance","tag-financial-information","tag-il","tag-investing","tag-investment-tools","tag-investor","tag-israel","tag-market-news","tag-mortgage","tag-mutual-funds","tag-personal-finance","tag-quote","tag-real-estate","tag-retirement","tag-stock","tag-stock-research","tag-stock-valuation","tag-stocks","tag-suze-orman","tag-tax","tag-technology","tag-track-portfolio"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/660151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=660151"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/660151\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/660152"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=660151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=660151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=660151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}