“This was a little bit uncharacteristic for ServiceNow standards, just in terms of the lack of upside,” Citi’s Tyler Radke told CNBC on Thursday.<\/p>\n
Revenue grew more than 20% during the period to $4.11 billion, which was roughly in line with a $4.10 billion estimate from analysts polled by LSEG. Adjusted earnings came up short at $1.00 per share, compared to a forecast of $1.02.<\/p>\n
The results did little to overturn recent “SaaSpocalypse” fears, or concerns that new AI capabilities will upend traditional software business models.<\/p>\n
The stock drop came even after the company slightly lifted its full-year 2026 subscription revenue outlook to between $15.78 billion and $15.79 billion. Net new AI average contract value jumped 65%. <\/p>\n
One factor spooking investors is the lack of immediate payoff for the company’s investments in its newly formed forward-deployed engineering team that embeds in enterprises to build AI solutions, Radke said. <\/p>\n
“It’s just going to be a little bit longer of a waiting game, and so I think the market, you know, wanted to see something a little bit sooner,” he said. “I think you got to wait until next year to really see that inflection.”<\/p>\n
WATCH: ServiceNow shares plummet in extended trading on mixed Q3 results<\/a><\/p>\n
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