ServiceNow shares suffer record drop after earnings
ServiceNow shares suffered their worst trading day on record after the company reported third-quarter results and outlook, with reported declines ranging from 19% to 27%. Subscription revenue rose 21% to $3.988 billion. Current remaining performance obligations grew 20.5% to $13.65 billion, above the cited analyst estimate of $13.56 billion, but the company forecast 18.5% growth for the December quarter against an average analyst projection of 19%. ServiceNow raised its full-year subscription-revenue forecast to $15.78 billion-$15.79 billion and its annual contract-value target for AI products to $1.7 billion by the end of 2026.
The record selloff shows that investors were weighing ServiceNow’s operating growth against concerns that AI could disrupt traditional enterprise-software business models. The reported decline also varied by source and timing.
ServiceNow shares fell as much as 25% to $112.37 after markets opened in New York on Thursday. It was the biggest intraday drop since the company went public in 2012, Brody Ford reported for Bloomberg. The stock was on course for its worst day on record, according to Dow Jones Market Data cited by MarketWatch.
The fall followed ServiceNow’s third-quarter results, released after the market closed on Wednesday. The shares had dropped 14% in extended trading that evening, Bloomberg reported.
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