What Did ServiceNow’s Quarter Change For Its Stock

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ServiceNow (NOW) stock fell 26.9% on October 29, 2026. The decline came the session after the company reported its fiscal Q3 2026 results, a day when the S&P 500 slipped 0.3% and Salesforce, Atlassian and Workday fell only 4.4% to 7.3%. Revenue and earnings per share arrived just below analysts' estimates, and management raised its full-year forecast for subscription revenue. So what in the quarter was new for ServiceNow holders?

ServiceNow Expects Slower Growth In Contracted Revenue

The new item was a forecast for contracted revenue. Current RPO, a backlog metric that management called a good indicator of future revenue, reached $13.65 billion at the end of fiscal Q3 2026. That represented a 21% increase from a year earlier at constant currency, but management expects that growth to slow to 18.5% for fiscal Q4 2026.

The quarter's results landed close to estimates. Revenue came in at $4.11 billion against a consensus of $4.14 billion, while earnings per share of $1.00 fell a little short of the $1.03 consensus. Current RPO itself beat management's Q3 guidance by 100 basis points, so the slower backlog growth sits in the forecast rather than the quarter just reported.

Is ServiceNow's Revenue Growth Slowing Too?

Not in management's forecast. ServiceNow expects subscription revenue to grow 21.5% at constant currency in fiscal Q4 2026, faster than the 20.5% constant-currency growth it reported for Q3. Total revenue growth, as reported, did slow in Q3 to 20.5% from 24.0% in Q2. Reported revenue growth has therefore slowed, and the speed-up in subscription revenue is still a forecast rather than a result.

The full-year forecast shifted only slightly. Management raised its fiscal 2026 subscription revenue forecast by $15 million at the midpoint, to $15.785 billion. For select large AI deals, ServiceNow now includes delivery work with its platform, booking that value as professional services rather than subscription revenue. Management put the effect on subscription revenue at about 25 basis points in Q3 and about 50 basis points in Q4, and said it was the only reason the company did not add the full Q3 subscription revenue beat to its full-year forecast.

Why Does ServiceNow Expect Slower Backlog Growth?

Management tied part of the slowdown to timing, because strong early renewals moved deals out of Q4 and into Q3. Speaking on the October 28, 2026 call, management said those early renewals made up about half of the Q3 beat in current RPO.

Management put numbers on two more items. Strong public sector demand is raising the share of on-premises sales in Q4, an effect the company put at a 25 basis point drag on current RPO growth. Separately, contract provisions leave about 50 basis points of backlog growth out of current RPO in Q4, though management said it will still count in revenue. Together those two items come to about 75 basis points of the slowdown, representing less than a third of the forecast drop in current RPO growth. Management also called the added delivery work on large AI deals a modest headwind to current RPO, but did not size it.

The quarter brought a slower forecast for ServiceNow's backlog growth and a faster one for its subscription revenue. When ServiceNow reports in January 2027, current RPO growth for fiscal Q4 2026 against management's 18.5% forecast is the figure to watch.

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