Why is ServiceNow stock plunging today?

ServiceNow stock plunged 18.7% in pre-open trading to reach $122, as investors reacted to a mixed Q3 2026 earnings report released after Wednesday’s closing bell that included the company’s first adjusted EPS miss in six quarters and a Q4 revenue guidance range of $4.25–$4.26 billion — meaningfully below the analyst consensus of $4.36 billion.

Adjusted EPS came in at $1.00, two cents short of the $1.02 estimate, as acquisition-related costs and lower interest income weighed on the bottom line, while GAAP operating margin contracted sharply from approximately 17% in the year-ago period to around 9.5%.

Beyond the headline EPS miss, investors were rattled by the company’s Q4 current remaining performance obligations (cRPO) growth outlook of roughly 18%, which signaled a deceleration in contracted revenue momentum. Management also disclosed an accounting shift — reclassifying a portion of revenue from subscription to professional services to speed up AI deployment for large enterprise customers — which added to near-term uncertainty.

On the positive side, the company raised its full-year AI annual contract value target to $1.7 billion, reported non-GAAP operating margin of 32.5% (150 basis points above guidance), and announced an expanded partnership with OpenAI focused on security and risk solutions, but these positives failed to offset the guidance disappointment.

The broader market environment offered little cushion, with the NASDAQ declining 1.1% and the S&P 500 slipping 0.2%, reflecting continued pressure on high-multiple technology stocks.

ServiceNow had already shed roughly 3% during the regular October 28 session ahead of the report, as investors trimmed exposure to a stock trading at a premium valuation with little room for error, and the post-earnings after-hours drop of more than 17% extended those losses sharply into today’s pre-market session.

Taken together, the combination of a rare EPS miss, a below-consensus Q4 revenue guide, margin compression from ongoing acquisition spending, and a premium valuation that demands consistent outperformance created the conditions for today’s severe pre-market decline, even as the company’s underlying AI growth metrics and operational efficiency continued to show meaningful progress.