Servicenow Suffers Record Drop as Software Shares Slide on Earnings

WHO:

The Motley Fool - ServiceNow (NOW) is a workflow software company.

The Motley Fool; Yahoo Finance - ServiceNow CFO Gina Mastantuono discussed the company’s current remaining performance obligations (cRPO) and fourth-quarter outlook.

Yahoo Finance - Oppenheimer analyst Brian Schwartz said ServiceNow’s AI adoption numbers did not show disruption, and recommended buying the post-earnings dip. Schwartz had a Buy rating and a $165 price target.

Yahoo Finance - Fortinet (FTNT) reported third-quarter results; BofA cut its rating on Fortinet to Neutral and set a $140 target. Mizuho Securities lowered its target from $160 to $118, and Piper Sandler lowered its target from $175 to $140.

Yahoo Finance - CrowdStrike (CRWD), Okta (OKTA), and Palo Alto Networks (PANW) shares declined during the software-sector sell-off.

WHAT:

The Motley Fool; Yahoo Finance - ServiceNow shares fell 26.95% to $109.67, down $40.46, in the company’s worst single-day decline since its 2012 public listing. The Motley Fool reported shares were near $112 during the session, about 25% below the previous close of $150.13.

The Motley Fool - ServiceNow third-quarter subscription revenue rose 21% year over year to $3.99 billion, or 20.5% in constant currency, exceeding the high end of management’s guidance.

The Motley Fool; Yahoo Finance - ServiceNow forecast fourth-quarter cRPO growth of 18.5%; Wall Street expected 19.4%, according to Yahoo Finance. cRPO is contracted revenue expected to be recognized within a year.

The Motley Fool - Reported cRPO growth was 22.5%, 21%, and 20.5% in the first three quarters of 2026. Management forecast fourth-quarter subscription-revenue growth of 21.5% in constant currency.

The Motley Fool - Mastantuono said early renewals contributed about half of the third-quarter cRPO beat and moved those deals from the fourth quarter into the third. She said additional on-premise public-sector deals would reduce fourth-quarter cRPO growth by about 0.25 percentage points but would still count toward revenue.

Yahoo Finance - Fortinet shares fell 20%. Its third-quarter results beat estimates, but it lowered its full-year service-revenue forecast to $5.15 billion–$5.17 billion from $5.18 billion–$5.22 billion, below the $5.2 billion estimate.

Yahoo Finance - Bloomberg Intelligence analysts said Fortinet’s forecast cut implied lower attach rates for bundled networking and secure-access service-edge offerings on its firewall platform.

WHERE:

The Motley Fool - ServiceNow is listed on the New York Stock Exchange (NYSE).

The Motley Fool - ServiceNow’s third-quarter subscription revenue was affected by delayed closings of several large on-premise deals in the Middle East.

WHY:

Yahoo Finance - ServiceNow’s outlook falling short of estimates renewed investor concerns that AI competition could pressure its software business.

Yahoo Finance - Bloomberg Intelligence analysts linked Fortinet’s reduced service-revenue forecast to lower attach rates for bundled offerings.

HOW:

The Motley Fool - Mastantuono characterized cRPO as affected by contract timing; she said it was “a nuanced accounting metric” that did not necessarily capture all business momentum.

Yahoo Finance - Mastantuono said, “CRPO, while it's a good metric that talks about what next year's revenue will look like, it's not perfect.”

Yahoo Finance - Schwartz wrote, “In our view, ServiceNow's AI momentum counters a disruption thesis, although it doesn't establish a clear path to organic reacceleration.”

(UPDATED October 30, 2026 10:02 UTC)

ServiceNow shares plunged nearly 27%, their steepest single-day drop since going public. Strong subscription growth couldn’t offset a fourth-quarter outlook below Wall Street expectations. Investors also sold Fortinet after it cut its annual service-revenue forecast.