Why ServiceNow's stock is sliding in the wake of earnings
ServiceNow's stock slid 13% in premarket trading after the company cut its margin guidance, despite touting artificial-intelligence momentum and increasing its AI revenue projection to $1.5 billion for 2026. The company's overall remaining performance obligations (RPO) grew 25% to $27.7 billion in the first quarter.
ServiceNow's stock price dropped 13% in premarket trading after the company reported its earnings and cut its margin guidance. The software giant now expects a 31.5% margin on its full-year adjusted income from operations, down from a previous target of 32%. ServiceNow's CEO Bill McDermott said he expects $1.5 billion in AI revenue for 2026, up from a previous projection of $1 billion. The company's overall remaining performance obligations (RPO) grew 25% to $27.7 billion in the first quarter, beating analyst expectations. ServiceNow also increased its buybacks, purchasing 20.1 million shares for over $2 billion in the first quarter. The company's subscription revenue was $3.67 billion, along with 97 cents in adjusted earnings per share, meeting analyst expectations.
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