ServiceNow sells subscriptions to a cloud platform that runs IT, human resources, customer service and security workflows for large enterprises, and over the past year it has recast that platform as a governance layer for AI agents. Subscription revenues reached $3,988 million in the quarter ended September 30, 2026, up 21% from a year earlier. That pace was slower than the 24.5% growth it reported for the June quarter. The year-earlier period, when the company still called itself an AI platform for business transformation, had expanded at a rate close to this one, according to its release at the time.

The company's central pitch is that it can govern and secure autonomous AI agents regardless of which vendor builds the underlying model, a theme Chief Executive Bill McDermott now labels the "Super Intelligence Control Tower." The yardstick it uses for that effort is AI annual contract value. The company raised its year-end AI contract value target to $1.7 billion, from $1 billion at the start of the year, and lifted its full-year free cash flow margin target to 36%, Chief Financial Officer Gina Mastantuono said. She tied the higher margin goal to reduced capital spending. Alongside the results, the company announced an expanded partnership with OpenAI and a new alliance whose founding members include Anthropic, Amazon Web Services and Nvidia, the release said.

Growth has been more expensive on a reported basis. Stock-based compensation and amortization from this year's Armis acquisition weigh on GAAP results, and the company has told investors to expect subscription gross margin to narrow in 2026 as customers draw on more third-party cloud capacity. Net income was $277 million, or $0.27 per diluted share, down from $502 million in the same quarter a year ago, the company's reported figures show.

Investors reacted the following day. The stock lost 27% on Oct. 29, its worst day ever, as results failed to calm the so-called "SaaSpocalypse," a worry that AI will overturn how established software makers earn their money, CNBC reported.