ServiceNow Shares Drop Sharply After Slower Q4 cRPO Growth Guidance

What the guidance and results showed

The outlook came with third-quarter results released after the close on October 28. According to the announcement, subscription revenue reached $3.988 billion, up 20.5% in constant currency, and cRPO grew 21%.

The guidance for fourth-quarter cRPO growth of approximately 18.5% marked a step down from that pace. The announcement states that reports tied the selloff to the quarterly sales outlook.

NOW shares fell roughly 19.5% before market open, to approximately $120.90. According to the release, the decline then deepened to more than 25% in midday trading.

AI targets raised on the same call

The same call also included a higher target for AI business. Management raised its 2026 AI annual contract value target to "$1.7 billion plus by year-end," according to the release. That was the second increase of the year, following a move from $1 billion to $1.5 billion in May.

Management also told investors, "We have no intention of delivering anything less than the best year in our history."

The investigation notice

The release is attorney advertising issued by SueWallSt.com. It says an investigation into potential securities law violations is underway and encourages shareholders with losses to submit details for a free review or contact Joseph E. Levi, Esq.

According to the notice, the investigation concerns whether ServiceNow made materially false or misleading statements about its growth outlook and business prospects heading into the fourth quarter of 2026. It refers to statements made before a corrective disclosure that allegedly led investors to buy securities at inflated prices. These are the law firm's framing; the release does not report any finding or filed case against ServiceNow.

The firm says investors who purchased NOW stock or securities and suffered financial losses may be eligible, and that eligibility depends on purchase date and documented losses rather than on whether the shares are still held. It lists brokerage statements or trade confirmations as the documents needed.

What it means for investors

For shareholders, the notice shows how quickly a sharp price move after guidance can draw legal attention. The firm says there is no upfront cost to submit information, and that matters are generally handled on a contingency basis, with attorneys' fees and expenses subject to court approval. It also says no immediate action is required to remain eligible and that participating in the investigation does not require court appearances or depositions.

The release states that prior results do not guarantee similar outcomes. Investors weighing their position will still be looking at the gap between the slower cRPO outlook and the raised AI contract value target announced on the same call.