NOW · ServiceNow · Q3 FY2026
ServiceNow Sees Growth Slow and Margins Narrow
Revenue growth moderated to 20.5% from 24.0%, and operating margin narrowed 741 basis points to 9.4%.
- Published
- Oct 29, 2026
- Event
- Oct 28, 2026
- Quarter ended
- Sep 30, 2026
- Data as of
- Oct 29, 2026
Published becauseQuarterly results were reported; guidance was introduced (Oct 28, 2026).
The Blockhaven read
ServiceNow's quarter softened on the measures that moved: revenue growth moderated to 20.5% from 24.0% and operating margin narrowed 741 basis points to 9.4%. GAAP operating income fell 32.7% against 20.5% revenue growth, so profit moved by more than sales, with the narrower margin accounting for the gap. A single quarter shows a direction, not yet a trend.
Latest reported quarter
Earnings release filed Oct 28, 2026
RevenueGAAP
- Latest
- $4.11 billion
- Year ago
- $3.41 billion
- Change
- +20.5% (Up year over year)
Operating incomeGAAP
- Latest
- $385 million
- Year ago
- $572 million
- Change
- −32.7% (Down year over year)
Net incomeGAAP
- Latest
- $277 million
- Year ago
- $502 million
- Change
- −44.8% (Down year over year)
Diluted EPSGAAP
- Latest
- $0.27
- Year ago
- $0.48
- Change
- −43.8% (Down year over year)
Operating margin (GAAP)Derived
- Latest
- 9.4%
- Year ago
- 16.8%
- Change
- −741 bp (Down year over year)
Gross margin (GAAP)Derived
- Latest
- 70.5%
- Year ago
- 77.3%
- Change
- −677 bp (Down year over year)
| Measure | Basis | Latest quarter | Year ago | Change |
|---|---|---|---|---|
| Revenue | GAAP | $4.11 billion | $3.41 billion | +20.5% (Up year over year) |
| Operating income | GAAP | $385 million | $572 million | −32.7% (Down year over year) |
| Net income | GAAP | $277 million | $502 million | −44.8% (Down year over year) |
| Diluted EPS | GAAP | $0.27 | $0.48 | −43.8% (Down year over year) |
| Operating margin (GAAP) | Derived | 9.4% | 16.8% | −741 bp (Down year over year) |
| Gross margin (GAAP) | Derived | 70.5% | 77.3% | −677 bp (Down year over year) |
Revenue growth +20.5% against +24.0% in the prior quarter (year over year, GAAP).
Trend: Deteriorating. Revenue growth slowed, operating margin narrowed and GAAP operating income weakened.
Guidance: Provided
- Fiscal 2026 Amount ($ millions) (2): about −2.0%, unchanged from about −2.0% (company-defined)
- Fiscal Q4 2026 Amount ($ millions) (2): about −2.0% (company-defined)
GAAP unless labelled. Non-GAAP and company-defined measures are labelled.
What changed
- Revenue growth slowed to 20.5% from 24.0%.
- Operating margin narrowed 741 basis points year over year, to 9.4% from 16.8% (GAAP).
- GAAP operating income fell 32.7% year over year, with net income 44.8% and diluted EPS 43.8% moving the same way.
Why it matters
Revenue rose 20.5%, but the margin narrowed 741 basis points, more than offsetting the added sales and leaving operating income 32.7% lower: margin, not volume, set the direction of operating profit this quarter.
Net income fell by more than operating income: the difference sits below the operating line.
Market reaction
At 8:15 AM ET on Oct 29, 2026, the quoted share price was down 18.8% from the prior close. This is a timed price observation, not an explanation of the move.
What to watch
- Operating margin at the next report against 9.4% this quarter: a further move in the same direction would confirm this reading, and a reversal would weaken it.
- Year-over-year revenue growth against 20.5% now and 24.0% before: a stabilisation would ease the tension with the outlook, and a further slowdown would sharpen it.
Data and sources
Figures come from the company's SEC filings and its own 8-K earnings release, filed Oct 28, 2026. GAAP figures are labelled as such. Blockhaven used no outside forecasts, so no figure here is measured against market expectations.
Descriptive company facts. Not investment advice, a rating or a recommendation.