ServiceNow Reports Q3 Earnings; Backlog Guidance Causes Stock Decline

ServiceNow reported $4.1 billion in total revenue for the third quarter, a 20.5% increase year over year, with subscription revenue rising 21% to nearly $4 billion. While management raised full-year artificial intelligence revenue targets, adjusted earnings per share came in at $1.00, missing the $1.02 consensus estimate. The stock declined after management provided guidance that current backlog growth would be 18.5% year over year on a constant currency basis.

The earnings report highlights the competition between ServiceNow and Salesforce in the enterprise workflow platform market. The market reaction suggests that despite strong AI momentum, the outlook for enterprise workflow platforms may face long-term growth friction.

ServiceNow and Salesforce are competing for enterprise AI market share.