New York, January 28, 2026, 19:21 EST — After-hours
- After hours, shares dropped roughly 6% as traders digested the guidance alongside a larger buyback plan
- ServiceNow’s forecast for 2026 subscription revenue beats Wall Street estimates
- Attention turns to AI collaborations and returns from the latest acquisitions
ServiceNow shares dropped roughly 6% in after-hours trading Wednesday, retreating following the company’s quarterly report and release of its 2026 outlook. The stock ended the regular session down 1.6% at $129.62 and slipped further to $121.49 after hours, according to Google Finance.
The reaction is crucial now as investors attempt to value “agentic” AI — tools that not only answer questions but also perform actions within corporate systems. ServiceNow is closely linked to spending decisions, and its results often hit hard in a market already wary of software budgets.
Deal fatigue is setting in. While big acquisitions grab headlines, they also muddy the waters between organic demand and growth through purchases. That’s the core of the debate this evening.
ServiceNow reported a 21% jump in subscription revenue for the quarter ending Dec. 31, reaching $3.466 billion. Total revenue increased 20.5% to $3.568 billion. The company’s current remaining performance obligations — contracts expected to be recognized over the next year — rose 25% to $12.85 billion. ServiceNow also highlighted that its Now Assist net new annual contract value more than doubled from the prior year. Looking ahead, it projects 2026 subscription revenue between $15.53 billion and $15.57 billion. The board has greenlit an additional $5 billion for share buybacks, including plans for an “imminent” $2 billion accelerated repurchase. The guidance factors in roughly a one percentage point contribution from Moveworks. (ServiceNow Newsroom)
An accelerated share repurchase usually involves a bank handing over shares immediately, with the settlement spread out over time. It’s a quick tool in a choppy market, but it doesn’t resolve the underlying demand issue.
ServiceNow has stepped up its AI game, deepening ties with Anthropic, the maker of the Claude chatbot, after already striking a deal with OpenAI, Reuters reported. Rebecca Wettemann, CEO of analyst firm Valoir, noted the company is growing “both organically and by acquisition” as it targets customer relationship management and security. Reuters also pointed out the stock dropped 28% in 2025 amid a flurry of deals, including a planned $7.75 billion acquisition of cybersecurity startup Armis, plus purchases of Veza, Moveworks, and Logik.ai. (Reuters)
On the earnings call, CEO Bill McDermott framed ServiceNow as the crucial link between AI models and enterprise operations, dubbing it “the gateway to this shift” and “the semantic layer” that enables AI to work across businesses. CFO Gina Mastantuono noted the stock pullback as the company gears up for its accelerated repurchase. (Investing)
Traders will now zero in on the balance between steady core workflow growth and the lift from acquisitions. They’ll also track if AI add-ons can push paid usage higher without squeezing margins amid rising infrastructure costs. The company’s guidance looks solid on paper, but the tape wants clearer evidence.
ServiceNow isn’t the only one. Other enterprise software companies focused on automation and customer systems have encountered similar “show me” battles as AI tools shift from demos into actual paid rollouts.
The risk scenario is clear. Weaker demand could stall new deals, and bringing Moveworks, Veza, and Armis onboard might complicate execution and push costs higher. If customers see AI as just a pilot project instead of a full rollout, growth could flatten fast.
Thursday’s session will test if the after-hours sell-off extends into regular trading and if chatter around buybacks can stabilize sentiment. Investors also have their sights set on ServiceNow’s Knowledge conference in Las Vegas from May 5-7, a key event where the company usually unveils product plans and highlights customer successes. (Servicenow)
