ServiceNow is set to report third-quarter results for the period ended Sept. 30 after the market closes on Oct. 28, with management scheduled to discuss the figures at 2 p. Investors are approaching the release with two different benchmarks: Wall Street’s earnings expectations and the company’s own operating targets.
It also forecast cRPO growth of 19. 5%, or 20% after adjusting for currency, and a 31% non-GAAP operating margin. CRPO represents contracted revenue expected to be recognized during the following 12 months, so the measure gives investors a view of future subscription sales alongside the quarter’s reported revenue.
Its cRPO reached $13. 20 billion, up 21% year over year, while total remaining performance obligations stood at $29 billion. The company also reported 123 transactions worth more than $1 million in net new annual contract value and 658 customers with more than $5 million in annual contract value.
The comparison is complicated by timing in the federal business. That pull-forward helped the earlier quarter, meaning a third-quarter result near the company’s guidance will be read in the context of the revenue shift rather than as a simple comparison with the prior period.
Artificial intelligence is the other major focus. ServiceNow said AI annual contract value exceeded $1 billion in the second quarter, and the company’s 2026 target is more than $1. 5 billion. Management also said AI net-new contract-value growth was running ahead of expectations and that agentic deployments had increased ninefold in nine months. The upcoming update will show whether that commercial momentum is translating into higher contract value, while the company’s separate financial disclosures will indicate how AI adoption and greater use of cloud partners are affecting subscription profitability.
The margin question matters because second-quarter non-GAAP subscription gross margin was 80. 5%, below the 81% full-year target and down from 83% a year earlier. The company attributed pressure partly to greater use of hyperscaler partnerships and faster AI adoption. ServiceNow also completed the roughly $7. 6 billion cash acquisition of Armis, which it had estimated would reduce full-year operating margin by about 75 basis points and free-cash-flow margin by about 200 basis points.
Analyst views remain positive but are not unanimous. Guggenheim reiterated a Buy rating and raised its price target to $175 from $125, pointing to achievable cRPO growth, demand for core IT-service-management products and healthy partner pipelines. A separate quantitative assessment rated the stock Hold. The shares had gained more than 3% in the supplied reporting’s year-to-date comparison, trailing the S&P 500’s gain of more than 12%.
The release will therefore be judged on more than whether revenue and earnings clear estimates. They will also want management to explain how the federal pull-forward affects the quarter and whether the company can keep expanding AI adoption while maintaining its broader margin and cash-flow targets.