ServiceNow Shares Plunge Following Lowered Backlog Growth Guidance
ServiceNow (NOW) shares fell approximately 23% after the company provided a fourth-quarter guidance for its current remaining performance obligation (cRPO) that signaled slower growth. While third-quarter subscription revenue grew 21% to nearly $4 billion, the projected cRPO growth of 18.5% trails the company's own 21.5% subscription revenue guide, suggesting a potential deceleration in future revenue. The financial results also highlighted a significant impact from deal-related costs and acquisitions, which caused GAAP diluted earnings per share to drop to $0.27 from $0.48. Although adjusted EPS rose to $1.00 by excluding non-cash charges, the company's cash position has been pressured by $9.2 billion in acquisition spending this year, leading to a decrease in cash and securities.
Coverage
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