$NOW · ServiceNow, Inc.
ServiceNow filed its Q3 FY2026 10-Q, reporting revenue of $4.106B (+20.5% YoY) with subscription revenue of $3.988B. Net income fell sharply to $277M from $502M a year ago as operating margin compressed to 9.4% from 16.8%. The balance sheet was transformed by $6.6B in goodwill from acquisitions, pushing total goodwill to $10.0B, while total debt surged to $7.5B from $1.5B at year-end 2025.
- Revenue $4.106B (+20.5% YoY) with subscription revenue $3.988B
- Net income fell to $277M from $502M YoY — a 44.8% decline
- Goodwill ballooned to $10.0B from $3.6B at year-end 2025 after $6.6B in acquisitions
- Total debt surged to $7.5B (short-term $2.1B + long-term $5.4B) vs $1.5B at year-end
- Operating margin compressed to 9.4% from 16.8% a year ago
Extended-hours trading shows shares at $127.07, down 15.36% from the $150.13 regular close. The $155B market-cap giant is being repriced on margin compression and a debt-heavy acquisition spree that added $6.6B in goodwill in nine months.
A $155B enterprise software leader seeing net income nearly halve while taking on $6B in new debt for M&A signals a high-stakes transformation bet that the market is punishing in real time.
ServiceNow's aggressive M&A — acquiring Armis and Veza for cyber asset intelligence and identity governance — mirrors the enterprise AI platform consolidation race, but the debt-fueled approach contrasts with peers funding deals from cash reserves.
Goodwill now stands at $10.0B — 31% of total assets — creating substantial impairment risk if acquired businesses underperform. Debt has quintupled to $7.5B in nine months to fund M&A, with $2.1B in short-term debt due within a year.