On April 23, 2026, ServiceNow shares experienced a significant drop of 18.10%, reaching an intraday low of $84.41. This decline followed the company's announcement of its first-quarter earnings, which, although beating analysts' expectations with earnings of 97 cents per share—up 20% year-over-year—and subscription revenue of $3.67 billion (a 22% increase), was overshadowed by a reduction in its projected operating margin. ServiceNow's updated guidance for 2026 now anticipates a 31.5% margin on adjusted operating income, down from 32%, primarily due to the recent acquisition of cybersecurity startup Armis for $7.75 billion. While the acquisition is expected to enhance subscription revenue growth, it will compress operating margins. The company also raised its AI annual recurring revenue target from $1 billion to $1.5 billion, highlighting its focus on artificial intelligence amidst rising skepticism from investors regarding growth sustainability in the AI era. Concerns about delayed deals in Europe and the Middle East, as well as the potential impact of generative AI tools on traditional software demand, have further fueled the sell-off in ServiceNow's stock, which has fallen approximately 47% this year.