US Stock Market Move | Q1 performance meets expectations but concerns about AI impact remain unresolved. ServiceNow (NOW.US) plummeted nearly 15%.

On Thursday, ServiceNow (NOW.US) opened trading with a sharp drop of nearly 15%, marking its largest decline since March 2020, and is currently trading at $87.83. In terms of news, ServiceNow reported better-than-expected first quarter performance and raised its full-year guidance. However, the company pointed out that conflicts in the Middle East have dragged down subscription revenue growth, and investor sentiment has cooled due to doubts about the future prospects of enterprise software in the era of artificial intelligence. According to the financial report, ServiceNow's first quarter revenue grew by 22% year-on-year to $3.77 billion, slightly higher than the analyst's average expectation of $3.74 billion. Broken down by business segments, subscription revenue rose by 22% year-on-year to $3.671 billion, while professional services and other revenue increased by 18.5% to $99 million. In terms of profitability, net profit was $469 million, with an adjusted earnings per share of $0.97, slightly higher than the analysts' average expectation of $0.96. ServiceNow stated that the growth of subscription revenue in the first quarter was "negatively impacted by approximately 75 basis points, due to delays in signing several large local deployment projects caused by ongoing conflicts in the Middle East." However, the company has raised its subscription revenue guidance for fiscal 2026 to $15.74 billion to $15.78 billion, higher than the previously provided range of $15.53 billion to $15.57 billion. The company's guidance for second quarter subscription revenue is in the range of $3.815 billion to $3.82 billion, a year-on-year growth of approximately 22.5%, higher than the analyst's average expectation of $3.75 billion.