New York, Feb 25, 2026, 11:20 AM ET — Regular session
- Workday shares dropped roughly 6.3% to $130.23, after earlier touching $125.86 at the low.
- Fiscal 2027 subscription revenue guidance came in under Wall Street’s estimates. Management pointed to a slower pace on larger deals.
- Salesforce reports after the bell, with traders watching closely for clues on software spending trends.
Workday Inc shares slid roughly 6.3% to $130.23 late Wednesday morning, dipping as low as $125.86 earlier in the session as trading volumes spiked.
The decline adds strain to a key player in cloud-based HR and finance software—a segment of tech that reacts quickly to changes in corporate hiring and budget decisions.
For Workday, subscription revenue — those regular payments from customers — matters most to investors following the stock. If signs point to softer growth here, worries about cooling deal activity can flare up regardless of whether total revenue lands near forecasts.
Workday projected fiscal 2027 subscription revenue between $9.93 billion and $9.95 billion on Tuesday, coming up short of the $10 billion analyst consensus tracked by LSEG. “Some net new large enterprise deals are taking longer to close,” chief commercial officer Rob Enslin noted. CFO Zane Rowe pointed to a focus on “incremental investment in our agentic AI roadmap to capture a larger market opportunity” — that is, AI designed to act on users’ behalf, not just respond. The shares dropped more than 8% in after-hours trading following the forecast. Software names lost ground as well, after AI lab Anthropic introduced new tools for its business clients. 1
Workday turned in fourth-quarter revenue of $2.532 billion, with $2.360 billion coming from subscriptions. Full-year subscription revenue landed at $8.833 billion. The company closed out fiscal 2026 sitting on a $28.101 billion subscription revenue backlog, and spent roughly $2.9 billion buying back its own shares over the year. 2
Workday tumbled to its lowest point in over five years on Wednesday, ranking it among this year’s biggest laggards in U.S. software, according to Reuters. CEO and co-founder Aneel Bhusri dismissed the notion that today’s rapid-fire AI coding tools could supplant essential HR or ERP platforms. “No amount of vibe coding is going to produce an HR or an ERP system,” Bhusri told analysts. Following the disappointing forecast, more than half of analysts tracking Workday cut their price targets. Piper Sandler remarked that “the guide likely does not allay investors’ general concerns” about software stocks. 3
The immediate question: Are these deferred deals rebounding soon, just postponed, or are software buyers starting to reroute budgets into fresh AI offerings instead of renewing older app agreements?
Here’s the risk: if government and healthcare see more delays, or if belt-tightening spreads, subscription growth might slip below what the company expects. On top of that, bigger bets on AI could crimp margins, especially if customer uptake doesn’t pick up speed.
Next up is Salesforce earnings—due after Wednesday’s close. Options are pricing in about a 9% move for the stock. If enterprise software demand looks soft, Workday could stay under pressure when trading resumes. 4
