Workday tumbles on dour revenue outlook amid AI threat

Rashika Singh

Wed, February 25, 2026 at 6:26 PM GMT+9 1 min read

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By Rashika Singh

Feb 25 (Reuters) - Workday shares fell about 10% premarket on Wednesday after the enterprise software maker ‌forecast downbeat revenue as corporations pull back on ‌spending amid broader macroeconomic uncertainty.

The shares have tumbled about 40% this year ​driven by a wider sell-off in software stocks after AI startup Anthropic rolled out new enterprise tools, fuelling investor worries that automation could squeeze revenue streams for some traditional software vendors.

The ‌Pleasanton, California-based company forecast ⁠subscription revenue between $9.93 billion and $9.95 billion for fiscal year 2027, shy of the roughly $10 billion analysts ⁠were expecting, and said it would prioritize additional spending on its “agentic AI” roadmap.

“In an environment where there is increased scrutinization of ​every ​metric amidst the AI debates, ​the guide likely does not ‌allay investors’ general concerns for app layer names,” Piper Sandler analysts said in a note.

Workday, which specializes in HR and payroll software, said elongated sales cycles, especially in government, education, healthcare and parts of the commercial market, had delayed some ‌large enterprise deals, though most remain ​active and a few have already ​closed early in ​the first quarter.

Aneel Bhusri, a Workday co‑founder, returned ‌earlier this month as CEO ​after stepping down ​as co‑CEO in 2024 while staying on as chairman. In a post-earnings conference call, Bhusri downplayed the narrative ​that AI will ‌displace traditional software.

Workday’s 12-month forward price-to-earnings multiple is 11.94, ​compared with peer Salesforce’s 13.98.

(Reporting by Rashika Singh in ​Bengaluru; Editing by Mrigank Dhaniwala)

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