PLEASANTON, California, August 27, 2026, 17:30 (EDT) – Workday (WDAY.O) shares fell 7.0% in after-hours trading after the company issued a subscription revenue outlook of $2.52 billion that fell short of analyst estimates.
- Workday shares were at $179.99 in after-hours trading, falling 7.02% compared to the closing price of $193.57.
- Revenue for the quarter increased by 12.8%, reaching $2.65 billion, while adjusted earnings per share were $2.75.
- Artificial intelligence accounted for over 25% of new contract value; however, near-term guidance was only in line with expectations.
Workday, Inc. (NASDAQ: WDAY) dropped 7.02% in after-hours trading to $179.99, wiping about $3.3 billion off its $47.1 billion market value at the close.
The selloff revealed tougher standards for enterprise software. Even with robust AI adoption and an earnings beat, guidance that merely met forecasts was not enough to counter the downturn.
Revenue for the fiscal second quarter increased by 12.8%, reaching $2.65 billion. Analysts surveyed by LSEG had anticipated revenue of approximately $2.64 billion, according to Reuters.
Adjusted earnings per share came in at $2.75, topping the $2.61 expected by analysts. This figure represented a 24% increase compared with the same quarter a year earlier.
| Investor measure | Reported / guided | Market reference | Read-through |
|---|---|---|---|
| Q2 total revenue | $2.649 billion | $2.636 billion | $13 million ahead |
| Q2 adjusted EPS | $2.75 | $2.61 | $0.14 ahead |
| Q3 subscription revenue | About $2.515 billion | About $2.52 billion | Roughly matches |
| FY subscription revenue | $9.94–$9.95 billion | Prior: $9.925–$9.95 billion | Midpoint up $7.5 million |
The forecast for full-year subscriptions saw a modest increase, with the midpoint advancing by $7.5 million—representing under 0.1% of the anticipated yearly subscription income.
Workday forecasts third-quarter subscription revenue of approximately $2.515 billion, roughly in line with analysts’ expectations and providing limited opportunity for estimate increases.
Workday saw strong AI adoption. CEO Aneel Bhusri reported that AI accounted for over 25% of new annual contract value, with at least 5,500 customers using a Workday agent.
The figures are significant since Workday targets conservative corporate budgets. Major finance and human-resources implementations continue to face extended approval times.
The company has approved a fresh $4 billion share buyback program. At $179.99 per share, this is approximately 9% of Workday’s implied market capitalization in after-hours trading.
Net income came in at $632 million, or $2.57 per share, which factored in a $1.52-per-share tax benefit resulting from an internal intellectual-property transfer Wall Street Journal.
Following a turbulent month, analysts’ opinions are split. Of those monitored by MarketScreener, forty-one have assigned an Outperform consensus, setting an average price target close to $188.21 analyst consensus.
The target implies a 4.6% upside from the after-hours price. The range, from $92 to $275, highlights a notably broad divergence in views on growth and valuation.
Risks: Prices during extended hours trading may shift amid low liquidity. Slowdowns in software project timelines, competition from AI-native firms, and pricing challenges may hinder further subscription expansion.
The next challenge is monetization. Workday needs to convert increased agent adoption into subscription growth that surpasses, not just matches, market expectations.
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