Observed Signal · Feb 24, 2026 · Earnings Report · Source: CNBC Technology · Impact: 4/5 · Sentiment: Neutral
Workday Shares Plunge on Weak Revenue Forecast
Workday reported fiscal fourth-quarter results and issued lighter-than-expected guidance, sending its shares down in extended trading. Q4 revenue and adjusted EPS modestly beat consensus, but the company forecast lower-than-expected subscription revenue and a slightly narrower adjusted operating margin for the upcoming quarter. Workday reiterated AI investments—annualized AI product revenue exceeds $400 million, it acquired Pipedream, and plans an AI agent for shift modifications—and noted some large deals are taking longer to close. Leadership changes were also recent: CEO Carl Eschenbach stepped down on Feb. 9 and co-founder Aneel Bhusri replaced him.
Earnings and guidance from a large enterprise SaaS (ERP/HR) vendor signal demand trends for enterprise software and AI-enabled features, which can influence corporate tech spending and vendor roadmaps.
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Key Takeaways & Evidence Grounding
- Workday shares fell about 10% in extended trading after the company issued soft quarterly guidance.
- Fiscal Q4 revenue was $2.53 billion (14.5% year-over-year growth) and adjusted EPS was $2.47 vs. LSEG consensus of $2.52 billion revenue and $2.32 EPS expected.
- Net income for the quarter was $145 million ($0.55 per share), up from $94 million ($0.35) a year earlier.
- Workday guided fiscal Q1 subscription revenue of $2.335 billion and an adjusted operating margin of 30.5% (StreetAccount analysts had expected $2.35 billion and a 30.9% margin).
- For fiscal 2027 Workday sees subscription revenue of $9.93–$9.95 billion (implying 12–13% growth) and a 30% adjusted operating margin.
- Workday's annualized revenue from AI products now exceeds $400 million; the company acquired startup Pipedream and plans an AI agent to handle shift-modification requests.
- On Feb. 9 Workday said CEO Carl Eschenbach was stepping down and co-founder Aneel Bhusri replaced him.
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Workday Raises Margin Forecast, Stock Jumps on AI
Workday reported stronger-than-expected fiscal Q1 results and said its artificial intelligence initiatives are driving margin improvement and customer adoption. Adjusted EPS of $2.66 and revenue of $2.54 billion beat LSEG consensus, and Workday raised its full-year adjusted operating margin outlook to 30.5% while maintaining 12%–13% growth guidance. Co-founder Aneel Bhusri returned as CEO during the quarter and the company said its Sana AI agents are now available to customers, with the number of clients using agents more than doubling to over 4,000. Workday’s management said annualized revenue from agentic AI solutions is approaching $500 million, a sign of growing monetization of its AI products.
Workday Shares Surge on Silver Lake Takeover Report
Reuters reported on August 14, 2026 that private equity firm Silver Lake is in talks to potentially acquire payroll and HR software provider Workday. The news sent Workday shares up about 18% — their best single-day performance since 2016 — triggering multiple trading halts and lifting market value from roughly $43 billion to about $51 billion. Analysts told CNBC the potential buyout could establish a valuation floor for software stocks after an AI-driven selloff and spur further software M&A. The report noted recent leadership changes — co-founder Aneel Bhusri was renamed CEO in March 2026 — and that Workday had posted better-than-expected results in May and raised its forecast citing AI tailwinds, even as some investors worry AI might disrupt its business model. Workday and Silver Lake did not immediately comment.
Adobe Stock Falls After CFO Departure, Analysts Downgrade
Adobe beat expectations for its fiscal second quarter and posted better-than-expected full-year guidance, but the company’s stock fell in premarket trading after the announced departure of CFO Dan Durn and the planned departure of CEO Shantanu Narayen later this year. Three Wall Street firms — Stifel, Wolfe Research and Evercore ISI — downgraded or lowered ratings on the stock, citing concerns about a shift toward a freemium strategy and disappointing annual recurring revenue (ARR) outlook. Stifel cut its rating to hold and set a $200 price target; Evercore lowered to hold with a $225 target; Wolfe moved to peer perform. Analysts flagged FY26 ARR guidance of 10.2% and expected net new ARR to slow in 2H26. Adobe shares were down in premarket trade and have declined materially year-to-date and over the past 12 months.
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