Workday forecasts 2027 subscription revenue below estimates, shares fall

Illustration shows Workday logo · Reuters

Reuters

Wed, February 25, 2026 at 6:09 AM GMT+9 1 min read

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Feb 24 (Reuters) - Workday on Tuesday forecast fiscal 2027 subscription revenue below Wall Street estimates, signaling ‌slower new client wins as corporations cut technology ‌spending amid economic uncertainty.

Shares of the company fell 7% in extended ​trading.

Despite its push into AI, the enterprise software company faces headwinds from a challenging macroeconomic environment. Higher interest rates and economic uncertainty have prompted businesses to scrutinize big-ticket ‌software investments and delay ⁠purchasing decisions, weighing on new client wins.

Separately, Artificial intelligence lab Anthropic’s release of a ⁠legal plug-in ignited an $830 billion global selloff in software and services stocks, including those of some of the startup’s ​partners, as ​investors worried that AI-powered ​automation could undercut revenue ‌streams at these companies.

Anthropic on Tuesday unveiled 10 new ways for business customers to plug in its technology to help with human resources-related tasks such as making new-hire materials reflect a brand’s tone and policies, and investment ‌banking tasks like reviewing deals.

Workday ​forecast annual subscription revenue between $9.93 billion ​and $9.95 billion, missing ​analyst expectations of $10 billion, according to data ‌compiled by LSEG.

Total revenue for ​the quarter ended ​January 31 came in at $2.53 billion, compared with analysts’ estimates of $2.52 billion.

Subscription revenue of the Pleasanton, California-based ​company came ‌in at $2.36 billion in the fourth quarter, in ​line with expectations.

(Reporting by Juby Babu in Mexico ​City; Editing by Tasim Zahid)

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