Workday shares tumbled in after-hours trading Tuesday after the enterprise software giant delivered weaker-than-expected revenue guidance for the coming quarters. The disappointing forecast comes just weeks after the company announced CEO Carl Eschenbach is stepping down, with co-founder Aneel Bhusri returning to the helm. The dual blow of soft numbers and leadership uncertainty is rattling investors who've counted on Workday as a steady player in the cloud software wars.
Workday just gave investors a reality check on the enterprise software market. The company's Q4 earnings report, released Tuesday evening, showed revenue guidance that fell short of Wall Street expectations, sending shares sliding in extended trading. According to the CNBC report, the cloud software provider is facing headwinds that go beyond typical quarterly fluctuations.
The timing couldn't be worse. Just weeks ago, Workday announced that CEO Carl Eschenbach would be stepping down after less than three years at the helm. Co-founder Aneel Bhusri, who previously served as CEO before handing the reins to Eschenbach in 2024, is making a comeback to steady the ship. The leadership shuffle already had analysts nervous, and now the soft guidance is amplifying those concerns.
Workday built its reputation on human capital management and financial planning software that enterprises depend on for core operations. But the market's getting crowded. Microsoft has been aggressively pushing Dynamics 365 with AI capabilities baked in, while SAP continues to defend its turf in the ERP space. The pressure's showing up in Workday's numbers.
What's particularly striking is the disconnect between enterprise software demand and Workday's performance. Most analysts expected robust cloud spending to continue, especially as companies invest in digital transformation and AI-powered tools. Yet Workday's guidance suggests something's not clicking, whether it's elongated sales cycles, pricing pressure, or customers hitting pause on big implementations.
