Workday’s shares dropped over 5% in after-hours trading following lower-than-expected quarterly margin guidance. The company reported earnings per share of $2.32, beating the expected $2.18, and revenue of $2.43 billion, slightly above the projected $2.42 billion. Workday’s revenue rose 13% year over year, with a net income of $252 million.

For the fourth quarter, Workday forecasted an adjusted operating margin of at least 28.5% and subscription revenue of $2.355 billion. Analysts had predicted a margin of 28.7% and $2.35 billion in subscription revenue. The company also announced the acquisition of AI and learning software startup Sana for $1.1 billion amidst shareholder activism.

Despite positive financial results, Workday’s stock has declined by 9% this year amid concerns about generative AI tools impacting the growth of cloud software companies. Activist investor Elliott Management disclosed a stake in the company worth over $2 billion. Company CEO Carl Eschenbach emphasized the false narrative of AI threatening software.

Read more at CNBC: Workday (WDAY) Q3 earnings report 2026