Workday Inc. (WDAY) experienced a significant pre-market plunge of 9.62% on Wednesday, extending losses from the previous after-hours session. The sharp decline follows the enterprise software company's latest quarterly earnings report and forward-looking guidance that disappointed investors.

The company forecast fiscal 2027 subscription revenue between $9.93 billion and $9.95 billion, falling short of Wall Street estimates of approximately $10 billion. Workday's guidance signals slower growth of 12% to 13% for its core subscription business, down from previous expectations. Management cited economic uncertainty and higher interest rates as factors prompting corporations to delay large software purchases, with some net new enterprise deals taking longer to close.

Investor concerns were compounded by Workday's emphasis on artificial intelligence investments, which the company acknowledged would pressure margins in the near term. The software maker is prioritizing incremental investment in its AI roadmap to capture market opportunities, but this comes at the cost of slower margin expansion. These factors combined to drive the substantial pre-market sell-off as investors reassessed the company's growth trajectory.