Workday says some new large deals taking longer to close

Workday says some new large deals taking longer to close

Workday Reports Delays in Closing Large Enterprise Deals Amid Market Shifts

Workday Inc. (NASDAQ: WDAY) has indicated that its sales cycle for large enterprise contracts has lengthened in recent quarters, reflecting broader trends in corporate spending and procurement decision-making. The cloud-based financial and human resources software provider noted the trend during its Q4 2025 earnings call, attributing the delays to extended evaluation periods by clients and increased competition in the enterprise software sector [1].

According to Workday's latest investor presentation, the average sales cycle for deals exceeding $10 million has extended by approximately 15% compared to 2024. While the company emphasized that its pipeline remains robust, with year-over-year growth in enterprise deal volume, the elongated sales process has introduced near-term uncertainty for revenue recognition [2]. Analysts suggest that macroeconomic factors, including cautious corporate budgeting and heightened scrutiny of software expenditures, are contributing to the slowdown.

Workday's CEO, Aneel Bhusri, highlighted during the earnings call that clients are prioritizing "thorough vendor evaluation" amid a competitive landscape marked by aggressive pricing strategies from rivals such as SAP and Oracle. The company reported $2.1 billion in annual recurring revenue (ARR) as of December 31, 2025, representing 8% year-over-year growth, but noted that a portion of its Q4 bookings came from smaller to midsize deals [3].

Investors have largely maintained a neutral stance, with analysts at JMP Securities noting that while the extended sales cycle may impact short-term revenue forecasts, Workday's long-term growth trajectory remains intact due to its strong market position in cloud ERP solutions. The company has not revised its full-year 2026 guidance but cautioned that deal closures in high-value segments could remain volatile [4].

The trend underscores broader challenges in the enterprise software sector, where companies are navigating shifting client priorities and economic headwinds. Workday has not disclosed specific timelines for when the sales cycle may normalize but remains focused on product innovation and customer retention [5].

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