Workday reports fiscal second-quarter 2027 results after the close today, and the earnings are almost secondary to the strategic question that has hung over the stock since August 13: whether Silver Lake formalizes a bid that could rank among the largest software buyouts in history.
Reuters reported on August 13 that Silver Lake is in talks to acquire Workday, sending shares nearly 18% higher in a single session before trading was halted multiple times. The stock closed that day at $206.45, up 17.78%, after trading as high as $227.49 intraday. The company’s market capitalization pushed above $51 billion on the move. Reuters Breakingviews modeled a hypothetical offer at roughly $227 per share, implying a $53.8 billion valuation at almost 5x estimated 2027 revenue. No formal bid has emerged since. That overhang is both a floor and a ceiling heading into tonight.
On the fundamentals, the setup is stronger than the stock’s compressed multiple suggests. Workday enters tonight with four consecutive EPS beats, and agentic AI solutions already approaching $500 million in annual recurring revenue. Q1 non-GAAP operating income hit $809 million, operating cash flow grew 52% year over year, and the company repurchased $1.6 billion of shares last quarter alone. Street consensus expects $2.63 in EPS on revenue of about $2.63 billion, and Workday guided fiscal Q2 subscription revenue at $2.455 billion, representing 13% growth.
The SaaS disruption fear that crushed the stock earlier this year is losing its grip across the sector. Silver Lake’s reported interest itself signals that private equity sees durable cash flow where public markets had priced existential risk. Thoma Bravo’s roughly $12.3 billion acquisition of Workday rival Dayforce makes the same point: buyers willing to write checks at these sizes do not believe AI is about to hollow out enterprise HR and finance software.
What to watch on the call: Organic subscription growth, stripped of any Informatica-adjacent noise. FY27 full-year subscription revenue guidance of $9.925 billion to $9.950 billion was reiterated in May; any upward revision confirms the acceleration thesis. Management commentary on Silver Lake, however brief or deflective, will move the stock. Any update on the agentic AI ARR trajectory is the most forward-looking data point in the release.
The risk: Workday’s Most Accurate Estimate sits below the Zacks consensus, implying recent analyst revisions have trended bearish. The stock has about $50 billion in market cap sitting on buyout speculation that has not closed. If tonight’s results disappoint and the deal quietly fades, the valuation premium built on August 13 partially unwinds.
Support sits near the pre-Silver Lake price around $175. Resistance is the post-announcement close just above $206. A clean beat with raised guidance puts $220-plus in reach before the deal question is resolved.
