Silver Lake in Talks to Buy Workday in $43 Billion Deal

Silver Lake is in talks to acquire Workday, the human-resources and financial management software maker with a market value of about $43 billion, in a deal that would rank among the largest software buyouts in history, people familiar with the matter said.

The private-equity firm and Workday have held discussions about a potential deal in recent months, the people said, speaking on condition of anonymity because the talks are confidential. The discussions are ongoing and there is no guarantee a deal will materialize, they said. Neither Silver Lake nor Workday responded to requests for comment.

Workday's shares surged as much as 14% and trading was halted after the report. The stock has fallen about 15% this year and is down more than 40% from its 2024 peak as investors questioned the durability of traditional software in an era of rapidly advancing artificial intelligence.

A buyout would take private one of the largest enterprise software companies and could lift valuations across a sector where peers such as Salesforce, ServiceNow and Oracle have faced similar questions about AI-driven disruption. Workday is scheduled to report fiscal second-quarter results on Aug. 27.

The deal talks follow a turbulent year for Workday, which has traded between roughly $127 and $250 over the past 12 months. The company posted its best new-ACV growth in five years in fiscal Q1, with subscription revenue up 14% and full-year non-GAAP operating margin guidance raised to 30.5%. Management reiterated fiscal 2027 subscription revenue guidance of $9.93 billion to $9.95 billion.

Workday has leaned into agentic AI as a growth driver, with new ACV from agentic products up more than 200% year over year and roughly $500 million in AI-related annual recurring revenue. More than 4,000 customers now use its AI agents, the company said. Returning co-founder Aneel Bhusri, who reassumed the CEO role, has made AI adoption a centerpiece of the turnaround pitch.

Wall Street remains split on the stock. Morgan Stanley rates Workday underweight with a $145 price target, citing decelerating core growth, while Oppenheimer stays bullish. The average analyst target sits near $189, roughly in line with the current price, according to data compiled by Perplexity Finance. Of 55 analysts covering the stock, 28 rate it a buy, 19 neutral and eight bearish.

The talks come as enterprise software stocks have been battered by fears that AI could disrupt consumption-based and application software business models. A selloff triggered by disappointing results from Datadog and HubSpot in early August dragged the sector lower before a relief rally, with Workday rebounding about 5.5% on Aug. 7. A Silver Lake deal would follow a wave of private-equity interest in enterprise software as public-market valuations have compressed, with the firm betting that Workday's franchise value and AI pipeline justify a premium to a stock that has shed more than 40% of its value from its 2024 high.

This article is for informational purposes only and does not constitute investment advice.