Hedge Fund Bets Big on Workiva Amidst Growth

Eminence Capital, a New York City-based hedge fund, significantly expanded its investment in Workiva during the third quarter. The fund acquired an additional 1.08 million shares, increasing its total stake to 3.72 million shares, which was valued at $320.52 million as of September 30. This substantial position now represents 3.89% of Eminence Capital's reportable U.S. equity assets under management, making Workiva its third-largest holding.

Workiva, a provider of cloud-based compliance and reporting solutions, demonstrated strong financial growth in the third quarter. The company's revenue rose by 21% year-over-year, driven by a 23% increase in subscription and support revenue. Notably, Workiva also achieved significant operational improvements, with its non-GAAP operating margin expanding to 12.7% from 4.1% in the prior year, and free cash flow margin doubling to approximately 20%.

This strategic investment by Eminence Capital, known for its long-term investment approach, suggests confidence in Workiva's fundamental business performance. Despite Workiva's stock being down 21% over the past year, the company's increasing customer base, particularly those spending over $500,000 annually, and its expanding margins indicate a positive outlook for its recurring revenue model and profitability.