Why One Fund Has a $320 Million Bet on Workiva Stock Despite a 21% Share Slide

Core Insights - Eminence Capital increased its stake in Workiva by 1.08 million shares in Q3, raising its total position to 3.72 million shares valued at $320.52 million as of September 30 [2][3][6] - Workiva represents 3.89% of Eminence Capital's reportable U.S. equity AUM, making it the fund's third-largest holding [4][6] - Workiva's stock price is currently $86.28, down 21% over the past year, while the S&P 500 has increased by about 17% [4] Company Overview - Workiva operates in the technology sector, providing a cloud-based platform for compliance, regulatory reporting, data integration, and audit trail solutions [5][8] - The company reported third-quarter revenue of $224 million, a 21% year-over-year increase, driven by a 23% rise in subscription and support revenue [10] - Workiva's non-GAAP operating margin improved to 12.7%, up from 4.1% a year ago, and free cash flow margin reached approximately 20%, compared to 10% one year ago [10] Investment Perspective - Eminence Capital's investment in Workiva appears to be a durability bet on recurring revenue and expanding margins, contrasting with the stock's recent performance [11] - The growth in Workiva's customer base is notable, with a 42% increase in customers spending more than $500,000 annually, indicating strong demand from larger accounts [10][12]