Irenic Capital urges Workiva to improve efficiency or consider sale

NEW YORK - Investment firm Irenic Capital Management, which holds approximately 2% of Workiva Inc. (NYSE:WK) shares, issued a presentation Monday outlining recommendations to address what it describes as significant share price underperformance at the cloud-based compliance and reporting software company. According to InvestingPro data, Workiva, currently valued at $4.77 billion, has seen its shares decline 21.65% year-to-date despite maintaining impressive gross profit margins of 76.8%.

In a press release statement, the New York-based investment firm called for a "revamped Board" at Workiva to conduct a strategic and operating review to determine the company’s future direction. Irenic proposed two potential paths: transforming Workiva into "a refocused and substantially more profitable public company" or pursuing a sale to a sponsor or strategic buyer.

The activist investor urged Workiva to adopt a "Rule of 40" operating model, which balances growth and increased profitability. According to Irenic, despite Workiva being "a high-quality business with market-leading products," the company currently trades at "a substantial discount to its peers and its historical valuation."

Irenic attributed this underperformance to what it views as Workiva’s "failure to achieve the appropriate mix of growth and operating profitability."

The investment firm’s recommendations focus on improving operational and go-to-market efficiency, enhancing corporate governance, and evaluating potential sponsor and strategic partner interest.

Workiva provides cloud-based compliance and reporting solutions. The company has not yet publicly responded to Irenic’s recommendations.

In other recent news, Workiva Inc. reported strong financial results for the second quarter of 2025, surpassing earnings expectations. The company achieved an earnings per share of $0.19, significantly higher than the forecasted $0.05, with revenue reaching $215 million, exceeding the expected $208.86 million. Despite the positive financial performance, the stock experienced a decline during regular trading hours. Additionally, Workiva’s stock received attention from analysts, with Stifel raising its price target to $92 while maintaining a Buy rating. Wolfe Research also increased its price target to $95, highlighting improved sales and marketing efficiencies and maintaining an Outperform rating. Truist Securities reiterated its Buy rating and kept its $95 price target, expressing confidence in Workiva’s subscription revenue growth potential. These developments were discussed during Workiva’s annual Amplify user conference, where the company reiterated its long-term topline targets and updated its FY27 operating margin target to 18%.

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