Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. US equities experienced solid returns in 2025, with double-digit gains across all major indices. A copy of the letter can be downloaded here. In 2025, the Conestoga Micro Cap Composite met its purpose of preserving capital during negative market returns and capturing upside during strong market returns. Micro Caps faced significant volatility in 2025. During the course of events, Conestoga Micro Cap Composite returned -1.91% net of fees in the fourth quarter and 16.24% net of fees for the full year 2025, trailing the Russell Microcap Growth Index’s 2.14% and 21.84% gains in the fourth quarter and full year, respectively. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted I3 Verticals, Inc. (NASDAQ:IIIV). I3 Verticals, Inc. (NASDAQ:IIIV) is an enterprise software and services solutions provider to public sector entities. On February 19, 2026, I3 Verticals, Inc. (NASDAQ:IIIV) stock closed at $21.68 per share. One-month return of I3 Verticals, Inc. (NASDAQ:IIIV) was -10.78%, and its shares declined 21.76% over the past 52 weeks. I3 Verticals, Inc. (NASDAQ:IIIV) has a market capitalization of $671.89 million.
Conestoga Capital Advisors stated the following regarding I3 Verticals, Inc. (NASDAQ:IIIV) in its fourth quarter 2025 investor letter:
“I3 Verticals, Inc. (NASDAQ:IIIV) delivers integrated software and payment solutions to the public sector and healthcare markets. The stock faced pressure during the quarter after management issued a conservative growth forecast for fiscal 2026. The company cited timing delays in project implementations within its utilities and transportation verticals as a primary factor. While the near-term outlook disappointed the market, we believe IIIV remains well-positioned to drive recurring revenue growth through its software-led strategy over the multi-year horizon.”
I3 Verticals, Inc. (NASDAQ:IIIV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 12 hedge fund portfolios held I3 Verticals, Inc. (NASDAQ:IIIV) at the end of the third quarter, up from 11 in the previous quarter. In the fourth quarter of 2025, I3 Verticals, Inc.’s (NASDAQ:IIIV) revenue grew just 1% compared to the same quarter last year, while recurring revenue increased over 8% year-over-year. While we acknowledge the risk and potential of I3 Verticals, Inc. (NASDAQ:IIIV) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than I3 Verticals, Inc. (NASDAQ:IIIV) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered I3 Verticals, Inc. (NASDAQ:IIIV) and shared a list of small-cap tech stocks on Wall Street’s radar. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
