Vertex (VERX) was Down 30% in Q3. Here’s Why

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 2.26% (gross) and 2.01% (net), compared to the Russell 2000 Growth Index’s 12.19% return. During the quarter, all asset classes except fixed income outside the U.S. posted positive returns. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, TimesSquare Capital U.S. Small Cap Growth Strategy highlighted stocks such as Vertex, Inc. (NASDAQ:VERX). Vertex, Inc. (NASDAQ:VERX) offers enterprise tax technology solutions for retail trade, wholesale trade, and manufacturing industries. The one-month return of Vertex, Inc. (NASDAQ:VERX) was -0.31%, and its shares lost 62.60% of their value over the last 52 weeks. On January 5, 2026, Vertex, Inc. (NASDAQ:VERX) stock closed at $19.56 per share, with a market capitalization of $3.12 billion.

TimesSquare Capital U.S. Small Cap Growth Strategy stated the following regarding Vertex, Inc. (NASDAQ:VERX) in its third quarter 2025 investor letter:

“Among the wide variety of Information Technology companies, we prefer critical system providers, specialized component designers, systems that improve productivity or efficiency for their clients, and others that are growing their shares of corporate IT budgets. Recently, short-term market sentiment penalized the secular growth area of software in favor of either cyclical semiconductors or anything related to the future possibility of quantum computing. In this environment, our general preference for application software companies showing steady demand became a headwind to our relative performance. An example of that was Vertex, Inc. (NASDAQ:VERX), which provides end-to-end tax compliance software for large businesses. Vertex reported earnings that were slightly lower than expected because some of its enterprise contracts took longer to complete as some clients delayed signing with concerns about the macroeconomic environment. The elongated sales cycle pushed some revenues into later periods, though Vertex’s two-year targets remain intact. Still, Vertex’s shares were down -30% this quarter.”

In another article, we covered Vertex, Inc. (NASDAQ:VERX) and shared the list of best beaten down stocks to invest in according to analysts. In addition, please check out our hedge fund investor letters Q3 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.