Group 1 - Laughing Water Capital reported a return of approximately 6.8% in Q4 2025, with full-year returns at around 3.9% net of fees and expenses, outperforming the SP500TR and R2000 indexes in the previous year [1] - The cumulative returns since inception for Laughing Water Capital are about 400%, compared to approximately 332% for the SP500TR and around 175% for the R2000 benchmark [1] - The firm highlighted its exit from Thryv Holdings, Inc. (NASDAQ:THRY), which had a significant decline in value, losing 66.05% over the last 52 weeks [2][3] Group 2 - Thryv Holdings, Inc. is a provider of digital marketing solutions and cloud-based tools for small-to-medium-sized businesses, with a market capitalization of approximately $235.499 million [2] - The investment thesis for Thryv included its declining Yellow Pages business and a fast-growing small business software segment, which was believed to have a competitive advantage due to its existing customer base [3] - Despite initial optimism, Thryv was identified as a significant detractor for Laughing Water Capital in 2025, leading to the decision to exit the position [3]

Performance Overview - Laughing Water Capital ("LWC") achieved a return of approximately 6.8% in Q4, resulting in a full-year return of about 3.9% after fees and expenses, compared to the SP500TR and R2000 which returned approximately 2.7% and 2.2% respectively in the same quarter [3] - Since inception, LWC's cumulative return is approximately 400%, outperforming the SP500TR's ~332% and the R2000's ~175% [4] Investment Philosophy - The company emphasizes investing in off-the-beaten-path businesses led by capable management, particularly during periods of uncertainty, believing this approach can yield outsized returns over time [6][8] - Despite the current market enthusiasm for sectors like artificial intelligence and technology, the company remains focused on fundamental business performance rather than market trends [7][8] Market Dynamics - Recent market trends have favored larger, growth-oriented companies, with a significant outperformance of large-cap stocks over small-cap stocks [10][15] - The SP500 has outperformed the equal-weight SP500 by 34% over the past three years, indicating a strong preference for larger companies [15] Specific Investments - Lifecore Biomedical is highlighted as a key investment, with expectations of significant growth due to its competitive advantages and increasing capacity utilization [13][14] - Liquidia Corp has seen early sales success with its drug Yutrephia, which has outperformed expectations, despite ongoing patent litigation with United Therapeutics [30][31] - NextNav Inc is positioned as a potential leader in providing a terrestrial backup to GPS, with bipartisan support for its proposal to repurpose spectrum for 5G use [36][39] Future Outlook - The company anticipates continued improvement in the fundamental performance of its investments, suggesting that over time, market recognition of these fundamentals will lead to better stock performance [62] - Management remains optimistic about the potential for significant upside in investments like Lifecore and Liquidia, while also acknowledging the challenges posed by market sentiment and timing [29][33]

Group 1 - William Blair analyst Arjun Bhatia downgraded Thryv Holdings (THRY) to Market Perform from Outperform without a price target [1] - The downgrade is attributed to "challenging growth dynamics" in the company's software-as-a-service business that emerged last quarter [1] - Thryv is entering a transition period for the next several quarters as it builds its self-serve customer acquisition motion [1] Group 2 - Limited near-term visibility into the company's growth dynamics is now observed by the analyst [1]

Market Overview - U.S. stocks showed mixed performance with the Dow Jones index gaining over 100 points, up 0.28% to 47,763.34, while NASDAQ fell 1.02% to 23,714.33 and S&P 500 dropped 0.45% to 6,859.64 [1] - Financial shares increased by 1%, while consumer discretionary stocks decreased by 1.3% [1] Company Performance - Microsoft Corp. reported first-quarter revenue of $77.7 billion, an 18% year-over-year increase, surpassing the consensus estimate of $75.3 billion. Quarterly earnings per share were $4.13, exceeding the estimate of $3.67 [2] - Microsoft anticipates second-quarter sales between $79.50 billion and $80.60 billion, slightly above market estimates of $79.95 billion [3] Commodity Market - Oil prices decreased by 0.7% to $60.05, while gold prices increased by 0.6% to $4,026.10. Silver rose by 1.3% to $48.525, but copper fell by 2.7% to $5.1235 [6] Notable Stock Movements - Guardant Health, Inc. shares surged 29% to $93.31 after reporting better-than-expected third-quarter results and raising FY25 sales guidance [9] - Cambium Networks Corporation shares jumped 107% to $6.11 following the integration of its network solution with Starlink services [9] - CPI Aerostructures, Inc. shares rose 51% to $3.5656 after receiving an order from Raytheon [9] - Thryv Holdings, Inc. shares dropped 21% to $9.30 due to weak quarterly earnings [9] - Sprouts Farmers Market, Inc. shares fell 26% to $77.80 after reporting disappointing third-quarter sales and issuing lower fourth-quarter EPS guidance [9] - FMC Corporation shares plummeted 44% to $16.34 after lowering FY2025 earnings and sales guidance [9] International Markets - European shares declined, with the eurozone's STOXX 600 down 0.40% and Spain's IBEX 35 Index falling 1.16% [7] - Asian markets closed mostly lower, with Japan's Nikkei 225 gaining slightly by 0.04%, while Hong Kong's Hang Seng fell 0.24%, China's Shanghai Composite dipped 0.73%, and India's BSE Sensex declined 0.70% [10]

Core Insights - Laughing Water Capital reported a decline of approximately -1% in Q3 2025, resulting in year-to-date returns of approximately -2.7%, while the SP500TR and R2000 indices returned 12.4% and 8.1% respectively for the quarter [1] - The fund highlighted Thryv Holdings, Inc. (NASDAQ:THRY) as a key stock, which has experienced a one-month return of -1.02% and a 52-week loss of 18.64%, closing at $11.70 per share with a market capitalization of $514.055 million [2] Company Analysis - Thryv Holdings, Inc. is positioned as a software provider for small and medium businesses, with a thesis suggesting that its declining business has been overshadowing growth in its software segment [3] - The company operates in a market with millions of small businesses in the U.S. that are transitioning from traditional methods to software solutions, driven by a new generation of business owners [3] - Thryv's SaaS business demonstrates strong metrics, including 25% organic year-over-year revenue growth and a 20% adjusted EBITDA margin, with a net revenue retention rate of approximately 100% [3] - The company has been actively paying down debt, allowing for greater flexibility in capital allocation moving forward [3] - Insider buying activity indicates confidence in the company's future, with four insiders purchasing shares in the open market this year, alongside a recent guidance raise [3]

Core Insights - Waystar Holding (WAY) reported quarterly earnings of $0.37 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and showing a significant increase from $0.14 per share a year ago, representing an earnings surprise of +8.82% [1] - The company achieved revenues of $268.65 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 4.73% and increasing from $240.11 million year-over-year [2] - Waystar has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The future performance of Waystar's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.35 on revenues of $256.63 million, while for the current fiscal year, the estimate is $1.39 on revenues of $1.04 billion [7] Industry Context - The Internet - Software industry, to which Waystar belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Core Viewpoint - Docusign, Inc. (DOCU) has shown strong performance over the past year, with a 31.6% increase in share price, significantly outperforming its industry and the Zacks S&P 500 Composite [1][4]. Group 1: Performance Analysis - DOCU shares have gained 5.7% in the last six months, while the industry and Thryv Holdings have seen declines of 5.4% and 33.3%, respectively [4]. - The stock closed at $76.39, down 41.2% from its 52-week high of $107.86 [4]. - DOCU's trailing 12-month return on equity (ROE) is 42.2%, surpassing the industry average of 31.7% [10]. Group 2: Product Development - Docusign launched Intelligent Agreement Management (IAM), an AI-powered platform aimed at enhancing agreement management, which has shown a high adoption rate [6][7]. - IAM contributed over 20% of direct sales in Q4 of fiscal 2025 and is expected to generate a low-double-digit percentage of recurring subscription revenue by Q4 of fiscal 2026 [7][8]. - The company added 56 customers with annual contract value (ACV) exceeding $300,000 in Q4 of fiscal 2025, indicating a rebound in enterprise expansion [9]. Group 3: Financial Outlook - The Zacks Consensus Estimate for Docusign's fiscal 2026 revenues is $3.1 billion, reflecting a 5.3% year-over-year growth [12]. - Despite strong top-line prospects, the bottom-line outlook appears weak, with potential challenges in IAM monetization and a concerning liquidity position [16]. Group 4: Liquidity Concerns - Docusign's current ratio is 0.81, below the industry average of 2.54, indicating a troubling liquidity position [14]. - The current ratio has declined from 0.83 in the previous quarter and 0.94 in the year-ago quarter, primarily due to increased short-term debt [14].