Core Insights - Vertex, Inc. reported double-digit revenue growth and significant profitability improvements in 2025, while also investing in future growth opportunities [2] - The company maintained its position as a leading provider of indirect tax solutions and experienced strong growth in its e-invoicing business [2] - Upcoming e-invoicing mandates in France and Germany are expected to provide growth tailwinds for Vertex [2] Financial Performance - Total revenues for Q4 2025 were $194.7 million, representing a 9.1% increase year-over-year [5] - Software subscription revenues reached $166.2 million, up 8.9% year-over-year, while cloud revenues grew by 23.0% to $94.6 million [5] - Annual Recurring Revenue (ARR) was $671.0 million, an increase of 11.3% year-over-year [5] - The company reported a net loss of $7.0 million for Q4 2025, a significant improvement from a net loss of $67.8 million in the same period the previous year [5] Profitability Metrics - Non-GAAP operating income for Q4 2025 was $36.1 million, compared to $32.5 million for the same period in the prior year [5] - Adjusted EBITDA for Q4 2025 was $42.5 million, with an adjusted EBITDA margin of 21.8%, slightly up from 21.3% year-over-year [5] - For the full year 2025, Vertex reported a net income of $7.2 million, a turnaround from a net loss of $52.7 million in 2024 [5] Customer Metrics - The average annual revenue per direct customer (AARPC) increased to $137,867 as of December 31, 2025, compared to $122,706 a year earlier [5] - Net Revenue Retention (NRR) was 105%, down from 109% at the end of 2024, while Gross Revenue Retention (GRR) was 94% [5] Cash Flow and Shareholder Returns - Cash provided by operating activities was $165.5 million, slightly up from $164.8 million in the previous year [5] - Free cash flow for 2025 was $47.6 million, down from $77.7 million in 2024 [5] - The company repurchased approximately $10 million of shares in Q4 2025 under its $150 million buyback authorization [6]

Market Overview - Mid cap equities showed flat to slightly positive performance in Q4, with the Russell Midcap Index returning 0.16% [2] - Market dynamics were influenced more by investor sentiment and positioning rather than macroeconomic factors, leading to uneven earnings reactions [2] - Mid cap equities lagged behind both small and large caps for the year, despite improvements in fundamentals for many mid cap businesses [3] Performance Analysis - The ClearBridge Mid Cap Strategy underperformed its benchmark due to broad market headwinds and uneven earnings reactions, despite solid execution in the portfolio [4] - Information technology and real estate sectors were significant detractors, while consumer discretionary holdings provided some positive contributions [4][5] Sector-Specific Insights - The IT sector faced challenges as investor sentiment weakened towards software businesses, impacting companies like Teledyne Technologies and Bentley Systems [5] - Real estate was pressured by Alexandria Real Estate Equities due to a slowdown in biopharma research spending, leading to a decline in leasing demand [6] - Consumer discretionary sector saw positive performance from companies like Light & Wonder and Expedia, which benefited from improved execution and market conditions [7] Portfolio Positioning - The company reallocated capital towards businesses with durable fundamentals and recurring revenue profiles, while exiting positions with unfavorable risk-reward profiles [9] - New positions were initiated in Casella Waste Systems and Tyler Technologies, focusing on companies with strong recurring revenue models [10] - Exited positions included Corpay and DraftKings due to emerging competitive uncertainties [11] Future Outlook - The environment for mid cap equities is expected to improve, with signs of easing market imbalances and potential for reaccelerated business investment [13][14] - A normalization of capital allocation could benefit mid cap companies with strong cash flows and attractive valuations [14] - The company is focusing on bottom-up stock selection and balanced portfolio construction to navigate the evolving opportunity set [15] Portfolio Highlights - The ClearBridge Mid Cap Strategy underperformed the Russell Midcap Index, with contributions primarily from consumer discretionary and health care sectors [16] - Stock selection in various sectors, including IT and real estate, detracted from performance, while consumer discretionary sector selection provided some benefits [17] - Notable individual stock performance included detractors like Alexandria Real Estate Equities and contributors like Light & Wonder and Expedia [18]

Core Viewpoint - Microsoft (MSFT) stock appears attractive following a recent decline attributed to a broader sell-off in the software sector, particularly influenced by developments in AI [1] Group 1: Company Analysis - The decline in Microsoft stock is part of a larger trend affecting nearly all software stocks [1] - The investment strategy focuses on GARP (growth at a reasonable price) while remaining open to other opportunities [1] - The investment approach is flexible, with no specified time horizon, allowing for adjustments based on the validity of the investment thesis [1] Group 2: Market Insights - The author has developed market-beating algorithms using Python to identify attractive investment opportunities [1] - Experience in analysis and news writing has provided insights into market trends and investor interests [1] - There is a noted prevalence of misinformation in the market, emphasizing the need for accurate information [1]

Economic Data - U.S. retail sales were unchanged month-over-month in December, weaker than expectations of +0.4% [2] - Core retail sales, excluding motor vehicles and parts, were also unchanged month-over-month, below the expected +0.3% [2] - The U.S. Q4 employment cost index rose +0.7% quarter-over-quarter, weaker than the anticipated +0.8% [2] - The U.S. import price index increased by +0.1% month-over-month in December, in line with expectations [2] Labor Market - Nonfarm payrolls expanded by 130,000 in January, significantly exceeding the anticipated 55,000 [4] - The unemployment rate fell to 4.3%, lower than the expected 4.4% [4] Stock Market Performance - Wall Street's major indexes closed mixed, with S&P Global (SPGI) dropping over -9% after weaker-than-expected Q4 adjusted EPS [3] - AI-infrastructure stocks like Western Digital (WDC) and Seagate Technology Holdings (STX) also retreated, with declines of over -8% and -6% respectively [3] - Datadog (DDOG) surged more than +13% after reporting stronger-than-expected Q4 results [3] Earnings Reports - Companies in the S&P 500 are expected to post an average +8.4% increase in quarterly earnings for Q4 compared to the previous year [8] - Prominent companies such as Cisco Systems (CSCO), McDonald's (MCD), and T-Mobile US (TMUS) are set to release their quarterly results [8] International Market Trends - The Euro Stoxx 50 Index is down -0.34% due to concerns over AI disruption, particularly affecting technology stocks [9] - Italy's December Industrial Production fell -0.4% month-over-month, stronger than expectations of -0.6% [11] - China's consumer inflation eased in January, with food prices declining 0.7% year-over-year [12]

Market Overview - U.S. stock futures are indicating a positive open, with S&P 500 futures up approximately 0.1% to 0.2%, Nasdaq 100 futures advancing between 0.1% and 0.35%, and Dow Jones Industrial Average futures increasing by 0.1% to 0.26% [2][3] - The Dow Jones Industrial Average (DJIA) closed at a record high of 50,135.87 points, marking its third consecutive record close, while the S&P 500 (SPX) and Nasdaq Composite (IXIC) experienced slight declines [2][4] Economic Indicators - The upcoming January Employment Situation Report is highly anticipated, with economists forecasting job growth of 55,000 to 67,000 new jobs, a decrease from the average monthly increase in 2024 [5] - Average hourly earnings are projected to rise by 3.6% year-over-year, down from 3.8% in December, indicating a potential moderation in wage growth [5] Corporate Earnings - Several prominent companies are set to report earnings, including McDonald's Corporation (MCD), T-Mobile US Inc. (TMUS), and Shopify Inc. (SHOP), which is expected to report strong results due to its position in the "AI commerce wars" [7][12] - Cloudflare Inc. (NET) saw a significant jump of 15.23% in premarket trading after reporting stronger-than-expected fourth-quarter results [12] - Shopify Inc. (SHOP) experienced a notable surge of 7.5% on Tuesday, fueled by an analyst upgrade and increased price target [12] - Coca-Cola Company (KO) shares dropped 3.8% after its fourth-quarter revenues fell short of estimates [12] - Spotify Technology S.A. (SPOT) soared 10% on Tuesday, driven by a first-quarter earnings forecast that exceeded expectations [12] Sector Performance - The technology sector is facing pressure due to concerns about the disruptive potential of artificial intelligence, impacting stocks like those in the Nasdaq Composite [4] - Under Armour Inc. (UAA) shares fell 5.7% after a downgrade from Citi, citing pressures on its North America turnaround [12] - DuPont de Nemours Inc. (DD) gained 2% after forecasting full-year adjusted profit above expectations [12]

Core Insights - A significant selloff in software stocks is hindering deal-making and IPOs in the sector, as volatility leads to unreliable valuations and cautious buyers [1][2] - The S&P 500 software and services index has experienced its worst three-month performance since May 2002, with software stocks down approximately 25% from their peak on October 28, while the S&P 500 index itself is up 1% [1][2] - The decline in software share prices has made it difficult for buyers and sellers to agree on valuations, with sellers reluctant to transact at low levels and buyers fearing overpayment for assets that may further decline in value [2][3] Market Dynamics - Anxiety surrounding artificial intelligence's impact on software business models is contributing to market volatility, with investors trading based on fear rather than a detailed analysis of company fundamentals [4] - The repricing of software companies is evident in recent deals, such as Brex, which was valued at over $12 billion during a funding round but sold for approximately $5.15 billion [5] - OneStream went public at a valuation near $6 billion but was taken private for about $6.4 billion, indicating limited gains for investors [6] Deal-Making Challenges - The volatility in the market complicates price negotiations, making it more challenging for dealmakers to reach agreements [7]

Group 1 - State Bank of India (SBI) has become the fourth-most valued company in India by market capitalization, surpassing Tata Consultancy Services (TCS) [1] - SBI's shares increased by 3.4% to a record high of ₹1,183, resulting in a market capitalization of ₹10.92 trillion [1] - TCS shares have decreased by 36% from their peak of ₹4,552, closing at ₹2,909, which values the company at ₹10.5 trillion [1] - The top three most valued companies in India are Reliance Industries (₹19.87 trillion), HDFC Bank (₹14.26 trillion), and Bharti Airtel (₹11.5 trillion) [1] Group 2 - Bharat Heavy Electricals' (BHEL) offer for sale (OFS) was oversubscribed, with demand for 220.8 million shares against 174 million shares available [2] - The floor price for the OFS was set at ₹254 per share, with most bids at ₹256 [2] - BHEL's shares fell by 5.6% in secondary market trading, closing at ₹260.7 [2] - The Government of India is selling a 5% stake in BHEL, which is expected to generate over ₹4,400 crore for the exchequer [2] - Citibank, ICICI Securities, and Nuvama are the investment banks managing the transaction [2]

Volkswagen's EV Production Strategy - Volkswagen is considering shifting the production of the Cupra Tavascan successor to Europe from China, indicating a potential strategic realignment in its electric vehicle manufacturing [2][9] - The current Cupra Tavascan is produced in China for export to Europe, and this move suggests a re-evaluation of global supply chains amidst changing geopolitical and trade conditions [2][3] Icertis Sale Consideration - SoftBank-backed Icertis is reportedly exploring a sale that could value the company at $5 billion, reflecting significant activity in the technology sector [6][9] - Icertis has reported over $300 million in annual recurring revenue for 2024 and has generated positive free cash flow, indicating strong financial performance [7] China-EU Trade Relations - China has threatened to implement countermeasures against the European Union if new duties are adopted, which may include anti-dumping duties on French wine, amid escalating trade tensions [8][9] - China's auto sales experienced a 19.5% year-on-year decline in January, falling to 1.4 million vehicles, attributed to policy adjustments and reduced government support for electric vehicles [10][9] UK Economic Strategy - The Chief Finance Minister of the UK is advocating for closer integration with the EU as the best pathway for economic growth, prioritizing this over ties with the U.S. and China [11][9] - Research suggests that aligning regulations with the EU could boost the UK's GDP by 1.7% to 2.2%, potentially mitigating the economic impact of Brexit [12]

Core Insights - The article does not provide specific insights or analysis regarding any companies or industries, focusing instead on disclosures and disclaimers related to the author's position and compensation [1][2] Group 1 - There is no stock, option, or similar derivative position held by the author in any of the companies mentioned [1] - The author expresses personal opinions and is not receiving compensation for the article, aside from Seeking Alpha [1] - The article emphasizes that past performance is not indicative of future results and does not provide investment recommendations [2]

Core Insights - The role of collaborative management software in China has fundamentally transformed from an auxiliary tool for enhancing internal administrative efficiency to a core operational platform that supports and drives intelligent transformation and business innovation in modern organizations [1][11][24] - The market size of China's collaborative management software industry is projected to reach approximately 10.233 billion yuan in 2024, representing a year-on-year growth of 17.58% [11][24] Industry Overview - Collaborative management software (CMS) is centered around people and utilizes information technology to integrate previously isolated resources within organizations, such as personnel, finances, materials, processes, documents, and customers, to achieve information sharing, event collaboration, plan execution, and decision support [2][16] - The software aims to enhance organizational collaboration efficiency, standardize organizational behavior, and help achieve overall strategic goals [2][16] Software Classification - Collaborative management software is categorized into three main types: - Collaborative tool software focuses on basic communication and collaboration, exemplified by products like DingTalk, WeChat Work, and Feishu, suitable for team communication and remote work [3][17] - Collaborative platform software serves as the underlying architecture for application development and integration, such as Zhiyuan V5 and Fanwei e-weaver, supporting low-code development and cross-system integration [3][17] - Collaborative application software targets specific business scenarios, including Zhiyuan A8-m and Yonyou YonSuite, optimizing business processes and enhancing operational efficiency [3][17] Industry Development History - The development of China's collaborative management software industry has evolved from personal office automation to internal organizational communication and collaboration, and further to business process optimization and knowledge management [5][17] - Each generation of collaborative management software has expanded and optimized based on the previous one, aligning more closely with actual enterprise needs [5][17] Industry Value Chain - The upstream of the collaborative management software industry chain includes servers, chips, network devices, storage devices, operating systems, databases, development frameworks, AI/large models, and low-code platforms [7][20] - The midstream involves the research and development and service segments of collaborative management software [7][20] - The downstream applications are primarily in government agencies, education, healthcare, finance, and manufacturing sectors [7][20] Market Trends - With the investment in industrial internet platforms, digital twins, and AI software solutions, the value chain of intelligent manufacturing is extending from production to upstream research and design and downstream supply chain collaboration and intelligent services [9][22] - Collaborative management software is evolving from a traditional office auxiliary tool to a core enabler and value multiplier for driving intelligent manufacturing [9][22]