Dear Subscribers,

We have executed a strategic transaction within the portfolio, initiating a new, tactical position in The Descartes Systems Group Inc. (DSGX).

Descartes fits our framework almost perfectly: it is an entrenched, mission-critical network utility operating at the very center of global trade infrastructure.

Business Overview

Descartes operates the Global Logistics Network (GLN), a proprietary, multi-sided software platform that acts as the connective tissue for international commerce. Handling over 24 billion electronic messages annually, the GLN automates the inter-enterprise exchange of information, such as shipping bookings, customs manifests, bills of lading, and real-time telematics, among thousands of manufacturers, ocean liners, air cargo carriers, trucking fleets, and logistics service providers.

Much like our positions in Broadridge, Mastercard, or Verisk, Descartes functions as an essential operational utility. It does not manage internal enterprise software; it powers the external flow of mission-critical data between completely disparate corporate entities.

Why We Own It

Descartes exhibits the exact high-barrier economic moat, exceptional capital efficiency, and recurring compounding power that define our investment universe:

• Multi-Sided Network Moat: The GLN is defended by a classic, highly entrenched two-sided network effect built on a hub-and-spoke model. When a major retail hub (such as Amazon or a global manufacturer) integrates into Descartes, its thousands of logistics spokes (carriers, brokers, and suppliers) are required to join the network as well. Once connected to Descartes’ standardized database, participants can instantly discover and exchange data with over 300,000 pre-certified trading partners without building custom, expensive point-to-point IT integrations. Every new participant makes the network exponentially more valuable to all others.

• Extreme Customer Dependence and High Switching Costs: Descartes sits directly inside the synchronous runtime operations of its clients. If a freight forwarder or customs broker loses connection to the GLN, cargo cannot be booked, labels cannot be printed, and shipments cannot clear government ports. Furthermore, because Descartes automates mandatory regulatory security filings across more than 100 sovereign jurisdictions, a software disruption would literally ground cargo planes and idle container ships. Unlinking an enterprise ERP from Descartes to re-map connections to hundreds of individual carrier systems carries prohibitive operational risk and downtime, resulting in exceptionally high customer retention.

• Macro-Exposed, Cycle-Resilient Economics: Nearly 93% of Descartes’ revenue is generated via recurring services—a blend of high-margin SaaS subscriptions and transaction-based network fees. While a decline in global trade volume can temporarily impact message fees, trade volatility, geopolitical friction, and shifting tariff regimes actually act as structural tailwinds. When supply chains break, or security rules shift, global shippers scramble to Descartes’ Global Trade Intelligence suite to reroute inventory and maintain legal compliance.

• Disciplined Capital Allocation and Asset-Light Compounding: Descartes is a textbook programmatic acquirer, echoing the disciplined capital allocation framework of Constellation Software. The company’s got virtually no debt and a high FCF conversion rate, so management uses this cash to fund strategic acquisitions that give a mid-teens multiple. This means they can expand their software coverage while keeping their ROIC well above their cost of capital.

Portfolio Fit & Construction

Descartes is a natural extension of our overarching portfolio strategy. We do not simply own “quality tech”; we intentionally own companies that hold a structural monopoly over critical market infrastructure:

• Payments & Securities Processing: Mastercard, Visa, Broadridge

• Data & Decision Infrastructure: S&P Global, FICO, Verisk, Equifax

• Salvage & Vertical Software Infrastructure: Copart, Constellation Software

• Supply Chain & Logistics Infrastructure: Descartes Systems Group

By initiating Descartes as a developing position rather than an immediate core weight, we allow ourselves the flexibility to evaluate its M&A integration cadence over time while still participating in its structural compounding. Adding Descartes provides us with direct, high-margin exposure to the multi-decade digitization of global logistics and complex cross-border trade without requiring us to take directional bets on cyclical shipping rates or asset-heavy transportation fleets.

Risk Considerations

Every investment carries trade-offs that require continuous monitoring:

• M&A Execution and Integration Risk: Descartes’ growth model relies significantly on buying niche logistics tools and integrating them into the GLN core. While management’s track record is outstanding, integrating dozens of legacy platforms introduces technical debt risks and places a heavy tax on management bandwidth.

• Geopolitical and Trade Volatility: While regulatory complexity fuels Descartes’ compliance software sales, a prolonged, severe contraction in macro global trade volumes would create transactional revenue drag across its messaging and tracking modules.

Conclusion

Descartes answers “yes” to every single test in our investment framework: Is it mission-critical? Does it become more valuable with scale? Are switching costs prohibitive? Can it compound capital for decades? And would we be comfortable owning it through a severe market drawdown?

Descartes provides the digital nervous system for global trade. Initiating a position in this asset ensures our capital remains deployed in high-margin, debt-free, entrenched incumbents that benefit from real-world complexity and trade automation.

Sincerely,

Stiliyan Loukanov - Founder & CIO, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

What stands out most is that the underlying investment theses remain intact. Rather than chasing short-term gains, these companies continue to strengthen their competitive advantages - whether through AI-enabled products, deeper customer integration, network effects, or expanding mission-critical data assets. The market may focus on quarterly beats and misses, but we believe the more important story is that these businesses are extending their moats while continuing to compound intrinsic value.

Below is a summary of the earnings reports released so far. The remaining portfolio companies will be added as they report over the coming weeks.

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MA (July 30, 2026):

Key Financial Highlights

• Net Revenue Growth: Increased by 12% year-over-year on a non-GAAP, currency-neutral basis.

• Adjusted Net Income: Rose by 16% year-over-year.

• Value-Added Services: Net revenue grew by 18%.

• EPS: Reported at $5.04, up 19%.

• Capital Allocation: Repurchased $4.9 billion in stock during the quarter.

Key Takeaways

• Strategic Network Flexibility: Mastercard is evolving its network architecture to capture incremental volume, exemplified by its partnership with the Central Bank of the UAE to provide switching technology for the domestic “Jaywan” scheme. These transactions are incremental to the company’s global switch volume.

• Agentic Commerce and Machine-to-Machine Payments: The company is positioning itself as a first-mover in “agentic commerce”, launching “Mastercard Agent Pay for Machines” to facilitate high-velocity, low-value payments between AI agents. This initiative is supported by over 30 industry leaders, including Adyen and Coinbase.

• Security and AI Integration: Mastercard is aggressively scaling its security suite, notably through the acquisition of Recorded Future. Its “Threat Intelligence” tool has identified over 7 million card testing transactions, preventing an estimated $172 million in fraud.

• Digital Assets and Interoperability: The company continues to integrate stablecoins and digital assets into its network, with crypto co-brand volume tripling over the last two years. The upcoming acquisition of BVNK is intended to serve as a “trusted interoperable layer” for digital asset commerce.

AMZN (July 30, 2026):

Key Financial Highlights

• Total Revenue: $200.6 billion, up 20% year-over-year.

• Operating Income: $27.5 billion, up 43% year-over-year.

• AWS Revenue: $42.2 billion, reflecting 36.7% growth.

• AWS Annualized Run Rate: $169 billion.

• Capital Expenditure: $53.1 billion in Q2, with a full-year 2026 forecast raised to $220 billion.

• Advertising Revenue: $19.8 billion, up 26% year-over-year

Key Takeaways

• AWS Growth Acceleration: AWS revenue growth accelerated for the fifth consecutive quarter, marking the fastest growth in 18 quarters. The backlog has reached $496 billion, growing at triple-digit rates.

• AI and Silicon Dominance: Amazon’s custom silicon business (Trainium and Graviton) and AI services have each reached an annual revenue run rate of over $25 billion. Management noted that growth in AI is actively pulling core cloud services along, as reinforcement learning and agentic tool use rely heavily on CPU-based infrastructure.

• Strategic Shift in AI Models: While Amazon continues to integrate third-party models into Bedrock, the company confirmed it is pursuing its own frontier model to gain better control over costs, prioritization, and speed.

• Retail Efficiency Gains: The company is seeing significant success with its “same-day” fulfillment network. In cities where same-day perishables are available, monthly active customers have grown over 50% since the start of the year, and orders average 3x more units per order.

• New Security Offering: Amazon launched AWS Continuum, a service that uses frontier models to discover, prioritize, and remediate code vulnerabilities, addressing a critical pain point for enterprise customers.

VRSK (July 29, 2026):

Key Financial Highlights

• Consolidated Revenue: $806 million, representing a 4% increase year-over-year.

• Adjusted EBITDA Margin: 57.5%, reflecting disciplined expense management and operational efficiency.

• Subscription Revenue Growth: 8% on an OCC basis, underscoring the resilience of the company’s core business model.

• Transactional Revenue: Declined 4.2% on an OCC basis, impacted by lower commercial property volumes and tough year-over-year comparisons.

• Diluted Adjusted EPS: $1.98 per share, a 5.3% increase driven by capital return activity

Key Takeaways

• AI-Driven Monetization: Verisk is successfully transitioning AI from experimentation to production. The company launched two Verisk MCP connectors for Anthropic’s Claude, becoming the first insurance data provider to do so. Adoption of XactAI has surged, with the number of users increasing nearly 10 times since March to reach almost 7,000 licensees.

• Strategic Innovation: The company launched Verisk Synergy Studio, a cloud-native platform for catastrophe modeling, alongside a re-engineered U.S. Tropical Cyclone Model. Additionally, Verisk acquired McKenzie Intelligence Services to bolster its geospatial intelligence and real-time event response capabilities.

• Market Dynamics: The insurance industry is experiencing improved profitability and lower catastrophe losses, with 2026 tracking to be the first year since 2020 with global catastrophe losses below $100 billion. This profitability has led to price competition across property lines, which Verisk is navigating by focusing on underwriting discipline and risk selection tools.

• Operational Leadership: The company announced the departure of CIO Nick Defond after two decades of service, with CTO Jeff Negrete stepping in as Interim CIO.

SPGI (July 28, 2026):

Key Financial Highlights

• Revenue Growth: 11% year-over-year on both reported and organic constant currency bases.

• EPS Growth: 23% increase in adjusted diluted EPS.

• Margin Expansion: 200 basis points of expansion to 54.3%.

• Capital Return: Increased 2026 share repurchase target by nearly $3 billion to over $7 billion.

• Ratings Performance: 17% revenue growth with a 68.5% operating margin.

• Indices Performance: 20% revenue growth, marking the 13th consecutive record quarter.

Key Takeaways

• Strategic Realignment: Following the July 1st spin-off of the Mobility division, S&P Global has consolidated its operations into four core divisions, with a specific focus on integrating supply chain assets into the Energy division and restructuring Market Intelligence to prioritize high-growth AI-ready data products.

• AI Monetization Momentum: The company is seeing rapid adoption of its AI solutions, with over 500 clients using Kensho LLM-ready APIs and MCP connectors. API call volume in the second quarter was more than five times the volume of the first quarter.

• Market Leadership: S&P Dow Jones Indices remains the world’s largest index provider by AUM, with ETF AUM reaching $6.35 trillion.

• M&A and Partnerships: The company announced the acquisition of datacenterHawk to bolster its energy and data center forecasting capabilities and a majority stake in Agusto & Co. to expand its credit rating footprint in Africa.

• Operational Efficiency: The Enterprise Data Organization (EDO) has achieved nearly 60% of its $100 million annualized cost savings target through AI-driven efficiencies.

CSU (Aug 11, 2026):

Key Financial Highlights

• …..

Key Takeaways

• …..

EFX (July 21, 2026):

Key Financial Highlights

• Revenue Growth: Reported revenue grew 11% (10% in constant currency), exceeding the April guidance midpoint by $5 million.

• Earnings Performance: Adjusted EPS reached $2.25, representing a 13% year-over-year increase and outperforming the April guidance midpoint by $0.05.

• Margin Expansion: EBITDA margins (excluding FICO) reached 35%, reflecting a 120 basis point improvement year-over-year.

• Capital Allocation: The company returned $366 million to shareholders in the quarter, including $300 million in share repurchases and $66 million in dividends.

Key Takeaways

• AI-Driven Productivity: Equifax doubled its AI-related productivity savings goal for 2026–2028 from $75 million to $150 million, citing rapid adoption of agentic AI across operations, technology, and support functions.

• Strategic M&A: The company signed a definitive agreement to acquire Círculo de Crédito in Mexico for $750 million. This acquisition is expected to be accretive in year one and provides access to a high-growth market with unique alternative data assets.

• Government Momentum: Equifax secured approximately $300 million in new and renewed state government contracts over the last four months, reinforcing the long-term growth potential of its $5 billion TAM in the government sector.

• VantageScore Adoption: Mortgage lender adoption of VantageScore is accelerating, with transaction volumes up nearly 3x sequentially in the second quarter as lenders seek to capture cost savings.

• Product Vitality: The company achieved a 16% Vitality Index in the second quarter, driven by the launch of 54 new products featuring embedded AI capabilities.

FICO (July 29, 2026):

Key Financial Highlights

• Total Revenue: $674 million, representing a 26% increase over the prior year.

• GAAP Net Income: $237 million, up 30% year-over-year.

• Non-GAAP Earnings: $12.18 per share, a 42% increase from the prior year.

• Free Cash Flow: $370 million for the quarter, contributing to $961 million over the last four quarters.

• Scores Segment Revenue: $459 million, up 41% versus the prior year.

• Software Platform ARR: $413 million, reflecting 62% growth year-over-year.

Key Takeaways

• Predictive Superiority: Independent analysis by Milliman confirmed that FICO Score 10T outperforms VantageScore 4.0 across all three key statistical measures of predictiveness, providing a 10% advantage for first-time homebuyers.

• Strategic Partnerships: FICO expanded its collaboration with Accenture to accelerate the adoption of the FICO Platform, pairing FICO’s AI decisioning technology with Accenture’s operational expertise.

• Market Gaming Dynamics: Management acknowledged that the “Lender Choice” policy has created a “gaming” environment where lenders pull both FICO and VantageScore scores to identify which provides a more favorable outcome for consumers, though FICO reports no significant loss in overall volume.

• Platform Milestone: For the first time in company history, Platform ARR has surpassed non-platform ARR, validating the long-term shift toward cloud-based, AI-driven decisioning solutions.

• UltraFICO Launch: The company achieved general availability for the next-generation UltraFICO Score, which integrates consumer-permissioned cash flow data from Plaid to improve credit risk assessment for subprime and near-prime populations.

BR (Aug 4, 2026):

Key Financial Highlights

• Revenue Growth: 8% constant currency recurring revenue growth for the full year.

• Earnings Performance: Adjusted EPS grew 12% to $9.60.

• Sales Momentum: Record $158 million in closed sales during Q4.

• Capital Returns: Returned over $1 billion to shareholders via dividends and a record $600 million in buybacks.

• Dividend Increase: Board approved a 12% increase in the annual dividend.

• Free Cash Flow: Generated $1.2 billion in free cash flow, representing 110% of adjusted earnings.

Key Takeaways

• Strategic Focus on Tokenization: BR is positioning itself as a primary infrastructure provider for tokenized assets. The company’s Distributed Ledger Repo (DLR) platform now processes $360 billion in daily volume, and the firm is launching DLX, a multi-asset platform to unify traditional and digital asset servicing.

• Agentic AI Integration: The company is actively deploying agentic AI to drive operational efficiency, targeting $25 million in productivity gains for FY2027. This technology is being integrated into core offerings such as BondGPT and trading algorithms to reduce clients' operational costs by up to 30%.

• Governance Innovation: BR completed its first proxy season using an AI-powered custom policy engine, covering over $800 billion in U.S. AUM. The firm is also expanding its “Voting Choice” capability, which now supports over 900 funds and $8 trillion in AUM.

• Regulatory Catalyst: The SEC’s E-Delivery rule proposal is viewed as a significant long-term opportunity. While it may reduce pass-through distribution revenues, management expects it to catalyze demand for digital-first communication solutions such as the Wealth InFocus platform.

CPRT (Sep 3, 2026):

Key Financial Highlights

• …..

Key Takeaways

• …..

V (July 28, 2026):

Key Financial Highlights

• Net Revenue: $11.6 billion, up 14% year-over-year.

• EPS Growth: 11% year-over-year.

• Payments Volume: 10% growth in constant $.

• Processed Transactions: 10% growth to $72 billion.

• Value-Added Services Revenue: 34% growth in constant dollars.

• Commercial and Money Movement Revenue: 17% growth year-over-year.

Key Takeaways

• Agentic AI Transformation: Visa is aggressively shifting its product development lifecycle by deploying “agentic squads” of two to four people, resulting in 65% faster feature development. The company has integrated AI into over 150 applications.

• Stablecoin Strategy: Visa launched the Visa Stablecoin Platform to facilitate minting and management, and joined the Open Standard to support the issuance of OpenUSD for global money movement.

• Strategic Partnerships: The company extended its global partnership with FIFA and formed a new partnership with OpenAI to secure Visa payments within agentic commerce.

• Operational Efficiency: Visa announced workforce reductions, primarily within technology and product teams, to reallocate resources toward high-growth opportunities.

• Client Engagement: Visa maintained a Net Promoter Score of 76 for the third consecutive year, reflecting strong trust and brand reliability among fintechs and sellers.

Thanks for reading!

Stiliyan Loukanov - Founder and CIO, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

Dear Subscribers,

We have executed a strategic portfolio reallocation, completely exiting our position in Duolingo (DUOL) to immediately and fully deploy the capital into Copart (CPRT). This “quality-for-quality” swap reflects a deliberate decision to maximize the structural coherence of our investment philosophy, prioritizing mission-critical ecosystem infrastructure over standalone product excellence.

This is not a reflection of a deteriorating thesis in Duolingo, which remains a phenomenal, rapidly growing business with an excellent product. Instead, it is a choice about the exact type of asset we want to own for the next 10 to 20 years.

To an outside viewer, our frequent portfolio updates over recent months might look like overactivity or short-term churning. However, every single one of these adjustments was made only after rigorous, deep-dive examination of our holdings and their alignment with our investment philosophy. With each of these recent moves, we have not been chasing trends; rather, we have deliberately aligned our portfolio more closely to our core philosophy and strict investment principles.

Business Overview

When looking across our portfolio, a clear and deliberate pattern emerges. We do not simply seek out “high quality”; we intentionally own companies that control the critical infrastructure of their respective ecosystems.

• Mastercard & Visa: Global payments infrastructure

• S&P Global & FICO: Capital markets data, ratings, and credit decision infrastructure

• Verisk & Equifax: Insurance and consumer credit data infrastructure

• Broadridge: Securities processing backbone

• Constellation Software: Essential vertical market software infrastructure

• Amazon: Cloud infrastructure via AWS

Copart belongs naturally in this elite group; Duolingo does not. Copart operates the dominant, two-sided online marketplace infrastructure for salvage vehicle liquidations. It sits at the absolute center of the automotive insurance ecosystem, acting as a non-discretionary partner for insurers who must clear total-loss vehicles.

Why We Own It

Copart aligns almost perfectly with our core compounding criteria:

• A Flywheel Moat: While many view Copart merely as an auction company, its true model is a highly entrenched two-sided network. Every additional insurer, dismantler, exporter, and repair shop that joins makes the platform structurally more valuable. Insurers seek maximum recovery values, which draws global buyers looking for inventory. A larger buyer pool drives up auction prices, which in turn attracts more insurer volume. This self-reinforcing flywheel has compounded for decades and shares striking economic similarities with Mastercard’s payment rails.

• Extreme Customer Dependence: A core question we ask of any holding is: How painful would it be if this company disappeared tomorrow? If Duolingo disappeared, users would migrate to alternative language apps; the ecosystem does not depend on it. If Copart disappeared, insurance companies would have to completely redesign their total-loss frameworks, recovery values would plummet, claims costs would spike, and operational efficiency across the automotive industry would collapse. Copart’s sticky, integrated position makes it incredibly difficult for customers to realistically switch.

• Disciplined Capital Allocation: Copart joins the ranks of Constellation Software, FICO, and S&P Global as a premier capital allocator. Management has consistently reinvested free cash flow into high-barrier assets, such as purchasing land near major metropolitan markets, expanding physical auction facilities, and scaling internationally, all while maintaining exceptional ROIC.

Portfolio Fit & Construction

This transaction represents a conscious choice to trade growth optionality for defensive resilience and structural alignment. By fully redeploying our Duolingo capital into Copart at once, we are taking a definitive step to expand Copart into a core holding, further strengthening the portfolio’s aggregate cash-flow durability in stressed macroeconomic regimes.

Crucially, the timing of this swap is heavily favored by an opportunistic valuation window. While Copart traditionally commands a steep premium, recent short-term volume headwinds have compressed its multiple down to roughly 18x P/E—its lowest valuation footprint in nearly a decade and a ~38% discount to its 10-year historical average.

While our top five holdings already comprise over 72% of our total capital, running a high-conviction portfolio means moving decisively when an elite infrastructure monopoly hits a deep valuation trough. Absorbing the entire Duolingo allocation into Copart today reflects our commitment to maintaining a concentrated, uncompromising collection of infrastructure monopolies at the best possible risk-adjusted prices.

Risk Considerations

Replacing one premium franchise with another requires a clear-eyed assessment of the trade-offs:

• Technological and Structural Evolution: The primary long-term operational risk we monitor with Copart relates to the multi-decade evolution of automotive technology. Over time, the widespread adoption of autonomous driving and advanced driver-assistance systems (ADAS) aims to reduce absolute accident rates. While this secular headwind is currently heavily countered by the skyrocketing complexity and cost of repairing modern tech-heavy bumpers and sensors (which increases the frequency of insurance total losses today), we must continually evaluate whether technological safety strides will eventually outpace rising vehicle repair costs over a 15- to 20-year horizon.

• Industry Concentration: This transaction modestly increases our exposure to the broader insurance ecosystem, alongside Verisk. However, we do not view this as redundant. Verisk and Copart occupy entirely different, complementary parts of the value chain: Verisk serves the front end by helping insurers price and assess risk, while Copart serves the back end by helping them efficiently dispose of total-loss assets.

Conclusion

Copart answers “yes” to every foundational question in our investment framework: Is it mission-critical? Does it become more valuable with scale? Are switching costs prohibitive? Can it compound capital for decades? And crucially, would we be comfortable owning it through a 50% market drawdown?

While Duolingo is a spectacular business, it lacks the infrastructure characteristics that define our highest-conviction holdings. Fully scaling our Copart position during this rare valuation disconnect hardens our portfolio against macro shocks while ensuring our capital remains explicitly aligned with an entrenched, wide-moat incumbent.

Sincerely,

Stiliyan Loukanov - Fund Manager, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

Dear Subscribers,

We have executed a strategic transaction within the portfolio, completely exiting our position in the recently distributed Mobility Global (MBGL) shares to initiate a new position in Copart (CPRT).

As a reminder, our Mobility Global shares were received purely as a spin-off distribution via our long-term holding in S&P Global (SPGI). Because we never actively allocated capital to or bought Mobility Global, we view this “clean slate” event as an opportunity to recycle these accidental shares into a high-conviction, compounding business that aligns with our strict investment criteria.

Business Overview

Copart operates a dominant, two-sided online marketplace for the auction of salvage and used vehicles. Serving as the primary intermediary between major automotive insurance companies (who look to dispose of totaled or recovered vehicles) and a global network of dismantlers, rebuilders, and used car dealers, Copart operates at the absolute center of the vehicle lifecycle ecosystem.

Much like our positions in Broadridge or Verisk, Copart functions as a mission-critical infrastructure provider. When a vehicle is declared a total loss, insurers do not have a discretionary choice on whether to liquidate it; they must clear it through specialized salvage channels. Copart’s auction network and expansive physical yard footprint are deeply integrated into the regulatory and claims processing workflows of the entire insurance industry.

Why We Own It

Copart exhibits the exact structural monopolies, high-barrier moats, and robust cash-flow characteristics that anchor our long-term portfolio strategy:

• Physical and Network Moat: Copart’s competitive advantage is defended by a powerful combination of a global digital network effect and a localized physical moat. The company owns thousands of acres of strategically located land near major metropolitan areas worldwide - real estate that is virtually impossible for competitors to replicate today due to stringent environmental and municipal regulations. This unmatched land footprint draws the largest inventory from insurers, which naturally attracts the largest global pool of buyers, creating an unbreakable network loop.

• Counter-Cyclical and Inflation-Resilient Economics: Copart possesses a remarkably durable business model. During economic downturns, vehicle repair costs rise relative to residual values, driving up the frequency of “total losses” by insurers and funneling more volume to Copart’s yards. Furthermore, because its auction fees are tied to the final selling price of the vehicles, Copart naturally scales its revenue with the rising nominal costs of used vehicles and salvage parts, providing an exceptional structural hedge.

• Elite Capital Allocation and Fortress Balance Sheet: Copart is a premier compounding engine, sporting a pristine, debt-free balance sheet and generating exceptional ROIC. The management team has a proven track record of prudently reinvesting free cash flow back into land acquisition and digital infrastructure, compounding shareholder value with minimal economic friction.

Portfolio Fit

This transaction optimizes our portfolio construction by replacing an un-vetted, non-core spin-off with a highly predictable, wide-moat compounder. While S&P Global remains an elite core holding that we continue to own with high conviction, keeping the spun-off Mobility Global shares would have meant holding an asset outside our core expertise and risk framework. Swapping into Copart allows us to rebalance our capital into a highly resilient, asset-right infrastructure business that improves the portfolio’s aggregate drawdown control and long-term cash-flow stability.

Risk Considerations

While Copart is a premier franchise, its business model is subject to specific structural dynamics that we monitor closely. The primary long-term risk relates to the evolution of autonomous driving technology and advanced driver-assistance systems (ADAS). If vehicle accidents drop materially over the coming decades, total salvage volume could contract, though this is heavily offset in the medium term by the rising complexity and cost of repairing modern ADAS-equipped vehicles, which actually increases total loss frequencies today.

Additionally, as a heavy land-owner, Copart faces ongoing localization risks regarding environmental compliance, zoning restrictions, and the execution of international expansions where land dynamics differ from its core North American strongholds.

Conclusion

Our decision to immediately trade our distributed Mobility Global shares for Copart reflects a disciplined adherence to our investment philosophy. We do not hold assets simply because they were handed to us via corporate actions; we allocate capital strictly to where it can compound with the highest predictability and safety.

Copart represents a rare combination of defensive resilience, high capital efficiency, and secular growth (the structural rise in total loss frequency). This trade hardens the portfolio against macro shocks while ensuring our capital remains fully deployed in an entrenched, wide-moat market champion.

Sincerely,

Stiliyan Loukanov, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

Dear Subscribers,

We have increased our exposure to Mastercard (MA). This move represents a doubling down on our highest-conviction thesis, further concentrated into one of the most resilient and indispensable duopolies in the global financial ecosystem. Following this addition, Mastercard now represents 20.5% of our total portfolio holdings.

Business Overview

Mastercard operates as a cornerstone of the global digital payments infrastructure, acting as a critical tollbooth for commerce across more than 210 countries and territories. Alongside Visa, it forms a formidable duopoly that routes billions of transactions daily, seamlessly connecting consumers, financial institutions, and merchants.

Much like our positions in regulated data networks and mission-critical software, Mastercard functions as an operational backbone. Its network rails are completely non-discretionary; they are deeply embedded into the fabric of daily consumer spending worldwide.

Why We Own It

Mastercard continues to exhibit the elite quality characteristics and compounding power that anchor our long-term investment strategy:

• Unmatched Economic Moat: Mastercard’s competitive advantage is defended by a massive, mature two-sided network effect that is virtually impossible to replicate. As more merchants accept Mastercard, the card becomes more valuable to consumers, and vice versa. This network is fortified by billions of dollars in historical infrastructure spend, strict regulatory compliance frameworks, and high trust barriers, creating an exceptionally wide economic moat.

• Inflation-Resilient Business Model: Because Mastercard primarily charges a percentage fee on gross dollar volume (GDV), its business model possesses an inherent, algorithmic hedge against inflation. When nominal prices for goods, services, and fuel rise, Mastercard’s revenue scales proportionally without requiring additional capital expenditure. This translates into incredibly high operating margins and predictable cash flow through various macroeconomic cycles.

• Secular Tailwinds and Value-Added Services: Beyond the structural transition from cash to digital payments, a multi-decade secular trend that still has a long runway in emerging markets, Mastercard is successfully expanding its high-margin Value-Added Services. Its initiatives in cybersecurity, fraud prevention, data analytics, and open banking turn it from a simple transaction processor into an essential strategic partner for its clients.

Portfolio Fit

This addition intentionally concentrates our capital into our highest conviction asset. At a 20.5% allocation, Mastercard anchors the core of our portfolio - a rock-solid foundation of recurring, high-margin revenue. Maximizing our weight in an ultra-high-quality compounder like Mastercard significantly enhances the portfolio’s overall risk-adjusted return profile and cash-flow durability in stressed economic regimes.

Risk Considerations

An allocation of this magnitude requires rigorous risk monitoring. While Mastercard is an elite business, a 20.5% position subjects the portfolio to concentrated regulatory and macro sensitivities.

The primary risks we see relate to regulatory intervention and antitrust scrutiny regarding interchange fees and network routing exclusivity. Additionally, a sharp decline in cross-border travel, its highest-margin transaction segment, would temporarily impact short-term organic growth. We also continuously monitor the long-term evolution of decentralized payment rails and alternative fintech payment methods, though we believe Mastercard’s entrenched network remains highly secure.

Conclusion

Mastercard represents the pinnacle of defensive resilience, high capital efficiency, and steady compounding. Increasing our stake to 20.5% reflects our commitment to allocating capital to where it is safest and most productive.

We believe that in the current market environment, the most favorable risk-adjusted returns are found in deeply entrenched, inflation-protected market incumbents. Mastercard hardens the portfolio against macro shocks while ensuring we remain heavily exposed to high-quality compounding.

Sincerely,

Stiliyan Loukanov, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

Dear Subscribers,

We have executed a strategic reallocation within the portfolio, exiting our position in Adobe (ADBE) to initiate a new position in Verisk Analytics (VRSK). This “quality-for-quality” trade reflects a deliberate shift in our risk management framework, prioritizing drawdown control and regime robustness over near-term upside optionality.

Business Overview

Much like our recent addition of Broadridge, which serves as the operational backbone of financial services, Verisk Analytics functions as the mission-critical data infrastructure for the global insurance industry. Its analytics and platforms are not discretionary; they are contractually embedded into the regulatory and underwriting workflows of insurers.

Verisk operates at the center of a highly complex ecosystem, providing essential risk assessment tools that would be extraordinarily difficult to replicate. By shifting from Adobe’s creative software suite to Verisk’s insurance-specific data, we are moving from a business sensitive to corporate IT budgets toward one supported by non-discretionary compliance mandates.

Why We Own It

Verisk exhibits the same quality characteristics and secular growth potential we seek in long-term compounders:

• Resilient Business Model: Verisk functions as the operational backbone for the global insurance industry, providing mission-critical analytics that are largely non-discretionary and, in many cases, mandated by regulation. While Adobe remains sensitive to the cyclicality of discretionary IT budgets, Verisk’s revenue is tied to insurance underwriting cycles rather than GDP, offering a degree of predictability and resilience that resembles a utility. This durable competitive advantage is supported by deep integration into client operations, ensuring the firm generates highly predictable cash flows even during periods of broader economic volatility

• Wide Economic Moat: Verisk’s sustainable competitive advantage is rooted in a powerful combination of proprietary, comprehensive data, deep industry expertise, high client switching costs, and network effects. Decades of data collection have built an unparalleled and continually updated repository of insurance-specific information that is exceptionally difficult and costly for competitors to replicate. This vast dataset, combined with Verisk’s specialized analytical models and software, creates highly accurate and indispensable solutions for underwriting and claims.

• Portfolio Fit: This move rebalances our exposure. While we maintain significant growth optionality through holdings such as AMZN and DUOL, we were tactically underweight in regulated data infrastructure. Adding Verisk complements our positions in SPGI and BR, improving cash-flow stability in stressed regimes.

Risk Considerations

This transition is an optimization for resilience, not a growth upgrade. By selling Adobe, we are consciously forfeiting its “best-in-class” creative monopoly and significant AI monetization optionality (e.g., Firefly and GenAI workflows). If the market enters a benign, AI-led bull run, Adobe’s long-term organic growth ceiling is undeniably higher.

Furthermore, while Verisk is less sensitive to economic cycles, it faces risks related to regulatory fee structures and the execution of technology migrations, similar to the risks we monitor in other infrastructure holdings.

Conclusion

Verisk Analytics represents a rare combination of defensive resilience and steady compounding. While Adobe remains a phenomenal business, our primary objective at this stage is to minimize drawdowns.

We believe the market offers a more favorable risk-adjusted profile in mission-critical data than in discretionary creative software. Verisk hardens the portfolio against macro shocks while ensuring we remain invested in a high-quality, entrenched incumbent.

Sincerely,

Stiliyan Loukanov, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

Dear Subscribers,

We have initiated a new position in Broadridge Financial Solutions, a high-quality financial technology company that operates as essential infrastructure for the global capital markets. Our decision reflects Broadridge’s unique combination of durable competitive advantages, highly predictable cash flows, and exposure to long-term structural growth in financial market digitization and governance.

Business Overview

Broadridge functions as the operational backbone of the financial services industry. Its systems support mission-critical workflows that are largely non-discretionary and, in many cases, mandated by regulation. The company operates across two core segments:

• Investor Communication Solutions (ICS), which manages regulatory communications, proxy distribution, shareholder voting, and governance services for public companies and financial intermediaries.

• Global Technology and Operations (GTO), which provides trade processing, clearing, settlement, and wealth management platforms for the world’s largest banks and asset managers.

Collectively, these platforms connect more than 1,000 banks and broker-dealers with over 10,000 public companies, placing Broadridge at the center of a highly complex and regulated ecosystem that would be extraordinarily difficult to replicate.

Why We Own It

Broadridge exhibits several characteristics we seek in long-term compounders:

1. Exceptional Revenue Quality
   Approximately 65% of revenue is recurring, supported by multi-year contracts and regulatory mandates. Client retention is consistently around 98%, reflecting deep integration into client operations and very high switching costs. Importantly, no single customer represents a material portion of revenue, limiting concentration risk.

2. Wide and Widening Economic Moat
   Broadridge benefits from powerful network effects, regulatory barriers, and scale advantages. Its role as a required intermediary in proxy distribution effectively positions the company as a regulated toll-booth. As financial markets migrate toward digital governance, tokenization, and AI-enabled operations, Broadridge’s incumbent network becomes increasingly valuable.

3. Attractive Financial Model
   The business is asset-light and generates substantial free cash flow. Capital expenditures are modest relative to revenue, and free cash flow conversion exceeds reported earnings. This cash generation supports consistent dividend growth, opportunistic share repurchases, and targeted acquisitions without straining the balance sheet.

4. Structural Growth Tailwinds
   Long-term drivers include continued growth in investor accounts, the shift from physical to digital communications, regulatory pressure for faster settlement cycles, and the adoption of distributed ledger technology. Broadridge is already a leader in several of these areas, including tokenized repo settlement and AI-driven governance tools.

Risk Considerations

The primary risks relate to regulatory fee structures within proxy distribution and the execution complexity of large-scale technology migrations. Additionally, near-term sales cycles can be influenced by macroeconomic conditions and elongated institutional decision-making timelines.

In addition, the continued rise in equity tokenization underpins a commonly cited bear case scenario. Critics argue that as securities move toward tokenized, blockchain-native formats, the traditional mechanisms for shareholder communication and proxy processing could become less complex, potentially reducing the economic value of intermediaries such as Broadridge. While we view this risk as longer-dated and partially mitigated by Broadridge’s early leadership in tokenized governance and digital voting infrastructure, a faster-than-expected industry shift could pressure legacy revenue pools and alter the long-term economics of the ICS segment.

Conclusion

Broadridge represents a rare combination of defensive characteristics and secular growth. It resembles a utility in terms of predictability and resilience, yet compounds value like a technology platform. We believe the market underappreciates the durability of its moat and the optionality embedded in its role as the industry transitions toward digital assets and next-generation market infrastructure.

For these reasons, we are pleased to add Broadridge Financial Solutions to the portfolio and view it as a high-conviction, long-term holding.

Sincerely,

Stiliyan Loukanov, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

Key Financial Highlights

• Net Revenue: Up 12% (non-GAAP, currency neutral)

• Net Income: Up 15% (non-GAAP, currency neutral)

• Diluted EPS: Up 18% (non-GAAP, currency neutral)

• Worldwide Gross Dollar Volume (GDV): Up 7% (local currency)

• Cross-Border Volume: Up 13% globally

• Switched Transactions: Up 9% (or 10% excluding Capital One debit portfolio migration)

• Value-Added Services and Solutions Net Revenue: Up 18% (currency neutral)

• Share Repurchases: $4 billion in Q1, with an additional $1.7 billion through April 27, 2026

Key Takeaways

Mastercard is strategically expanding its ecosystem and capabilities, particularly in emerging payment rails and value-added services. A significant development is the planned acquisition of BVNK, which aims to enhance Mastercard’s ability to send, receive, convert, and hold stablecoins, addressing interoperability challenges and securing critical licenses and compliance tools in the digital asset space. The company is also deepening its engagement in agentic commerce, reinforcing its partnership with OpenAI for Agent Pay and collaborating with Crossmint to integrate secure Mastercard transactions for AI agents, supported by the newly launched Verifiable Intent standard. In consumer payments, the Amazon Small Business co-brand card is moving to Mastercard, alongside significant portfolio wins with CIB in Egypt (over 5 million new Mastercards) and Westpac in Australia. The new World Legend card is showing strong early traction, demonstrating 3 times higher cross-border spend compared to the World Elite portfolio. Furthermore, Mastercard is doubling down on commercial payments, securing new fleet partners like Ryd in Europe and expanding B2B travel payments with partners such as Highnote and Travelsoft. The demand for Value-Added Services and Solutions remains high, with Ethoca products growing around 25% year-over-year and Mastercard Threat Intelligence (following the Recorded Future acquisition) gaining rapid adoption with over 500 customers engaged, highlighting the company’s focus on cybersecurity amidst rising AI-driven fraud.

AMZN:

Key Financial Highlights

• Q1 2026 Revenue: $181.5 billion, an increase of 17% year-over-year, or 15% excluding foreign exchange impacts.

• Operating Income: $23.9 billion, achieving a record 13.1% operating margin.

• AWS Revenue: $37.6 billion, accelerating 480 basis points to 28% year-over-year growth.

• AWS Operating Income: $14.2 billion.

• North America Segment Revenue: $104.1 billion, up 12% year-over-year, with $8.3 billion in operating income.

• International Segment Revenue: $39.8 billion, up 11% year-over-year excluding foreign exchange, with $1.4 billion in operating income.

• Amazon Ads Revenue: $17.2 billion, growing 22% year-over-year.

• Worldwide Units Growth: 15% year-over-year.

• Q1 Cash Capital Expenditures: $43.2 billion, primarily for AWS and generative AI.

• AWS Contractual Backlog: $364 billion, excluding the recent Anthropic deal.

Key Takeaways

Amazon is positioning itself as a leader in the burgeoning AI market, with AWS’s AI revenue run rate now exceeding $15 billion, growing nearly 260 times faster than AWS’s initial three years. A significant development is the availability of OpenAI’s GPT 5.4 (and soon 5.5) models on Bedrock, alongside the preview of Bedrock Managed Agents, a stateful runtime environment for generative AI applications, which is expected to rapidly accelerate agentic AI adoption. The company’s custom silicon strategy is proving highly successful, with its chips business now among the top three data center chip businesses globally, boasting an annual revenue run rate over $20 billion. Trainium2 is largely sold out, Trainium3 (offering 30-40% better price performance than Trainium2) is nearly fully subscribed, and much of Trainium4 is already reserved, with Trainium projected to save tens of billions in CapEx annually. Meta has committed to using tens of millions of Graviton cores, highlighting the increasing CPU demand driven by agentic AI workloads.

The Stores segment is demonstrating renewed vitality, with 15% unit growth, the highest since the COVID-19 lockdowns. The grocery business has become the second-largest grocer in the U.S., with over $150 billion in gross sales in 2025, and perishable sales growing over 40 times year-over-year. Agentic AI is being deeply integrated into the consumer experience, with Rufus, the AI shopping assistant, seeing monthly active users increase by 115% and engagement by nearly 400% year-over-year. Internally, AI is expected to radically transform operations, with an example cited of five people rebuilding a service in 65 days that would typically take 40-50 people a year, indicating massive potential for operating efficiency.

Amazon Leo, the satellite internet constellation, is gaining significant momentum with commercial service on track to launch in a few months, backed by substantial revenue commitments from enterprises and governments, including Delta Air Lines and NASA. The planned acquisition of Globalstar will expand Leo’s capabilities to include direct-to-device services, and an agreement with Apple will see Leo power satellite services for iPhones and Apple Watches. This venture is viewed as a multi-billion-dollar opportunity with long-term attractive free cash flow and return on invested capital, despite being capital-intensive upfront. The company acknowledges that current high growth in AWS necessitates significant CapEx investments, which challenge early-year free cash flow but are expected to yield compelling operating margins and ROIC in the long term.

SPGI:

Key Financial Highlights

• Reported revenue increased 10% year-over-year, with organic constant currency revenue up 9%.

• Adjusted diluted EPS grew 14% year-over-year.

• Adjusted operating margin expanded by 100 basis points to 51.8%.

• $1 billion was returned to shareholders through share repurchases.

• Divisional revenue growth: Ratings 13%, S&P Dow Jones Indices 17%, Market Intelligence 8%, Energy 7%, Mobility 8%.

Key Takeaways

The quarter was significantly shaped by the ongoing geopolitical conflict in Iran, which has created a substantial energy shock, driving volatility and impacting client demand, particularly within the Energy division. Despite this, S&P Global demonstrated strong resilience, partly by accelerating its AI strategy. The company is seeing early but strong monetization signals from its AI-native solutions like ChatIQ and its strategy of making proprietary data accessible via AI-ready APIs and plugins, with AI-enabled customers showing significantly higher Annual Contract Value (ACV) growth and retention rates.

A notable strategic shift occurred in the Energy division with the agreement to divest its Upstream software portfolio, representing approximately 25% of Upstream revenues, to SLB. This move aims to streamline operations and focus on high-value proprietary data and insights, with the new AI-native CERA Titan platform already generating strong customer interest and sales. Across other divisions, innovation continues with new blockchain-native indices from S&P Dow Jones Indices and the first Bitcoin-backed ABS rating from Ratings, underscoring leadership in digital asset finance.

The planned spin-off of the Mobility business is progressing on schedule for mid-2026, with key milestones like the Form 10 filing and an Investor Day approaching. Concurrently, S&P Global has increased its share repurchase target to at least 100% of adjusted free cash flow, or approximately $4.5 billion, leveraging anticipated proceeds from Mobility’s debt offering, reflecting confidence in the business’s long-term profitable growth and an attractive share price.

ADBE:

Reporting on Jun 11, 2026.

FICO:

Key Financial Highlights

• Q2 Revenue: $692 million (up 39% year-over-year)

• GAAP Net Income: $264 million (up 63% year-over-year)

• GAAP EPS: $11.14 (up 69% year-over-year)

• Non-GAAP Net Income: $297 million (up 54% year-over-year)

• Non-GAAP EPS: $12.50 (up 60% year-over-year)

• Free Cash Flow (Q2): $214 million

• Share Repurchases (Q2): $605 million (484,000 shares at an average price of $1,251 per share)

• Scores Segment Revenue: $475 million (up 60% year-over-year)

• Software Segment Revenue: $217 million (up 7% year-over-year)

• Platform Annual Recurring Revenue (ARR): $349 million (up 49% year-over-year)

• Non-Platform ARR: $440 million (down 8% year-over-year)

• Dollar-based Net Retention Rate: 109% (Platform NRR: 136%, Non-Platform NRR: 90%)

Key Takeaways

FICO has strategically adjusted its FICO Score 10T performance model pricing for the FICO Mortgage Direct License Program to $0.99 per score plus a $65 funding fee, a significant reduction from the previous $4.95 plus $33. This move is designed to encourage widespread adoption of FICO Score 10T, which incorporates rental and utility payment history to qualify more borrowers, and to achieve price parity with VantageScore in the conforming mortgage market. The company is actively working with resellers, having signed 3 of the top 5 major resellers, and anticipates the program going live once FHFA provides final sign-off on reseller score calculation.

FICO maintains a strong competitive stance against VantageScore, asserting that FICO Score 10T is the most predictive score and that VantageScore’s current market share remains trivial, estimated at approximately 2%. The company does not anticipate significant share loss in any vertical, including the conforming mortgage market, due to 10T’s superior predictiveness and competitive pricing. Concerns about “gaming” in a two-score system are acknowledged, but FICO does not foresee volume loss, noting that the securitization market is not yet ready to accept VantageScore. Furthermore, FICO views AI as a significant opportunity, having secured 137 AI-based patents, particularly in explainable and ethical AI, which is crucial for highly regulated industries like financial services where black-box underwriting faces substantial regulatory hurdles.

The FICO Platform continues its strong growth trajectory, with Platform Annual Recurring Revenue (ARR) increasing 49% year-over-year, or in the mid-30% range excluding migrations. This growth is attributed to a successful “land and expand” strategy, securing new customer wins, and expanding use cases with existing clients primarily within the financial services sector. The platform’s agentic architecture and embedded domain expertise enable clients to operationalize AI at scale, driving business outcomes and fostering a self-reinforcing cycle of value generation.

FICO demonstrated a robust commitment to shareholder returns, executing its largest-ever quarterly share repurchase of $605 million in Q2, buying back 484,000 shares at an average price of $1,251 per share. This aggressive capital allocation strategy, supported by strong free cash flow and a recent $1.5 billion board authorization, signals management’s view of the stock as an opportunistic investment at current levels.

CSU:

Reporting on May 13, 2026.

EFX:

Key Financial Highlights

• Reported Revenue: $1.649 billion, up 14% year-over-year.

• Organic Constant Currency Revenue Growth: 13%.

• EBITDA: $477 million, up 13% year-over-year.

• EBITDA Margin (excluding FICO): 31.2%, up 80 basis points year-over-year.

• Adjusted EPS: Up 22% year-over-year.

• Shareholder Returns: $327 million returned, including $260 million for 1.3 million share repurchases and a 12% increase in quarterly dividend to $0.56 per share.

• Vitality Index: Record 17%, reflecting new product innovation.

Key Takeaways

• Strategic Share Gains via TWN Indicator: Equifax is actively leveraging its unique Work Number (TWN) data by offering the TWN Indicator, along with cell phone, utility, and pay TV attributes, at no cost in mortgage pre-approval products. This strategy is successfully driving share gains and is being expanded to auto, card, and personal loan verticals, providing lenders with instant income and employment insights to streamline workflows and improve approval rates.

• Accelerated AI-Driven Innovation and Efficiency: The company’s cloud-native infrastructure and EFX.AI capabilities have significantly accelerated its innovation cycle, quadrupling the product innovation funnel and halving development life cycles. 100% of new models and scores in 2025 were built using EFX.AI, contributing to higher-performing products. AI is also a growing driver of internal cost productivity across operations, call centers, and technology development.

• VantageScore as a Significant Future Margin Opportunity: Despite current guidance assuming no VantageScore conversion in 2026, there is strong industry momentum. Over 240 mortgage originators are ingesting the free VantageScore, and 50+ non-GSE lenders are already using it for originations. The recent reduction in VantageScore mortgage pricing to $1 (from $4.50) is expected to further incentivize adoption, presenting a $1 billion annual savings opportunity for the industry and a potential $35 million annual margin upside for Equifax upon full conversion.

• Robust Government Growth Pipeline: The Workforce Solutions government vertical shows strong long-term growth potential, with pipelines for new and expanded services up 2x year-over-year. This is driven by new federal requirements under OB3 for income validation in Medicaid and SNAP, though significant revenue benefits are anticipated primarily in 2027 and beyond due to typical government deal closure and activation timelines.

• Proprietary Data “AI Moat”: 90% of Equifax’s revenue is generated from proprietary data sources, including its income and employment exchanges, credit exchanges, and alternative data sets. This data is not publicly available and is subject to stringent regulatory and privacy controls, creating a unique “AI moat” that differentiates Equifax’s analytical solutions.

• Impact of Macroeconomic Uncertainty: The Iran conflict and subsequent interest rate increases in March led to a slowdown in U.S. transactional activity, particularly in mortgage and, to a lesser extent, auto and banking. This ongoing uncertainty was cited as the primary reason for maintaining full-year guidance despite strong Q1 performance, indicating a cautious outlook on near-term market conditions.

• Employer Services Headwind: Revenue in employer services is expected to decline slightly in 2026 due to the non-extension of the Work Opportunity Tax Credit (WOTC) legislation, though historical precedent suggests potential retroactive renewal.

V:

Key Financial Highlights

• Net revenue: $11.2 billion, up 17% year-over-year (16% in constant dollars).

• EPS: $3.31, up 20% year-over-year.

• Payments volume: $3.7 trillion, up 9% year-over-year in constant dollars.

• Processed transactions: 66 billion, up 9% year-over-year.

• Value-added services revenue: $3.3 billion, up 27% year-over-year in constant dollars, now representing 30% of net revenue.

• Commercial and money movement solutions revenue: Up 24% year-over-year in constant dollars.

• Visa Direct transactions: 3.7 billion, up 23% year-over-year.

• Share buyback: $7.9 billion in Q2, the highest quarterly buyback in Visa’s history.

• New share repurchase program: $20 billion authorized, bringing total buyback capacity to approximately $33 billion.

Key Takeaways

• Strategic Pillars Driving Growth: Visa’s “Visa as a Service” stack is effectively driving growth by winning in consumer, commercial, and money movement; expanding its addressable market through AI and agentic commerce; establishing itself as a key interoperability layer for stablecoins and blockchain; and significantly growing value-added services.

• Agentic Commerce as a Future Growth Engine: Visa anticipates AI and agentic commerce will accelerate the digitization of commerce, generate significantly more microtransactions, streamline B2B payments, and contribute to overall economic growth. Visa is leveraging its network, security, and trust, particularly through tokenization and new initiatives like Intelligent Commerce Connect and Visa CLI, to capitalize on this emerging market.

• Stablecoin and Blockchain Interoperability: Visa is positioning itself as a “hyperscaling bridge layer” for stablecoins, facilitating on-ramps and off-ramps with over 160 stablecoin-linked card programs, which saw payments volume increase by nearly 200% year-over-year. Visa’s own settlement capabilities now support 9 blockchains, with an annual run rate of $7 billion in stablecoin settlement volume, growing over 50% quarter-over-quarter. The company is also becoming a key blockchain infrastructure player by running validator nodes on Tempo and Canton Network.

• Value-Added Services (VAS) Outperformance: VAS revenue grew 27% in constant dollars, now constituting 30% of net revenue. This growth is attributed to strong underlying business drivers, increased demand for network products, and marketing services. AI-powered fraud and risk services, including the new Visa large transaction model, are demonstrating substantial impact, with early results showing up to a 5x increase in fraud value capture.

• Significant Partnerships and Acquisitions:

  • TikTok Creator Card (UK): Launched a debit card for content creators to provide faster access to income.

  • PayPay (Japan): Collaborating to expand Japanese merchant acceptance, integrate multiple payment methods via Visa Flexible Credential, and facilitate international expansion.

  • X Money (U.S.): Enabling early public access for push and pull payments via Visa Direct and Visa Flexible Credential.

  • UnionPay International (Mainland China): Connecting Visa Direct with MoneyExpress for real-time cross-border remittances to over 95% of debit cardholders.

  • Highnote (Travel): Expanded agreement to enable eight OTA platforms with Visa Commercial Choice for Travel.

  • Westpac (Fleet/Commercial): Signed a new agreement expanding the partnership and securing commercial card portfolios, leveraging Pismo for modernization.

  • Scotiabank (LatAm/Caribbean): Formed a new strategic agreement across 11 countries, consolidating the relationship and expanding into affluent and small business issuance.

  • Pismo Client Wins: Secured first clients in France, the Philippines, Paraguay, and Romania, expanding its reach to 15 new countries since the acquisition.

  • Wells Fargo & Pismo: Wells Fargo entered an agreement to migrate to Pismo’s core account ledger as part of its core banking modernization.

  • Prisma and Newpay Acquisitions (Argentina): Acquired an issuer-processor and a real-time payment services/ATM network to accelerate advanced technology deployment and grow carded and non-carded business in Argentina.

• Resilient Consumer Spending: U.S. payments volume grew 8%, with e-commerce outperforming face-to-face. Both credit (10%) and debit (7%) showed broad-based improvement, partly aided by higher tax refunds, with no observed weakening among lower-spend consumers.

• Impact of Middle East Conflict: Payments volume growth in the MEIA region experienced a 2.5-point step-down from Q1, primarily due to the conflict, although MEIA constitutes only about 6% of total payments volume. Cross-border travel was also affected, particularly in March.

DUOL:

Key Financial Highlights

• Q1 Revenue: Double-digit decelerating growth (27% YoY).

• Q1 Bookings: Decelerating growth rate from 24% in Q4’25 to 14% (9% on constant currency) this Q.

• Q1 Gross Margin: Expanded to 72.7%.

• Q1 Adjusted EBITDA: $83 million, approximately 29% of revenue.

• Cash Position: Over $1 billion in cash, no debt.

• Free Cash Flow: Expected to generate over $350 million in 2026. FCF / Net Income: 98.5%.

• Share Buyback: Repurchased about 1% of fully diluted shares outstanding.

Key Takeaways

• AI’s Transformative Impact: AI has fundamentally changed Duolingo’s capabilities, enabling the publication of 20,500 course units in Q1, a tenfold increase from two years prior. This also significantly enhances personalization and conversational fluency in features like Video Call, leading to a doubling of average words spoken per user year-over-year.

• Enhanced Free Tier and Word-of-Mouth Strategy: The company is actively improving the free user experience with new speaking features and experimenting with longer free trials (e.g., one-month trials) to boost word-of-mouth growth without conflicting with monetization efforts.

• Advanced Content Milestone: Duolingo now offers courses up to professional proficiency (B2 on the CEFR scale) across its nine most learned languages, a significant achievement that strengthens its educational offering.

• Strategic Monetization Shift: Duolingo is focused on developing monetization tactics that do not create friction for free users or impede DAU growth, moving away from past approaches that may have over-monetized certain aspects.

• Increased Marketing Investment: The company is professionalizing and increasing its performance marketing budget, particularly in under-penetrated, high-growth regions like Asia (e.g., China), where profitable user acquisition for English learners is observed.

• Product Experimentation with Paid Tiers: Experiments are underway to integrate Video Call into Super Duolingo for new subscribers, with early indications that users are willing to pay more for Super with this feature. The future strategy for the Max subscription tier is under evaluation.

• Consistent DAU Growth: Daily Active User growth is projected to remain around 20% year-over-year throughout 2026, with Asia identified as the fastest-growing region.

• Engineer Productivity Boost: AI usage is leading to a moderate but noticeable increase in engineer productivity and the number of A/B tests that can be concurrently run, marking the first such per capita increase in years.

• Expansion into Other Subjects: While AI facilitates faster development of new subjects (e.g., Chess in nine months), it is not yet trivial due to the need for interactive diagrams and specific content types. The company is currently satisfied with its existing subjects, particularly Math, which now covers grades 2-12 with explanatory features.

Thanks for reading!

Stiliyan Loukanov, Feather Fund

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

1. APPLYING BUSHIDO TO INVESTING

One of the most influential works we encountered this past year was Musashi, Eiji Yoshikawa’s epic historical novel. Reading it, we found it impossible not to draw parallels between the samurai’s code of conduct and the discipline required for successful long-term investing. The following reflections outline how the Way of the Warrior informs our approach to the markets.

Rectitude and Discipline

Bushido’s highest virtue is Gi (Rectitude) - an unwavering moral discipline. A samurai is expected to “decide upon a course of conduct in accordance with reason, without wavering”. In the context of a portfolio, this translates to a rigorous, criteria-based strategy. We do not gamble on momentum; instead, we adhere to strict standards, seeking durable moats and fortress-like balance sheets, and possess the discipline to ignore impulsive trades that fall outside these parameters.

Perseverance

The Way of the Samurai demands extraordinary perseverance: “To bear and face all calamities and adversities with patience”. Musashi’s journey teaches that true strength is “bearing the unbearable”. As investors, we mirror this stoicism by remaining steadfast during market turmoil. We view volatility not as a threat, but as a test of our resolve to maintain a long-term horizon.

Humility

Bushido values Rei (Politeness/Respect) and humility; the true warrior never boasts. A samurai’s honor is inward: “what is truly honorable lies within himself”. Similarly, an investor must remain humble before the market’s complexity. We strive to be the first to acknowledge our mistakes, learning from them rather than defending them. We never assume infallibility; we know that overconfidence is the precursor to ruin.

Lifelong Training

The path of the sword is one of Kaizen, or continuous improvement. Samurai devote their entire lives to mastering their craft through self-control and training. As Charlie Munger famously noted, “Those who keep learning will keep rising in life”. We view our investment process as a lifelong apprenticeship, consistently refining our analytical skills and, more importantly, tempering our emotional responses.

Meticulous Preparation

In the world of Musashi, preparation is the margin between life and death. Samurai prepared for battle with such intensity that they meditated on every possible outcome to eliminate fear. In investing, this preparedness is built through exhaustive fundamental research. By understanding a business deeply before we buy, we are mentally prepared for market drawdowns before they inevitably arrive.

The Courage to be Contrarian

Finally, Bushido demands Yu (Heroic Courage) - the bravery to do what is right even when it is difficult. For the investor, this means the courage to act against the herd. It takes a warrior’s spirit to be contrarian: to maintain conviction when the headlines are bleak and to have the bravery to buy when prices plunge, provided the underlying fundamentals remain strong.

2. PORTFOLIO HOLDINGS

In total, the portfolio currently comprises a concentrated selection of 9 high-quality companies.

As of April 30, 2026, the consolidated financial characteristics of these holdings are summarized below:

Profitability:

• Gross Profit Margin: 72.2%% (vs. last year’s 61.3%)

• Operating Margin: 35.7% (vs. last year’s 31.3%)

• Net Profit Margin: 26.9% (vs. last year’s 27.5%)

• Free Cash Flow Margin: 31.5% (vs. last year’s 24.0%)

Cash Flow Generation:

• FCF Conversion Ratio: 145% (vs. last year’s 79.8%)

Capital Efficiency:

• Return on Invested Capital: 23.5% (vs. last year’s 15.4%)

• Return on Capital Employed: 35.2% (vs. last year’s 22.3%)

• Return on Equity: 59.2% (vs. last year’s 22.1%)

Financial Health:

• Debt / Equity: 0.9x (vs. last year’s 0.4x)

• Interest Coverage Ratio: 23x (vs. last year’s 101.3x)

Shareholder Returns:

• Dividend Yield: 0.4% (payout ratio: 13.4%) (vs. last year’s 0.87% and 15.8%)

• Buyback Yield: 5.4% (vs. last year’s 2.2%)

These aggregate metrics reflect our focus on investing in businesses with strong profitability, efficient capital utilization, robust cash flow generation, and solid financial health. As evidenced by the comparison with last year’s portfolio composition, we have significantly increased the quality of our holdings over the year.

Our best-performing position has been AMZN (+39%) over the past year.

Conversely, the largest detractor from performance is DUOL (-57%) since we opened the position in September 2025.

3. THE RELATIVE PERFORMANCE

We evaluate our performance against the S&P 500 Index, which serves as our primary benchmark. While various other indices exist, such as the MSCI World Index, we use the S&P 500 because we believe it is a widely recognized and demanding benchmark for equity performance. Our philosophy is clear: we hold ourselves accountable for outperforming this benchmark over the long run. Indeed, if we cannot demonstrate the ability to exceed the S&P 500's returns over 5-10 years, the fundamental premise for the Fund's actively managed approach would be called into question.

Year-to-date (YTD):

For the past year:

We’re pretty disappointed with how things have gone over the past year, and we’re concerned about these results. But we’re still optimistic about the years ahead, as we continue to focus on quality stocks in the long term.

The data highlights the exact moment we drifted from our core strategy, pivoting from quality toward a reactive chase for “value”. There’s no sense in sugarcoating our responsibility for this gap. It was an unforced error. Had we chosen patience over activity, our performance would have remained intact.

4. LESSONS HARD-WON

Following the transparent approach of investors such as François Rochon, whose “Podium of Errors” section in his Giverny Capital letters openly addresses key mistakes, this part of the letter highlights and reviews some of our less successful investment decisions from the past year. Candidly examining these instances is vital for continuous improvement in our process.

The Error of Overactivity: Alphabet and ASML

Our primary mistake this past year was a failure of patience. We exited our positions in GOOGL and ASML, two businesses with exceptional competitive advantages, simply because they reached a period of significant price appreciation.

In hindsight, these were “unforced errors”. By rushing to lock in gains, we prioritized short-term satisfaction over the long-term compounding that characterizes our strategy. Great businesses are rare; we must have the discipline to hold them even when the temptation to “do something” is high.

The Error of Strategy: PayPal

If the sale of GOOGL and ASLM was a failure of patience, the purchase of PYPL was a failure of rectitude. Upon reflection, this investment did not align with our core investment philosophy. We allowed ourselves to be lured by a seemingly attractive valuation without a sufficiently clear conviction in its long-term moat or structural tailwinds; quite the opposite, we see extreme competition and deteriorating fundamentals. This serves as a stark reminder: if a business does not fit our strict criteria, no “discount” is deep enough to justify its place in the portfolio.

The Error of Temperament: Cash Deployment

By the end of 2025, we held a significant cash position in anticipation of a market correction. While our preparation was sound, our execution was flawed. We lacked the self-control required to wait for the fat pitch.

Driven by an impatient desire to be “fully invested,” we deployed capital prematurely rather than waiting for the specific opportunities our strategy demands. As we move forward, we are recommitting to the idea that doing nothing is often the most difficult, yet most rewarding, action an investor can take.

5. BECOMING A LEARNING MACHINE

In the past year, we actively pursued not only financial growth but also intellectual expansion. We enriched our knowledge universe with these compelling materials that we thoroughly enjoyed:

• The Great Mental Models (Vol. 1, 2, 3, and 4), by Shane Parrish

• Zero to One: Notes on Startups, or How to Build the Future, by Peter Thiel

• Richer, Wiser, Happier: How the World’s Greatest Investors Win in Markets and Life, by William Green

• The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success, by William N. Thorndike Jr.

• More Than You Know: Finding Financial Wisdom in Unconventional Places, by Michael J. Mauboussin

Many paths ahead. Choose your best. Stay the course.

Thanks for reading!

Stiliyan Loukanov, Feather Fund

Open an account with Interactive Brokers:

 https://ibkr.com/referral/stiliyan756 

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Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.

It's been a year since we launched Feather Fund and started this blog, and it feels like a lifetime has passed. The market has experienced a rollercoaster ride, from extreme greed to extreme fear. Trump's trade war ignited the initial decline, but the market was already showing signs of overvaluation. Recessionary fears have intensified, as major U.S. banks have notably increased their estimates for the probability of a recession. In response, companies are beginning to curtail capital expenditure while awaiting a clearer economic outlook.

While the uncertainty and market volatility have risen, we've remained steadfast in our investment approach. We view market declines as buying opportunities and have fully invested in the market for the first time since the fund’s inception.

Given that macroeconomic forecasting isn't our forte, in times like these, our focus is on individual companies, utilizing the bottom-up approach. After all, identifying buying opportunities in a declining market is far easier than doing so in an overoptimistic and overpriced market.

High uncertainty often leads investors to wait for the market bottom. However, trying to time the absolute low is as unreliable as trying to time the absolute high. Instead of waiting on the sidelines, we believe in taking action and increasing our holdings in strong companies. Peter Lynch's observation remains pertinent:

"Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves."

Source: https://x.com/InvestingVisual

2. PORTFOLIO HOLDINGS

The portfolio's initial composition, established since its inception, included positions in V, GOOGL, EVO, and MSCI, as well as a number of other positions that have since been exited (please refer to: https://featherfund.substack.com/p/i-am-a-sinner).

Throughout the year, we strategically added the following companies to the portfolio (listed chronologically by the date of initiation): EKT (our deep dive on EKT: https://featherfund.substack.com/p/energiekontor-ag), ASML, UBER, FOUR (our deep dive on FOUR: https://featherfund.substack.com/p/shift4-payments-inc), AMZN, and SPGI.

In total, the portfolio currently comprises a concentrated selection of 10 high-quality companies.

As of April 30, 2025, the consolidated financial characteristics of these holdings are summarized below:

Profitability:

• Gross Profit Margin: 61.3%

• Operating Margin: 31.3%

• Net Profit Margin: 27.5%

• Free Cash Flow Margin: 24.0%

Cash Flow Generation:

• FCF Conversion Ratio: 79.8%

Capital Efficiency:

• Return on Invested Capital: 15.4%

• Return on Capital Employed: 22.3%

• Return on Equity: 22.1%

Financial Health:

• Debt / Equity: 0.4x

• Interest Coverage Ratio: 101.3x

Shareholder Returns:

• Dividend Yield: 0.87% (payout ratio: 15.8%)

• Buyback Yield: 2.2%

These aggregate metrics reflect our focus on investing in businesses with strong profitability, efficient capital utilization, robust cash flow generation, and solid financial health.

Our two best-performing positions are UBER and V, both having generated a return of more than 20% since purchase. Based on its initial acquisition cost, the performance of MSCI would have also qualified it for this group. However, subsequent additions to the position at higher price levels have increased our average cost basis, which moderates its overall return as measured for the portfolio.

Conversely, the two largest detractors from performance are EVO and EKT. Based on our average cost basis, EVO has been down 25%, and EKT has been down approximately 13%. We are closely monitoring the situation with both EVO and EKT, assessing the potential duration and impact of the current short-term headwinds clouding the business outlook. Should these challenges persist and negatively affect the long-term investment thesis, we will evaluate the appropriateness of maintaining these positions and may decide to exit.

3. THE RELATIVE PERFORMANCE

We evaluate our performance against the S&P 500 Index, which serves as our primary benchmark. While various other indices exist, such as the MSCI World Index, we utilize the S&P 500 as we believe it represents a widely recognized and demanding standard for equity performance. Our philosophy is clear: we hold ourselves accountable for outperforming this benchmark over the long term. Indeed, if we cannot demonstrate the ability to exceed the S&P 500's returns over 5-10 years, the fundamental premise for the Fund's actively managed approach would be called into question.

Year-to-date (YTD):

For the past year:

We are pleased with the outstanding performance achieved over the past year, and are grateful for these results. However, we temper expectations for the years ahead, as we do not anticipate replicating this level of performance.

4. LESSONS HARD-WON

Following the transparent approach of investors such as François Rochon, whose 'Podium of Errors' section in his Giverny Capital letters openly addresses key mistakes, this part of the letter is dedicated to highlighting and reviewing some of our less successful investment decisions from the past year. Candidly examining these instances is vital for continuous improvement in our process.

Our experience with PM provides a clear example of how a lack of conviction can lead to costly errors. We initiated a purchase at approximately $90 but subsequently exited the position shortly thereafter. This swift exit stemmed from insufficient prior research and a resulting lack of conviction when initiating the position; it was a decision made too spontaneously. Since our sale, the stock has appreciated significantly, highlighting that the initial thesis to own the stock may have been correct, but the decision to sell prematurely was a costly error. The key lesson here is the importance of conducting thorough research before initiating a position and, once a decision is made based on solid analysis, trusting that research with long-term conviction, rather than acting on impulse. This underscores the need to dedicate ample time to research, resist pressure for swift action, and, when a decision is made based on solid analysis, maintain a long-term perspective.

Another instance worth analyzing is our position in FOUR. Following news of management changes and a significant acquisition, the stock declined sharply, falling 20% in a single day. We reacted quickly to establish a position, perhaps too quickly. However, the sell-off continued, and our position, at one point, was down approximately 25%. This experience reinforced the lesson that building a position, especially following sharp price movements, should be a more gradual and methodical process, allowing time to assess unfolding information rather than acting instantaneously.

Our third notable mistake was the decision to launch a distinct fund dedicated to real estate exposure, predominantly via investments in Real Estate Investment Trusts (REITs). This was initially intended to provide diversification into an alternative asset class, leveraging the publicly traded nature of REITs for ease of implementation.

Yet, it soon became clear that operating a separate fund required a commitment of time, capital, and focus that directly detracted from our primary responsibility: managing the Feather Fund. Understanding this inherent conflict, we concluded that the optimal course of action was to wind down the separate fund and fully concentrate our efforts and resources on the Feather Fund.

5. BECOMING A LEARNING MACHINE

In the past year, we actively pursued not only financial growth but also intellectual expansion. We enriched our bookshelf with these compelling reads that we thoroughly enjoyed:

• Only the Best Will Do: The compelling case for investing in quality growth businesses, by Peter Seilern

• How to Pick Quality Shares: A three-step process for selecting profitable stocks, by Phil Oakley

• Good to Great: Why Some Companies Make the Leap... and Others Don't, by Jim Collins

• Seeking Wisdom: From Darwin To Munger, by Peter Bevelin

• Investing: The Last Liberal Art, by Robert G. Hagstrom

• The Most Important Thing: Uncommon Sense for the Thoughtful Investor, by Howard Marks

• The Financier, by Theodore Dreiser

• The Warren Buffett Way: Investment Strategies of the World's Greatest Investor, by Robert G. Hagstrom

Many paths ahead. Choose your best. Stay the course.

Thanks for reading!

Stiliyan Loukanov, Feather Fund

Open an account with Interactive Brokers:

 https://ibkr.com/referral/stiliyan756 

Sign up to Revolut with the link below to support the blog:

ttps://revolut.com/referral/?referral-code=stiliyujwu!MAY1-24-AR 

Open an account with eToro to support the blog:

https://etoro.tw/3KEsigx

Disclaimer: The information presented here, including ideas, opinions, views, predictions, forecasts, commentaries, or suggestions, whether explicitly stated or implied, is intended purely for informational, entertainment, or educational purposes. None of the content should be interpreted as personalized investment or financial advice. Although every effort has been made to ensure the accuracy of the information provided, errors or inaccuracies may be present. Always exercise caution and seek professional financial advice before making any investment decisions.