Conestoga Small Cap Composite Q2 2026 Portfolio Activity

DGII stock moved higher after the company reported record revenue and continued progress shifting toward a more recurring revenue-oriented business model. We remain encouraged by DSGX's mission-critical software, highly recurring revenue model, and disciplined capital allocation strategy, which continue to support our long-term investment thesis. We believe Kodiak Gas Services is well positioned to benefit from growing demand for natural gas infrastructure, LNG exports, and power generation supporting AI-related data center development. We sold the Clearwater Analytics position following its acquisition by Thoma Bravo, which successfully monetized our investment thesis and provided an attractive exit.

We believe that investors can earn a premium return in small capitalization growth equities by identifying higher quality companies that are capable of growing through multiple business cycles. We seek to take advantage of the inefficient discovery process for small companies and other investors’ focus on near-term earnings.