The performance discussion for both the calendar quarter and fiscal year is dominated by Intelligent Systems (INS) ( “INS,” +147% in the first quarter; +525% for the fiscal year). Until somewhat recently, Intelligent Systems was a small, unknown technology company, whose CoreCard operation provides processing for credit card providers and software that helps clients manage various credit programs. Although not a traditional start-up (INS has created or incubated technology businesses for over 35 years), its CoreCard operation has recently disclosed the signing of several new important client relationships that have transformed the company’s trajectory. Despite an under the radar profile, CoreCard’s doubling of revenue and transition from loss making to profit generating has not gone unnoticed by investors or, lately, the press. Growth comparisons are always skewed by the onboarding of new clients, and while we (and management) believe CoreCard’s growth prospects remain strong, the pace of growth will certainly slow. Nevertheless, the financial results clearly demonstrate the profile of the business has changed and has captured Wall Street’s imagination.
From Wally Weitz's first-quarter 2019 Partners Opportunity III Fund shareholder letter.
