FTAI Infrastructure (FIP), AvePoint (AVPT), Docebo (DCBO), Alkami (ALKT)
FTAI Infrastructure (FIP) reported after the bell yesterday and held its conference call at 8:00 AM ET this morning. Given all that’s going on within the four main businesses, there is a lot to cover, so I’ll start with the high level.
But first, the stock. The report SHOULD contain enough positive forward commentary to get FIP out of this ugly downward slide, so keeping at buy. That said, watching VERY closely. BUY
The results: Q4 was a relatively soft quarter as revenue and adjusted EBITDA dipped modestly across most business segments, except for Long Ridge Power & Gas. Total revenue shrank 0.8% to $80.8 million and adjusted EBITDA shrank 12.4% to $29.2 million.
For the full year 2024, revenue grew 3.4% to $331.5 million and adjusted EBITDA grew 18.7% to $127.6 million.
There are a lot of segment-specific dynamics that impacted the Q4 results. But the big picture here is that the company is building out each of these businesses to become MUCH more significant in the years ahead, starting with 2025.
Remember, this management team is in the business of building and managing infrastructure assets for cash flow over the long term, not to drive quarterly results.
Management says it has contracted incremental business that should drive $195 million in incremental annualized adjusted EBITDA that will start to hit in the current quarter (totaling $120 million for Long Ridge, $50 million at Repauno and $25 million at Jefferson Terminal).
It is also in talks that could drive another $80 million in annualized adjusted EBITDA.
In other words, 2025 should be a big year with potential for $400 million in new annualized EBITDA to start flowing. That’s a big increase over the $128 million in EBITDA reported in 2024.
The stock does not reflect this potential.
A couple segment-specific details/reminders/updates:
Long Ridge Transactions
· 2/19/25 refinanced existing debt.
· Annual re-pricing of power sale contracts at 50% higher rates.
· 2/26/25 purchased 49.9% stake for $189 million.
· Combined increase in annual adjusted EBITDA of about $160 million with impact to start ramping modestly in Q1 and full annual run rate hitting in Q3.
Transtar Railroad
· On question of U.S. Steel (X), management says all likely outcomes are positive for Transtar. Tariffs on imported steel (25%) likely good for U.S. Steel as it primarily sells domestically.
· Lots of M&A potential in railroad market, pursuing deals that could add up to $100 million in annualized adjusted EBTIDA.
Jefferson Terminal
· 2025 focus is three contracts with incremental $25 million of adjusted EBITDA set to start this spring/summer.
· Currently negotiating multiple potential contracts with potential of annual adjusted EBITDA of $50 million (waxy crudes from Utah, ammonia/renewables, natural gas liquids).
Repauno
· Phase 2 NGL export facility construction has begun.
· Two new contracts (beginning in 2026) represent $50 million in annual adjusted EBITDA.
· Expects to get underground cavern storage permits within a couple of months (approaching mile 26 of this marathon). Economics of underground storage are better than above ground.
· Management will consider selling Repauno once permits are in hand.
AvePoint (AVPT)
Shares of AvePoint (AVPT) had a mini-crash at the opening bell this morning, dropping roughly 20%. That’s too much to be sensible. But also … this market is volatile and illogical at times. Watching and considering moving back to buy, but not yet.
In Q4, revenue grew 19.5% to $89.2 million, beating expectations by $1.2 million. SaaS revenue grew by 43% to $64.8 million and now accounts for 70% of revenue. Non-GAAP operating income was $14.5 million, compared to $10.3 million for Q4 2023.
Management guided for 2025 revenue to fall in the range of $380 - $388 million (+17.4% at the high end of range, slightly below consensus of $390 million) and total annualized recurring revenue (ARR) to fall in the range of $401.3 - $487.3 million (+24%, roughly).
The difference between revenue and ARR guidance is due to the continued transition of the business away from the on-premise software model (which is declining and which recognizes revenue up front) to the SaaS (Subscription-as-a-Service) model (growing quickly and recognizes revenue over time). The SaaS model is better as it allows for higher growth, higher margins, and lower development and maintenance costs.
Management said the company’s U.S. Federal business exposure is only about 2% of ARR, helping to clarify some of the DOGE-related risk.
The company continues to invest in sales marketing and R&D to drive profitable growth, given that data security remains a high priority as companies seek to both protect their data while also implementing automation and AI initiatives. HOLD
Docebo (DCBO)
We’re going to walk away from Docebo (DCBO) today. The company beat expectations in the quarter, but guidance wasn’t great, and the company is laying off people in a number of positions across the company as it expects a shift in desired skill sets in the coming years due to transitioning to an AI-first learning platform. I listened to the call and, honestly, I thought it was a bit messy, without a lot of energy coming from analysts and a lot of questions with long-winded answers. That may just be my take, but while there are numerous stocks that have pulled back significantly after earnings and which I want to buy (just not yet), DCBO falls into another category. There are certainly bright spots, but in an increasingly iffy market, I’d prefer to put this money to work elsewhere. SELL
Alkami (ALKT): Buy Second Half
Alkami (ALKT) put up a very respectable Q4, with revenue (+25.6% to $89.7 million) and adjusted EPS (+200% to $0.08) both meeting expectations. Forward guidance for 2025 revenue of $440 to $445 million is well ahead of consensus for $416 million, while 2025 adjusted EBITDA guidance of $47 - $51 million is shy of $54.9 million consensus.
The focus of the conference call was the announced acquisition of MANTL (which is also why guidance beat expectations with MANTL expected to contribute $30 million in 2025 revenue), an account opening solution that should help Alkami attract new customers and cross-sell existing solutions. There is very little customer base overlap. The purchase price of $400 million isn’t cheap, but MANTL is a growth company (about 30% revenue growth currently).
We don’t yet know how the acquisition will be paid for, though it would seem convertible debt is a better option than an equity offering, given ALKT’s current price. The deal is expected to close before March 31.
Analysts are mostly positive on the quarter and the deal’s potential. There is potential for some stock volatility once financing is announced, but given the stock’s current price, I believe there’s a comfortable margin of error here. Let’s fill the second half of our position. BUY SECOND HALF
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