FTAI Infrastructure (FIP)

Infrastructure investment and operations firm FTAI Infrastructure (NASDAQ:FIP) fell short of the markets revenue expectations in Q3 CY2025, but sales rose 68.7% year on year to $140.6 million. Its GAAP loss of $1.38 per share was significantly below analysts’ consensus estimates.

Company Overview

Spun off from FTAI Aviation in 2021, FTAI Infrastructure (NASDAQ:FIP) invests in and operates infrastructure and related assets across the transportation and energy sectors.

Areas like the energy transition and emission reduction are thematic and front of mind today. This can be a double-edged sword for the energy products and services industry. Those who innovate and build new expertise can jolt demand while those who cling to legacy technologies or fall behind in the trending areas could see their market shares diminish. Bigger picture, energy products and services companies are still at the whim of construction and infrastructure project volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.

Public competitors in the infrastructure sector include Brookfield Infrastructure (NYSE:BIP), Macquarie Infrastructure (NYSE:MIC), and AECOM (NYSE:ACM).

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, FTAI Infrastructure’s sales grew at an incredible 49.1% compounded annual growth rate over the last four years. Its growth beat the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. FTAI Infrastructure’s annualized revenue growth of 19% over the last two years is below its four-year trend, but we still think the results suggest healthy demand.

This quarter, FTAI Infrastructure achieved a magnificent 68.7% year-on-year revenue growth rate, but its $140.6 million of revenue fell short of Wall Street’s lofty estimates.

Looking ahead, sell-side analysts expect revenue to grow 75.1% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and suggests its newer products and services will catalyze better top-line performance.

FTAI Infrastructure has bad unit economics for an industrials company, giving it less room to reinvest and develop new offerings. As you can see below, it averaged a 23.2% gross margin over the last five years. That means FTAI Infrastructure paid its suppliers a lot of money ($76.77 for every $100 in revenue) to run its business.

FTAI Infrastructure’s gross profit margin came in at 14.6% this quarter, marking a 10 percentage point decrease from 24.7% in the same quarter last year. Zooming out, however, FTAI Infrastructure’s full-year margin has been trending up over the past 12 months, increasing by 1.1 percentage points. If this move continues, it could suggest better unit economics due to more leverage from its growing sales on the fixed portion of its cost of goods sold (such as manufacturing expenses).

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

FTAI Infrastructure’s high expenses have contributed to an average operating margin of negative 17% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

On the plus side, FTAI Infrastructure’s operating margin rose by 41.7 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.

This quarter, FTAI Infrastructure generated a negative 70.8% operating margin.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

FTAI Infrastructure’s earnings losses deepened over the last four years as its EPS dropped 41% annually. We’ll keep a close eye on the company as diminishing earnings could imply changing secular trends and preferences.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For FTAI Infrastructure, its two-year annual EPS declines of 13.5% show it’s still underperforming. These results were bad no matter how you slice the data, but given it was successful in other measures of financial health, we’re hopeful FTAI Infrastructure can generate earnings growth in the future.

In Q3, FTAI Infrastructure reported EPS of negative $1.38, down from negative $0.45 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects FTAI Infrastructure to improve its earnings losses. Analysts forecast its full-year EPS of negative $2.46 will advance to negative $1.36.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

FTAI Infrastructure’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 70.8%, meaning it lit $70.83 of cash on fire for every $100 in revenue.

Taking a step back, an encouraging sign is that FTAI Infrastructure’s margin expanded during that time. In light of its glaring cash burn, however, this improvement is a bucket of hot water in a cold ocean.

FTAI Infrastructure burned through $90.71 million of cash in Q3, equivalent to a negative 64.5% margin. The company’s cash burn increased from $12.08 million of lost cash in the same quarter last year.

This was an optically tough quarter as its revenue and EPS fell short of Wall Street’s estimates. However, the EPS miss was largely due to the one-time extinguishment of bad debt, causing EBITDA to nearly double to $71 million. The stock traded up 7.2% to $5.50 immediately following the results.

Updated: December 4, 2025 at 10:25 PM EST

Before deciding whether to buy FTAI Infrastructure or pass, we urge investors to consider business quality, valuation, and the latest quarterly results.

FTAI Infrastructure is a fine business. First off, its revenue growth was exceptional over the last four years and is expected to accelerate over the next 12 months. And while its declining EPS over the last four years makes it a less attractive asset to the public markets, its rising cash profitability gives it more optionality. On top of that, its expanding operating margin shows the business has become more efficient.

FTAI Infrastructure’s EV-to-EBITDA ratio based on the next 12 months is 1.6x. When scanning the industrials space, FTAI Infrastructure trades at a fair valuation. If you’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $11.67 on the company (compared to the current share price of $5.04), implying they see 131% upside in buying FTAI Infrastructure in the short term.