Datalex PLC: Navigating to Profitability via SaaS Dominance and Strategic Innovation

Philip CarterFriday, May 16, 2025 3:19 pm ET
20min read

In the dynamic world of aviation software, Datalex PLC (DLE) has emerged as a critical player undergoing a profound transformation. Its FY2024 results, marked by a 24% surge in platform revenue and a debt-free balance sheet, signal a strategic pivot toward high-margin recurring revenue streams. This shift positions the company to capitalize on its next-generation products—DLX Pay and Pricing AI—while targeting EBITDA breakeven in 2025. For investors seeking exposure to software-driven aviation tech plays, this is a pivotal moment.

The SaaS Revolution: 24% Platform Growth Amid Transition Pains

While total revenue dipped 5% to $27.5 million due to the loss of non-recurring contracts, Datalex’s platform revenue soared 24% to $16.1 million—now representing 58% of total revenue. This dramatic shift underscores the success of its SaaS licensing model, which prioritizes recurring revenue over volatile services work. The gross margin expanded to 37% from 34% in FY2023, a clear validation of the SaaS model’s profitability.

DLX Operating Revenue

The decline in services revenue (down 27% to $10.2 million) was anticipated, as Datalex deliberately exited low-margin, project-based contracts. This pruning of legacy operations has freed resources to focus on high-value SaaS products, such as the Stellex Platform, which now serves airlines like easyJet and Air China. The company’s ability to migrate clients to its modern stack without sacrificing growth is a testament to its execution.

DLX Pay and Pricing AI: New Products with Massive Upside

Datalex’s 2025 roadmap hinges on two game-changing products:
1. DLX Pay: A payment platform for airlines, set to launch with Air Transat this year. This solution addresses a critical pain point for airlines seeking to manage complex ancillary services and loyalty programs. With airlines globally under pressure to monetize ancillaries, DLX Pay’s modular design positions it as a must-have tool.
2. Pricing AI: An advanced module now enabling airlines to integrate their own AI models into Datalex’s pricing engine. This differentiation reduces reliance on third-party data, enhancing profit margins for airlines—and by extension, Datalex’s recurring revenue.

These products are not just incremental upgrades; they’re standalone revenue engines. With airlines increasingly digitizing their operations, Datalex’s software-as-a-service model aligns perfectly with the industry’s shift toward subscription-based tech solutions.

Debt-Free Balance Sheet: A Foundation for Growth

The repayment of $17.0 million in debt by September 2024—funded by a €25 million equity raise—eliminated interest expenses, a major drag on profitability. Cash reserves rose to $6.4 million, providing a buffer for product development and potential acquisitions. While a backstop loan from Tireragh Limited exists, Datalex’s focus on 2025 capital raises suggests it will avoid future debt dependency.

DLX Total Liabilities, Cash and Cash Equivalents

This financial discipline is critical. With operating expenses now stabilized, the path to EBITDA breakeven becomes clearer. The FY2024 adjusted EBITDA loss of $3.1 million was narrower than feared, and management’s confidence in turning EBITDA positive this year is bolstered by margin improvements and new product adoption.

Why 2025 is the Year of Re-Rating

Datalex’s target to achieve positive Adjusted EBITDA in 2025 is the near-term catalyst investors should watch. With platform revenue growing at 24% and the cost base under control, this milestone could unlock significant valuation upside.

Consider this:
- Margin Expansion: Every dollar of platform revenue carries a higher margin than services, accelerating profit growth.
- Product Momentum: DLX Pay’s launch with Air Transat and Pricing AI’s adoption by major carriers create scalable revenue streams.
- Valuation Multiple Reset: If EBITDA turns positive, the stock could re-rate from a “turnaround play” to a “growth stock,” attracting broader institutional interest.

Investment Thesis: A Buy on Structural Turnaround

Datalex is no longer a company struggling to adapt—it is a SaaS-driven tech firm with a clear path to profitability. The stock trades at a P/S ratio of 2.5x, far below peers like Amadeus (AMS.MC) or Sabre Corp (TASY), despite its lower revenue base. As SaaS revenue scales and EBITDA turns positive, this discount will narrow.

SABR Trend
Network error, please try to refresh

The risks? Execution on product launches and potential delays in airline migrations. However, the strategic clarity and financial discipline outlined in FY2024 results suggest management is prepared for these challenges.

Conclusion: A Compelling Case for Immediate Action

Datalex’s transition to a SaaS-centric model has passed its first critical test. With a debt-free balance sheet, margin improvements, and high-value products like DLX Pay and Pricing AI, the company is primed to deliver on its 2025 EBITDA target. For investors, this is a rare opportunity to buy a software-driven aviation tech company at a valuation trough—just before its turnaround becomes tangible.

The time to act is now. Datalex is not just surviving—it is building a future where recurring revenue, not legacy contracts, fuels sustained growth.

DLX EBITDA, EBITDA YoY