O'Keefe Stevens Advisory, Inc. on Octave Intelligence

O’Keefe Stevens bought Octave, a spin-off from Hexagon, because selling by parent-company shareholders and index constraints created a potentially price-insensitive supply of stock. The industrial and public-safety software protects mission-critical assets, has high customer retention and is difficult to replace with generic AI tools; the adviser argues AI can enhance its products rather than displace them. Cross-selling is the central catalyst: 86% of customers use one workflow, while multi-workflow accounts generate materially higher recurring revenue. The move from perpetual licenses to SaaS temporarily depresses recognized revenue but should improve customer lifetime value, with annual recurring revenue still expected to grow 6%-8%. Roughly $340 million of net debt, equivalent to about a year of free cash flow, gives management room for bolt-on acquisitions or buybacks. Purchased at roughly $19, the shares were valued at around 3 times 2026 sales and 12 times forward earnings, at a discount to peers that may narrow if recurring revenue and net retention improve.