DraftKings Inc. (DKNG) is the leading mobile sportsbook and gaming operator in the U.S. Its products include daily fantasy sports, regulated internet casino gaming, and regulated online sports betting. DraftKings offers sports betting in 26 states and online casino gaming in five states.
DraftKings is the market share leader in internet casino gaming and remains well positioned to capitalize on the rapid growth of regulated sports betting and iGaming in the U.S. The company is demonstrating healthy profit margins in its most mature markets and remains focused on driving strong customer lifetime value. We believe DraftKings’s product and scale advantages will enable the company to maintain its leadership position in the years ahead.

CyberArk Software Ltd. (CYBR) is an identity-based security software provider focused on privileged access management (PAM). The PAM platform prevents against theft of the credentials of privileged accounts (such as IT administrators) and restricts access to critical resources.
CyberArk is a recognized market leader with more than 25% share in PAM and deployments in over half of the Fortune 500. The company is leveraging its foothold in PAM across its 8,000 clients to expand into adjacent markets such as single sign-on, multifactor authentication, secrets management, and endpoint privilege management. New product categories, which are doubling on a yearly basis, account for roughly 40% of revenue. Transition to a subscription-based model should lead to revenue reacceleration, strong free cash flow margins, and increased customer lifetime value. 

Advanced Energy Industries, Inc. (AEIS) is a pure-play power conversion company that makes equipment to transform, refine, and modify electrical power from a utility into controllable, usable power for semiconductor, industrial/medical, data center, and telecom infrastructure applications.
Advanced Energy is a leader in power control in each of its end markets, as many of its products are used in applications where switching suppliers is costly. Through M&A, Advanced Energy has become a more diversified industrial technology company with a long runway for earnings growth from its prior positioning as a high-margin but cyclical semi-cap equipment sub-supplier. The company generates significant cash flow, and we believe it will continue to pursue accretive bolt-on acquisitions, focusing on high-growth and high-margin industrial and medical markets.

Axon Enterprise, Inc. (AXON) is a public safety company with three major product lines: high-definition body and vehicle cameras (sensor division), subscription-based digital evidence services and storage, and non-lethal taser devices.
With $1.6 billion in sales in 2023, Axon has less than 3% share of its $63 billion addressable market. Building off its dominant position in tasers, Axon is seeking to grow its software business from approximately 38% of revenue today to close to 50% by 2028, which, in turn, should enhance margins. We think Axon can increase EBITDA margins to over 25%, with sustained revenue growth greater than 20%. Axon is a winner-take-most company in its markets given its reputation, scale, and integration of evidentiary products with sensors and tasers.

Kratos Defense & Security Solutions, Inc. (KTOS) develops and fields transformative, affordable technology, platforms, and systems for U.S. national security-related customers, allies, and commercial enterprises.
Kratos specializes in unmanned systems, satellite communications, cybersecurity/warfare, missile defense, training, and combat systems. Kratos’ unmanned systems/drone business offers technologically disruptive solutions that enable cost-effective upgrades of U.S. military technology. Within government services, the majority of revenue comes from high growth space, small jet engine, and missile defense businesses. We expect growth to accelerate as Kratos' unmanned solutions win key government contracts, supported by growth across the government services segment.

Montrose Environmental Group, Inc. (MEG) is an environmental services company that supports government and commercial organizations with services ranging from air measurement and laboratory services to regulatory compliance, permitting, engineering, and remediation.
Montrose's plan is to consolidate the $1.3 trillion environmental services industry, in which there is no current leader. Management believes that organic growth will remain in the high-single-digit range, and that Montrose can increase margins by 100 bps to 150 bps per year. The secular backdrop is quite strong given the increasing focus on environmental issues, and the company has an ESG overtone. There is optionality around additional contaminant regulations, such as monitoring PFAS chemicals in water and methane emissions.

Chart Industries, Inc. (GTLS) is a leader in cryogenic and compression technology and equipment for fluid processing and storage. Its products perform key functions in process and transportation/storage steps across clean energy (including hydrogen), liquified natural gas (LNG), and industrial industries.
In 2023, Chart closed its acquisition of Howden, a leader in compression technology, expanding Chart's product offering and exposure to clean energy markets while creating a more globally diversified, resilient company with a strong financial profile and continued double-digit growth opportunities. We think Chart is well positioned to benefit from growth in LNG, hydrogen, and other "nexus of clean" opportunities, where it leverages its existing products and application-specific IP to maintain leading market share. Robust cash flow should lead to rapid deleveraging.

PAR Technology Corporation (PAR) is a leading global provider of software, systems, and service solutions to the restaurant industry. Its cloud-based SaaS offering for point of sale, loyalty, ordering, and back office is purpose-built for enterprise restaurants.
PAR is building a cloud-based unified commerce platform for enterprise restaurants to improve operational efficiencies and customer satisfaction. Through acquisitions, PAR now has most of the key pieces of the restaurant tech stack in-house and is driving cross-sell and penetration across enterprise restaurants. The company has a multi-year opportunity to drive the secular shift among restaurant operators to cloud-based systems, with limited competition from incumbents. We think PAR can deliver 20% to 30% ARR growth for several years with strong operating leverage.

Texas Roadhouse, Inc. (TXRH) is a restaurant company operating primarily in the casual dining segment. Together with its franchisees, it operates more than 753 restaurants in 49 states and 10 countries, including 697 Texas Roadhouse restaurants, 45 Bubba’s 33 restaurants, and 11 Jaggers restaurants.
Texas Roadhouse is one of the highest-quality casual dining concepts in the U.S., in our view, and has consistently gained share in its category. We think the company’s success is due to its proven strategy of offering high-quality, freshly prepared food at attractive prices. We expect it to grow units at a mid-single-digit CAGR and increase profits at a high-single-digit to low-double-digit rate. As inflation pressures, particularly on food costs, abate, Texas Roadhouse should also expand its operating margin and compound shares at a low-double-digit CAGR.

GitLab Inc. (GTLB) provides a software development and IT operations (DevOps) platform that developers, product managers, IT teams, and security professionals use to collaborate throughout the development lifecycle. 
The $43 billion app development market is expanding as the number of projects and pace of development increase. GitLab is the only DevOps platform addressing all stages of the app lifecycle, from planning to monitoring, using a single codebase and unified data model, which gives it a competitive advantage over point solutions. Its open-source model taps into 4,000 external developers, enabling GitLab to release upgrades faster than competitors. GitLab is in the early innings of monetizing its 30 million users. Its strong product velocity and ROI drive good net expansion.

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