Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Enfusion Inc (ENFN, Financial) reported a strong quarter with 15% year-over-year revenue growth, reaching $51.2 million.
- The company achieved a record adjusted EBITDA margin of 21.8%, with adjusted EBITDA totaling $11.1 million.
- Enfusion Inc (ENFN) signed 38 new clients in Q3 2024, increasing its total client count to 894, a new company record.
- The company's Portfolio Workbench tool has been central to its strategy, helping to win larger accounts and expand into up-market segments.
- Enfusion Inc (ENFN) continues to expand its geographic footprint, with significant growth in the Americas and EMEA regions, and new client wins in the Middle East and Asia Pacific.
Negative Points
- Revenue growth in the Asia Pacific region slowed to 6% year-over-year, impacted by geopolitical trends and capital outflows.
- The company experienced an unusually high amount of involuntary churn in EMEA, affecting growth trajectory.
- Net revenue retention (NDR) decreased to 102%, down from the previous quarter, due to lower growth from the back book and consolidation of two large broker-dealer customers.
- The back book growth has been temporarily moderated, with softness among domestic hedge fund clients and geopolitical headwinds in Asia.
- Despite strong bookings, there was minimal sequential growth in Annual Contract Value (ACV) for Q3 2024, indicating potential timing issues in monetization.
Q & A Highlights
Q: Can you discuss the exploration of strategic alternatives and the state of the business today?
A: Oleg Movchan, CEO: We don't comment on rumors. Our focus remains on creating long-term shareholder value.
Q: Given the back-book trends, how do you plan to achieve the medium-term outlook for 2025?
A: Bradley Herring, CFO: We have more levers to pull in 2025, including new hires and product opportunities. We expect to maintain margin improvements and have confidence in our growth strategies.
Q: How do recent executive hires impact your strategy and confidence in moving upmarket?
A: Oleg Movchan, CEO: We're aligning the firm to capture opportunities in institutional asset management. Neal Pawar, COO: New hires are enhancing our product offerings and managed services, which should positively impact our back book.
Q: Can you provide insights into the pipeline and conversion trends as you move upmarket?
A: Neal Pawar, COO: We see a 30-40% conversion rate for qualified opportunities. The Portfolio Workbench has been instrumental in unlocking new client opportunities.
Q: What are the key product innovations that will drive your move upmarket?
A: Oleg Movchan, CEO: We're focusing on advanced portfolio construction and analytics capabilities. Neal Pawar, COO: Our data platform and marketplace initiatives will also play significant roles in our strategy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
