Enfusion(US:ENFN)2024-08-10 18:46Financial Data and Key Metrics Changes - Enfusion reported Q2 2024 revenue of $49.5 million, representing a 16% year-over-year growth [7][30] - Adjusted EBITDA for Q2 2024 totaled $10.1 million, with an adjusted EBITDA margin of 20.5%, up 190 basis points from the previous year [34] - Annual recurring revenue (ARR) reached $195.7 million, up 14% year-over-year [32] - Adjusted free cash flow for the quarter was $4.6 million, with a free cash flow conversion of 46% [34] Business Line Data and Key Metrics Changes - Enfusion signed 39 new clients in Q2 2024, increasing total client count to 879 [7] - Average contract value (ACV) increased from $226,000 to $228,000, marking a 7.5% year-over-year growth [8] - The company continues to focus on moving up-market, targeting larger asset managers while maintaining its core hedge fund segment [8][10] Market Data and Key Metrics Changes - Revenue in the Americas grew 15% year-over-year, with notable strength in U.S. fund launches [9] - Asia Pacific revenue grew 10% year-over-year, despite geopolitical and macroeconomic headwinds [12] - EMEA revenue grew 28% year-over-year, reflecting strong momentum and diversification beyond the U.K. [15][16] Company Strategy and Development Direction - Enfusion aims for a revenue growth rate of over 20% from 2025 to 2027, focusing on institutional asset managers and enhancing service delivery [5][6] - The company is investing in its services platform to empower clients and improve operational efficiencies [6][19] - Enfusion is expanding its partnerships with consultants and system integrators to enhance its market presence in the institutional asset management space [45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience to macroeconomic forces, highlighting a strong demand for modern investment technology [26][58] - The company anticipates continued growth in client onboarding and conversions, despite some short-term volatility in the back book [36][55] - Management remains optimistic about the long-term growth potential, even amid potential interest rate changes [58] Other Important Information - Enfusion's mobile app and Portfolio Workbench tool enhancements are expected to drive client satisfaction and operational efficiencies [20][21] - The company has made key hires to strengthen its product management and transformation teams [24] Q&A Session All Questions and Answers Question: Impact of product enhancements on win rates and bookings - Management indicated that enhancements like the Portfolio Workbench are essential for institutional asset managers and have improved client acquisition and pipeline opportunities [40][41] Question: Churn trends and their impact on the back book - Management noted that churn has normalized, but upsell opportunities remain a focus for improvement in the back book [42][43] Question: Role of partnerships in the services ecosystem - Management confirmed that partnerships with consultants and system integrators are crucial for onboarding and implementation in the institutional asset management sector [44][45] Question: Cross-sell opportunities in the back book - Management highlighted efforts in partnerships and product capabilities to enhance cross-sell opportunities, which are expected to yield dividends [49][50] Question: Guidance and macroeconomic visibility - Management maintained guidance amid macroeconomic uncertainty, emphasizing the strong performance of the front book and the need to monitor back book dynamics closely [55][56]