Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen and thank you for standing by. Welcome to Enfusion's Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to hand you over to our host Ignatius Njoku, Head of Investor Relations. Please go ahead.

Ignatius Njoku

you thank and morning operator. Good to We conference quarter earnings fourth welcome you call. XXXX Enfusion's call Enfusion's Hosting and Oleg are today's Movchan, Enfusion's Financial Brad Chief Chief Officer. Herring, Officer; Executive

quarterly to the and our Investor subject forward-looking website. quarterly forth which shareholder today's set Please you section to statements numerous to risks IR make are our of with Actual forward-looking call note, available posted includes the are may I'd including our contain today. our in materially forward-looking been all website. and our financial in remind SEC differ from letter, that Relations filings like results These in those may statements uncertainties, results any statements. we

does them obligation intent These as speak today's forward-looking following statements only required assume company to or not by update of except the call, as and law. any today,

measures. Reconciliation call as financial a available today's measures. include which a may in be is nearest website. today's quarterly to on found addition, substitute and supplement considered shareholder In measures as letter, to measure GAAP not non-GAAP company's should can the be GAAP the for These

With I'd to begin. like to the to over that, call Oleg turn

Oleg Movchan

brings first I thank welcome lead XXXX all and be warm I'm looking to us for this an all to our fourth for thank to I company Brad scale Enfusion of Financial I'm today our formal be the discuss you addressing forward my in in a through for that would quarter Good as opportunity stage joining to facing I'm Herring I new and results. morning, like the impressive to you happy to go colleagues also I'm of today welcome here received we honored position role. CEO. and him track to to working CFO. I'm next set along the record growth. who to that today. Enfusion Chief forward and as Officer, as our look with is energized thrilled by public Enfusion

more and a company the and from successful a margins, for our high maintain for adjacent expanded profitability focus key Despite new within year revenue and and owners. global institutional services We've continues strength, market strong on end changing combination Enfusion. opportunities. numerous Very fund in of volatility markets, position year Enfusion was of and growth, vertical for focused larger and space. We'll delivered mandates our investment SaaS we be as into growth managers, that technology, XXXX a institutional our to profitability client of demand scale continue won prepare environment. the expansion complex product asset the allocation to capital and hedge managers towards demonstrating

underscore in best-in-class, this the the the our year enable on a client for and durability the outcomes business discipline software free fiscal model remain maintain offering. Our cash With we to objective and momentum, revenue the half and flows. heading We stable and plan delivering in shareholders. expanded profile. These positive laser our to into outcomes powered and deliver and margin to generate of our demonstrate company focused value positive margin growth ability of exceptional resulted exceptionally second services expansion deliver enhance by XXXX,

to XX.X%. generated progress profitability. on its outcome returning improvement a This reflects of XXX growth year-over-year. Enfusion are was demand growth and $XX.X million, to EBITDA We million with quarter's in to ongoing XX% margin Were and execution. turn allocation. solid quarter this performance, margin disciplined represents million further and $X.X Adjusted historical strong let's fourth results. capital Now grew pleased delivering by profile, companies of ARR or focused Revenue reflecting driven our healthy XX%

new We continue products to in across services. and sales see strength our all

XXX.X%. net retention Excluding dollar churn, was involuntary

NGI our healthy total of remain existing to XX a in As meaningful rate continue with XXX.X%. new quarter accounted new churn, clients XXX of expansion within Conversions wins. ends the the at in the build base, quarter a involuntary clients. commercial we for client client Within of including XX%

win remained slight fund As overall for launches, uptick previous we the year. launches from rate in down hedge saw a

the client wins highlight move proposition again deliver region. the value by In management global powerful we investment the let's demand Americas in Now that the the revenue year-over-year, driven XX% community. client to ongoing

a with new is Carolina North is This seeking clients classes owner One to the asset legacy the of efficient workflow record with the our replace to EMEA year-over-year. manager asset momentum well. supports for to expect XXXX as outdated all bookings positive end this In end and university capabilities. revenue Enfusion, compliance total investment platform cost grew and manual we're XX% continue system the endowment. about level a of based partnering and ownership. at more in includes its that By Look excited region reduces

platforms. one fund anemia-based as of goal global I'm to a equity well-known a anticipated the process which complexity. and was as dollar biggest, support fund them one This manager pleased to grow hedge hedge native multibillion luxury Enfusion announce increased is launch the that The seeking accelerate robust life hedge cloud new allow from well platform, spinoff would fund. and

Enfusion chosen for many as technology was stack service. flexible, with its coupled modern and comprehensive enter

our announce with excited and in fund this third-party supported base vendors. newly multiple them to partner strategies, was fixed the addition, is to to that the In reporting equity, client multiple with and in technology flexibility particularly framework robust provide API income integrate macro. fund also I'm interested global wealth hedge including by the launched Middle East. This will manager employ sovereign and for investment

and both East, demonstrates an fund Together set reach, global API infusion end and stack. workloads. technology enable will our end deploy this native data because collected in efficient managers. one is services, fund Enfusion and Middle The manager software scale hedge funds expanding it destination because allocators platform, to a to robust success particularly cloud single significant, into and for capital and important differentiated the This our of

by APAC, Now, grew we to turning XX% year-over-year. revenue

premise that demand Tokyo healthy efficient with As complicated of dollar agreement technology I'm to with which to consisted on outdated announce into an seeking entered multibillion This stack, plan a manager. alternative thrilled investment abilities. the and modernize in based region. we're the disparate, their was

investment compressed success platform. to selected for manager In end fully selling of prone APEC. and OMS, specific that understanding continue in resources our direct capabilities their cost of region accounting error integrated with data technology drive operational infrastructure significantly product ownership. our reduce our deep transformation of because end analytics Enfusion confusion and the internal as requirements The and manual declined of functional replace to a total digital will need

regions adjacent markets, all our move expanded times and new when will global exciting to of ability to convergence further This validate more market during uncertainty. across significant upstream all

strategies. let's PanAgora our an talk live $XX customer technology Finally, Management equity quantitative asset extensive fourth objective the briefly PanAgora deploys which for assets is investment manager that new the confusion the and of to on active reduce diligence, that including billion multi collected footprint business. the under about over their and investment PanAgora strategies, improve retail member replace multiple with functionality quarter, Asset After in is to due OMS with longtime management. growing quantitative a went a platform

capabilities. streamline Enfusion infusion and and to the workflows PanAgora onboarding legacy during API partner the enhance

come. live continue that scalable flexibility business on afford upgrades and the technology PanAgora will from years a to their in Now benefit Enfusion to evolving frictionless platform, the

new success closely market. we and product moving and pillar for solutions are Innovation key of portion deploy next our is by the client our demands steadily Turning and technology. products total to and to through to committed a generation listening adjacent addressable

are all new rolled the and quarter we platforms functionality. expand and across enhancements out continuing features and scale During ability

our so class their to ledger with and example, we For easily allow have We're platform. own the to books released API workload, quickly integrate quoting develop our self-service a their also to over control posting general continuing discretion. clients at

this in framework to systematically initial quarter made drive platform. logic UI and facilities, the our a really For efficiency handling within enhancements other in our platform They capability the with instance, new creating to suite as launch were capability the support is updating for at trade our voters. support our clients made and last series large quarters API API and for began credit capability cancers brought debt as types for many scale inclined we notable volumes, well to few more line and have of that bank support over enhancements drawdown for our

one is to down few amount and downs, cost the credit platforms our draw positions. cases, we global non including the pro were and to downs this of aggregate, to models and the from Enfusion our problem rata that segment. success leverage In support rata. of in Now, well ethical many support truly driving limited but has been the can delay trading the complex strategies pro clients both and positioned carry, pay And edge long counting, not the of

across innovation. counseling XXX platform our further demonstrating deploy we All-in-all, the from musicians during our ongoing quarter,

driven the has out Moving trends to market. uncertainty market multiple to dynamics, play macroeconomic in

managers effective sets disparate fully by our First, we on integrated, The competitor shifting capabilities. pieces global premise continue asset to embracing software, stitched cost from acquisitions. together and of is homegrown of industry away increasingly or either robust see

technology back are front managers back our outsourcing Enfusion operationally services. operations is asset the both cost Additionally, and efficient focused and scalable on office coupled This where and comes to effective middle With cloud best-in-class with trade. in.

our weather ongoing benefit We business also to uncertainty, only well is it. from believe positioned macroeconomic but not the

to by in fund one led and set number reduction decisions a cycle. of the hand, opportunity hedge the existing firms On delays in reduce investment the launches could in sales purchase

and saw asset hand, relying scenario On are now, to our tentative In situations. of the system managers optimizing typically it in the a what services throughout support convergence their their software their to terms by of continue to will legacy cost That's in Enfusion competitive launch a investment and traditional business. the our other on win converting outside platforms we city structures firm. history

remain off future. manager in reduce capital in continue to funds familiarity Subsequently, the and our as backdoor account transition growing we we from platforms rapidly become multi-manager managed hedge where to to better where successful see strategy personal strategies. that keep technology key the teams and separately Enfusion outside operational diversified launches risks, as alternative of fund access are shifting to to attain toward stage structures such internally. This operational current see been we'll and and launches looking clients hedge and have strong smaller and from is portfolio benefit see performance, in away spin multi continue larger continues platforms multi Importantly, mature. demand investors near

plan turn our momentum our our for areas for on Now let and shareholders. me partners build value clients, create focus XXXX. key to We to to

and a competitive such, As our driving on a client thoughtful client share By investing and organizations. innovation enhance deliver market functionality, service capital our and are we're able drive technology our and product in modes, to in needs opportunities. system Courts in our advantage and and upsell our services, responding portfolio way. expanding allocation capabilities technology stack timely capture competitive to and new focus we product more technology,

Next, Enfusion's onboarding strategy service experience. clients. conversion best on overall win process to in focused our and implementation to our underpins improve class, client We're enhancing new

Additionally, our support to the larger we'll more management work on margins. manage will our This while operationally making teams services efficient us more first, related by improving investments technologies. investing enable in and complex and account

bolster to position service a This deliver investments Enfusion and to as will to high our continue we'll stance, our clients. competitive quality software

with we're more been also our as margins team rates And result. path line committed have model. business margin has focused efficiency coupled expansion of infusions staple importantly, a management the this and high quarter to ever. by as witnessed As towards bottom a than on the operational maintaining High growth

with the support in team only position. XXXX. our our work feature customer, in the set quarter every in for capability, and of Enfusion ticket the new set our every success up reinforced In technology opportunity in new system, the summary, by result new our magnitude is unique Every the how execution in front of company every fourth

hard focus I'd didn't selfless acknowledge talented execution. on their our globally remiss be for I employees if and work,

to face Our to quarter the enable reflection problems returns dedication, a clients and risk our passion, simply our Their creativity are of for superior our their generate solve and this the customers results caliber investors. adjusted of challenging continue team. most

was on Brad, to Michael our the with of board committee the I the made We're strengthen Before the to audit who like our steps to Somers, Deirdre I highlight to pleased welcome governance further turn Spellacy, and and committee, new independent would nominating call the sits Board Chair. over were who and appointed directors. two addition

over to turn discuss more financial call I will our the Brad in now results detail. to

Brad Herring

to today. its to here us our as you Happy and Thanks Enfusion all employees lead Oleg the role joining thanks, for of of with everyone today next new growth. to help the speak working I Oleg, executive CFO Enfusion. look to stage with and team my forward of

over in generated an on was the of demand of comprehensive increase Growth XX% for fourth million, solution. and by wins driven last we client XX.X share Now year. same the continued quarter to our numbers, the quarter, revenue

increased these margin results a which adjusted change to an This quarter by profit, QX year-over-year which adjusted gross allocation XX%. It's Fourth represents million. of excludes noting that approximately margin $XX.X points. gross by stock-based gross were cost compensation in basis impacted adjusted by methodology, XXX worth XX% lowered

EBITDA Excluding a gross adjusted would EBITDA same been year was this up this profit XXX change XX.X% have of from Adjusted the ago. XXX% quarter margin points of represents XX.X%. year-over-year. million, quarter same methodology $X.X period an adjusted Against for basis revenues, the

model with Year-over-year of prudent margin expansion in cost combined was the scalability quarter. our of SaaS discipline the result the

cash earnings adjusted a our flow letter. included was flow free the One of our of cash adjusted discussion appendix free shareholder making is of the in an in of metric, Enfusion reconciliation changes we're the

For to $X.X rate $X.X in was due a deferral ago. same generated higher some adjusted our free cash CapEx items the that adjusted of a against Free Current XXXX. into million, negative slightly flow year will EBITDA. represent period of expectations a we than the to quarter, cash the XX% fourth conversion push conversion quarter million results compared

year involuntary their driven points sequential We retention exited up a additions quarter-over-quarter. our $XXX.X focuses year-over-year sector growth to strength by including decline retention reflects sizing XX% our ARR structure. market, was increasingly ongoing XXX with despite to in was dollar an in win volatility from ongoing XXXX ARR the Net the relatively XXX.X% in is The a quarter right the basis ability of Net ago share as churn cost down customer voluntary challenging our dollar healthy fourth on period. XXX.X% for customers. excluding flat of churn million,

XX% total with noting up signed our increased fourth XXX as quarter customers in income quarter, approximately the $X.X cash our the last same period new compared XX Net considerable quarter on gives of flexibility includes position was It's and fourth move strategy of long-term based clients. the to to execute We the to logos the We that continue which We in debt. compensation. with strategy. approximately $XX strong ending and of year, in worth cash also for we believe to the equivalents stock size average year on a million execute us our $XXX,XXX, our million the ended strength no sheet cash market. balance

Now guidance. on the

the I each an to Before and to board, on from the on quarter Oleg to We're we quarterly get was provide change with will practices. guidance our annual also of distinct based two during too deep, between of calls. decided I we've want insights guidance to on our guidance forward discussions our comment and our providing a earnings change relevant, pasting myself throughout had we're This anticipated making updates results factors. year. After be shift

use financial practices between the alignment First, business. and we to our the the to improve run wanted philosophies we

value create our practice philosophy. capital shareholders with the has is been approach to that deploy Our aligned for guidance quarterly long-term of to and discussing not always

our Second, scale given the of practice the is prudent. providing the macro in combination not current business, quarterly uncertainty level guidance of simply of

that and comments the our let's position cash making revamped X-K more While for earnings we addition I'll conversion to outlook removing be few filing metrics. in flow materials start our are guidance, that a in will of the to fourth adjusted our said, cash will feel information are you we see All free flow year. Notably, with quarter recently quarterly relevant. our adding XXXX. we turn

significantly with mentioned underlying down volatility within markets financial in sustained face challenges XXXX, our and clients As earlier, markets. considerable

anticipate their uncertainty, will opportunities economic right managers look business. to our for we macro first asset that structures impacts with combined size several into dynamics the has short-term cost This continue these half to XXXX. on Given of

First, ownership. market cost advantage solution market providing of us with the share considerable it a to by provides total with with gain lower a premium

spin the will stabilize. continue the continue launches new continued net we finally, anticipate lag until retention our as of expect levels dollar monitor rates, backdrop customers we in our their I've mentioned. historical Second, in uncertainties phone to volatility And current to markets

investing in support of regards we our are to primaries growth cost two strategy. in With structure XXXX, overall in our

in client and servicing model that sustainable making we function a expectations. customer's First, our investments scalable to are services our provide high meets

product R&D software Second, as to our addressable we are open position strengthen segments. up leading development our adding and capacity to teams both current well market as new market

pressure Combine margins. investments on put will short-term slight these

outlook and these supports growth are However, introducing Based on the we initiatives feel trajectory business improved these and revenue year for our all we EBITDA that adjusted margin funding going XXXX as inputs, full expansion positions forward. follows.

be revenue XX%. $XXX to million, million midpoint year-over-year of expect growth $XXX range represents which to We at in the the of

uncertain my revenue to facing higher be of to back the anticipate in the slightly we segment, on second market rates Referring comments half growth conditions the year. the

to EBITDA be in and We which midpoint the XXXX EBITDA ranges steadily our lowest adjusted the throughout million exiting $XX of margins EBITDA represents year XX%. of of the to adjusted project to expect before an margin We $XX in adjusted approximately at quarter, at range million, XX%. the expanding third be

For of full year. for stock-based approximately modeling $XX we purposes, project million compensation the

in with the In we despite completed XXXX segment. results summary, strong headwinds

business, continuing free in ability service to Moving our and long-term investments enhance our based building capabilities. to deliver leading cloud while end in flow. foundation platform I investment making XXXX, management margins revenue are both that on expand cash in on product to strategic to market and our the strong have grow of trajectory great end our and to we by growth, confidence

that, open Operator, the go to please like to up questions. call With I'd ahead.

Operator

James of Faucette comes [Operator first from Morgan Instructions] of line our Stanley. the So question

James Faucette

the appears How Is about really to larger of indicative we slower be in we and X% decision you a the cycle I the think what in disclosures kind bit pace momentum the conversion the last slowing period? and be a to gave given shareholder your should appreciate around of making conversion to helpful statistic of sales all on quarter XX% XX% statistical little letter ago to provided of clients that to expect relative Firstly, of some that year that persist? as should deck?

Oleg Movchan

from last not going that historically is This XX% to believe, we've for far any we to we're conversion can as at number like shooting forward our business as on seen indicative particular it's We concerned. be of over we average. my something is years, probably XX% the perceive expect on Actually, twofold what perspective. easily couple side, of trend

I could far decisions, overall stable in that overall have As rate on our increase continue conversions. an we in that of the far this of our something in book. Yes, as to of definitely percentage as purchasing percentage see of impact impact on, it delay don't to overall, will has an I impact think but the will business is wins book, as very that think growth overall our share as

James Faucette

from not be, be need in guiding next know, you're your to of you I that dollar three where the And decline of How should and outlook? net from volatile, net at to and performance, order really least strong think you there. to then, when perspective retention least know as in pretty bit our VR, roughly little etc. see, about deliver at think years? I able in to perspective should constructive, even part And but what's about be that specifically at still you'll talked drivers the that, guess, retention, it's revenue revenue to saw I a one, dollar of being level we the And a kind achieve five of metric you your we

Oleg Movchan

the tactically So me strategically, let so way. I answer and things this, think, following so a couple of

of the you come in, us and macroeconomic expect So the and by in, to came they driven the licenses is as allows clients. And formula that current we know, with environment, licenses. our scale in out they and volatility reduce right. it and increased number number of they Clients

clients, to and relationship, have our scale it's because increases downgrades, of in relationship. typically So they not actually, they our our with cancel to it and that of, just and us something seen out you and stickiness from want call that the that's just upgrades, binary, part in don't business, we've of is stay perspective this

three And there. this capabilities accountable and what, service, that get I to been say, would in gold terms standard from And world the company, technology. myself to of years, platform. know, historically accountable I in I is think holding a So both on That's what cloud deserve is MDR. my don't year, one holding XXX% technology what I'm services this addition this best-in-class team perspective our four us, to and long-term our than years, customer customers my nothing think I less is I class to, as

creating people to to within actual that perspective, drivers ability base, footprint. to and our the platforms. of and think looking be that I already in segments, this conservative, of there asked trying this green we're with between client you attention which a we're expanded little really prior multi good to out a some and in careful will terms we I about, downgrade and more think the mentioned close And value we're I growth sort balance remarks relationship the in very be So growth multi with commercially, clients at what market haven't something from paying manager scale of job a in our related institutional growth our our at strategy code and is deeply, very expand done shoots historically, in seeing

Operator

line Our Kevin McVeigh comes of the Suisse. next question Credit of from

Kevin McVeigh

where optionality way does existing about any it are sits to clients a that's year? Is think of way just different to active within is of frame we if kind any up? a flex get a back Just historically see, and there me percentage that at headcount of the that? of, way of think sense terms end a there's certain is times dormant of been in lower where about that range that the today to accounts, and to maybe where Is there clients the

Oleg Movchan

are to they, people both currency that on are was not performance whole are I fees looking equities and the will down accordingly are mean, which I talking that many anywhere about the XX% in country are remarks even definitely, at between and coming it. bonds of I down off, in seasonality mentioned off some year. XX%. his accordingly industry any Brad coming don't are AMs a volatility clients cases. of fees, is know, there difficult if down in depending management, say

So, there's the economics the changed. business just are of

So it's not the where It's the about to year. is, cycle, of in time so about speak. the industry

there As reduce see this is slowdown number I We the some balance. do mentioned, and of decision people making, and licenses.

However, what as convexity and seeing call that's financial you this results our results, from can our the out today. from in see we're downside business, I is guidance, playing this what

of launches. We're some a reexamine hand, people to are they're supporting our multi sitting to is sweet scale. legacy these the hedge on disparate that actually come counterbalanced people, million, that today find XXX fund what multi platforms. they this that into On trying $XX where spot. the service is help seen of in. with and and we million is capital, reimagined they're systems, hedge capital, amount and staff coming small of tech $XX and to as sort And we We've one significant And us this budgets, I'm this clients and where funds scaling manager with going good funds, strategy

they as door subsequently, then that spin right launch what call their as success they managers them And seed I have launches. was there on get and I attained them platforms, off as to were

getting speak years, dormancy. to seasonality arguably not It's for in classes this to for to XX about evolved, year have it's so is, like for positioned performance this just little growth with through asset again, business. worst core further ourselves summarize, really again, and trough related which us XXXX, So

Kevin McVeigh

low-end or about revenue you wins, good? looks above you the to the the puts EBITDA. any really, just it which high of guidance, range? of to obviously around that really Is and the end and takes Any versus on kind thoughts range And the get what high-end then think the thoughts client

Brad Herring

We a guidance take Brad, was is felt I'll good the that. like balance. this Kevin,

I talked couple times that think of of a couple kind over the will We've of year. play there's the of course the segment. condition out things a the about

toward launches. the kind back talked obviously the stability hedge think about bit. high better that, drive down come up end pick tends with That We to in some of us a of if stability slowed push We up market. the the So markets, into of that some fund think could that. that I could little has

also of get going to six where we put current for to We in but us out a get the out the positions bookings we're some the we year. product capabilities certainly huge doesn't putting puts the on think year. the have be sooner table three months, impact, higher inure in It this next could those that revenue

to prudent timed pull. expense for consolidation, some to some We've be got opportunities we've capital. Just a to going for quickly money we that, kind in make that side, certainly going spending lot moving lot expense that on some got some revenue of our that efforts levers in very to opportunities some our the mentioned the of of of We're We're spenders enhanced that for sure tools year, we've improve to watching our the well. got impacts could create environment as XXXX scalability major to strong with in I that has next it a as do some some scalability. well. services, closely client be

Operator

Becker of comes question Dylan the Blair. from line William next of Our

Dylan Becker

you with benefiting that starting letter. again innovation you. how feeling pipeline overall lot evolution as was of in Oleg in talking Brad to software in you the the maybe not a efficiency could adoption elaborate on client the R&D speak momentum? around well, see just the about what can shareholder Wondering and Maybe, service on kind if these There talk of and only piece framework kind service models, but that was how of that

Oleg Movchan

this afraid about I'm does of topic. question, doctor talking whole Great call my the

we of the of would all things us like resolving an couple up to affirmations, ongoing is whole, basis, supporting things a I things with and a ongoing business between clients service and client confirmations racks clients ended doing say the on and that as basis So and the here. services trade a business, an on in consistent that and managed want the which difference the technology Brad as just issues that. managed for of services like customizing make

And of really it's as in done, first thing, just as that know, the service our client better that things much as aligned and business our restructure concerned each I is aligned much sure when that with experiences sales I've revamp It's of part make is better and that came so healthy the far you one client Enfusion. how process and it's to with aligned. it's overall

and of one said having is good for than will they services remember, point right. what's recent I'm on historically, taking week, is that your might now client to and of way been focused forget, players. our is important support this And And ever. simpler clients software we've heart good. smaller you if Because the effectively, last really as more us and I not it just this never So themselves

And software and of and still customizing and has using kind it And been it. so really it customers powerful, love powerful. torturing so

drove not we much, actually do to result as have which economics. actually, that did So a

white them they as and extension default, Now actually some looking and complex by us service. larger expect go they're expect teams. managers, of of of especially service at one, their operating upstream many they And kind as therefore, we much larger glove

we aligned is number in make so operationally accommodate the we're have sure efficient. actually it just, team to sure business this And has team designing to happen. to feel number one, to it's make we we And have our therefore, that,

the scale actually technology of we business. maintain to use economics and So the

are could we margins plus, are gross is net long-term. a So all a our margins our XX% result think what conforming as business And target. this to be this our

our managed we'll here, is, we're rather second by business up business. design. as in and it them is as we And where currently that can a and asking looking Brad in carefully We in than this services us The call incumbent the by line ended today. our clients, default, extension see for part really of client at is, if position our very marketplace, that an coming do business, us to of separate relationship to which base,

as it price do, have clients actually what do, question we create to And what we XXX XXX today, But services. so the and so what clients is, value deliver properly, we that should managed roughly for using shareholders we right about value the us we now the well. for we and client, how can

that So that's using of our entire capability. of base, a actually client portion our huge part

behooves deeply if it And expand can us so actually that see we and relationship. look to

again, PanAgora, as this us to some go certain and And we like it's a and SaaS I a this so economic model us just clients software partnership, is of basis. makes mentioned, a between, service, institutional partnership is they assumption, pure where service, to I us And there's there and managed service perform and ongoing interest hope would expect level clients, organization support, this for where duality managed the a model tasks, provide perform two there. or to any in us other it services as and asking like services, expect sense. ongoing opportunities daily and

Dylan Becker

of we industry the drivers thinking be kind of I see another investment capabilities? about the Maybe automation, compression How changes, cycle some as to towards level nice and office moves, should to elect. as time to real relative proposed more settlement recent processing other back of interesting areas, potential one, higher the guess,

Oleg Movchan

That us. of opportunities right. those big one for Again, is this

the of conversations the on looking subject. have actually The lot to We clients to contribute discourse. are a

internally think to we at given so And well were we And to capabilities. looking software are positioned very it. ways I do kind of different our so were address

are as the in changes, market as changes of us to great is we So demand. regulatory think, terms all on this is pretty responding in are of importance, a compliance, another OMS where This software the before regulatory before we method both which well well reporting. functionality side, microstructure market of area

be we there definitely So, accommodate. to course, will of

Operator

America. the Our Koji line next Bank comes Ikeda of of of question from

Koji Ikeda

and Oleg thanks for Brad, taking the questions.

perspective different First year? for is, go-to-market me geography when from strategies compared into or a one your and last you about Maybe focus? XXXX, head could either be as thinking that how you year are this product to

Oleg Movchan

an our refocus there on I difference. I example, EMEA, to competitive advantages do have. want for will effort, we regional example just that is highlight actually think don't where as any We

won other its work is own world, And related its this East. right. fact, to our on in where Middle ton I region were functionality like the risk before; I to point operating highlighted trading, mix. subject, become XX% And historically relative, opportunity different it has is lot It region. of the the a has APAC. any a stable of nuances, that we're the of expected business just own of nuances in become we the It how a the in seeing an getting opportunity relatively the there's That specific has overall nuances. in we it's lot to and revenue actual part, to are what doing

valued. We've cloud into our the capabilities where differentiate proposition, our overall I above native, fact really value call clients head local generic had but did can that integrated traditional exceptionally taking position, and how we competition thinking we well our within won. localized just how account advantages. software, we different front-end It's shoulders an about and or would that competitive sort not of that's ourselves, it's it And actually what software

far one, conversions that is But of hedge to And be client relatively Japanese also so course, that's launches what some we're far Kong global funds, the I Australia. had both as of as in thinking largest active, continue Singapore mentioned, expansion as success we've and the and are as concerned. concerned. Hong And one

a is, our business. And larger which a very with a people that funds, see and ODMs is ability they the worry U.S. we infusion interest strategy, recent create where of together about and that with multi in about trading management a the just essence to capture, the in this technology operations. testament all don't and and about management where endowment worried closed, and of portfolio multi backhand other end is a risk the about, account front to wins into worry and we're allocation, risk capital asset or is framework take in way, manager are of segment couple recently position example, aggressive more that to a that institutional we continuing for most managers in In with fourth again about bring people

would So focus overarching it messages and more there would there say, say is the on focus I to the send position the go-to-market continued the, was larger market same with no really, remains and strategy and some I that actual executing zeroing highlight for particular really then in would against figuring institutional on as that and local that basis. what actually and I far that complex relentlessly clients. on that winning market, out really nuance, works But and as

Koji Ikeda

follow-up higher was Is net I assumptions been then might embedded we customer that churn And X.X%, on with that. but a the and that right churn retention be characterization out involuntary It to commentary the customer involuntary guidance? more on the forward, churn about shakes are have wanted And a dollar that revenue how XXXX question the customer in sounds like churn than just bit about thinking from should QX? retention. thinking how Brad in revenue ask

Brad Herring

and churn numbers Your on presumptions right. are

back As the minute did into see, projected midyear. you we churn. same of more the the kind I've kind of of a mentioned, up of improve XXXX but by conversation that kind of back normal we it's half market slightly going pick a to And around numbers, into little churn XXXX, and a had how at out. of off those comes byproduct anticipated to ago dries about that a play we stability of residual that levels XXXX do think I to think bit that's up We've the

half. bit So, for for half, the think back returns of a it first we do to normal expect churn increased the back little but we

Operator

Parker comes next question line Our of from of Lane Stifel. the

Matthew Kikkert

go-to-market you scale whole successful on Parker. Matthew a solutions with looks adding a these Kikkert start, like larger suite is on as management of customers just up Are To conversion? front portfolio landing have well? learned they a This pitch with what Are system? for

Oleg Movchan

So definitely the holistic approach.

of in piece into sort We're into the large we or their successful liquid expanding then and actually terms that fit those in overall on would selling situations seen stack. We of what are have functionality, strategies platform. more you where multi some land of call naturally just offer thing institutional also in and outs asset players expand

now trend or been XX, institutional of in know and don't As I points X to manager offer for you private the I'm XX size to CTA point real sort strategies ETF complex to everything that to global become of and sure macro has S&P from different and basis supermarket basis trying index and the from X years, of recent, strike substantial strategies the XXX very equity. estate quants

organization that that We billion. quantitative actually in bucket typically into strategies. and billion so And systematic $XXX then as build footprint the relationship manages, liquid don't expend we for things. And I we hold lot where know else, more a that some to other of they fit and $XXX within

is broader I functionality driven to product driven the you of for product some of highlight from And expansion can perspective. just growth

respect include to product benchmarks to benchmarks and as Some to managers initiatives enabling capabilities either benchmarks around to or of rebalance our those risk trying to portfolios their creating take match the the active beat investors those. with are

to And we is this and those strength really our of will the And them and things trades then related active loop, hand trades then orders hedging shine. closing portfolio strategies our think or that translating repeat, so some and bets, of actual of going that and OMS. construction and into offer oil send why into vector those one rinse on back

a sort work that market their of business high-level think comments of as segment, stratify have I about the we you about segment, hedge a similar. and and those segments still if but they're job. So, say every course, of particular Complexity They're similar. of very this can the funds almost it fund and lot like, or the within think more not, high can but is far universe, is same, less are you as every

is what to from we those every we learn it unique. they When And need of and workflows we see organizations, perspective. quickly, and one large those adapt, comes

looking different very risk of how are to in as sophisticated them actually and back hedge almost what offering and for what looking in kind in of the course, on of doing, want analytics of some the from but both OMS funds they're terms institutional of are terms terms some just well, par management all works, expand And compliance actually clients relatively we're risk where that requirements, for our not risk capability. the end, of

Matthew Kikkert

you do What large impact managed ability over how having foresee the expand scaling year? to next segment margins? on us And envision solution secondly, simultaneously you then your your do

Oleg Movchan

be so first. question your the Right, And questions that's in is sort going drive the that's, the second, second of of part asked you to two one. to going

the business Dylan managed I asked full, those software a ended with of as large So This relationships services. and times our have of one other we that. on, assets we sitting position in underappreciated and when was similar is I is our that this portion sell firms keep business to up question, mentioned, when that highlighting managed where And where, we we are it very my economic from have services, providing this perspective, them. played

again, footprint and this trying at both as in how tactically to figure be strategically looking position out expand a our causing and we're there, so fair, of brand to design by sort And bolster default. by

is before. perspective, Now, actually execute trick me convinced from that. SaaS margins, absolutely challenging And how is we to of to grow is identify And second without some we functionality that the business in it to that the trick product continue actually on the speak. to that our possible. it's We gaps, deal. on did diluting which and your is I'm have so that a requirements to pure done gross margin, that second, question, diluting without in need big do Everybody and part that's

knows than pure have internally a both We that on is lot a lower Everybody of sort of margin conversations services business SaaS standalone business. externally and as subject. managed the

services that the but cake, create which to just would managed managed if one actually, our but we also I icing going piecemeal years competitive offer we has formula is the have that one this will figure I final of of stack, on company, in these situations is the the been I where conclusion technology seen, to become enable is of and key what believe in sort is services And replace thought, company, that I because a of system to will we the were driving we bread-and-butter And role win more aware the IPO, company think entire complex example, were to all where be business. end. profitability we replace competitor OMS for upfront, stack. is back then And the all portfolio role not growth, a of the of ad management this setting. for where replaced I'm that, sudden Enfusion's out prior conversion all actually with replaced a

so disparate we to But actually for other in that company example, who that actually Enfusion support managed service better, and who fold they, replace once services organization legacy is another stack And than lines between. is to use stack, Enfusion. best former case, is they with it, that in this the support technology

actually we also happens one make increases replacements, economics it's of of have the So supplement [indiscernible] works, we business the to extension that Koji of actually questions and as happens is Does services. a stickiness manage asked. what competitively, what side was that sense? natural as back win, If technology it a those this that's the clients set effect, to right

Operator

from question the Goldman Borges final of Gabriela comes Sachs. Our of line

Unidentified Analyst

Gabriela. This for on Kelly [indiscernible] is

is quarter of me NRR versus we having for thing impact NRR at an should is think impact the of on XXX. about looking the growth First the average How in contract that new contract the the XX% value just on average customers? value

Brad Herring

take I'll that.

This asset of a byproduct move That's to we just of going what I is completely market. that us in the walked size the as managers. whole customer through move think, terms talk as first. we'll about And increase obviously that's stack contract in in we've available. becomes especially growth we up market bigger up value,

it points there's of translates NDR, there. As key I a couple into think

contract NDR think of was has terms always entire managed it I to of but come I of NDR, a plays a and gold then some of like we think into adding kind how into to One that discussion also going to standard from of that things XX% stack. effect that that services facilitates is ripple had, size, key management is really services make, that point that in

are because we the may I think necessarily stack, managers much mutually market size. and out but in exclusive. initial So the got larger size, to see include increase still not they're contract going where We've in they're also you're up scale our contracts full a scenarios not asset into very go intertwined, an overall

Oleg Movchan

I way cannot make expand have to time real our in with us commercial compliment and want We lot and expand we to to the it want services the to team with clients. just actually work We a portfolio as managed the to only sort is done I client a of our relationship to recently of that. respond client. product And give don't result, an like know, for the relationship upgrade expand demands. technology the sound

those great But are on And mean, in getting other sides of services one same to two sizes ticket that for and because driven. some within we And customer. two have frankly using the some situations, client managed where just, don't drivers the the not just point, is there's stickiness that has the going just two, still those deeper clients are are not the is of capability. do sense, the of base. and two MDR I we into it, bigger. valid don't really Brad's this hand, customers That, not, business current it. they number and larger it's those are coin So it one it's but is know

And my situations, it me, in right. just, those makes boil blood makes it

Tokyo, day outside, we that client engaged on or just whatever it's about not proactively is what really continue it's is sure that is about just we XXXX clients going we is about do sure it's in or really about the happy, this making Sydney, base business, that bookings, even making sure false. not really, today really with not growing great. and from making and to single client serve so are that a It's raise not to focusing just And aggressive that Dubai the about value we every just hear name being not that every current referenceable, like

Unidentified Analyst

in And to you've curious, at companies February, We've environment some of then the the you've that and a follow-up any a about the the heard start nuances of get XXXX? January talking start just seen customers? as seen stronger year

Oleg Movchan

a XXXX will very we're with low from from in within what is case, this thing. I into I defer perspective, markets, cash, fee his qualitative U.S. down, to mean, technical quantitatively, asset a I cash perspective, dollar norms. All from walking are base. again, beyond Brad this this aside is Yes, mean, historical is above just to comment, just their and this

people that know, base, a better crystal better, have and the feel been last we that's assets we well, months, makes couple that fact makes the people behaving breathe in from what don't But fine. I of have know or mode mentioned So risk two behavioral this markets people today a are we see whatever, going month, see to go definitely that so in just the years. don't I can change sometimes. that and are in wait ball,

opportunities some In result of other uncertainty what being strategy. a optimal is just are people thinking But customers. that with to we not will on what the XXXX. are that the we're for as sort launches value and our is well is and this positioned interesting cost whatever they're will really and good sense, horizon convicted things capture If focus expect, does If really in more allocated we're our side, either we business expansion as budgets reposition. more great, shareholder but right, it sort not On tactically of more is okay, in things to see created couple about simply optimization months, come the be creation, being actually hand, us, it's of active. and of this long-term time just within

Brad Herring

getting out very to QX prerecorded into of things pickup. that slight question. then our We're itself We're corrected about QX. But QX time, we seeing I specific remarks, anticipated, QX the seeing the like to your that, kind and trends extend mentioned we're same certainly pipeline what add a those my timeframe. in at little continue segment seeing of some kind like of on just improvements We I'll coming as bit into also thought.

we Our were improved has of significantly pipeline where couple a from months ago.

diversification do to a tough, we times I think do as point So natural well well, great, always times well. in are we business. If if it's are this

of into So kind business. a inherent I the just think great It's it's built hedge.

Oleg Movchan

addition. We'll our go not will. potentially real law to into only performance bastardize filter might balance some in question and just as gold But strategies. we as if this far and beta typically, There this quick performance of see clients. more, be business, some seen, you on additional we more one as -- degradation call have One

so, that really We are doing hedge are some well. managers doing our and well are platform given are seeing doing fund actually volatility, some well, the

are that $X of and not redeeming But or also, manage you have interestingly risk when that oftentimes premium, compression funds the should, to billion. this enough, somebody because the $XX typically, from people they $X $XX now billion manage they of from funds can, or billion situations used they and billion

And that point economics especially the of a at watermarks of us decision the us are all sometimes no business, so sudden almost high different. the regarding give becomes a And brainer.

Operator

were questions back team closing like the there no time, I'd As to over this for at additional call remarks. conference the to waiting hand management

Oleg Movchan

great Well, thank questions. you for all

for shareholders. are and will trust, for available we we always our of any Thank for work course, continue Of Thank the on questions. behalf real to you challenge. additional you time your in relentlessly

Operator

a conference quarter that gentlemen, day great XXXX earnings Have ahead. call. and fourth Ladies conclude Enfusion's

your disconnect You may now lines.

Enfusion (ENFN) 7 Mar 232022 Q4 Earnings call transcript