Earnings call transcript Q1 2023

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Enfusion's First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I'd now like to turn the call over to Ignatius Njoku, Head of Investor Relations, to begin.

Ignatius Njoku

you, thank and morning, Operator. Good to We conference quarter earnings first 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 filings and to our subject forward-looking our website. quarterly forth which the shareholder today's Please you to statements uncertainties, to IR and are set have forward-looking call in note, posted includes are may I'd our contain our including SEC been those all financial in section with remind letter, risks that Investor the like numerous on results, These statements. website. our available Relations

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

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

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

Oleg Movchan

morning, joining to our happy us quarter all you discuss Enfusion. I'm and strong to XXXX today results. quarter another thank first announce for Good for

Our despite business both ongoing performed for in profitability line with macroeconomic and uncertainty. revenue our expectations and market

regions. new clients across existing of all and to asset continues both Enfusion strategies, classes hearts and and minds capture investment

software protecting enhancing services focused are competitive centered the and on unique and We advantage around offering. our best-in-class

share classes and performance historically global investment space, and outcomes negative adjacent delivered our across Despite of with This business macroeconomic market uncertainty, model alternative year segments to has market extreme strong all the with our unlock ability our managers, footprint. an asset ongoing expand investment quarter. this traditional and last foundation strategic our is increase new

the managers unique challenging a Predictably, delaying are the purchasing and as industry reviewing technology seeing dealing we is with time, are real budgets, in market environment spending, it However, more for their now dynamics. management investment decisions. recalibrating

last the earnings headwinds factors in to As contributed some business. quarter's these all call, anticipated on and short-term discussed our

to tends resilience, however, environment times model these its Importantly, market It flexibility to business like share not to is we during market prove when situations this us. tend to Enfusion's expansion. amplify and is and precisely opportunities and as growth use accelerate this unfamiliar

no exception. This is year

continue from stale, will inefficient expensive business We situations. take away in technologies legacy and to competitive

our owners client the competitive are and We delivering best-in-class to edge unparalleled scaling globally. experience doubling asset and managers on technology down by investment

strategy years shareholder Our unquestionably to execute for exceptional the will value drive many on ability to come.

me let of XX% $X.X for I financial our will through let performance results a our million year-over-year XX.X%. represented financial walk reflecting color. grew XX% provide to and software Adjusted to Herring $XXX Now you million, Revenue EBITDA Brad more for resilient key client $XX highlights of and ARR the margin services. quarter. unpack grew was demand the and our million.

business especially and these focus flexibility, combined with margin profile. enabled excellence, expense ongoing proud our on operational built-in of to discipline. driving strong All efficiencies the optimizing I'm our efforts us maintain team's operational

new reflects agreement fund I to year-to-date. announce hedge grew across to dollar that with life delighted would that above. Now highlight new strategic I'm regions. In signed a the the of fund, largest year-over-year, like hedge U.S., wins bring our a all XX% to one few multibillion which we launches outlined vision an market revenue dynamics the

derivatives. framework, debt, special platform and involves strategies situations as firm was loan equities, supports and which investment that corporate equity looking unique for The origination its and a direct credit includes such technology lending derivatives,

integrated this flexibility, support large launches hedge of end-to-end and our architecture. instrument in set broad of and partnership a and complex partnered Enfusion their The with investment platform asset more win fully fund to evidence classes across of ability environment. because our fund This ability types, and manager to its delivers mandate comprehensive

management deal with particularly grew excited strength announce a revenue investment late-stage and capital of a a Middle XX% with multiple alternative region, London-based $XX portfolios ongoing EMEA, East. well-known the and public by investment year-over-year, in In signed manager in arm AUM, to manages This driven fund. aided venture that global over billion private solid companies. we of sales I'm marquee the in execution by

our our this of conversion, both capabilities requirements native selected and In back-office outdated front, manager services replacing managed offering. support that offering to public supports The because cloud private fully integrated is robust with pieced-together technology fund Enfusion and middle, of Enfusion cloud and the ability mix all client. the investments,

agreement In that macro an with announce global functionality. a a fund powerful to that we complete front-to-back addition, offers and to I'm newly set a launched also credit solution into of entered provide pleased

platform, deal about the a it dedicated account We sourced this because was broader Innocap Management. are Investment a Global particularly excited managed first relationship with fund through

technology. separately how example can and efficiently using Innocap investment new flexible and is dedicated native account of cloud managed another end-to-end launch scalable platforms vehicles alternative quickly Enfusion's

sourced focus As SMAs see efforts through be one multi-manager, multi-strategy and construction, to either risk vehicles. portfolio sourcing Innocap managers account generating commingled client this many We structuring, believe and management. management, we demand or of can and our investment scalable investment and a on alpha investor on that result, the is relationship dedicated through their can continue Innocap for delivered products will with direct

by XX% revenue grew year-over-year. APAC, In

continue the success across see We region. to

of processes. in legacy expansion highlights continuing using the funds one our signed legacy value APAC the and limited The the This an the into with hedge error long/short update Enfusion's to of Asian we their which clients platform resulted example, region our For prone and software see incumbent manager demonstrates software. equity Singapore with Enfusion provider in largest functionality, and services. manual win in best-in-class use investment was

clients Shifting to our of drive broaden access operating our you software allowed use we clients partners how technology our to improvements an a with with partner interact to continued unique doing platform and platform our I'd strategy, like in meaningful And as result. our in how to capabilities product so, as have ecosystem. share system to

to our risk partnership strategic deliver clients solution. with an Qontigo Axioma with Risk, new level thrilled Qontigo management I'm Specifically, of enterprise Enfusion's

With can risk including from and Axioma Risk, models, capabilities, risk attribution. multi-asset class scenario risk analytics management, exposure benefit our clients multifactor

managers fund sizes of result, portfolio better view a can of profiles. risk make by As comprehensive all informed a investments decisions and their construction

to and clients. we robust enhances Axioma's our With value further comprehensive capabilities, the risk Enfusion deliver

workflows, open Importantly, architecture to a make management ubiquitous this for our partnership that operational leverage also Enfusion's investment industry the ongoing our showcases decision-making. only platform and facilitates but not offering investment commitment

platform. invest to in the developing continue enterprise-grade We best-in-class SaaS

improvements, cost first increased ownership, ever-expanded and out features. lower of Enfusion XXX rolled clients, and functionality. the productivity, In our continuous For means quarter, that enhancements

our For added swap OMS, example, order convertible transaction capabilities employ which option asset enriches of clients for set a convertible arbitrage who for support in for we strategies. entry

both credit We trade derivatives. bonds also added and clients a new credit, cash that enhancement for

that supports developed team tool bond new a rate and fixed trading. Our floating

Enfusion, just day For in the it's another office.

We will continue on highest and to experience at rate client to capabilities weekly in improve deploy enhancement the new a to the this basis industry.

Now let's dynamics. turn to market

continues team space. investment the execute management our the macroeconomic have headwinds challenged sustained While high-level, a to at

in stabilization macro we the uncertainty However, encouraged in and signs dynamics drive the reduction a year. of better materially back to see we half of as expect remain

in significant hedge data suggests fund recent year-to-date. launches new uptick a instance, industry For

share our upcoming of have a offering, opportunity new we Given fund differentiated an capture significant launches. to

far year. share the we of won cash this largest launches an have fund outsized fact, In so

several from position market competitive Further, a themes current we this environment us see will stronger that to position. in emerge

client remain end-to-end digital disparate transformation solutions. native tailwinds legacy robust The secular the from First, early in our systems is to industry in favor. innings of

managers Second, our qualified upmarket Recent pipeline infrastructure. reimagine pushed technology for opportunities fund and remains healthy. conversions to has volatility their market

As improve a their look to these structure cost Enfusion productivity. result, help managers at optimize and

increase to continue of customer we our the our strategy wallet. Third, focus share on to

OEMS, the clients solution, only fully our this from the realizing are PMS value relationships opportunity integrated cost to and As lower and NGL client added capabilities. while accounting capturing expand to our of

the potential same in the offering. expanding our conjunction managed with for with software our services offering Along core tremendous lines,

Importantly, competitive win-win durability comes when conversions also with our profile. a hedge economic basis, larger complex it financial managers. It on our a to makes and better clients relationship not it institutional does more Enfusion funds but only enhances of for drive

more the core of support our competitive by client our view managed and functionality our advantage we investments rates our exceptional as streamlining and and We of profile future generating and are onboarding, to bringing and robustness and services. new investing in franchise. introducing these Finally, readiness expanding critical growth sustaining scale platform, business our to profitability

durable differentiation that conclude, To scalable. creation our continues for and demonstrate our drives despite fundamentals market product shareholders. Enfusion exceptional value our remain business to customers challenges, strong, and

our to several and kill. was Even climate came and through more navigated resilient, clients, no operating is culture made Enfusion market what us passion This grow we we'll and One first and stronger, better, brand, today, unique out Enfusion our founded, our excellence. current challenging in And have economic leverage in technology, and impossible integrity for place, them grew cycles. different. Since can good the pride still, of environments we

We to both wealth will continues offices managers, for undeniable will shareholders. from managers, institutional asset durable for family multi-manager to into and clients create that see value translate Enfusion's our Enfusion convinced long-term value proposition, hedge fund clients, value crystalize platform investment future, new which our our remain unparalleled large, complex, and and current launches accelerated owners. creation and

turn now discuss our financials. Brad Herring over to will to the I call

Brad Herring

macro solid us report everyone, investment for environment today. another managers. Enfusion Oleg, to challenging joining Thanks, and quarter thank for you, the for I'm despite pleased yet

For revenue $XX the of year. the quarter first we over same last million, an XX% of quarter, generated increase

our Oleg driven expectations over as the base was evidenced guidance on into provided our customer made line in existing Revenue penetration these as last results our new commentary sales of with consistent were NDR by we call. as earnings As well and growth XXX%. discussed, further by our with

compensation, XX.X%. onboarding stock-based mentioned client deliver XX% to and an services This investments experience. adjusted in a best-in-class results gross client which and margin adjusted scalable quarter These year-over-year our profit, million. First gross represents targeted of capabilities by $XX.X excludes include increased to previously

and our several continue margins the we XX% investments As activities, to in gross make we expect remain between next to for client-facing prudent quarters. XX% adjusted

vision year. the for of adjusted this points XXX of of represents by $XX XXX% pass-through up basis an on the rates million, EBITDA same was balance prudent our incremental million, quarter our up a expansion of delivering Adjusted growth revenues superior margin generated to over to over margin high EBITDA and continue of QX long-term combination $X.X compared last we matched period XX.X%, Against from revenues expanding was as expense revenue management year profitability. a ago. with Year-over-year

results the million from income For negative quarter in EBITDA. an the was flow $XX.X net free GAAP quarter cash against compared a period generated adjusted $X.X year. million ago. Current last $X.X XX% adjusted million represent up to same period for our in million, negative year we same of rate quarter, $X.X conversion the the

cash and and of This cash positive cash ended the flow cash free our no options of in equivalents quarter approximately provides We with with number initiatives. ongoing us $XX million production, to position, portfolio combined debt. a with strategic fund

$XXX our up retention dollar points including was metrics, churn quarter some million, XXX%, year-over-year. first Net quarter. from quarter. churn, the Onto of excluding ARR in previous involuntary operating dollar XXX% Net was XXX basis the involuntary was retention, down XX%

our XXX remain management quarter, sector with retention the I in optimizing XX earnings expect dollar quarter call, first structures volatility in cost on as As in discussed signed last reaction the logos clients. investment level forces. their net exiting focused to participants macro We on we in contracted short-term new the

assets. As down without typical launch number wind funds increased Oleg an saw those would of that QX the hedge redeploy mentioned,

hedge first fund up the however, have few QX launch on and accelerated. weeks Based launches have of counts picked

has Finally, move the upmarket. year, our approximately to XX% increased our of customers of strategy last continued same compared reflection period size to the average a

turn outlook to let's our XXXX. for Now

$XXX full previous million to First full million and guidance million foremost, of year reaffirming our adjusted year $XX and we million for revenues EBITDA. are $XXX $XX for to

continued to take This talked to effect Let generation. environment a creates To color fee minute markets structures financial to clients of dual they as their position. look current some for we've how on Enfusion's volatility levels realign within start, their me on our our a business. the challenging has a provide about expense

customers existing reported on and pressure from through may near-term of their downward our expenses, as fees decrease, putting work First, book our back customers NDR. revenues

tailwind our total in On event infrastructure. the of significant has as with a to a created the prospective their other catalyst or explore conditions front asset hand, environment respect managers this clients, for book ownership cost current to reductions of market provide

position and through to in tends leads software with lower us clients measured our a more onboarding sales Our as This proven and is weeks these unique we cycles pipeline process. in puts and The of total subsequent qualified cost months evident of healthy as rates. win ownership, of and timing work tailwinds, monetizing to new by be capabilities, arise. however, opportunities the a servicing combined win these

compensation full the previously year are million of mentioned. Lastly, for $XX to for stock-based modeling we as approximately $XX projection revising purposes, million, from the

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

Operator

[Operator Thank from the of The Blair. Instructions] first you. comes William line Dylan question with Becker

proceed. now may You

Dylan Becker

Oleg, as it in I seeing, spend. some some the it, you well, think, reflected kind mentioned Brad, but of trends of the segmentation, you're up markets customer of the move of highlighted kind and you customer the

support kind We are of of industry you this incremental tailwinds some in and wanted Thanks. of I the of starting guidance those well. to overall to broader maybe of lap kind digitization of optimizations, and reiterating kind broader confidence of kind that But kind drivers the those give through some as tailwinds half go to back X here.

Oleg Movchan

Sure.

potentially theme. the in our between environment of the brakes same tapping see scale we clients what costs when the on balance to and a are the talking as have forward. theme they be going talking observed and uncertain patterns, continues to We into time. after underlying the people all prospects, the and to purchasing thinking of same. course, observed how It's about to kind reduce we We're people So XXXX,

capture half hand, other accelerate pipeline the of lot us a of From for a perspective, On the market see towards it to balance. is second opportunity the actually and share a year. we

is in of I that little is as business, how which comes churn think far positioned thing, are it's into gives as you from most the interesting U.S. volatility a we concerned, insight Another

toward And of versus this forward. APAC breakdown and as focusing we and efforts markets And where this stability. in that we see in our is focused. U.S., core think rebalanced expect up and profile, is of going we're more we business sort our being if our the stable away you fact, we EMEA go higher from and about we're where And adjacent position chain regional think

our play to sort is the high-level components to flexing backyard, some properly, course, that defense Of cannot respect and both area. offense and U.S. control. kind our control, our that's That's operating in a in beta of are summary. muscle reflected We with our kind but there expense market core of we of

Brad Herring

this out were I'll Dylan, first Hey, talking to is I thing investors. active one to that. Oleg the Brad. quarter pretty add and in

all been firsthand, confirmed some spend, probe their to hypotheses to within those confidence just investors infrastructure us. of these processes conversations, but around their and investor on Everything a context, the it's not big it their of looking As unique around have part has here's we've we base. of kind I the to decision-making another to what opportunity run kind feel. businesses, able of anecdotal, through conversations. of infrastructure test for observe customers to of said that opportunities for you we We've point kind those that's been give revisit

Oleg Movchan

clients, they that just accounting reducing counterintuitive our same maybe, And ownership, OEMS success success of are capturing in as semiautomatically thinking are focused cost pure of automatically most base. that results for we about people clients. just And GL total Dylan, comes, and the both current touch And the some see at already cost upsells. and or but also PMS we back-end in from savings Yes. time, our client are do because also one point, on it's

Dylan Becker

operating figure of like guess out, ton to of playing to win cost mandates, best having Oleg, to sense. new a ability go EMS operate some your visibility unifying are efficiency makes the by going lies some afforded of maybe, platform of these the new standardization systems of the that for companies, the kind of versus and customers, like helpful super I Thanks. way and out kind much of forward, out proposition as you're That's AUM synergies, it. these Got them Maybe conversations, value as in how even well? trying too.

Oleg Movchan

question. That's an excellent

I think about think for -- let for second. a me it

become It -- and launches. PB bit a and important space. the important. more consultants more somewhat competitive be are for seems to around launches, to asset just to consultants looking for talking it's think We I landscape we management

success Enfusion cases, so Hey, especially in of everything standards operating your high many in are our boxes sort given one winning investors is are, and be place, that must launches, large We those check. of latest have in we good. you

couple one, I institutional Number and large there. top clients, there I considerations. For think things say are of the costs a probably are would efficiencies

of prototypical of institutional will, However, the to you that We as allows front increasingly put I is And to thing is new see actually user system us that us earlier, and an investment here the persona, the mentioned the from process our because sort operator, that making related app. for analytics decision-making back in of the sort investors demand or loop CFO and decisions. portfolio People the complete to while theme middle the back-office the to of manager. are if interesting recurring it actually is CEO.

rinse From to the to are product which large it's for and environment sees data we are, that portfolio we as And from and back margin our infancy, the it's that in there, decision OEMS strategy increasing see analytics and to context, our Enfusion on and but demand repeat. well. business quite sort its decisions, in of implementation a revamping construction we speaking for a high have very a side, we it, frankly potential of us. lot particular few clients really And

Dylan Becker

Got guys. the appreciate Thank I you, taking you it. time.

Brad Herring

Thanks, Dylan.

Operator

The Faucette from question with Morgan next the comes Thank James Stanley. of Mr. Becker. line you,

proceed. You may now

James Faucette

understand conversion wins, initially. you revenue of your the full confidence to flow-through if to very visibility least half can of what at color the into the timing year I'm of to appears be your your a which monetize to and some just have back appreciate longer recent in the trying obviously to thank as Hey, take level you outlook. particularly visibility bit speak little you sizable pretty a wondering the relates post-implementation, And acceleration much gentlemen. on of I terms with to it outlook.

Brad Herring

Hey, will James, it's that. Brad. take I

we fair remarks. to color provide and pre So, also it's question, some tried in the why

QX, slow pick of we a expand back kind seeing starting of on pick a toward of saw in talked are slowdown Two funds about in the kind we to are One, up. end, bit. QX, We Just we saw things hedge of bit funds to them We up. little little the happening. in really but see hedge did half QX, down.

we're funds visibility, us more confidence do getting one look through X. counts we as So funds through up, the normal starting to we element gives funds that and from have see back hedge those the of redeployed. to unwound That's are now those levels pick as QX

on in conversations, byproduct in The pipeline, other the is the that quality better a we've And in do through than of of quite had historically. a as much we of byproduct out but time it, also look at some pipeline one a us been have today it's we spending also effort. generating it's is, condition pipeline a generating terms time. investor of best our part us not terms more When only of in road, it's but leads, of leads sales scrubbing

Those To get timing, them weeks I'll the question on really of call months. vanilla-type and back depends short launches. on it some to your measured in are more

live takes that will If But months is stream. mind, PMS, out the the be keep could will funds, complicated first several monetization get talking certainly much you in place. the always thing go large into revenue that first you before be more hedge

to if a all for Once short-term robust year, and drive the months then into with get is typically our you look of there's at connections we long-term medium launches that before qualified and mixed OEMS really back But the us confidence. get you monetization, through. and the board we ability the hedge that, when fund between monetization you of pipeline where and that's half combine couple a

Oleg Movchan

to are advantage. competitive just this Jim, being We smoothly just our and our clients to heavily we quickly as view particular supplement in of onboard able this, sources actually generically, one of area. us investing

Of course, stop will can we improving. never never and

and element, as until close it's we the us, For a switching going possible. strategy cost is never stop thing. as It's to simple cost to switching we're -- just a will zero

but move especially actually, clients which -- source And take years thing becomes competitively, of also as Aladdin advantage in have, such competitive we a with market, a nice to not against SimCorp, onboard up that incumbents as similar to it's just profiles.

sort of on revenue focused to really pulling present. the the are we from future So

James Faucette

churn the in first touched question this I among having prepared it. performance. been seems public your client Got clients, count at thing fund you've the think any it voluntary total appears some of has like churn you know there Can is given least, I And then on quarter that mix or was around that actually this it to remarks where the involuntary your in to versus the involuntary churn on to since speak contracted. Especially you response and whole voluntary but impact hedge if be quarter? particularly NDR

Brad Herring

Yes, a it's great question, Jim.

So an voluntary when insignificant our still to churn, you number. remains be at look it

as the and single If in look at of you low think than wise, deconversion a even less of that of off it's even. of terms accounts that. that digits it's churned Percentage number than unwind, clients actually rather us

Oleg Movchan

just asking alluded Yes. I I to Dylan was when say questions. couple will of things a

X%. had our been as X-ish see the component now, last that X% of quite very stable X, lowest to high. the has X% Actually, figure Right beta years. high you component is results. We it XXXX. the market is X we The are is as tracking the just been voluntary closely. as end under roughly it's churn of The for in The at

below Now stable last X%, it's just it's and over years. been hovering X.X the around

James Faucette

Brad. lot, Oleg. Thanks Great. Thanks, a

Oleg Movchan

for to downstream have, strategic a to going Yes, U.S. Jim, thing and to the and just I just just globally, rebalancing reiterate before, Dylan it's both make us. it again, business I from upstream stable, away said what and from to it's

James Faucette

Got it. Thanks. Got it.

Oleg Movchan

Thanks. Sure.

Operator

from Stifel. Mr. Lane of comes Faucette. next The with Thank line Parker question you, the

You may now proceed.

J. Parker Lane

front? and much environment, challenging budgets, Hi, as this dynamic And more of I the of to Yes. these foot with opportunity you door in that Thanks are you on discussion? sort the the discussion? guys. is an guys In your becoming guess, for their deploying tactics seeing the looking more are to what seeing, one question. get more more deal pricing centerpieces of organizations a you and recalibrate taking the pricing get in customers Are aggressive if some of of

Brad Herring

This take I will Brad. that. is Yes, Parker. hey,

seeing We of lot not come whole are pricing topics a actually up.

think may about of more are price-sensitive in for sensitive I competitors us, of it's not not we price or go put and seeing solution We front we provider. be that are compression. not our in may some a our than us. But price

think can have more between we I how us we but of entire uniqueness kind is seeing more give that been latitude, It price we bundle to compression how else. because and does That end-to-end environment's us stack. we and up everything accounting full are general even we and solution in OEMS analytics though the and gives not the market come with and The that certainly latitude go PMS a pressured.

Oleg Movchan

Yes.

much compression market to several Parker, It's one a to element not price environment. last just a price there's It's years. So, so competitive been the over it, always just related segment. it's -- recent

new also the much just And and are much of incumbent narrow. some cheaper. set more much, Their of players some capabilities the entrants

defense concerned, we million $XX price-sensitive, strategically launches, segments, $XX very launch launches, and $XXX compete but on low price. playing type are refuse to million, are When we million tactically AUM within launches debt think there, purely even

set have and we we that. not $XX,XXX successful. decide and with when when convert they we when them much a go successful, start-ups those care. away they're X them And really year don't see to typically no problem we years capability capabilities. as less, take limited now, And compete they on And and from if are a for grow, We more if

J. Parker Lane

And mix Very clients your a closures, Brad, curious commentary Just if those of customers and average could to hedge funds Understood. if hedge pretty scale give was there? characterize be would about you Did weave an of these value. smaller a fund and that that contract about it. or any then, it where average color the helpful. think with in metrics solid on I be of really the Got closed value sense from helpful. us contract tend that

Brad Herring

small to Parker. closing, average smaller Yes, side that book. going to are are that the ones. the our ones typically those Yes, the be ones the that's are fine, are compared Certainly, on unwinding,

J. Parker Lane

Perfect. Got guys. again, it. Thanks

Brad Herring

Yes.

Operator

Thank you, Mr. from of line America. Koji Lane. Ikeda of comes the The Bank next question with

You may proceed. now

Koji Ikeda

was this wanted for rest trough about ARR specifically, ask to be the we the the half, a be ARR Yes. year? a ARR, ARR. growth year, out million. when about can should we is, from how more on about this question growth net maybe look on growth Even growth should Hey, When anticipate of every I quite at guys. for we kind we $X.X year. And the how do the rest I question the slow questions. thinking the quarter second quarterly comps in ARR thinking the think year? for guys ease how Thanks taking or ARR new XQ, should of So the if the to model, the you ARR here bit of but increase net new should

for year. this Thanks. to think growth ARR reconcile you Just guys about trying how

Brad Herring

Yes, like see on I our within see elements to byproduct of couple Yes, you're will going back short-term that. on ARR a couple grow. of some book. going ARR think I pressure take obviously. to things, continue to of you're a Koji, a I mentioned One It's before, is,

of the between as it even first half see more ARR I little clients get get to you're But to a some don't to going think see in half into I you see start know variability and necessarily a growth. trough slower to monetize, the into growth back that going I'm in to the as that going you as rates then we're as might near start bit accelerate. see year. probably boarding And as much those you importantly, term, XXXX. probably next you're

Koji Ikeda

just Got And Thank it. That's helpful. a follow-up you. question here. actually very, very

a your think the with guys you stabilizing is this prospects even that prepared Are improving there improving taking markets The today. remarks, in guys. of guidance on assumptions on of the you in I the macro the maybe out this macro guide later reaffirmed like for any the be assumptions questions. that's Thanks underlying or an embedded end what the year. Thanks, mentioned may year? in there and looks data that are seeing change question for

Brad Herring

even we we first it Sure, expected than had Koji. be last quarter, back we guidance, the slower to half and we a half. gave the about the when talked mentioned bit When

that seeing the see in to that we are more changes it starting that much We not of got out any towards way, reaffirmation as end QX. as play are we especially necessarily as

it's an not out it to guidance philosophies somewhat last playing update internal It's our expected the provided our just So as own we when or quarter. it's in we necessarily -- models.

Koji Ikeda

it. No, Appreciate it. so much helpful. really that’s no, questions. really, for Got you, the taking guys, Thank

Brad Herring

Koji, thanks.

Operator

you, Ikeda. of from next line with Sachs. comes Mr. Goldman Borges the Gabriela The Thank question

You may proceed. now

Unidentified Analyst

This on is for [indiscernible] Gabriela.

tends seeing understand the as and well the on between quarters expectation as bit First that me, one behavior back more for NRR in half NRR appreciate you the just of a move conversions? call. existing customer to color those any improve would gave around on quite that But

Brad Herring

difference of on primarily NDR. mentioned take that. our the right. impact which down, Yes, back volatility timing results. I is short-term the which mentioned NDR last QX book. what Yes, the expected remarks, quarter drive exactly it for drove of I we as my front of this impact, the Think the book is is Brad. that's NDR book I and some between in our more Like will back will the near-term mean we

be on bring always with But modules and analytics, talked OEMS, managed on starts about be different over book land-and-expand bringing where they'll on example, for customers we've they'll bringing PMS, then board on those front to a model kind they'll of bringing be the services. time, as then the like

probably recover to You'd teens. way to the has levels, normal see But to in in played expect the term, back to out. start NDR that this more near exactly you mid the upper would see yes,

Unidentified Analyst

the productivity you of giving XQ makes Kind right. XQ? seeing that you that guide? that's Are terms All sales Thank in in what in you seeing in sales then productivity? of trend in have been how seeing close how and And That you. step a sense. confidence up trended you're

Oleg Movchan

signs take, see L-type this so People our That's will not cadence confidence recovery, getting the we point deals. data the positive we of in a close V-shaped -- do. recovery, focus us another see definitely some conversations in maybe we ability that are good sorry, these much it's take, and we time we but people's It before, how the recovery cannot I'm and it and more will to we and our having gives the new in back Yes, But services end It's OEMS, sell, other be richer. conversations are upsell and as about much the year, as and of how brakes may pipeline trough verticals the can there. pretty extend how tapping accounting while GL said itself conversations conversations. time much, conversations just the engaged definitely predict well. managed we not including upsells definitely

Unidentified Analyst

right. you. Thank All Great.

Operator

additional registered, Thank at I'll you, Ms. time Borges. been for [Operator questions Instructions] remarks. management have the back further to No any this team so pass conference

Oleg Movchan

questions. for the all of year. execution with balance I all continue the the on Well, shortly. their all focus to and we thank investors, you look you, for forward to you trust, will Thank for reconnecting

Operator

conference concludes That you call. for today's participation. Thank your

may disconnect. You now

Enfusion (ENFN) 9 May 232023 Q1 Earnings call transcript