Enfusion (ENFN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $49.5M, up 16% year-over-year, with net income of $2.5M and strong adjusted EBITDA margin expansion.

• Added 39 new accounts, including major wins in insurance, banking, and Asia Pacific, with onboarding satisfaction at three-year highs.

• Recurring subscription-based revenues comprised 99.1% of total revenues in Q2 2024.

• Product innovation included enhancements to Portfolio Workbench and Cash Ladder, supporting deeper client engagement and upmarket wins.

• Operating expenses increased 18.1% year-over-year, mainly due to higher stock-based compensation and headcount.

Financial highlights

• Q2 2024 revenue was $49.5M, up 16% year-over-year; adjusted EBITDA was $10.1M (20.5% margin), and net income was $2.5M.

• Adjusted gross profit grew to $33.9M (68.5% margin); GAAP gross profit was $33.5M (67.7% margin).

• Adjusted net income was $6.6M; adjusted EPS $0.05; Q2 2024 EPS (diluted) was $0.02.

• Free cash flow for the quarter was $4.6M, with a 46% conversion rate; operating cash flow was $7.3M.

• Ended Q2 with $34.4M in cash and no debt, with $100M revolver capacity.

Outlook and guidance

• Reaffirmed 2024 guidance: revenue $200M–$210M, adjusted EBITDA $40M–$45M, free cash conversion 50%–55%.

• Medium-term (2025–2027) targets: 20–22% annual revenue growth, 200–400 bps adjusted EBITDA margin expansion, 300–500 bps FCF conversion expansion.

• Stock-based compensation expected at $19M–$20M for the year.

• NDR target of 106%–107% may be delayed into early 2025 due to tempered upsell environment.

• Current liquidity and available credit are expected to be sufficient for at least the next 12 months.