Enfusion (ENFN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $51.2 million, up 15.4% year-over-year, driven by up-market strategy, new product rollouts, and client expansion, with 38 new clients added for a total of 894.

• Record annualized contract value (ACV) of $229,000, up 5.7% year-over-year, and notable wins in the Americas, EMEA, and APAC, including Agile Investment Management, Frontier Global Partners, and a $500M AUM Hong Kong manager.

• Growth was driven by upsell, increased users within existing contracts, new client revenue, and full-period impact of prior contracts.

• Product initiatives and talent upgrades expanded the addressable market and improved service for larger clients, with geographic diversification and wins in 12 countries.

• Operating as a single reportable segment, with continued investment in technology and development to expand the SaaS platform.

Financial highlights

• Q3 2024 total revenue: $51.2 million (+15.4% YoY); gross profit: $34.8 million (68.1% margin); adjusted gross profit: $35.2 million (68.8% margin).

• Adjusted EBITDA: $11.1 million (21.8% margin); adjusted net income: $5.9 million (EPS $0.05); GAAP net income: $2.0 million (EPS $0.02).

• Adjusted free cash flow: $13.7 million (123% conversion); net cash from operating activities for nine months: $25.0 million, up 31.3% year-over-year.

• Cash and cash equivalents were $48.3 million as of September 30, 2024, with no debt and $99.9 million in available borrowing capacity.

• Operating expenses rose 17.2% to $31.8 million, mainly due to higher stock-based compensation, payroll, and professional fees.

Outlook and guidance

• Full-year 2024 revenue guidance narrowed to $202–$205 million; adjusted EBITDA guidance to $41–$45 million, with a midpoint margin of 21.1%.

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

• Reiterated free cash flow conversion guidance of 50–55%.

• Management expects continued investment in technology and development to drive future growth.

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