Enfusion, Inc.

good afternoon thank you for attending today's infusion first quarter fiscal year 2022 earnings call my name is tania and i will be your moderator for today's call alliance will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you would like to ask a question please press start one on your telephone keypad i would now like to pass the conference over to our host iggy njoku head of investor relations with infusion please go ahead

Thank you. Before we begin, I'd like to remind you that today's call may contain forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including those set forth in our filings with the SEC and are available in the Investor Relations section in our website. Actual results may differ materially from any forward-looking statements we make today. These forward-looking statements speak only as of today, and the company does not assume any obligation or intent to update them following today's call, except as required by law. In addition, today's call may include non-GAAP measures. These measures should be considered as a supplement to and not a substitute for GAAP financial measures. Reconciliation to the nearest gap measure can be found in today's earnings press release, which is available on the company's website. Posting today's call are Thomas Ken, Infusion's Chief Executive Officer, and Steve Thornton, Infusion's Chief Financial Officer. With that, I'd like to turn the call over to Thomas to begin.

Thanks, Iggy, and thanks to everyone for taking the time to join us. Today, I'm going to highlight our first quarter results and then dive deeper into the market opportunity and our road ahead. For the quarter, we delivered revenues ahead of our expectations, driven by solid execution, broad adoption across all of our cloud-native and managed services offerings, and the overall resiliency of our business model in a volatile global market. We expanded our base of global enterprise fund managers, notably with the addition of two seven-figure deals for the first time in the same quarter, both utilizing our end-to-end portfolio management and OEMS solution, as well as winning four new institutional asset managers. Overall, the fundamentals of our global business remain unchanged and strong. The company we have built is executing as we had envisioned and outlined throughout the journey to becoming a public company. We remain focused on the same three strategic areas for long-term growth, moving upstream to larger fund managers and institutional asset managers, unlocking new and adjacent TAM, and expanding our global presence. With that said, we are investing for the future as we have done so successfully in the past, targeting our hallmarks for excellence around client experience and continued product innovation. We expect these investments to drive incremental revenue growth and generate profitable returns over time, and they are already delivering a speedy return. This has had an amplified effect as the investment management industry continues to transition to the cloud and our clients continue to embrace our platform and services. Our ability to continue to deliver high revenue growth speaks to the strength of our business and the consistent execution of our global strategy. Now, turning our attention to results, let me walk you through some highlights. Despite increasing volatility in the capital market, particularly within the hedge fund industry, We continue to successfully accelerate revenue in the quarter. First quarter revenue grew 40% to $34.1 million, reflecting robust growth with existing customers, as well as new larger customers. ARR grew 37% to $137.6 million, as we are seeing the benefit of new client wins signed both in the back half of last year and in the first quarter of 2022. Adjusted EBITDA was $2.1 million, reflecting non-recurring expenses related to public company operating costs and higher than expected operational expenses related to talent acquisition and retention. I want to take a moment to acknowledge that we fully recognize our shareholders expect more from us, given our recent track record on the level of profitability expected. We share this sentiment and expect to do better. In a moment, Steve will walk you through this with additional detail. Turning to existing customer growth, the success and stability we're seeing as a result of the upselling of additional products and services exemplified by our net dollar retention of 116% when excluding involuntary churn. The healthy net dollar retention demonstrates the durability of our business model and continued growth despite market volatility. In addition, our client diversification continues to expand nicely, as we said it would. We won 42 new clients during the quarter, ending the quarter with 756 clients. The uniqueness of this outcome is that, in all, these wins in the quarter represent a record aggregate contract value of total new logo wins that we've never seen in previous quarters, demonstrating strong sales execution, our ability to increasingly win more resilient enterprise clients across our products and services, and the ongoing strength across all regions. Overall, I'm proud of the team's accomplishments, and I'm excited to continue seeing the investment management industry embrace our cloud-native solutions, which translated to a strong first quarter business result. On the last call, I shared that one of the top priorities is to win more share within our current markets and expand into new markets as well as adjacencies. We've made further progress on this front with the addition of new logos that demonstrate our ability to not only win larger fund managers and institutional asset managers, but also unlock new adjacencies. In addition, we're continuing to see strong return on our profitable investments we made during the last few quarters, signaling to us that our strategy is working. As I discussed earlier, for the first time in our company's history, we signed two seven-figure deals in the same quarter. We also further penetrated the large institutional fund manager market by signing four new institutional asset managers, all of which were conversions replacing legacy systems across portfolio management, accounting, order management, and execution management systems. These compelling wins provide further proof points to the success we are having with large institutional investment managers and enterprise alternative investment managers who desire a more comprehensive end-to-end technology solution. And despite the recent market volatility across the world, we're still seeing strong demand from both new fund launches and conversions. In fact, we're continuing to consistently displace incumbent providers at a fast pace, as we saw over 60% of new client wins driven by conversions from legacy systems in the first quarter. Finally, as we stated in the last earnings call, we are seeing an acceleration in client adoption for our OEMS product suite. OEMS bookings accounted for 46% of total bookings compared to 29.5% in the same prior period. Winning OEMS clients is incredibly important to the fundamentals of the business for several reasons. First, it is proving out our purposefully designed end-to-end infusion solution. Our OEMS solution supports the full front, middle, and back office technology stack. With the accelerating adoption of OEMS, investment managers are recognizing the breadth and depth of the complete offering. By selecting our OEMS solution, traders are increasingly confident in communicating orders through our technology stack, further bolstering our ability to support mission-critical trading strategies. Before I discuss client wins, let me discuss a significant alliance we announced earlier this week. I'm thrilled that Northern Trust has selected Infusion as part of their whole office strategy. This strategy is designed to facilitate asset manager access to new technologies and capabilities across the spectrum of strategy and trading, operational, data, digital, and analytics solutions. The goal of this partnership is to drive mutual growth by working together to market and sell to prospective mutual clients. This alliance goes further than referrals. Our two teams are committed to providing coordinated white glove service to mutual clients. Our joint clients will benefit from bespoke coordinated services across our two teams. Now let me shift and walk you through several client wins in the quarter that I am excited about to help illustrate our progress in moving upstream and entering new markets. In the U.S., revenue grew 34% year over year as we saw strength across all our products as well as client types. As discussed earlier, I'm excited to announce that we signed a seven-figure deal with a Boston-based fund manager. the investment manager was looking to replace its 15-year legacy OEMS incumbent provider with a newer cloud-native investment management platform that could help them build and quickly expand into new trading strategies across global equities and credit debt as their business requires. They selected Infusion because of our ability to support not only the firm's current complex trading strategies, but also partners to support their growth alongside our high-touch service. I'm also pleased to announce that we entered into an agreement with a large global macro multi-billion dollar fund manager. The firm was looking for a technology platform that supports their new multi-manager line of business, as well as a variety of trading strategies, including global macro and FX hedging. They partnered with Infusion because of our flexibility and our ability to support a diverse array of strategies, at a time when global macro funds are benefiting from price dislocations and commodities instability. I'm particularly excited about this deal because it demonstrates the impact that our capabilities can have for a wide array of fund managers during times of market volatility and capital flows. In this instance, with global macro funds gaining the lion's share of fund flows into the hedge fund industry in Q1, we're excited to be in a position where we can be impactful. Further, it demonstrates a pattern we are increasingly seeing in which infusion continues to support multiple types of asset managers across asset classes beyond equities. In EMEA, we had record revenue growth of 59% year-over-year this quarter, driven by strength in Africa and Middle East. A marquee win in this region included another seven-figure deal with a global multibillion-dollar fund manager to provide a cloud-native front-to-back solution. In this competitive takeaway, Infusion is replacing a patchwork of different solutions and databases with a singular unified solution with a single source of truth, allowing the investment manager to reduce their tech footprint and realize cost efficiencies. This new client, which we're thrilled to partner with, was using a legacy incumbent for years that was not evolving with their business needs and was looking for a partner that would solicit their feedback, collaborate, and bring ideas to life. Simply put, the investment manager and Infusion are partnering to not only enhance Infusion's OEMS offering, but also be a quality contributor to our OEMS product roadmap. In addition, I'm pleased to announce that we expanded our geographic presence in continental Europe with the signing of a Paris-based long-running institutional asset manager. The fund manager chose Infusion due to the breadth and depth of our product offering, allowing them to overhaul their disparate legacy systems. We're proud of this win because it shows not only the increasing demand from institutional asset managers, but also our ability to continue to expand Infusion's presence internationally. Now turning to APAC, we grew revenue by 47% as we continue to see success across the region and new adjacent markets. For example, we entered into an agreement with an asset management subsidiary of a leading Chinese commercial bank that manages both fixed income and equities. The fund manager decided to revamp its outdated back office technology and its manual front office workflow, which has limited their ability to view and access their portfolio in real time. By partnering with Infusion, they consolidated their many disjointed technologies onto Infusion's singular platform, all while benefiting from real-time portfolio views across multiple assets as well as improved workflows. Finally, I'm excited to announce that an Australian-based leading fund administrator chose Infusion to replace their front, middle, and back office technology, This win demonstrates not only our continued scale in the APAC region, but also our ability to unlock new adjacent markets. They selected Infusion because of our strong track record in delivering a robust end-to-end technology, our ability to streamline workflows, and significantly reduce their costs. The fund administrator can now focus on delivering cost-effective front, middle, and back-office solutions to their clients. These client stories reflect the continued demand and engagement we're seeing from all our customers across all regions and supports our strategy to move upstream across investment strategies and asset classes and win new adjacencies. We also continue to roll out new products and next generation solutions for investment managers. We bring innovation to our platform and our customers are seeing the benefit of our cloud native end-to-end solutions. In fact, our cloud native architecture allows us to be nimble by releasing product updates quickly and enables us to provide software updates as frequently as weekly. In the first quarter, Infusion rolled out more than 528 enhancements and features across our front to back platform. For example, our portfolio management solution continues to evolve based on the feedback from our client community. This is the foundation to how we partner with our clients. Let me walk you through just a couple of the many enhancements released during the quarter. First, we enhanced our credit facility processing and data feed automation tool, which enables users to view global credit facilities holdings with ease. The new update provides users with term loan pay down processing, global activity events, and compliance rules. In addition, we added functions to pricing models of derivatives, such as exotic volatility swaps. For the OEMS, we rolled out more than 100 enhancements and features in our constant effort to streamline the investment manager experience. We have meticulously fine-tuned a new first-class interest rate swap order ticket that allows for quicker, more intuitive IRS order entry, as well as staging these transactions to select IRS execution venues. We're also continually expanding our API-driven technology stack which we believe not only drives efficiency and reduce operational risk, but also gives our clients and partners the freedom to use Infusion in broader ways. In some instances, in ways our engineer never imagined, fueling the art of possible with our platform. And with this, our APIs are enhancing our ability to deliver a seamless, easy to integrate, single point of data access for our clients and third party vendors. In addition to innovating and developing new product enhancements, our investments in improving the client experience through our client services and onboarding teams are paying off. They're paying off in both the number of client onboardings we can do at any given time and the quality of those onboardings. Client support continues to evolve as we strive to act as an informed extension of our clients' own operations. We are seeing clients continue to sign up with Infusion because of our high-touch service. It is the kind of excellent customer service that differentiates and, more importantly, is impactful. I think it would also be helpful for me to give you some color on market dynamics and how these dynamics are impacting Infusion. We are seeing several favorable trends in the market that bode well for Infusion. First, despite the increased market volatility, the hedge fund industry attracted the largest inflows in seven years during the first quarter of 2022. According to WithIntelligence, the hedge fund industry added $11.2 billion of net flows in the first quarter of 2022. Given rising interest rates and higher volatility, investors are searching for opportunities to hedge their risk. We think this market dynamic bodes well for us as we anticipate an increase in hedge fund launches in 2022. Second, during a period of market volatility, investment managers seek opportunities to reduce costs and become more profitable. They focus on achieving technological efficiency as well as searching for alpha. Infusion is uniquely positioned to not only help them in delivering alpha, but also enabling them to realize cost efficiency. The market recognizes our capabilities as evidenced by the continued strength of our pipeline, even in periods of volatility. Next, as we continue to see more industry consolidation, investment managers now have the opportunity to choose more technologically relevant solutions, not only to replace legacy systems, but to merge operations in a more unified manner that can support the designs behind consolidation. Finally, we're also seeing strong secular tailwinds in the market. The investment management industry continues to move toward cloud-based solutions. They are in the early innings of a digital transformation from disparate legacy systems to cloud-native end-to-end solutions. Infusion believes it is the leader in driving this next-generation technological shift. In conclusion, this was a good quarter. We exceeded our revenue targets by generating 40% top-line growth. We continue to meaningfully expand our international footprint, driving higher revenue growth in both EMEA and APAC by 59% and 47%, respectively. We continue to execute on our broader strategy to move upstream to larger funds and unlocking new and adjacent TAMs. We continue to develop meaningful partnerships that accelerate our growth strategy. When I add all this up, we have a clear line of sight in achieving our long-term margin target above 30% over the next two to three years, while also meeting our commitment of excellent client experience and innovation that our clients require. To that end, I'd like to thank all of our employees for their hard work and dedication. Their efforts continue to position Infusion as the leader in investment management software. With our new wins and unique solutions, I'm excited about how we continue to build momentum in the market and about where we're going to take this company in the future. Let me now turn the call over to Steve to discuss our financials.

Thanks, Thomas, and thank you, everyone, for joining us today. I will begin with our first quarter results and touch on our operating expenses and 2022 guidance. In the first quarter, we generated total revenue of $34.1 million, an increase of 40% year over year, exceeding the high end of our guidance. We continue to see strong business momentum and ongoing demand for our platform as the investment management industry continues to move to the cloud. Recurring revenue was up 41% year over year to $33.8 million. First quarter ARR, our annual recurring revenue was up 37.4% year over year from the year ago period to $137.6 million. Continued strength in existing clients, adopting more of our end-to-end products, resulted in net dollar retention excluding involuntary churn of 116% compared to 121% in the year-ago period. Net dollar retention including involuntary churn was 112% compared to 116% in the year-ago period. As Thomas stated, we signed 42 new logos in the first quarter, ending the quarter with 756 total clients. We saw strong demand marked by a record aggregate contract value in new logo wins in the quarter. In addition, we saw an increase of 54% growth in bookings per client in the quarter. We also had significantly higher bookings in OEMS. These are proof points that the product innovation investments being made are translating into quality business outcomes. Ultimately, the new client ones are bigger, utilizing more of our end-to-end solution and more global in nature. First quarter gross profit increased by 32% to $23.2 million, which includes $354,000 in stock-based compensation compared to gross profit of $17.5 million in the year-ago period. First quarter gross margin was 67.8%, including stock-based compensation, compared to 72% in the year-ago period. As we stated in previous quarters, we continue to invest in our hallmark client experience and product innovation. As such, we anticipate some impact on gross margin for the next few quarters. Income from operations was negative $12.4 million for the first quarter, compared to $5.8 million in the year-ago period. First quarter income from operations includes stock-based compensation of $12.7 million. Adjusted EBITDA was $2.1 million in the first quarter, compared to $6.6 million in the year-ago period. First quarter adjusted EBITDA was below our expectations and was impacted by a combination of non-recurring fees, public company costs, and higher than expected operational costs associated with acquiring and retaining talent. Let's discuss the factors that led to this. First, we incurred non-recurring fees and public company expenses of approximately $1.6 million. These expenses included incremental costs associated with professional services, temporary staffing, tax advisory, legal, and SEC reporting activities. While we anticipated professional service fees in the quarter, we underestimated the scope of these projects. Second, we incurred $2.9 million of higher expenses related to our people, including increased recruiting fees, employee benefits, higher wage inflation to attract and retain talent, and costs associated with return to office globally. We remain committed to prudent management of our cost structure as we continue to grow our business. GAAP net income for the first quarter was negative $12.5 million, which includes $12.7 million of stock-based compensation as compared to $4.1 million in the year-ago quarter. We ended the quarter with $56.2 million in cash and cash equivalents. We generated free cash flow of negative $7.3 million. Finally, let's turn to guidance. For Q2, We expect revenue to be in the range of $35 to $36 million, which represents 34% growth at the midpoint. We anticipate adjusted EBITDA to be in the range of $4 to $4.5 million, representing an adjusted EBITDA margin of 12% at the midpoint. For the full year 2022, we expect revenue to be in the range of $148.1 to $151.1 million, which represents 34% growth at the midpoint. We expect adjusted EBITDA to be in the range of $17.2 million to $19.2 million, representing an adjusted EBITDA margin of 12.2% at the midpoint. For modeling purposes, we expect stock-based compensation of $32 million for the full year 2022 and $7.6 million for the second quarter. Turning to our updated 2022 adjusted EBITDA guidance, which incorporates the following factors. First, the lower than expected first quarter adjusted EBITDA results, as discussed earlier. Second, we are experiencing significant increase in cost for talent. As such, we expect accelerated costs with wage inflation, retaining and attracting talent. This is consistent with what we are seeing in the market. Finally, we see opportunity to further expand on our platform capabilities, where the investments will primarily be in our technology and development group. We remain committed to achieving higher revenue growth and our long-term adjusted EBITDA margin target of greater than 30% over the next two to three years. Further, we have a conviction that the investments made help us achieve greater operating leverage and increased productivity that directly enables both higher top-line growth and higher profitability. In fact, these investments are already having impact by contributing to higher revenue generation globally in Q1. We saw durable growth of 59% in EMEA, 47% in APAC, and 35% in the Americas. These investments will continue to enable future growth and scalability. They are focused on one product innovation that is not only driven by our community of client requests, but also positions us to win more new logos and to onboarding significantly more clients simultaneously, which allows us through time to recognize revenue faster. As we continue to land a higher velocity of clients, larger conversions, and upsell our offering to our existing clients. Alongside these investments, our pricing power and our geographic expansion efforts tied to our go-to-market strategy sets us up to support and accelerate our top line while we see increasing operating leverage across sales and marketing, client support, technology, and G&A as an overall percentage of our revenue. This gives us confidence in our long-term fundamentals competitive position, and the overall investment thesis. Infusion is well positioned to continue delivering high growth in 2022, as well as our profitability, driven by new client demand for our products, especially with institutional asset managers, upselling momentum with our existing clients, and the TAM we continue to unlock. With that, we'd like to open up the call to questions. Operator, please go ahead.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly if questions are registered. The first question is from Dylan Becker with William Blair. Your line is open.

Hey, guys. Thanks for taking the questions. Maybe first for Steve on the margin guide. You guys talked about investing last quarter and helpful color on the stock-based comp or some of the hiring wage inflation dynamics, too. But can you help us maybe get a sense of the pace of investment kind of accelerating further here? Is it kind of the go-to-market capacity side of things, any fundamental infrastructure needs? And maybe is there a way to quantify? I know you gave it for the quarter, but what that annual dynamic you guys are factoring in from that pure kind of wage component as well?

Thanks for the question. No changes fundamentally to the business at all, right? And so as we look at our Q1, it really is from the, you know, underestimation of our non-recurring and public company costs, right? And we did start to see wage inflation as we were going through the quarter. And we are continuing to see that wage inflation as we're going through the year. So, one, we just want to make sure that we have a prudent forecast and that we are thinking about what that wage inflation could possibly be as we go forward. We are also doing a little investment as we look at our technology and development group, just to make sure that we're continuing to innovate as we look at the platform overall.

Okay. That's super helpful. Maybe for TK here, too. It's good to see the strength, obviously, the foundational PMS and accounting integration, but the natural extension for order execution, right? Maybe dig in a little bit deeper here on the compliance side around some ancillary areas, maybe tied to kind of pre- or post-trade side of things. How can you guys help maybe manage this? It seems like a key area tied to that order execution side, but what's kind of the driver of that accelerated traction of that solution as well? Thanks.

Thanks, Dylan. It's a great question. And so how I would frame it would be, first, there is an overarching realization and benefit of basically what an end-to-end solution looks like. And so as we think about the journey of the broader markets and infusions, participation into that, It's playing out the way that I sort of described both in the roadshow and as early as last quarter. And so as the market moves towards a more unified solution, as they begin to learn more about infusion and our capabilities of doing so, it's naturally moving into this arena of the transaction component of what our capabilities can deliver. And so, if you have the portfolio construction, the accounting and the GL embedded, the natural progression of what's happening is, let me now do my trading relative to the strategies that we've created in the system, you know, coupled with then the managed services capabilities behind it in terms of the middle and back office. And so, the realization of basically what's happening is just the follow-through of what we started. And as you think about the OEMS capabilities, you're spot on in terms of that pre- and post-trade capabilities that we offer. That's not singularly pulled out as an individual feature or component of the broader thing, but that pre and post embedded into that end-to-end. This is the value proposition. and the simplification of both the workflows, the technology stack, the costs that come alongside of that, and the efficiencies that basically our clients are able to realize as all of those things come together. And the OEMS progress that we've made and the evidence that we see in terms of the market adopting to it is just further proof points that it's playing out the way that we had hoped. Does that answer your question, Dylan?

Yeah, absolutely. Appreciate all the color there. Thanks, guys.

Thanks, Dylan.

Thank you, Mr. Becker. The next question is from Parker Lane with Stifel. Your line is open.

Hi, this is Matthew Kickert for Parker. Thanks a lot for taking my questions. To start, you highlighted really strong international growth. on the print and I'm curious what percentage of your sales team is focused on this market right now and you plan on accelerating these investments going forward

So I'll go backwards, and then I'll let Steve jump in. And so the international component of our overall business, whether you take into consideration EMEA or APAC, is a critical component of our overall strategy. And so we expect those markets to continue to grow. And what we've seen in the first quarter, we're really pleased with how that's coming together. Our overall go-to-market strategy within all of our regions, you know, is continually being fortified through the relationships that we currently have with our clients, with prime brokers and the electronic trading desks. the consultants across the world that continue to cover and support Infusion on the cloud native side. And we're continuing to evolve our relationships with strategic partners like we did with the Coinbase in the previous quarter and like we did with or doing with Northern Trust currently. And so all of these things, coupled with our professional sales team, you know, will continue to lean in on achieving the goal of sort of the growth and the penetration and our expansion within the various regions that we think we can continue to dominate in.

And as a follow-up, as you look at our sales team overall, the breakdown is typically around 50% is based on the Americas, and about 25% in EMEA and about 25% in APEC.

Got it. And then secondly, last quarter you announced a partnership with Coinbase for crypto portfolios. Do you have any update on how that partnership is progressing and how it's being received by current customers?

It's been received pretty well by customers and the market more broadly. And the partnership, we're happy about the progress that's being made. And so we're watching, you know, the broader digital asset space, whether it's, you know, on the blockchain side or on the actual crypto side. And so the feedback that we're getting from our clients is that they're very interested, continue to be interested in adding crypto into their portfolios, and they're happy that we're taking a leadership effort in helping deliver the ability to do so within our platform. And so we're very excited about it. And, you know, when we think about Northern Trust as well, it's just another one of those in terms of we want to be the, if you want to call it the operating system where we are extremely friendly to third-party partners where they can come in and utilize our APIs and utilize our core to help not only fuel and power their products and services, but ultimately together deliver meaningful experience and impact to mutual clients. And so we continue to be extremely excited about these types of relationships, and I expect that we will continue to enter into these types of relationships that allow us to accelerate these our ability to continue to offer our products and services and overall adoption, you know, across the world. Does that help, Matthew?

Yes, that does. Thank you very much.

Thanks for the question.

Thank you. The next question is from Koji Akita with Bank of America. Your line is open.

Hi, guys. This is Sanika Naira on for Goji. Thanks for taking my question. And really, really great growth in the first quarter. 40% is superb. My question is on adjusted EBITDA guidance and how we should be thinking about profitability over the next 12 to 18 months. So one of the things we like about the business is that it's got a great growth and profitability profile. And in our forecast, we had a rule of 60, 30% growth and 30% EBITDA margin. But it seems to have changed slightly for 2022. So my question is, how should we be thinking about base or linearity to get back to the 30% or greater EBITDA margin profile? Yeah.

Yeah, if I could. So our long-term targets have not changed, right? We are committed to achieving the greater than 30% adjusted EBITDA. And as we look at our investments, they are to enable future growth and scalability, right? And so as we look at those investments, it's really around product innovation. And that product innovation is really coming from our client requests. And as we fulfill those requests, it also positions us to win more logos as we go forward. We're also adding to our client services. And so onboarding today, we are able to onboard more clients simultaneously than we ever had before. And it's almost twice as many as we were a year ago. And then as those clients become onboarded, then there is the tech support, and that grows as we scale as well. And we've reduced the number of clients that are being, you know, serviced by each team for technical support. And so we've really improved there as well, and we're actually hearing positive responses from our clients. That goes along with the investments that we're making that are in line with our go-to-market strategy. So we have pricing power. We're continuing to expand geographically, and that will allow our revenue to grow and our business to scale over time. So we do have a line in sight in how we're going to achieve it, and now we're going to deliver on that.

That's great. Thanks so much.

It's a great question. If I could just kind of add to that. I think that the investments that we've been making, none of it has been taken lightly from the expectations of the impact that we're looking to have. And as Steve mentioned, You know, we're seeing effectively the ability to do implementations at any given time to effectively double relative to where we were. This allows us to actually recognize revenue faster. And so the leverage that we see through time, we expect to accelerate, you know, as we continue to increase the velocity of the wins that we expect to see throughout the course of the year. Coupled with the fact that, as Steve mentioned, which is a little bit more commentary, just put it into context, you know, the investments that we've made in support is the same thing. First of all, these are things that our customers are asking in terms of the client experience that they're expecting. That is one of the main differentiators of the reasons why they're coming to us and why we're seeing changes. the top-line growth that we continue to see. But when you take into consideration even the support side, as we've invested in previous quarters, the ability to basically deliver better support, that is also adding to our ability as a result of having happy clients. the ability for us to basically upsell better as a result of being able to understand, you know, in their happy state what their problems are and being able to, at the right time, be able to deliver services and products that directly address and solve for those problems. And so this type of leverage that we expect to see directly correlates to the increases that in revenue and business that we expect to see, which then correlates directly into our journey back to delivering the types of EBITDA profiles that we're aiming to do over the course of the of the next year or two. And so all of these things are coming together to produce a very durable and reliable business overall that we're extremely excited about, if that helps.

Thank you. The next question is from Gabriella Borges with Goldman Sachs. Your line is open.

Hi, good afternoon. Thank you for taking my question. One for TK and one for Steve. So for TK, I think you mentioned up front you had the great data point on flow of funds into hedge funds. And I think you also mentioned that new hedge funds start this year. could be or will be greater than they were last year. And so we'd just love to get a little bit more color around that and where that comment is coming from. And then for Steve, the data point in the press release on OEMS bookings being 46% of the total, could you just remind us relative to history, how does that compare to this time last year, this time three years ago? What is the trend? Thank you.

Hey, Gabriella, great questions. Listen, on the hedge fund launch side, the data points in terms of what we're collecting and what we're watching is basically the capital flows, where it's going, what it looks like, coupled with effectively what we are hearing from prime brokers and our own salespeople in terms of what the boots on the ground are saying. And we also have another special data point in terms of our clients, their relationships, and the relationships that they have with folks that are actually looking or thinking about launching new funds. And so when we add all that up, Obviously, we could never predict the future, but based on what we're hearing and the data points that we're seeing and the capital flow that it's actually just going in the direction that it's going so far, that we feel pretty good that the expectations that we hope to see is a healthy environment for new fund launches throughout the course of the year. But obviously, as we step through the year and have better visibility, we'll be able to come back and see whether or not that actually played out that way.

And then on your second question around OEMS as a percentage of bookings. So in past years, it's typically been somewhere around 25%. okay but uh in q4 and especially in q1 as we see more and more conversions and as we see more and more asset managers that percentage has consistently grown and so in uh in the uh in q4 we actually saw oems in the high third the high to mid 30s and then in q4 we saw it at 46 that was primarily we had two clients that that had a pretty large amount of their bookings were around the OEMS tool that we had.

And so could we see a scenario where OEMS actually becomes the majority of the bookings, or would that be unusual given the strength in your PMS platform?

I think that that would be unusual, right? I think that it will typically stay around, you know, it'll be unusual for it to ever become a majority.

Okay, thank you. Thank you, Ms. Borges. The next question is from Chris Donat with Piper Family. Your line is open.

Hi, good afternoon. Thanks for taking my questions. Just wanted to ask one on international and if that relates to the EBITDA margins. Your growth in EMEA and APAC has been really impressive. And I'm just wondering, is that a lower EBITDA margin business or is it similar to the Americas business?

No, it's very similar to the Americas business. We really do not see any type of differentiation between the clients that we have globally when it comes to that.

Okay. I figured as much, but just thought I'd ask given the different trajectories. And then just one on the, as we think about your client count, and the current macro environment and more so market volatility. The churn this quarter was 20 clients. Do you think that that might be higher going forward? And then there was also the comment before about macro funds and doing better with them. Is that a potential offset of just having more new clients coming from the macro side or clients who want like the currency functionality you bring and other things you talked. I'm just trying to understand the market dynamics here.

Sure. I can go backwards and then Steve can kind of spike the ball. Listen, One of the benefits that we feel very good about is that our overall sort of offering is very – our sweet spots are across these strategies, right, whether it's global macro or systematic or long-short or you name it. I think that the flexibility and the configuration scenarios that can be had within the front and back that we offer is giving these various strategies or these funds that employ these various strategies a lot of different optionality, both to start and to evolve and grow into. And so though we saw a real nice uptick from global macro clients as well as wins. It's basically how they're thinking about how they're going to grow alongside of that as their business grows is really sort of where we're excited about. and it just helps that we're available uh and that out of the gate we're strong in those areas um and they see that and i think that that's kind of why we're seeing some of these upticks take place the way that they are and then on your question on churn you know we have not really seen churn uh change at all in the last six quarters and we do not see any indications of churn

increasing or decreasing at this point in time. We have not seen anything around that.

Okay. I will take that as good news. Thank you. Thanks, Chris.

Thank you, Mr. Donut. Again, to ask a question, press star 1. The next question is from James Fawcett with Morgan Stanley. Your line is open.

Great. Thanks a lot. I appreciate it. You've mentioned that along with accelerating leverage, your long-term EBITDA margin target of 30% is still where it has been or it's unchanged. But can you help me think about the change in cadence to get back to those levels? And particularly given the midpoint of your outlook seems to imply something more in the low teens range. No, I mean, we are continuing... We've made investments over the last few quarters. We're continuing to make... some of those investments we but we have a line of sight as those investments are paying off we're already starting to see some of those returns now when you just look at some of our international growth overall right and so as we added to our uh add to our technology and development team we continue to see innovation and that really sets us up for more wins as we go forward As you look at our onboarding, we're really in position to simultaneously add a lot more clients, and that is going to accelerate the revenue that we see. So, yeah, we continue to see that grow, and we will continue to see that over time over the next few quarters, and we'll get there. Well, and on that point of payoff on your investments, et cetera, how should we be contemplating the time to return and how that ramps through the P&L? You know, I just want to make sure that we're taking that into account, you know, as we try to roll those investments and think about the investment payback periods into our forecasts appropriately. yeah i will tell you i mean we've always looked at our returns for every dollar we're looking for three back right and and as we've looked at some of our payback period for our investments we're typically seeing somewhere around four to five months and we start to get a payback in that and so with that and with the investments that we're making we're you know we do have that line of sight to get to the 30 percent in two to three years That's great input. Thanks, guys.

Thanks, James. Thanks, Mr. Fawcett. There are no additional questions waiting at this time. I will now turn the conference over to management for any concluding remarks.

Thank you all for taking the time to join us today. Appreciate all the support and the continued interest. Look forward to continuing the dialogue and have a wonderful evening.

That concludes the Infusion first quarter fiscal year 2022 earnings call. Thank you for your participation.