Enfusion, Inc.

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Infusion's third quarter 2022 earnings conference call. At this time, all lines have been placed on mute to prevent any background noise. Following the speaker's remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded. I would now like to turn the call over to Ignatius Njoku, Head of Investor Relations, to begin.

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 on 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 as a substitute for GAAP financial measures. Reconciliation to the nearest GAAP measure can be found in today's earnings press release, which is available on the company's website. Hosting today's call are Oleg Moshin, Infusion's Interim Chief Executive Officer, and Steve Dorton, Infusion's Chief Financial Officer. With that, I'd like to turn the call over to Oleg to begin.

Good afternoon, and thank you all for joining us today to discuss our third quarter 2022 results. I'm delighted to be here speaking with you, and my role as the company's interim CEO, and I'm honored to have received the confidence of the board to lead Infusion. First, let me introduce myself. I'm a founding investor in Infusion and have been on Infusion's board for over 10 years. I've also worked with the company in multiple capacities for more than 13 years. Since my appointment as interim CEO, I've been focused on engaging with our clients and employees through downfalls, virtual, and in-person meetings. The more time I spend on the day-to-day operations of the business, the more I appreciate the talent and experience of our team. It's the strength and depth of Infusion's talent pool that gives me the utmost confidence we will continue to deliver innovation in the rapidly changing investment management industry. Stepping back for a moment, since the first time I was introduced to Infusion over a decade ago, the company's vision and determination to achieve this vision have been unwavering. The vision has always been to transform the investment management industry with our cloud-native technology and product-driven service. The ultimate outcome of this transformation for our clients would be reduction of operational inefficiencies, cost-effectiveness, and ability to focus on enhancing the investment process and generating alpha. Currently, we're focused on building our top-notch client experience across onboarding, implementation, support, and managed services. Excellent customer service is foundational to the way our clients experience Infusion technology and serves as a critical component of our overall strategy to expand our footprint in the institutional asset management segment. Our focus on quality services and support continues to differentiate Infusion from our competitors. As you know, I'm currently serving as Infusion CEO on an interim basis. The board's top priority is to recruit the next permanent CEO. The board has retained an executive search firm and is currently reviewing a number of high-caliber candidates with terrific backgrounds and strong leadership capabilities. As the search continues, the board is looking for a CEO with strong leadership skills and deep experience in scaling high-growth SaaS businesses with focus on product excellence as a foundation of delivering superior client services. We're convinced that the strength of our brand, execution records, and the tremendous growth opportunity in front of us will attract high caliber executive talent that will lead the company towards its next stage of evolution. I'm extremely excited by what the future holds. We're executing against our strategy of moving up market, unlocking new adjacencies, and expanding our global footprint. We have the momentum to continue generating strong top line growth while maintaining healthy profitability. As you have seen, our results this quarter demonstrate that investment managers continue to embrace the cloud-based digital transformation. As a result, we continue to extend our leadership position as the industry replaces outdated and disjointed legacy systems with our superior software and the service offering. Now let's turn to third quarter results. We're pleased to report another strong quarter as our execution efforts maintain momentum. Revenue grew 35%, to $39.2 million, reflecting continued demand for our products and services. Adjusted EBITDA was $5.4 million, including CEO transition costs of $670,000, which represents a margin of 13.9%. During the third quarter, we generated AAR of $158.7 million, which represents 33% growth year-over-year. This growth was driven by strong sales execution and client adoption across all our product capabilities and managed services. The ongoing durability of our business is reflected in healthy net dollar retention of 116.6%. Including involuntary churn, the NDR was 112.7%. Our healthy net dollar retention and strong AR growth underscore the durable and resilient structure of Infusion's financial profile. In addition, we signed 43 new clients this quarter, ending the quarter with a total of 810 clients. We made material progress with larger investment managers as we signed another seven-figure deal in the quarter. We further penetrated the large institutional fund manager market by signing eight new institutional asset managers, half of which were conversions. Despite the market volatility, and perhaps because of it, we see ongoing strength in conversions, which accounted for 60% of new client wins in the quarter. Now let me discuss several new latest client wins demonstrate our continued sales momentum and the america's revenue again grew 33 percent year over year driven by broad adoption across all our products i'm excited to announce that we signed another seven figure deal with a well-known multi-billion dollar new york-based family office the family office invests in the wide variety of strategies in asset classes including public and private equity fixed income credit currencies and commodities The fund manager was seeking to replace its front, middle, and back office capabilities that consistent of a combination of complex and health systems in disparate legacy vendor solutions which resulted in manual and cumbersome processes. Attesting yet again to our core value proposition, by selecting Infusion, the client significantly streamlined workflows, reduced operational risks, and increased efficiencies. As a result, the family office is better able to meaningfully reduce overhead costs, as well as lessen the burden on their internal resources. We're extremely pleased with this partnership. Not only does it demonstrate our ability to win larger and more complex clients, but also validates the strength of our product offering. In EMEA, revenue grew 41% year-over-year this quarter. We had a record bookings level in the quarter and for the region, with strong double-digit growth. I'm pleased to announce that Infusion won a London-based multi-billion dollar family office. This client employs multiple strategies, including private equity, credit, and public equities. In this competitive takeaway, our fully integrated end-to-end solution, including portfolio management system, order and execution management system, and data analytics are replacing the client's front, middle, and back office technology, which was pieced together from disparate vendor solutions in an obsolete homegrown system. They selected Infusion because of our cloud-based technology and its ability to streamline workflows. As a result, the investment manager drastically reduced the total cost of ownership while creating an opportunity to reallocate resources towards the investment process. Now turning to APAC. We grew revenue by 35% year-over-year as we continue to see healthy demand in the region. I'm excited to announce that we entered into an agreement with a Hong Kong-based alternative investment manager. The investment manager was seeking to replace its 10-year-old provider with a robust cloud-based technology platform that supports compliance requirements in new features like mobile delivery. By partnering with Infusion, the manager adds more functionality, materially reduces the technology footprint, and significantly improves productivity at a considerably lower cost. Finally, I'm thrilled that Apex Group selected Infusion to deliver middle office services to its global fund administration client base. This win represents another example of Infusion's continued global expansion beyond our core market segments and exemplifies our revenue diversification strategy. Apex's group will utilize Infusion for cash and position reconciliation, corporate actions processing, trade affirmation, shadowing and recalculations, and reporting. We're excited to align with Apex to serve their global clients and look forward to our shared growth. Turn into product and technology. We rolled out more than 480 features and enhancements for our portfolio management system and OEMS. Our ongoing focus on expanding our API-driven technology stack and opening data and analytics architecture allows us to drive efficiencies and scale. This framework gives our clients the flexibility to leverage Infusion platform and develop their own proprietary customization and integration capabilities. Notable enhancements this quarter include the improvements of our API technology to support corporate actions reporting, enhancements to OMS compliance, and support for listed and OTC securities transactions. We also launched a new column feature for OMS, which helps in debugging order tickets. Innovation remains a key pillar of our success and sets us apart from our competition. The breadth and depth of our platform, as well as fast pace of product development and system upgrades, allows us to maintain our competitive edge and expand our mold. We'll continue to win in competitive situations where differentiated technology capabilities matter to our prospects. Infusion will remain focused on sustaining such competitive edge going forward. Now, let me briefly comment on the market dynamics. The simultaneous and precipitous decline in both equity and fixed income markets, rising inflation in macroeconomic and geopolitical uncertainty are causing the industry yet again to re-examine its investment processes and business models. Although we see a decrease in hedge fund launches, the number of hedge fund closures remains moderate by historical standards. While we expect this uncertain environment to persist, we believe our business is resilient as we continue to see strength in conversions as a result of industry focus on digital transformation and shift away from outdated legacy systems to cloud-native integrated solutions. In fact, We have seen this environment play out several times during Infusion's history. As AMs come down and performance delivery becomes more challenging, investment managers tend to question the cost-effectiveness of their status quo technology infrastructure. Such setups historically presented a broad opportunity set for Infusion as a go-to partner, displacing expensive and unstable technology stacks. Additionally, in such uncertain market environments, asset allocators tend to emphasize alternative investment strategies over passive exposures, which falls squarely within our core and adjacent addressable market segments. Our healthy conversion pipeline supports growth opportunities similar to what we saw in the past. As we improve our value proposition and win larger and more complex clients, we expect our revenue mix to continue to shift towards conversions. Finally, I'm happy Infusion is increasingly recognized as the leading software provider within the financial technology industry. As one testament to our industry standing, Infusion was once again included in IDC's financial insight top 100 FinTech list. In conclusion, we delivered solid third quarter results driven by ongoing sales momentum, strong bottom line, and broad adoption across all products and managed services. Our ability to deliver high revenue growth with an attractive profitability profile speaks to the strength and durability of our business and consistency of strategy execution. To that end, I'd like to thank all of our employees for their hard work, dedication, and passion for our brand. Our team demonstrated once again that Infusion is laser-focused on executing and delivering outcomes for our clients at the highest level. By the same token, I'd like to thank our clients for their trust with our most sensitive and mission-critical operational capabilities. I will now turn the call over to Steve to discuss our financials.