Enfusion, Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Infusion's fourth quarter and full year 2023 earnings conference call. At this time, all lines are being placed on mute to prevent any background noise. Following the speakers and remarks, we will open the lines for your questions. As a reminder, this conference call is being recorded. I'd now like to turn the call over to Bill Wright, head of investor relations, to begin.

Good morning and thank you, operator. We welcome you to Infusion's fourth quarter and full year 2023 earnings conference call. Hosting today's call are Oleg Malchin, Infusion's chief executive officer, Brad Herring, Infusion's chief financial officer, and Neil Pallar, Infusion's newly appointed chief operating officer. Please note, our quarterly shareholder letter, which includes our quarterly financial results, has been posted to our investor relations website. I would 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, which are available in the investor relations section of 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 measures can be found in today's quarterly shareholder letter, which is available on the company's website. With that, I'd like to turn the call over to Oleg to begin.

Good morning, and thank you for joining us today to discuss our results in the fourth quarter of 2023. I'm honored to be completing my first four years as Infusion CEO and thrilled to welcome Neil Pawar, our new Chief Operating Officer, to the Infusion team. Neil joined us in November and brings a tremendous amount of operating experience, along with breadth and depth of technology experience across the financial services industry. In just the past three months, Neil's presence and enormous enthusiasm has been felt across our entire organization. We're sure Neil will be instrumental in helping us scale the business and expand our market footprint with global enterprise clients. As for the fourth quarter, I'm pleased to announce that Infusion's business achieved several milestones and we saw the economic profile of our business continue to strengthen and become more predictable. While not immune to macro headwinds we have discussed in previous quarters, we have focused on controlling what we can under our roof. To that end, we continue to enhance our world-class end-to-end platform that empowers all workflows. Infusion is built with unparalleled technology, continued innovation, and relentless dedication to our clients. In doing so, we have and will continue to widen our economic moat. Our strong financial results this quarter reflect discipline strategy execution and cost control. Several of our wins this quarter validated fusion strategy as we continue to move up market. We saw a combination of new client wins as well as conversions from our biggest competitors across several temp segments and geographies. Now, let me walk you through some of our key financial metrics in the fourth quarter. Our economic trajectory in selected upward in Q4 23 as we reported $46.5 million in revenue, delivering 15% revenue growth year over year. Fourth quarter adjusted EBITDA totaled $9.8 million, translating into an adjusted EBITDA margin of 21%, representing a 436 basis points expansion compared to the same period a year ago. This outcome is attributable to a combination of discipline expense control and improving scale. From a full year perspective, in 2023, we reported $174.5 million in revenue, delivering 16% growth year over year, and $31.7 million in adjusted EBITDA, also expanding our adjusted EBITDA margins from 13% to 18%, an improvement of approximately 500 basis points compared to the previous year. Despite a challenging and turbulent industry backdrop, Throughout 2023, we saw growing momentum in Q4 that led to 45 new client additions, our biggest quarterly client win since the second quarter of 2022. This brings our total client count to 865, a new firm record. Our ACV increased to $219,000, another firm record representing a 1% quarter-over-quarter and 6% year-over-year growth. Our progress upmarket continues to broaden our client base and has contributed to our continued ACV increase. Let me provide you with more details on our client wins this quarter. In the Americas, revenue grew 15% year-over-year, reflecting a combination of market share gains and wins for large and complex clients in competitive situations. This dynamic provides a more stable set of business economics going forward. One notable win this quarter, which I'm excited to share with you, is Utah Retirement Systems or URS, a prominent pension plan that will move approximately $10 billion of internally managed AUM to the Infusion platform. Instead of upgrading its legacy OMS, URS will utilize Infusion's full front-to-back capabilities. Additionally, ERS will take advantage of our portfolio workbench tool for quarterly rebalancing functionality. This is an exemplary strategic win for our business, particularly as we continue to grow in service pension advisors. We remain keenly focused on taking market share. I'm also thrilled to announce that Infusion signed Mariner Investment Group, a prominent alternative investment manager with $7 billion AUM. Mariner will have 70 plus users utilizing our platform across trading, portfolio management, operations, and technology. Our team was able to design a well-suited solution that will consolidate and replace multiple pre-existing systems for Mariner and provide one centralized view with increased automation for all trading teams involved. This is an exciting competitive win and another proof point validating our ability to support complex fund structures and multiple asset classes and strategies as we continue to grow our presence in the multi-strategy space. In Europe, Middle East, and Africa, revenue grew 24% year over year, reflecting our continued expansion in Europe. We signed our first asset manager in Belgium and a large multifamily office in Sweden. Both of these wins are additional confirmation that Infusion is executing our global strategy to reach traditional managers and grow beyond the concentrated money centers in Europe, where we already have a dominant position. In the Asia Pacific region, revenue grew 7% year over year, which is an outstanding result given the regional capital outflows and the challenging geopolitical and economic backdrop. Our growth in APAC was driven in part by client conversion from an asset management arm of a large corporation headquartered in South Korea. We were able to take this business away from one of our biggest competitors. This client win is a testament to our focused product strategy, which has enabled us to displace established competitors upmarket. Edging out the incumbents reflects our ability to listen to our clients' needs as they re-evaluate their tech stack and seek a single product with one data set or single source of truth. This allowed the client to eliminate multiple modules as they look to lower their total cost of ownership. At this time, I would like to introduce Neil Pawar, our new Chief Operating Officer, to provide updates on our platform capabilities and client services.