Enfusion, Inc.

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Infusion's third quarter 2024 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 floor for 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 third quarter 2024 earnings conference call. Hosting today's call are Oleg Novchin, Infusion's Chief Executive Officer, Brad Herring, Infusion's Chief Financial Officer, and Neil Pilar, Infusion's 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 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. And now, I would like to turn the call over to Oleg to begin.

Good morning, and thank you for joining us today to discuss our results for the third quarter of 2024. This quarter was about execution of our long-term strategy. We're pleased to see that our initiatives over the past several quarters are aligning and starting to add up. Throughout the year, we have been delivering new products that allow us to attract and retain larger upmarket clients in line with our strategy to expand into higher value market segments. We will discuss some of this product developments and subsequent wins or proof points on our call today. As you can see from our third quarter 2024 earnings release published earlier this morning, we reported a strong quarter with 15% top line growth and narrowed our 2024 full year guidance, which Brad will discuss later. We also remain on track to deliver on our medium term guidance of 20% to 22% revenue growth rate over the 2025-2027 period. Our confidence in achieving our midterm guidance is based on our ability to win new business by broadening our product offering to capture up market opportunities while further expanding our geographic footprint. I believe we can accomplish this because we are already doing it as our investments in platform capabilities result in broad product adoption. We're capturing new business today that was previously out of reach due to our expanded product suite and global reach. Our more than 1,100 employees are constantly striving to deliver the last upgrade our clients will ever need. Now let me walk you through some key financial highlights from the third quarter. We delivered $51.2 million in revenue in Q3 2024, representing 15% year-over-year growth. Third quarter adjusted EBITDA totaled $11.1 million, translating to a healthy adjusted EBITDA margin of 21.8%. Brad will provide a deeper dive on financials later. We signed 38 new clients in Q3 2024, up from the 37 signed in Q3 2023. This brings our total client count to 894, another firm record. The strong U.S. launch market we highlighted in the first half of the year continued into Q3. We captured eight new launches, totaling 31 year-to-date in the Americas, which puts us on track for our best year since 2021, which had 35 new launches. Fund launch wins tend to originate from portfolio managers that have a strong loyalty to Infusion brand from their previous firms. From a customer count standpoint, in Q3, launches represent 53% of new clients versus 47% for conversions. However, from a booking standpoint, Launches represent 38%, while conversions represent 62% of bookings, as conversions are typically much larger accounts. Overall ACV for the firm rose to $229,000 in Q3, which is another firm record, and it represents 5.7% year-over-year growth. Several of our new account wins this quarter are direct results of our expanded product shelf and continued client adoption. As you have heard me say many times, our new product rollout this year, including our Portfolio Workbench tool, has been central to our strategy in expanding our market, leading to larger and more profitable relationships with more stable revenue profiles. The second release of our Portfolio Workbench tool in Q2 included additional enhancements that expanded our serviceable TAM and allowed us to win accounts in the third quarter that were previously out of reach. We're very excited to see this effort materialize. Importantly, as we roll out premium features that enhance our offer in portfolio construction, we expect to see revenue expansion in both the front and back book. Allow me to provide you with a few notable plant wins across geographies from this quarter. In the Americas, revenue grew 17% year over year, up significantly from 10% last year and up from 15% last quarter. The following wins illustrate how the product investment has been unlocking new clients for Infusion. Credit fund formations have remained strong this year, and we continue expanding our market share in this segment. I'm thrilled to announce that Infusion signed Agile Investment Management. Agile Investment Management is a Florida-based institutional asset management fixed income firm with about $650 million in assets under management and assets under administration. The Agile investment process combines top-down and bottom-up analysis with the team's commitment to comprehensive risk management. In identifying opportunities to generate attractive income streams, the Agile team maintains the constant focus on the risk management that has defined InGenesis signature style for almost 40 years. When Agile was appointed sub-advisor to the IA Clarington Core Plus Bond Fund, they needed to ensure that they had a technology partner that was able to drive operational efficiencies across the front office while operating on a modern platform that could scale with them into the future. They chose Infusion. Agile will utilize Infusion's OMS broadly, including portfolio workbench for cash flow rebalancing, pre-trade compliance, cash ladder reporting, and managed services offering. This is a very exciting win as we continue to grow our momentum in the institutional asset management space. Another notable win-up market this quarter, which I am pleased to share, demonstrates our continued expansion in the institutional asset manager space. Frontier Global Partners is among the latest to partner with Infusion and enhance their investment trading and operations. Frontier's strategies invest not only in frontier markets, but also global, international, and international small cap equity markets. And it was imperative that they partner with a firm that has the security coverage. Frontier was an opportunity we nearly lost two years ago, but we stayed in contact with them periodically. Then recently, unhappy with their existing provider, they came back to us realizing their business needs lined up with infusion build of our portfolio workbench, which allows dynamic portfolio rebalancing workflows coupled with a robust compliance engine. The compliance engine provides transparency into the data, which their legacy provider could not support. This is a very exciting win with a prestigious and well-known asset manager in the institutional asset management space. As we've stated throughout the year, we have made a concerted effort to win more institutional asset management, and I'm pleased with the team's effort, execution, and most importantly, results. Turning towards EMEA, revenue grew 22% year-over-year in Q3 2024, down modestly from the last quarter. as we saw an unusually high amount of involuntary churn at the end of Q2 and beginning of Q3. These closures impacted the growth trajectory for the quarter, but Q3 was also the best quarterly bookings in EMEA in our history. Signing several large new asset managers is a positive leading indicator for future growth. As a reminder, Europe has a diverse mix of financial institutions, and Scandinavia continues to be a growth region for us. We won another account in Norway this quarter with Fearnley Asset Management. This is a newly formed asset management arm of Astrop Fearnley AS and will be trading longshore equity and credit. The Astrop Fearnley Group represents over a century of history, growth, and excellence in the areas of shipping and offshore services. Infusion's presence continues to expand within the Norwegian assets management industry. As mentioned in our Q2 call, we have been focused on the Middle East, and specifically Dubai. As a result of these efforts, I'm happy to share that we closed another account in Dubai. We are pleased to announce that Magellan Capital, a prolific several hundred million dollar multi-strategy launch in Dubai, has selected Infusion to support our complex asset classes and workflow requirements. This win is a further testament that Infusion's success and continued growth precedence in the Middle East. Lastly, with our London space, we're proud to announce that TT International, an alpha-driven specialist investment manager, has selected Infusion as their strategic partner for PMS, OEMS, accounting, and portfolio construction and rebalancing. Following a thorough market evaluation, their decision to replace multiple existing systems with our front-to-back solution underscored their confidence in our platform. The partnership is set to boost operational efficiency, streamline workflows, and enhance straight-through processing. Turning to Asia Pacific, revenue grew 6% year-over-year, moderating from 10% year-over-year growth last quarter. As you may recall, we have highlighted the capital outflows and geopolitical trends in APEC for the past few quarters, and given those macro headwinds, we're pleased with these results. We continue to sustain healthy growth through the market share gains among traditional and hybrid asset managers as we weather the macro conditions that are impacting the hedge fund market. The following client win is a good representation of how we continue to diversify our business. GuoSan is among the latest institutional asset managers to partner with Infusion and enhance their investment management operations. GuoSan is a Chinese financial services company with services from sell side, sales and trading, research, investment banking, to buy side, asset management and private equity investments. Infusion was selected as the primary technology and services provider to help them grow and scale their asset management division. The advantage they see from Infusion is our all-in-one design to help seamlessly connect their front office trading and operation teams, and it allows them to replace two of their incumbent systems including their order management system and accounting system, which will optimize their total cost of ownership. Another key win this quarter and proof point demonstrating our continued market leadership position in Hong Kong was a $500 million AUM loan short equity manager with offices in China and Hong Kong. It is among the latest investment managers to partner with Infusion to enhance their investment operations. Infusion has been selected as the primary technology and services provider to help them grow and scale their investment business. They chose Infusion due to the functionality of our EMS feature within the mobile app and also pre-trade compliance checks, helping ensure they're always trading within their compliance and regulation. At this time, I'd like to have Neil Pawar, our COO, to make a few comments on product and services.