Enfusion, Inc. (ENFN)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue was $52.9 million (+13.9% y/y); Adjusted EBITDA rose to $12.3 million (+25.3% y/y) with margin expanding to 23.2% .
• Gross Profit Margin improved to 69.0% (Adjusted Gross Margin 69.6%); Net Income Margin was 0.3% as non-recurring merger-related costs and higher operating expenses weighed on GAAP profitability .
• Key KPIs: ARR reached $210.4 million (+13.6% y/y); NDR improved to 103.0%; 41 new clients added in Q4; total clients were 916 .
• Enfusion entered a definitive agreement to be acquired by Clearwater Analytics; closing is targeted for Q2 2025; the company will not host an earnings call or provide FY2025 guidance, which is the primary stock narrative catalyst near term .

What Went Well and What Went Wrong

What Went Well

• Strong top-line and margin expansion: Revenue +13.9% y/y to $52.9 million; Adjusted EBITDA +25.3% y/y to $12.3 million with margin at 23.2% .
• KPIs strengthened: ARR grew to $210.4 million (+13.6% y/y); NDR improved to 103.0% indicating healthier expansion within the base .
• Up-market product strategy resonating: “Portfolio Workbench… central to our strategy in expanding up-market, leading to larger and more profitable relationships” (CEO) . Management also highlighted managed services enhancements and AI-enabled documentation (“Violet”) improving throughput and client experience (COO) .

What Went Wrong

• GAAP profitability compressed: Net Income Margin fell to 0.3% in Q4, reflecting higher operating expenses and non-recurring items tied to the pending merger .
• Elevated opex: General & Administrative rose to $21.1 million vs. $17.1 million prior year; Technology & Development and Sales & Marketing also increased, pressuring GAAP operating income .
• Non-recurring costs: Adjustments included $3.712 million of corporate restructuring and professional fees related to the Clearwater transaction in Q4, and the related tax adjustment, impacting reported EPS/NI .

Financial Results

Segment revenue breakdown:

KPIs and cash metrics:

Guidance Changes

Earnings Call Themes & Trends

Note: Enfusion did not host a Q4 2024 earnings call due to the announced transaction with Clearwater Analytics . Themes below track Q2 and Q3 commentary and Q4 disclosures.

Management Commentary

• “Portfolio Workbench… central to our strategy in expanding up-market, leading to larger and more profitable relationships with more stable revenue profiles.” (CEO, Q3)
• “We remain committed to continuing to enhance our platform so we can provide our clients with the last upgrade they will ever need.” (COO, Q3)
• “We are adding a number of new features to our managed services platform… improving both the client and operations user experience, while also increasing productivity and hence margins.” (COO, Q3)
• In light of the announced transaction, Enfusion will not host an earnings conference call, release a Shareholder Letter, or provide financial guidance for fiscal 2025 (Q4 press release) .

Q&A Highlights

• Back-book dynamics and NDR: Management indicated NDR had likely bottomed at ~102–103%; back-book softness driven by smaller seat/connection changes; expected improvement via pricing actions and cross-sell (CFO) .
• Up-market pipeline and conversions: Qualified up-market opportunities converting at ~30–40%; Portfolio Workbench unlocking accounts with integrated OMS workflows (COO) .
• Managed services and margins: Self-service tooling and dashboards designed to improve productivity and margins; targeted efficiency projects to drive margin expansion (COO/CFO) .
• Macro/talent and 2025 levers: Broader leadership/talent additions increase product velocity; more levers (pricing, cross-sell, premium features) to drive 2025 back-book performance (CFO/CEO) .

Estimates Context

• S&P Global consensus EPS and revenue estimates for Q4 2024 and FY 2024 were unavailable via our system mapping for ENFN at the time of analysis. As a result, we cannot assess beats/misses versus Wall Street consensus for Q4 2024. Management did not provide FY2025 guidance due to the pending Clearwater transaction .

Key Takeaways for Investors

• Q4 delivered healthy top-line and margin expansion; Adjusted EBITDA margin reached 23.2% while ARR and NDR strengthened, consistent with execution on up-market strategy .
• GAAP profitability was muted (0.3% margin) due to higher opex and non-recurring merger costs; focus remains on scalable services and product throughput to sustain adjusted margin gains .
• Front-book momentum and product-led expansion (Portfolio Workbench, OEMS, managed services) continue to grow larger, more durable client relationships, supporting ARR growth and future margin leverage .
• Near-term stock narrative is dominated by the Clearwater acquisition process (closing targeted Q2 2025) and the suspension of FY2025 guidance/call—expect trading to be catalyst-driven by merger progress .
• Back-book/NDR stability and pricing actions are key medium-term drivers; watch for resumed upsell cadence post-transaction and continued cross-sell/marketplace adoption .
• Cash generation is solid with sequential OCF/FCF and FCF conversion variability typical of year-end; ongoing margin scaling and efficiency initiatives should underpin cash yields .
• Monitor APAC macro and any merger-related integration updates; EMEA/Americas momentum offsets APAC headwinds per recent quarters’ commentary .