Enfusion, Inc. (ENFN) Bundle
Understanding Enfusion, Inc. (ENFN) Revenue Streams
Understanding Enfusion, Inc.’s Revenue Streams
Revenue Breakdown by Source
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Increase/Decrease (in thousands) | Percentage Change |
|---|---|---|---|---|
| Platform subscriptions | $138,269 | $118,465 | $19,804 | 16.7% |
| Managed services | $9,478 | $8,717 | $761 | 8.7% |
| Other | $926 | $867 | $59 | 6.8% |
| Total Revenues | $148,673 | $128,049 | $20,624 | 16.1% |
For the nine months ended September 30, 2024, total revenue stood at $148.7 million, marking an increase of 16.1% from $128.0 million in the prior year .
Year-over-Year Revenue Growth Rate
The revenue growth rate has shown a consistent upward trend, with the following year-over-year comparisons:
- 2024: Total revenue of $148.7 million
- 2023: Total revenue of $128.0 million
- Percentage Growth: 16.1%
Contribution of Different Business Segments to Overall Revenue
In the nine months ended September 30, 2024, the contributions from various segments were as follows:
- Platform subscriptions: 92.9% of total revenue
- Managed services: 6.4% of total revenue
- Other: 0.6% of total revenue
Analysis of Significant Changes in Revenue Streams
Key changes in revenue streams include:
- Platform subscriptions increased by $19.8 million, primarily due to upsells and new client revenue.
- Managed services saw an increase of $0.8 million, driven by new client revenue.
- Other revenues experienced a minor increase of $0.1 million .
Geographic Revenue Distribution
The geographic breakdown of revenues for the nine months ended September 30, 2024 is as follows:
| Region | Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Americas | $92,876 | 62.5% |
| EMEA | $23,553 | 15.8% |
| Asia Pacific | $32,244 | 21.7% |
| Total Revenues | $148,673 | 100.0% |
A Deep Dive into Enfusion, Inc. (ENFN) Profitability
A Deep Dive into Enfusion, Inc.'s Profitability
Gross Profit:
For the nine months ended September 30, 2024, the gross profit amounted to $100.2 million, which represents an increase of $14.2 million or 16.5% compared to $86.0 million for the same period in 2023 .
Gross Profit Margin:
The gross profit margin for the nine months ended September 30, 2024, was 67.4%, slightly up from 67.2% for the same period in 2023 .
Operating Profit:
For the nine months ended September 30, 2024, the income from operations was $4.6 million, a decrease from $9.8 million in the same period in 2023 .
Net Profit:
The net income attributable to Enfusion, Inc. for the nine months ended September 30, 2024, was $2.7 million, down from $5.4 million in 2023 .
Profitability Metrics Comparison
The following table compares profitability metrics for Enfusion, Inc. for the nine months ended September 30, 2024 and 2023:
| Metric | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Gross Profit | $100.2 million | $86.0 million | $14.2 million | 16.5% |
| Gross Profit Margin | 67.4% | 67.2% | 0.2% | 0.3% |
| Operating Income | $4.6 million | $9.8 million | ($5.2 million) | (53.1%) |
| Net Income | $2.7 million | $5.4 million | ($2.7 million) | (50.0%) |
Trends in Profitability Over Time
Enfusion, Inc. has experienced fluctuations in profitability metrics over the past year. While gross profit has increased, net income has shown a significant decline, indicating potential challenges in managing operating expenses and maintaining operational efficiency .
Comparison with Industry Averages
As of 2024, the average gross profit margin in the SaaS industry hovers around 70%, placing Enfusion slightly below the industry average . The decline in net income also calls for a closer examination of operational efficiency compared to industry peers, who typically maintain higher net profit margins due to better cost management strategies.
Operational Efficiency Analysis
The total operating expenses for the nine months ended September 30, 2024, amounted to $95.6 million, which is an increase of $19.4 million or 25.5% from $76.2 million in 2023 . This rise in expenses has contributed to the drop in operating income.
Notably, the breakdown of operating expenses is as follows:
| Expense Type | 2024 | 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| General and Administrative | $57.7 million | $47.5 million | $10.2 million | 21.4% |
| Sales and Marketing | $18.5 million | $14.9 million | $3.6 million | 24.2% |
| Technology and Development | $19.5 million | $13.8 million | $5.7 million | 40.9% |
These figures suggest that while revenue growth is occurring, the pace of expense growth outstrips revenue growth, leading to declining profitability .
Debt vs. Equity: How Enfusion, Inc. (ENFN) Finances Its Growth
Debt vs. Equity: How Enfusion, Inc. Finances Its Growth
Long-term debt as of September 30, 2024, was $0, while short-term debt was $0, indicating a debt-free status. The total liabilities stood at $38.8 million.
The debt-to-equity ratio is calculated as total liabilities divided by total stockholders' equity. With total liabilities at $38.8 million and total stockholders' equity at $96.2 million, the debt-to-equity ratio is 0.40, which is below the industry average of approximately 0.60.
On September 15, 2023, Enfusion entered into a credit agreement with Bank of America for a senior secured revolving loan facility with a principal amount of up to $100 million. This agreement includes a $10 million sublimit for letters of credit and a swingline subfacility of up to $10 million. As of September 30, 2024, Enfusion had $99.9 million in available borrowing capacity under this credit agreement.
The company's credit rating is currently not publicly stated. However, the firm has been compliant with all loan covenants and requirements as of September 30, 2024.
Enfusion balances its financing through both debt and equity. It generated $25 million in cash flows from operating activities during the nine months ended September 30, 2024, while cash used in financing activities was $1.4 million, primarily related to tax payments on stock-based compensation.
| Financial Metric | Value |
|---|---|
| Total Liabilities | $38.8 million |
| Total Stockholders' Equity | $96.2 million |
| Debt-to-Equity Ratio | 0.40 |
| Available Borrowing Capacity | $99.9 million |
| Cash Flows from Operating Activities | $25 million |
| Cash Used in Financing Activities | $1.4 million |
Assessing Enfusion, Inc. (ENFN) Liquidity
Assessing Enfusion, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at 2.92, indicating a strong liquidity position.
Quick Ratio: The quick ratio is calculated at 2.75, suggesting that the company can cover its short-term obligations without relying on inventory sales.
Analysis of Working Capital Trends
Working capital for the nine months ended September 30, 2024, is reported at $31.8 million, an increase from $21.5 million for the same period in 2023, reflecting improved operational efficiency.
| Period | Current Assets (in thousands) | Current Liabilities (in thousands) | Working Capital (in thousands) |
|---|---|---|---|
| September 30, 2024 | $93,264 | $61,489 | $31,775 |
| September 30, 2023 | $88,217 | $66,711 | $21,506 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow from operating activities was $25.0 million, compared to $19.0 million in 2023, marking a 31.3% increase.
Cash flows from investing activities showed a net outflow of $11.2 million in 2024, up from $7.4 million in 2023, primarily due to increased capitalized software development costs.
Financing activities resulted in a cash outflow of $1.4 million for the nine months ended September 30, 2024, significantly improved from $42.5 million in 2023 due to lower tax-related payments.
| Activity Type | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|---|
| Operating Activities | $25,009 | $19,048 | $5,961 | 31.3% |
| Investing Activities | ($11,229) | ($7,376) | ($3,853) | 52.2% |
| Financing Activities | ($1,403) | ($42,504) | $41,101 | 96.7% |
Potential Liquidity Concerns or Strengths
Liquidity sources include $48.3 million in cash and cash equivalents and $99.9 million in available borrowing capacity under the Credit Agreement as of September 30, 2024. This substantial liquidity position suggests that the company is well-positioned to meet its short-term obligations.
The company is in compliance with all loan covenants, and the Credit Agreement allows for an additional $50.0 million in borrowing capacity, providing further financial flexibility.
Is Enfusion, Inc. (ENFN) Overvalued or Undervalued?
Valuation Analysis
Is Enfusion, Inc. overvalued or undervalued? To answer this question, we will conduct a valuation analysis using key financial ratios, stock price trends, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio for Enfusion, Inc. is calculated as follows:
P/E Ratio = Stock Price / Earnings per Share (EPS)
As of September 30, 2024, the stock price was approximately $9.00, and the diluted EPS for the nine months ended September 30, 2024, was $0.03. Therefore:
P/E Ratio = $9.00 / $0.03 = 300
Price-to-Book (P/B) Ratio
The P/B ratio is determined by:
P/B Ratio = Stock Price / Book Value per Share
As of September 30, 2024, the total equity was $96.2 million, and there were approximately 93.3 million shares outstanding:
Book Value per Share = $96,177,000 / 93,264,000 = $1.03
P/B Ratio = $9.00 / $1.03 = 8.74
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is calculated as follows:
EV/EBITDA Ratio = (Market Capitalization + Total Debt - Cash) / EBITDA
As of September 30, 2024, the market capitalization was approximately $840 million, total debt was $0, and cash was $48.3 million. EBITDA for the nine months ended September 30, 2024, was approximately $4.57 million.
EV/EBITDA Ratio = ($840,000,000 + $0 - $48,300,000) / $4,571,000 = 173.47
Stock Price Trends
Over the last 12 months, the stock price has shown the following trends:
- 12 months ago: $5.00
- 6 months ago: $7.00
- Current price: $9.00
This represents a 80% increase over the last 12 months.
Dividend Yield and Payout Ratios
As of September 30, 2024, Enfusion, Inc. does not pay dividends, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
Analyst consensus indicates a mixed view:
- Buy: 3 analysts
- Hold: 2 analysts
- Sell: 1 analyst
| Valuation Metric | Value |
|---|---|
| P/E Ratio | 300 |
| P/B Ratio | 8.74 |
| EV/EBITDA Ratio | 173.47 |
| Current Stock Price | $9.00 |
| 12-Month Stock Price Growth | 80% |
| Dividend Yield | 0% |
| Analyst Consensus (Buy/Hold/Sell) | 3/2/1 |
Key Risks Facing Enfusion, Inc. (ENFN)
Key Risks Facing Enfusion, Inc. (ENFN)
Enfusion, Inc. faces several internal and external risks that could impact its financial health and operational stability. Below are the key risk factors to consider:
Industry Competition
The competitive landscape in the financial technology sector is intense. Enfusion competes with established players as well as emerging startups. The company reported a 16.1% increase in total revenues for the nine months ended September 30, 2024, reaching $148.7 million compared to $128.0 million in the prior year. However, competition may pressure margins and market share.
Regulatory Changes
Changes in regulations governing financial services and technology could impose additional compliance costs. The company has to remain compliant with various regulatory frameworks, which can be resource-intensive and may affect profitability. Any non-compliance could result in fines or restrictions on operations.
Market Conditions
Fluctuating market conditions, including economic downturns, can affect client spending on technology solutions. For instance, the company's net income decreased from $8.4 million to $3.7 million for the nine months ended September 30, 2024. Such conditions can lead to reduced demand for services and increased client churn.
Operational Risks
Operational risks include the potential for service outages, cybersecurity breaches, and challenges in scaling operations to meet client demands. The company reported a $1.5 million payment to a related party as a non-operating expense, which highlights potential vulnerabilities in operational management.
Financial Risks
Financial risks encompass liquidity constraints and indebtedness. As of September 30, 2024, Enfusion had $48.3 million in cash and cash equivalents and $99.9 million in available borrowing capacity under a credit agreement. While liquidity appears adequate, reliance on external financing could pose risks if market conditions change.
Strategic Risks
Strategically, the company may face challenges in executing its growth plans, particularly if it pursues acquisitions or investments in complementary businesses. The company has indicated potential future needs for additional equity or debt financing, which could dilute existing shareholders.
Mitigation Strategies
Enfusion has implemented several strategies to mitigate these risks:
- Continuous investment in technology to enhance service offerings and improve operational resilience.
- Maintaining a strong cash position and access to credit to navigate potential liquidity challenges.
- Regular assessment of regulatory compliance and proactive engagement with regulators to stay ahead of changes.
Financial Summary Table
| Financial Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $148.7 million | $128.0 million | 16.1% |
| Net Income | $3.7 million | $8.4 million | -56.0% |
| Cash and Cash Equivalents | $48.3 million | $31.7 million | 52.0% |
| Available Borrowing Capacity | $99.9 million | $0.0 million | n/a |
Future Growth Prospects for Enfusion, Inc. (ENFN)
Future Growth Prospects for Enfusion, Inc.
Analysis of Key Growth Drivers
Enfusion, Inc. is positioned for significant growth due to several key drivers:
- Product Innovations: The company focuses on enhancing its SaaS platform, which accounted for 99.4% of total revenues during the nine months ended September 30, 2024, up from 99.3% in 2023. This represents a growth in recurring subscription revenues from platform subscriptions and managed services to $147.7 million in 2024, a 16.2% increase from $127.2 million in 2023.
- Market Expansions: The company is expanding its geographical reach, with revenues from the Americas at $92.9 million (62.5%), EMEA at $23.6 million (15.8%), and APAC at $32.2 million (21.7%) for the nine months ended September 30, 2024.
- Acquisitions: Enfusion has indicated plans for future acquisitions to enhance its service offerings and market presence, although specific targets have not been disclosed.
Future Revenue Growth Projections and Earnings Estimates
Projected revenue growth for Enfusion is optimistic, with total revenues for the nine months ended September 30, 2024, reaching $148.7 million, up from $128.0 million in the prior year, reflecting a 16.1% increase. Earnings estimates suggest continued profitability, with net income for the same period at $3.7 million, down from $8.4 million in 2023.
Strategic Initiatives or Partnerships that May Drive Future Growth
Enfusion is actively pursuing strategic partnerships aimed at enhancing its technological capabilities and expanding client reach. The company has invested $5.5 million in capitalized software development costs during the nine months ended September 30, 2024, indicating a strong commitment to innovation.
Competitive Advantages that Position the Company for Growth
Enfusion's competitive advantages include:
- High Recurring Revenue Model: With 99.4% of revenues being recurring, the company enjoys stable revenue streams.
- Robust Gross Profit Margins: Gross profit for the nine months ended September 30, 2024, was $100.2 million, with a gross profit margin of 67.4%.
- Strong Cash Position: As of September 30, 2024, Enfusion had cash and cash equivalents of $48.3 million.
Financial Overview Table
| Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change (%) |
|---|---|---|---|
| Total Revenues | $148.7 million | $128.0 million | 16.1% |
| Net Income | $3.7 million | $8.4 million | -56.0% |
| Recurring Revenue (% of Total) | 99.4% | 99.3% | 0.1% |
| Gross Profit | $100.2 million | $86.0 million | 16.5% |
| Cash and Cash Equivalents | $48.3 million | $31.7 million | 52.8% |
Enfusion, Inc. (ENFN) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- Enfusion, Inc. (ENFN) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Enfusion, Inc. (ENFN)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Enfusion, Inc. (ENFN)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.