10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-40949

Enfusion, Inc.

(Exact name of registrant as specified in its charter)

Delaware	87-1268462
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

125 South Clark Street, Suite 750

Chicago, Illinois 60603

(Address of Principal Executive Offices)

(312) 253-9800

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of Exchange on which registered
Class A common stock, par value $0.001 per share	ENFN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  ☒    No   ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  ☒    No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐	Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  ☐    No  ☒

As of November 9, 2022, the registrant had 114,055,220 shares of common stock outstanding, consisting of 68,986,067 outstanding shares of Class A common stock and 45,069,153 outstanding shares of Class B common stock.

TABLE OF CONTENTS

		Page
	GLOSSARY	3
	SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS	4
Part I.	FINANCIAL INFORMATION	6
Item 1.	Condensed Consolidated Interim Financial Statements (Unaudited)	6
	Condensed Consolidated Interim Balance Sheets	6
	Condensed Consolidated Interim Statements of Operations	7
	Condensed Consolidated Interim Statements of Comprehensive Income (Loss)	8
	Condensed Consolidated Interim Statements of Preferred Units, Stockholders’ Equity and Members’ Deficit	9
	Condensed Consolidated Interim Statements of Cash Flows	10
	Notes to Condensed Consolidated Interim Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
Part II.	OTHER INFORMATION	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
	Signatures	38

2

GLOSSARY

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires:

● “Award Units” refers to Management Incentive Award Units issued under Enfusion Ltd. LLC’s Change in Control Bonus Plan.

● “Change in Control Bonus Plan” refers to Enfusion Ltd. LLC’s former Change in Control Bonus Plan for certain members of management that provided for the payment of a cash bonus based on a specified number of Award Units in the event of a change in control transaction, as defined in Enfusion Ltd. LLC’s operating agreement.  In October 2021, Enfusion Ltd. LLC’s board of managers elected to terminate such plan (and all Award Units issued thereunder) upon effectiveness of the registration statement for our IPO.

● “Common Units” refers to the new class of units of Enfusion Ltd. LLC created by the reclassification of the LLC interests of Enfusion Ltd. LLC as part of the Reorganization Transactions.

● “Enfusion,” the “Company,” “we,” “us” and “our” and similar references refer: (1) following the consummation of the Reorganization Transactions, including our IPO, to Enfusion, Inc., and, unless otherwise stated, all of its direct and indirect subsidiaries, including Enfusion Ltd. LLC and (2) prior to the completion of the Reorganization Transactions, including our IPO, to Enfusion Ltd. LLC and, unless otherwise stated, all of its direct and indirect subsidiaries.

● “IPO” refers to the Company’s initial public offering, completed on October 25, 2021.

● “Pre-IPO Owners” refer to the equity holders who were the owners of Enfusion Ltd. LLC immediately prior to the Reorganization Transactions.

● “Pre-IPO Common Unitholders” refer to Pre-IPO Owners that held Common Units following the Reorganization Transactions.

● “Reorganization Transactions” refer to our IPO and certain organizational transactions that were affected in connection with our IPO, and the application of the net proceeds therefrom. See “Initial Public Offering and Reorganization Transactions” in Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 for a description of the transactions.

3

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations, financial condition, business strategy, plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks, and changes in circumstances that are difficult to predict. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements concerning the following:

● our future financial performance, including our revenues, costs of revenues, gross profit or gross profit margin and operating expenses;

● the sufficiency of our cash, cash to meet our liquidity needs;

● anticipated trends and growth rates in our business and in the markets in which we operate;

● our ability to maintain the security and availability of the products and services that comprise our solution;

● our ability to increase the number of clients using our solution;

● our ability to sell additional products and services to and retain our existing clients;

● our ability to successfully expand in our existing markets and into new markets;

● our ability to effectively manage our growth and future expenses;

● our market opportunity and the potential growth of that market, our liquidity and capital needs and other similar matters;

● our ability to maintain, protect and enhance our intellectual property;

● our ability to comply with modified or new laws and regulations applying to our business;

● the attraction and retention of qualified employees and key personnel;

● our anticipated investments in sales and marketing and research and development;

● our ability to successfully defend litigation brought against us;

● the increased expenses associated with being a public company;

● the impact of the COVID-19 pandemic and other global financial, economic, and political events on our business and industry; and

● our ability to compete effectively with existing competitors and new market entrants.

4

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in Item 1A. Risk Factors in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K for the year ended December 31, 2021. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q. And while we believe such information provides a reasonable basis for such statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements.

5

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

Condensed Consolidated Interim Balance Sheets

(dollars in thousands)

	As of		As of
	September 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	63,543	$	64,365
Accounts receivable, net		28,992		18,223
Prepaid expenses		2,605		6,030
Other current assets		888		1,060
Total current assets		96,028		89,678
Property and equipment, net		15,423		13,051
Other assets		4,151		3,356
Total assets	$	115,602	$	106,085
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,185	$	2,528
Accrued expenses and other current liabilities		10,804		5,578
Total current liabilities		11,989		8,106
Other liabilities		443		538
Total liabilities		12,432		8,644
Stockholders' Equity:
Class A common stock, $0.001 par value; 1,000,000,000 shares authorized, 67,009,006 and 65,583,289 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		67		66
Class B common stock, $0.001 par value; 150,000,000 shares authorized, 46,069,153 and 47,470,971 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		46		47
Additional paid-in capital		241,045		226,717
Accumulated deficit		(179,357)		(171,209)
Accumulated other comprehensive loss		(672)		(325)
Total stockholders’ equity attributable to Enfusion, Inc.		61,129		55,296
Non-controlling interests		42,041		42,145
Total stockholders' equity		103,170		97,441
Total liabilities and stockholders' equity	$	115,602	$	106,085

See Notes to Condensed Consolidated Interim Financial Statements.

6

ENFUSION, INC.

Condensed Consolidated Interim Statements of Operations

(dollars in thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
REVENUES:
Platform subscriptions	$	35,953	$	26,950	$	101,064	$	73,697
Managed services		2,504		1,877		7,130		5,140
Other		694		218		1,638		1,010
Total revenues		39,151		29,045		109,832		79,847
COST OF REVENUES:
Platform subscriptions		10,077		6,878		28,453		18,539
Managed services		1,776		1,125		5,059		2,968
Other		121		92		292		174
Total cost of revenues		11,974		8,095		33,804		21,681
Gross profit		27,177		20,950		76,028		58,166
OPERATING EXPENSES:
General and administrative		13,094		8,546		53,691		22,385
Sales and marketing		7,278		4,901		23,285		12,323
Technology and development		3,864		2,600		12,388		6,844
Total operating expenses		24,236		16,047		89,364		41,552
Income (loss) from operations		2,941		4,903		(13,336)		16,614
NON-OPERATING (EXPENSE) INCOME:
Interest expense		(4)		(1,485)		(11)		(4,287)
Other (expense) income		(52)		29		(48)		29
Total non-operating expense		(56)		(1,456)		(59)		(4,258)
Income (loss) before income taxes		2,885		3,447		(13,395)		12,356
Income taxes		287		154		656		704
Net income (loss)	$	2,598	$	3,293	$	(14,051)	$	11,652
Net income (loss) attributable to non-controlling interests		1,059		—		(5,903)		—
Net income (loss) attributable to Enfusion, Inc.	$	1,539	$	3,293	$	(8,148)	$	11,652
Net income (loss) per Class A common shares attributable to Enfusion, Inc.:
Basic	$	0.02			$	(0.11)
Diluted	$	0.02			$	(0.11)
Weighted Average number of Class A common shares outstanding:
Basic		85,156				84,508
Diluted		131,760				84,508

See Notes to Condensed Consolidated Interim Financial Statements.

7

ENFUSION, INC.

Condensed Consolidated Interim Statements of Comprehensive (Loss) Income

(dollars in thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	2,598	$	3,293	$	(14,051)	$	11,652
Other comprehensive income (loss), net of income tax:
Foreign currency translation (loss)		(152)		(17)		(591)		(94)
Total other comprehensive income (loss)		2,446		3,276		(14,642)		11,558
Comprehensive income (loss) attributable to non-controlling interests		997		—		(6,147)		—
Total comprehensive income (loss) attributable to Enfusion, Inc.	$	1,449	$	3,276	$	(8,495)	$	11,558

See Notes to Condensed Consolidated Interim Financial Statements.

8

ENFUSION, INC.

Condensed Consolidated Interim Statements of Preferred Units, Stockholders’ Equity and Members’ Deficit

(dollars in thousands)

(Unaudited)

											Accumulated
	Class A			Class B			Additional				Other				Total
	Common Stock			Common Stock			Paid-in		Accumulated		Comprehensive		Non-Controlling		Stockholders'
	Shares		Amount	Shares	Amount		Capital		Deficit		Loss		Interest		Equity
June 30, 2022	67,001,652	$	67	46,069,153	$	46	$	240,501	$	(180,896)	$	(582)	$	40,670	$	99,806
Net income	—		—	—		—		—		1,539		—		1,059		2,598
Stock-based compensation, net of taxes paid	—		—	—		—		544		—		—		374		918
Issuance of restricted shares	7,354		—	—		—		—		—		—		—		—
Foreign currency translation loss	—		—	—		—		—		—		(90)		(62)		(152)
September 30, 2022	67,009,006	$	67	46,069,153	$	46	$	241,045	$	(179,357)	$	(672)	$	42,041	$	103,170
January 1, 2022	65,583,289	$	66	47,470,971	$	47	$	226,717	$	(171,209)	$	(325)	$	42,145	$	97,441
Net loss	—		—	—		—		—		(8,148)		—		(5,903)		(14,051)
Stock-based compensation, net of taxes paid	—		—	—		—		11,875		—		—		8,496		20,371
Share exchange	1,401,818		1	(1,401,818)		(1)		2,453		—		—		(2,453)		—
Issuance of restricted shares	23,899		—	—		—		—		—		—		—		—
Foreign currency translation loss	—		—	—		—		—		—		(347)		(244)		(591)
September 30, 2022	67,009,006	$	67	46,069,153	$	46	$	241,045	$	(179,357)	$	(672)	$	42,041	$	103,170

							Other
	Preferred Units			Members’ Deficit			Comprehensive		Total
	Units	Amount		Units	Amount		Loss		Members’ Deficit
June 30, 2021	53.774	$	168,369	47.968	$	(230,594)	$	(289)	$	(230,883)
Net income	—		1,740	—		1,553		—		1,553
Foreign currency translation loss	—		—	—		—		(17)		(17)
Distributions to members	—		(243)	—		(288)		—		(288)
September 30, 2021	53.774	$	169,866	47.968	$	(229,329)	$	(306)	$	(229,635)
January 1, 2021	53.774	$	165,515	47.968	$	(233,347)	$	(212)	$	(233,559)
Net income	—		6,158	—		5,494		—		5,494
Foreign currency translation loss	—		—	—		—		(94)		(94)
Distributions to members	—		(1,807)	—		(1,476)		—		(1,476)
September 30, 2021	53.774	$	169,866	47.968	$	(229,329)	$	(306)	$	(229,635)

See Notes to Condensed Consolidated Interim Financial Statements.

9

ENFUSION, INC.

Condensed Consolidated Interim Statements of Cash Flows

(dollars in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net (loss) income	$	(14,051)	$	11,652
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		4,654		2,659
Provision for bad debts		1,261		278
Amortization of debt-related costs		19		222
Stock-based compensation expense		20,788		—
Change in operating assets and liabilities:
Accounts receivable		(12,030)		(7,097)
Prepaid expenses and other current assets		2,246		(5,505)
Accounts payable		(1,383)		1,825
Accrued expenses and other liabilities		5,131		1,460
Net cash provided by operating activities		6,635		5,494
Cash flows from investing activities:
Purchases of property and equipment		(6,185)		(6,373)
Net cash used in investing activities		(6,185)		(6,373)
Cash flows from financing activities:
Repayment of Term Loan		—		(1,250)
Payment of Member distributions		—		(3,283)
Payment of withholding taxes on stock-based compensation		(917)		—
Net cash used in financing activities		(917)		(4,533)
Effect of exchange rate changes on cash		(355)		(94)
Net decrease in cash		(822)		(5,506)
Cash and cash equivalents, beginning of period		64,365		13,938
Cash and cash equivalents, end of period	$	63,543	$	8,432
Supplemental disclosure of non-cash investing activities:
Accrued Property, Plant and Equipment	$	40	$	—
Capitalized Stock-based compensation expense	$	500	$	—
Supplemental disclosure of cash flow information:
Interest paid in cash	$	—	$	3,806
Income taxes paid in cash	$	1,053	$	—

See Notes to Condensed Consolidated Interim Financial Statements.

10

ENFUSION, INC.

Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

Note 1   Organization and Description of Business

Enfusion is a leading provider of cloud-based order and execution management, portfolio management and risk systems. Enfusion’s clients include large global hedge fund managers, institutional asset managers, family offices and other institutional investors. Enfusion provides its clients with innovative real-time performance, risk calculations, and accounting capabilities for some of the most sophisticated financial products. The Company is headquartered in Chicago, Illinois and has offices in Chicago, New York, London, Dublin, Hong Kong, Singapore, São Paulo, Mumbai, Bengaluru, and Sydney.

Enfusion, Inc. was incorporated in Delaware on June 11, 2021 for the purpose of facilitating an initial public offering, which was completed on October 25, 2021, and other related transactions in order to carry on the business of Enfusion Ltd. LLC.

Enfusion, Inc. has three wholly-owned subsidiaries: Enfusion US 1, Inc., Enfusion US 2, Inc. and Enfusion US 3, Inc.; as well as a substantial financial interest in Enfusion Ltd. LLC and its majority-owned subsidiary, Enfusion Softech India Private Limited, as well as the wholly-owned subsidiaries of Enfusion Ltd. LLC: Enfusion Systems UK Ltd, Enfusion HK Limited, Enfusion Software Limited, Enfusion (Singapore) Pte. Ltd., Enfusion do Brasil Tecnologia da Informacao Ltda, Enfusion (Australia) Pty. Ltd. and Enfusion (Shanghai) Co., Ltd. Enfusion, Inc., through its control over the managing member of Enfusion Ltd. LLC, manages and operates Enfusion Ltd. LLC’s business and controls its strategic decisions and day-to-day operations. As such, Enfusion, Inc. consolidates the financial results of Enfusion Ltd. LLC, and a portion of Enfusion, Inc.’s net income is allocated to non-controlling interests to reflect the entitlement to a portion of Enfusion Ltd. LLC’s net income by the Pre-IPO Common Unitholders.  As of September 30, 2022, Enfusion, Inc. owned approximately 59% of Enfusion Ltd. LLC.

Note 2    Basis of Presentation

Principles of Consolidation

These statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations, and all adjustments are of a normal recurring nature. The operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results expected for the full year ending December 31, 2022. The condensed consolidated interim financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The unaudited condensed consolidated interim financial statements include the accounts of Enfusion, Inc. and its wholly or majority-owned subsidiaries.  All intercompany balances and transactions are eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated interim financial statements and accompanying notes. Actual results could differ from those estimates. The effect of the change in the estimates will be recognized in the period of the change.

In order to better align with industry standards, the Company revised the presentation of its condensed  consolidated interim statement of operations for the three and nine months ended September 30, 2021 to reclassify certain immaterial expenses to cost of sales for Platform subscriptions.  These expenses were previously classified in cost of sales

11

for Managed services and Other revenues.  This change in presentation has no effect on our gross profit or other consolidated results.  In addition, the Company revised the presentation of certain credit charges that were previously recorded in Other revenues to reclassify these charges to Platform subscription and Managed services revenues, respectively.  This change in presentation has no effect on the Company’s total revenues or other consolidated results.  

Note 3   Summary of Significant Accounting Policies

A description of the Company’s significant accounting policies is included in the audited financial statements within its Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2022.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an initial maturity date of three months or less to be cash equivalents. Funds held as investments in money market funds are included within cash and cash equivalents.  As of September 30, 2022, the Company had approximately $55 million invested in money market accounts.  

Financial Instruments and Fair Value Measurements

The Company has investments in money market accounts, which are included in cash and cash equivalents on the condensed consolidated balance sheets. Fair value inputs for these investments are considered Level 1 measurements within the Fair Value Hierarchy, as money market account fair values are known and observable through daily published floating net asset values.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification 606 (“ASC 606”), Revenue from Contracts with Customers. The Company derives its revenues primarily from fees for platform subscription and managed services provided to clients. Revenues are recognized when control of these services are transferred to the Company’s clients in an amount that reflects the consideration the Company expects to be entitled to in exchange for these services. Revenues are recognized net of taxes that will be remitted to governmental agencies applicable to service contacts.

Historically, platform subscription contracts have typically had a one-year term and were cancellable with 30 days’ notice.  Beginning in the first quarter of 2021, our default platform subscription contract has had a multi-year term and did not allow termination for convenience, though each contract has and can be negotiated with varying term lengths, with or without a termination for convenience clause.  Clients are invoiced each month for the services provided in accordance with the stated terms of their service contracts. Fees for partial term service contracts are prorated, as applicable. Payment of fees are due from clients within 30 days of the invoice date. The Company does not provide financing to clients. The Company determines revenue recognition through the following five-step framework:

● Identification of the contract, or contracts, with a client;

● Identification of the performance obligation in the contract;

● Determination of transaction price;

● Allocation of the transaction price to the performance obligations in the contract; and

● Recognition of revenue when, or as, performance obligations are satisfied.

12

Platform subscription revenues

Platform subscription revenues consist primarily of fees for providing clients with access to the Company’s cloud-based platform. Platform subscription clients do not have the right to take possession of the platform’s software, and do not have any general return rights. Platform subscription revenues are recognized ratably over the period of contractually enforceable rights and obligations, beginning on the date that the client gains access to the platform. Installment payments are invoiced at the end of each calendar month during the subscription term.

Managed services revenues

Managed services revenues primarily consist of client-selected middle and back-office services provided on our clients’ behalf using the Company’s platform. Revenue is recognized monthly as the managed services are performed, with invoicing occurring at the end of the calendar month.

Other revenues

Other revenues consists of non-subscription-based revenues, such as data conversion and services that integrate a client’s historical data into our solution. The Company recognizes revenues as these services are performed with invoicing occurring at the end of each month.

Service contracts with multiple performance obligations

Our service contracts with clients can include multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. However, all distinct performance obligations within a contract are satisfied over a similar period of time with the same measure of progress. Accordingly, each distinct performance obligation within a contract has the same pattern of revenue recognition. The Company has determined that implementation services are not distinct from the ongoing platform subscription services due to the highly specialized knowledge required to execute on our solution. Such services are recognized with the platform subscription services revenue over time.

Remaining performance obligations

For the Company’s contracts that exceed one year and do not include a termination for convenience clause, the amount of the transaction price allocated to remaining performance obligations as of September  30, 2022 and December 31, 2021 was $32.1 million and $23.4 million, respectively. The Company expects to recognize this amount over the next one to five years.

Disaggregation of revenue

The Company’s total revenues by geographic region, based on the client’s physical location is presented in the following tables (in thousands):

	Three Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	25,109	64.1	%	$	18,821	64.8	%
Europe, Middle East and Africa (EMEA)		5,113	13.1	%		3,631	12.5	%
Asia Pacific (APAC)		8,929	22.8	%		6,593	22.7	%
Total revenues	$	39,151	100.0	%	$	29,045	100.0	%

* The Company’s total revenues in the United States were $24.5 million and $18.4 million for the three months ended September 30, 2022 and 2021, respectively.

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	Nine Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	70,386	64.1	%	$	52,220	65.4	%
Europe, Middle East and Africa (EMEA)		14,063	12.8	%		9,607	12.0	%
Asia Pacific (APAC)		25,383	23.1	%		18,020	22.6	%
Total revenues	$	109,832	100.0	%	$	79,847	100.0	%

*   The Company’s total revenues in the United States were $68.8 million and $51.0 million for the nine months ended September 30, 2022 and 2021, respectively.

Accounts Receivable

As of September 30, 2022 and December 31, 2021, no individual client represented more than 10% of accounts receivable. For the three and nine months ended September 30, 2022 and 2021, respectively, no individual client represented more than 10% of the Company’s total revenues.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the guidance in former ASC 840, Leases, to increase transparency and comparability among organizations by requiring recognition of right-of-use assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements (with the exception of short-term leases). In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new Leases (Topic 842) standard. ASU 2016-02, as subsequently amended for various technical issues, is effective for private companies and emerging growth companies in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, and early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, it has not yet determined the full impact the adoption of this standard will have on its consolidated financial statements and related disclosures.  However, the Company expects the adjustment to retained earnings to be immaterial.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13, as subsequently amended for various technical issues is effective for annual reporting periods beginning after December 15, 2022, for private entities and emerging growth companies. The Company is evaluating the impact of this standard on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for private entities and emerging growth companies in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, with early adoption permitted, including adoption in an interim period. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its consolidated financial statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. The guidance is temporary and can be applied through

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December 31, 2022. The guidance has not impacted the condensed consolidated financial statements to date. The Company will continue to monitor the impact of the ASU on our consolidated financial statements in the future.

Note 4   Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

	September 30, 2022		December 31, 2021
Computer equipment	$	16,631	$	14,163
Software development costs		8,487		4,866
Leasehold improvements		1,833		1,947
Furniture and fixtures		426		540
Total property and equipment, cost		27,377		21,516
Less accumulated depreciation and amortization		(11,954)		(8,465)
Total property and equipment, net	$	15,423	$	13,051

As of September 30, 2022 and December 31, 2021, property and equipment, net located in the United States was $13.2 million and $10.4 million, respectively. The remainder was located in our various international locations. Included in property and equipment are the capitalized costs of software development. Software development costs capitalized during the three months ended September 30, 2022 and 2021 were $1.1 million and $400 thousand, respectively.  Software development costs capitalized during the nine months ended September 30, 2022 and 2021 were $3.6 million and $1.4 million, respectively.  

Depreciation and amortization expense related to property and equipment, excluding software development costs, was $892 thousand and $700 thousand for the three months ended September 30, 2022 and 2021, respectively. Depreciation and amortization expense related to property and equipment, excluding software development costs, was $2.5 million and $1.8 million for the nine months ended September 30, 2022 and 2021, respectively. Amortization expense related to software development costs was $582 thousand and $300 thousand for the three months ended September 30, 2022 and 2021, respectively. Amortization expense related to software development costs was $1.5 million and $900 thousand for the nine months ended September 30, 2022 and 2021, respectively.

Note 5   Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30, 2022		December 31, 2021
Accrued compensation	$	8,845	$	3,180
Accrued expenses and other		1,684		1,182
Accrued taxes		275		1,216
Total accrued expenses and other current liabilities	$	10,804	$	5,578

Accrued compensation includes accrued expenses for bonuses, sales commissions, compensated absences, and other compensation-related expenses.

Note 6   Operating Leases and Service Agreements

Operating Leases and Service Agreements

The Company leases office space in various locations under operating lease agreements in the normal course of business, which expire at various dates through 2025. Certain operating leases are secured with cash security deposits or letters of credit.

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The Company has service agreements for the use of data processing facilities. These service agreements expire at various dates through 2023. Monthly base payments as of September 30, 2022 range from $6 thousand to $16 thousand.

Future aggregate minimum rental payments under the noncancelable operating leases and service agreements noted above, excluding the Company’s share of real estate taxes and other operating costs, are as follows (in thousands):

	Amount
2022 (remaining three months)	$	951
2023		3,319
2024		2,010
2025		901
Total	$	7,181

Total expense related to these lease agreements, which is included in Cost of revenues and Operating expenses, was $1.0 million and $3.2 million for the three and nine months ended September 30, 2022, respectively, and $1.0 million and $2.8 million for the three and nine months ended September 30, 2021, respectively.

Note 7   Commitments and Contingencies

The Company records accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. A description of a contingent payment arrangement under the Company’s Tax Receivable Agreement is included in Note 12 – Related Party Transactions.  No accruals for contingencies were recorded as of September 30, 2022 and December 31, 2021, respectively.

Note 8   Preferred Units, Stockholders’ Equity and Members’ Deficit

Prior to the Reorganization Transactions, Enfusion Ltd. LLC was organized as a limited liability company owned by its members, each of whose membership interests consisted of an equal number of: (i) “Economic Units”, which represented a Member’s economic interest in Enfusion Ltd. LLC; and (ii) “Participation Units”, which represented a Member’s right to participate (vote) in the affairs of Enfusion Ltd. LLC.

As a limited liability company, the Enfusion Ltd. LLC issued more than one class of Units. The Class A Units were considered to be Members’ Equity, whereas all of the other Unit classes were considered to be Preferred Units because of provisions in the Company’s former Operating Agreement that conferred certain rights and privileges to the members owning these Units, such as voting rights, redemption rights and liquidation preferences.

Holders of the Class C-1, C-2 and D Preferred Units had the option to require the Company to redeem their Units. In accordance with the guidance in ASC 480, Distinguishing Liabilities from Equity, outstanding Class C-1, C-2 and D Preferred Units were classified outside of permanent equity and within temporary equity due to their optional redemption features and liquidation preferences.

In connection with the Reorganization Transactions, the Amended and Restated Operating Agreement of Enfusion Ltd. LLC (the “LLC Operating Agreement”) was amended and restated to, among other things, modify its capital structure by reclassifying each of the outstanding Class A Units and C-1, C-2 and D Preferred Units into the Common Units through a stock split on a 1,000,000 to 1 basis. The number of Common Units outstanding following the Reorganization Transaction reflect the 1,000,000 to 1 stock split. Pursuant to the adoption of the LLC Operating Agreement, Enfusion US 1, Inc., a newly-formed wholly owned subsidiary of Enfusion, Inc., was appointed the sole managing member of Enfusion Ltd. LLC.

Amendment and Restatement of Certificate of Incorporation

In October 2021, the Company amended its certificate of incorporation. The amended and restated certificate of incorporation of Enfusion, Inc. provides for 1,000,000,000 authorized shares of Class A common stock, 150,000,000 authorized shares of Class B common stock and 100,000,000 shares of preferred stock. Each share of the Company’s Class

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A common stock is entitled to one vote per share and is not convertible into any other shares of the Company’s capital stock. Holders of shares of the Company’s Class A common stock are entitled to receive dividends when, as and if declared by the Company’s board of directors. Upon the Company’s liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors, and subject to the rights of the holders of one or more outstanding series of preferred stock, as applicable, having liquidation preferences, the holders of shares of the Company’s Class A common stock will be entitled to receive pro rata the Company’s remaining assets available for distribution. Each share of the Company’s Class B common stock is entitled to one vote per share and is not convertible or exchangeable for a share of Class A common stock or any other security. Holders of the Company’s Class B common stock do not have any right to receive dividends or to receive a distribution upon a liquidation, dissolution or winding up of Enfusion, Inc.

Preferred Stock

The Company’s board of directors has the authority, without further action by the Company’s stockholders, to issue up to 100,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting, or the designation of, such series, any or all of which may be greater than the rights of Class A common stock. As of September 30, 2022, the Company has not issued any shares of preferred stock nor has the Company’s board of directors established the rights and privileges related to any series of preferred stock.

Note 9 Stock-Based Compensation

The Company recognized total stock compensation expense for the three and nine months ended September 30, 2022 of $0.8 million and $20.8 million, respectively.  No stock compensation expense was recognized in the comparative periods.

In connection with obligations to issue Class A common stock to former holders of Award Units under the Company’s former Change in Control Bonus Plan, the Company paid approximately $1.4 million of tax withholding obligations for federal and state payroll taxes. Of that amount, $917 thousand related to employee payroll tax withholdings and has accordingly been recorded as a reduction to additional paid-in capital. The Company’s stock compensation expense was recognized in the following captions within the consolidated statements of operations:

(in thousands)	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Cost of revenues	$	406	$	1,100
General and administrative*		(1,478)		12,034
Sales and marketing		1,454		4,939
Technology and development		451		2,715
Total stock compensation expense	$	833	$	20,788

*Includes forfeitures of restricted stock primarily resulting from Chief Executive Officer transition in the three months ended September 30, 2022.

Total unrecognized stock compensation expense related to unvested restricted stock units (“RSUs”) and contingently issuable shares of Class A common stock that will vest within one year of the IPO contingent upon continued employment requirements (“Contingently Issuable Shares”) was $25.9 million as of September 30, 2022, which is expected to be recognized over a weighted-average period of 2 years from the date of grant.

In connection with the IPO, the Company adopted the 2021 Incentive Plan (the “Plan”). The Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards intended to align the interests of participants with those of the Company’s shareholders.

During the three months ended September 30, 2022, there were no stock options granted under the Plan.  For the nine months ended September 30, 2022, there were 84,000 options granted under the Plan, at a weighted average exercise

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price of $9.86 per option.  During the three months ended September 30, 2022, 32,000 stock options were forfeited. As of September 30, 2022, there was approximately $296 thousand of unrecognized equity-based compensation expense related to the remaining stock options issued during 2022, which is expected to be recognized over a weighted-average period of approximately 3 years.  No stock options were granted prior to the quarter ended June 30, 2022.  The total fair value of the stock options that vested in the nine months ended September 30, 2022 was immaterial.

The assumptions used for the options granted under the Plan during the nine months ended September 30, 2022 were as follows:

Assumptions
Expected volatility	64.54%
Expected term of award	6.5 years
Risk-free rate	3.39%
Dividend yield	0.00%

In connection with the IPO, the Company also adopted the 2021 Employee Stock Purchase Plan (“2021 ESPP”). Under the 2021 ESPP, eligible employees may be granted options to purchase shares of Class A common stock at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. As of September 30, 2022, no options were granted to employees under the 2021 ESPP.

Note 10  Net Income (Loss) Per Class A Common Share

Basic income (loss) per share is computed by dividing net loss attributable to Enfusion, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted loss per share is computed giving effect to all potentially dilutive shares.

Prior to the IPO, the Enfusion, LLC membership structure included Common Units and multiple classes of Preferred Units. The Company analyzed the calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that would not be meaningful to the users of these Condensed Consolidated Financial Statements. Therefore, earnings per share information has not been presented for periods prior to the IPO on October 20, 2021.

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A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share of Class A common stock is as follows:

	Three Months		Nine Months
(in thousands, except per share amounts)	Ended September 30, 2022		Ended September 30, 2022
Net income (loss)	$	2,598	$	(14,051)
Less: Net income (loss) attributable to non-controlling interests		(1,059)		5,903
Net income (loss) attributable to Enfusion, Inc.	$	1,539	$	(8,148)
Numerator:
Net income (loss) attributable to Enfusion, Inc.	$	1,539	$	(8,148)
Adjustment to income (loss) attributable to common stockholders		142		(897)
Numerator for Basic Earnings per Share	$	1,681	$	(9,045)
Adjustment to Income for Dilutive Shares		917		-
Numerator for Diluted Earnings per Share	$	2,598	$	(9,045)
Denominator:
Weighted-average shares of Class A common stock outstanding		66,648		66,296
Vested shares of Class A common stock and RSUs		18,508		18,212
Weighted-average shares of Class A common stock outstanding--basic		85,156		84,508
Add: Dilutive Shares		46,604		-
Weighted-average shares of Class A common stock outstanding--diluted		131,760		84,508
Net income (loss) per share of Class A common stock--Basic	$	0.02	$	(0.11)
Net income (loss) per share of Class A common stock--Diluted	$	0.02	$	(0.11)

The following number of potentially dilutive shares were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been antidilutive:

	Three Months		Nine Months
(in thousands)	Ended September 30, 2022		Ended September 30, 2022
Class B common stock		-		46,765
Contingently issuable shares of Class A common stock		-		540
Restricted stock units		-		2,766
Stock options		52		52
		52		50,123

Shares of Class B common stock do not share in earnings and are not participating securities. Accordingly, separate presentation of loss per share of Class B common stock under the two-class method has not been presented. Shares of Class B common stock are, however, considered potentially dilutive shares of Class A common stock. After evaluating the potential dilutive effect under both the treasury stock method and if-converted method, shares of Class B common stock were determined to be dilutive for the three months ended September 30, 2022, and have therefore been included in the computation of diluted earnings per share of Class A common stock. However, for the nine months ended September 30, 2022, shares of Class B common stock were determined to be anti-dilutive, and have therefore been excluded from the computation of diluted earnings per share of Class A common stock.

Note 11 Income Taxes

The Company is taxed as a corporation for income tax purposes and is subject to federal, state, and local taxes on the income allocated to it from Enfusion Ltd. LLC based upon the Company’s economic interest in Enfusion Ltd. LLC. The Company is the sole managing member of Enfusion Ltd. LLC and, as a result, consolidates the financial results of Enfusion Ltd. LLC.

Enfusion Ltd. LLC. is a limited liability company taxed as a partnership for income tax purposes. Enfusion Ltd. LLC does not pay any federal income taxes, as income or loss is included in the tax returns of the individual members.

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Additionally, certain wholly-owned entities taxed as corporations are subject to federal, state, and foreign income taxes in the jurisdictions in which they operate, and accruals for such taxes are included in the Condensed Consolidated Financial Statements. For periods prior to the IPO, the Company’s taxes represent those of Enfusion Ltd. LLC.

The Company’s effective tax rate for the three months ended September 30, 2022 and 2021 was 9.94% and 4.47%, respectively. The Company’s effective tax rate for the nine months ended September 30, 2022 and 2021 was (4.89)% and 5.7%, respectively. In the three and nine months ending September 30, 2022, respectively, the Company’s effective tax rate differed from the U.S. statutory tax rate of 21% primarily due to non-controlling interest and having a full valuation allowance in the U.S. Conversely, in the three and nine months ending September 30, 2021, respectively, the Company’s effective tax rate differed from the U.S. statutory tax rate of 21% primarily due to the pass-through income generated.  

Note 12  Related Party Transactions

Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions. Since transactions with related parties may raise potential or actual conflicts of interest between the related party and the Company, upon the completion of the IPO the Company implemented a related party transaction policy that requires related party transactions to be reviewed and approved by its nominating and corporate governance committee.  

The Company used the proceeds (net of underwriting discounts) from the issuance of 5,526,608 shares in the IPO ($87.8 million) to purchase an equivalent number of Common Units from the Company’s Pre-IPO Common Unitholders.

In connection with the IPO, the Company entered into the Tax Receivable Agreement with certain of the Pre-IPO Owners, which provides for the payment by Enfusion Inc. of 85% of certain cash tax benefits that Enfusion, Inc. actually realizes, or in some cases is deemed to realize. As of September 30, 2022 and December 31, 2021, the Company has not recorded a liability under the Tax Receivable Agreement related to the tax benefits originating from the Reorganization Transactions, IPO and subsequent purchase of Enfusion Ltd. LLC units during the year ended December 31, 2021 as it is not probable that the Company will realize such tax benefits. 

On May 6, 2022, a Pre-IPO Common Unitholder delivered an exchange notice pursuant to Article XII of the LLC Operating Agreement, relating to the exchange of 1,401,818 Common Units and an equal number of shares of class B common stock for an equal number of shares of Class A common stock.

Pursuant to the terms of the LLC Operating Agreement, the Pre-IPO Common Unitholder surrendered 1,401,818 Common Units and an equal number of shares of Class B common stock. In connection therewith, the Company issued 1,401,818 shares of Class A common stock to such Pre-IPO Common Unitholder, canceled an equal number of Class B Common Stock, and received an equal number of Common Units, increasing the Company’s ownership of Common Units by 1,401,818.

On August 21, 2022, the Company appointed Oleg Movchan to the position of Interim Chief Executive Officer of the Company.  In connection therewith, on August 21, 2022, the Company and Enfusion Ltd. LLC entered into an employment agreement with Oleg Movchan, who as of such date was a director of the Company and beneficial owner of more than 5% of the Company’s issued and outstanding class B common stock.  Under the employment agreement, among other things, Enfusion Ltd. LLC will provide Mr. Movchan with an annual base salary of $650,000 and a cash bonus of up to $650,000 (pro-rated based on the term of Mr. Movchan’s service during the 12 months following the date of the Agreement).

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Note 13  Subsequent Events

Share Exchange

On October 12, 2022, a Pre-IPO Common Unitholder delivered an exchange notice pursuant to Article XII of the LLC Operating Agreement, relating to the exchange of 1,000,000 Common Units and an equal number of shares of class B common stock for an equal number of shares of Class A common stock.

Pursuant to the terms of the LLC Operating Agreement, on October 19, 2022, the Pre-IPO Common Unitholder surrendered 1,000,000 Common Units and an equal number of shares of Class B common stock. In connection therewith, the Company issued 1,000,000 shares of Class A common stock to such Pre-IPO Common Unitholder, canceled an equal number of shares of Class B Common Stock, and received an equal number of Common Units, increasing the Company’s ownership of Common Units by 1,000,000.

Issuance of Shares

On October 20, 2022, the Company issued 107,046 shares of Class A common stock in connection with the vesting of certain RSUs that were granted at the time of the IPO to U.S. and foreign employees.  On October 25, 2022, the Company issued 1,396,677 shares of Class A common stock to the former U.S. and foreign holders of Award Units and a non-executive employee.

The individual tax withholding obligations to be incurred in connection with the above issuances were satisfied through our withholding 526,662 shares from issuance (with a value as of the date of issuance that satisfies the withholding amount due), and using approximately $6.96 million of the Company’s cash to remit the related withholding tax amount to the applicable U.S. and foreign tax authorities.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis reflect historical results of operations and financial position. The following discussion and analysis is intended to highlight and supplement data and information presented elsewhere in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated interim financial statements and related notes and other financial information, and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2022. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to the historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could results to differ materially from management’s expectations. Factors that could cause or contribute to such differences are discussed in the section titled “Special Note Regarding Forward-Looking Statements” and “Item 1A. Risk Factors.” We assume no obligation to update any of these forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on Enfusion’s behalf are qualified in their entirety by this paragraph.

Overview

Enfusion is a global, high-growth, software-as-a-service provider focused on transforming the investment management industry. The products and services that comprise our solution are designed to eliminate technology and information barriers, empowering investment managers to confidently make and execute better-informed investment decisions in real time. We simplify investment and operational workflows by unifying mission critical systems and coalescing data into a single dataset resulting in a single source of truth. This allows stakeholders throughout the entire client organization to interact more effectively with one another across the investment management lifecycle.

Our total revenues were approximately 98.2% and 98.5% recurring subscription-based during the three and nine months ended September 30, 2022, respectively, and 99.2% and 98.7% during the three and nine months ended September 30, 2021, respectively. Generally, we charge our clients fees comprised of various components such as user fees, connectivity fees, market data fees and technology-powered, managed service fees, all of which take into account client complexity and that is subject to contract minimums. The weekly enhancements and upgrades that we deliver and the dedicated client service are included in the price of the contract.

To support our growth and capitalize on our market opportunity, we continue to invest across all aspects of our business. In research and development, we are focused on developing additional system functionality that will open revenue opportunities across alternative and institutional investment managers.

We operate as a single operating and reportable segment, which reflects the way our chief operating decision maker reviews and assesses the performance of our business. Our total revenues were $39.2 million and $109.8 million for the three and nine months ended September 30, 2022, respectively, compared to $29.0 million and $79.8 million for the three and nine months ended September 30, 2021, respectively. Platform subscriptions and managed services revenues were $38.5 million for the three months ended September 30, 2022, up approximately 33.4% from $28.8 million for the three months ended September 30, 2021.  For the nine months ended September 30, 2022, platform subscriptions and managed services revenues were $108.2 million, up 37.2% compared to $78.8 million for the nine months ended September 30, 2021.  We had net income of $2.6 million and a net loss of $14.1 million for the three and nine months ended September 30, 2022, compared to net income of $3.3 million and $11.7 million for the three and nine months ended September 30, 2021, respectively.

Components of Our Results of Operations

Revenues

Platform subscriptions

Platform subscriptions revenues consists primarily of user fees to provide our clients access to our cloud-based solution. Fees consider various components such as number of users, connectivity, trading volume, data usage and product

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coverage. Platform subscription clients do not have the right to take possession of the platform’s software and do not have any general return right. Platform subscription revenues are recognized ratably over the period of contractually enforceable rights and obligations, beginning on the date that the client gains access to the platform. Historically, our platform subscription contracts have typically had a one-year term and were cancellable with 30 days’ notice.  Beginning in the first quarter of 2021, our default platform subscription contract has had a multi-year term and did not allow termination for convenience, though each contract has and can be negotiated with varying term lengths, with or without a termination for convenience clause. Installment payments are invoiced at the end of each calendar month during the subscription term.

Managed services

Managed services revenues primarily consists of client-selected middle- and back-office, technology-powered services. We recognize revenues monthly as the managed services are performed with invoicing occurring at the end of the month. Generally, invoices have a 30-day payment period in accordance with the associated contract. There is no financing available.

Other

Other revenues consist of non-subscription-based revenues, such as data conversion and services that integrate a client’s historical data into our solution.  We recognize revenues as these services are performed with invoicing occurring at the end of each month.

Cost of Revenues

Cost of revenues consists primarily of personnel-related costs associated with the delivery of our software and services, including base salaries, bonuses, employee benefits and related costs. Additionally, cost of revenues includes amortization of capitalized software development costs, allocated overhead and certain direct data and hosting costs, and stock-based compensation. Our cost of revenues has fixed and variable components and depends on the type of revenues earned in each period. We expect our cost of revenues to increase in absolute dollars as we continue to hire personnel to provide hosting services and technical support to our growing client base. We anticipate additional expenses as a result of stock-based compensation expenses for the contingently issuable shares of our Class A common stock that will vest within one year of the IPO contingent upon continued employment requirements (the “Contingently Issuable Shares”), restricted stock units granted in connection with the IPO, and other equity awards to be issued under our equity plans.

Operating Expenses

We present stock-based compensation expense within General and administrative, Sales and marketing, and Technology and development expenses based on the individual employee’s department. We anticipate additional expenses as a result of stock-based compensation expenses for the Contingently Issuable Shares, restricted stock units granted in connection with the IPO, and other equity awards to be issued under our equity plans.

General and administrative

General and administrative expenses consist of personnel costs and related expenses for executive, finance, legal, human resources, and recruiting and administrative personnel.  These personnel costs and related expenses include salaries, benefits and bonuses, fees for external legal, accounting, recruiting and other consulting services, and stock-based compensation expense. We expect certain expenses to increase as we continue to operate as a publicly traded company and expand our client base and geographic footprint.

Sales and marketing

Sales and marketing expenses consist primarily of personnel and related costs associated with our sales and marketing staff, including base salaries, employee benefits, bonuses and commissions, and stock-based compensation expense.

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Technology and development

Technology and development expenses consist primarily of research and development activities, non-capitalizable costs of developing content and certain overhead allocations, and stock-based compensation. These costs include employee-related costs, consulting services, and expenses related to the product design, development, testing and enhancements of our subscription services. We expect that our technology and development expenses will increase as we continue to enhance our platform functionality and develop new content and features.

Income Taxes

Enfusion Ltd. LLC has historically been and is treated as a pass-through entity for U.S. federal tax purposes and most applicable state and local income tax purposes. Income tax provision represents the income tax expense or benefit associated with our foreign operations based on the tax laws of the jurisdictions in which we operate.

After consummation of the Reorganization Transactions, Enfusion, Inc. became subject to U.S. federal income taxes with respect to our allocable share of any U.S. taxable income of Enfusion, Ltd. LLC and is taxed at the prevailing corporate tax rates. Enfusion, Inc. is treated as a U.S. corporation for U.S. federal, state and local income tax purposes. Accordingly, a provision for income taxes is recorded for the anticipated tax consequences of our reported results of operations for federal income taxes.

Non-Controlling Interests

Non-controlling interests represent the portion of profit or loss, net assets and comprehensive loss of our consolidated subsidiary that is not allocable to the Company based on our percentage of ownership of this entity. Income or loss attributed to the non-controlling interests is based on the Common Units outstanding during the period and is presented on the consolidated statements of operations and consolidated statements of comprehensive (loss) income.

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Results of Operations

The results of operations presented below should be reviewed in conjunction with the condensed consolidated interim financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q.

Comparison of the Three Months Ended September 30, 2022 and 2021

The following table sets forth our consolidated results of operations for the periods shown:

	Three Months Ended September 30,
(in thousands)	2022		2021
	Unaudited
REVENUES:
Platform subscriptions	$	35,953	$	26,950
Managed services		2,504		1,877
Other		694		218
Total revenues		39,151		29,045
COST OF REVENUES:
Platform subscriptions		10,077		6,878
Managed services		1,776		1,125
Other		121		92
Total cost of revenues		11,974		8,095
Gross profit		27,177		20,950
OPERATING EXPENSES:
General and administrative		13,094		8,546
Sales and marketing		7,278		4,901
Technology and development		3,864		2,600
Total operating expenses		24,236		16,047
Income from operations		2,941		4,903
NON-OPERATING EXPENSE:
Interest expense		(4)		(1,485)
Other (expense) income		(52)		29
Total non-operating expense		(56)		(1,456)
Income before income taxes		2,885		3,447
Income taxes		287		154
Net income		2,598		3,293
Net income attributable to non-controlling interests		1,059		—
Net income attributable to Enfusion, Inc.	$	1,539	$	3,293

Revenues

	Three Months Ended September 30,
					Increase (Decrease)
(in thousands)	2022		2021		Amount		Percent
Platform subscriptions	$	35,953	$	26,950	$	9,003	33.4	%
Managed services		2,504		1,877		627	33.4	%
Other		694		218		476	218.3	%
Total revenues	$	39,151	$	29,045	$	10,106	34.8	%

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Total revenue was $39.2 million for the three months ended September 30, 2022 compared to approximately $29.1 million for the three months ended September 30, 2021, representing an increase of $10.1 million, or 34.8%.

Platform subscriptions

Platform subscriptions revenue increased by $9 million or 33.4%, from $27 million for the three months ended September 30, 2021 to $36 million for the three months ended September 30, 2022.  The increase was primarily driven by increased revenues from new clients of approximately $4.8 million. Revenue also increased for existing clients; $5.4 million of this increase relates to sales of new services and additional users within existing contracts, and $1 million reflects the full-period impact of sales booked in prior periods, partially offset by client churn.

Managed services

Managed services revenue increased by approximately $627 thousand or 33.4%, from $1.9 million for the three months ended September 30, 2021 to $2.5 million for the three months ended September 30, 2022.  The increase was primarily driven by revenue from new clients of approximately $600 thousand and increases in revenue from existing clients of approximately $500 thousand, partially offset by client churn.

Other

Other revenues, primarily consisting of data conversion services, increased by approximately $500 thousand over the comparative period.  The increase was due primarily to a higher volume of data conversion projects.

Cost of Revenues, Gross Profit and Gross Profit Margin

	Three Months Ended September 30,
							Increase (Decrease)
(in thousands)	2022			2021			Amount		Percent
Cost of revenues:
Platform subscriptions	$	10,077		$	6,878		$	3,199	46.5	%
Managed services		1,776			1,125			651	57.9	%
Other		121			92			29	31.5	%
Total cost of revenues	$	11,974		$	8,095		$	3,879	47.9	%
Gross profit	$	27,177		$	20,950		$	6,227	29.7	%
Gross profit margin		69.4	%		72.1	%

Cost of Revenues

Cost of revenues increased by $3.9 million or 47.9%, from $8.1 million for the three months ended September 30, 2021 to approximately $12 million for the three months ended September 30, 2022. The increase was primarily driven by an increase in payroll and payroll-related costs of $2.6 million, largely resulting from headcount additions to support our continued growth. In addition, hosting costs and data fees increased by approximately $600 thousand over the comparative period, reflective of an increased client base and increased usage.  Stock-based compensation expense of approximately $400 thousand also contributed to the increase. 

Gross profit increased by $6.2 million, from $21 million for the three months ended September 30, 2021 to $27.2 million for the three months ended September 30, 2022.  Gross profit margin as a percentage of revenue decreased by 2.7%.  The decrease in gross profit margin as a percentage of revenues was primarily attributable to increased personnel costs for onboarding and client services.

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Operating Expenses

	Three Months Ended September 30,
					Increase (Decrease)
(in thousands)	2022		2021		Amount		Percent
General and administrative	$	13,094	$	8,546	$	4,548	53.2	%
Sales and marketing		7,278		4,901		2,377	48.5	%
Technology and development		3,864		2,600		1,264	48.6	%
Total operating expenses	$	24,236	$	16,047	$	8,189	51.0	%

General and administrative

General and administrative expenses increased by $4.5 million, from approximately $8.5 million for the three months ended September 30, 2021 to $13.1 million for the three months ended September 30, 2022. The increase in general and administrative expenses was primarily attributable to professional fees for consulting, legal, and tax services, which increased by approximately $1.4 million over the comparative period.  In addition, corporate personnel costs increased by approximately $1 million over the comparative period.  The Company also incurred $670 thousand of CEO transition costs.  The remaining fees were incurred to support our growth and the increased administrative complexity related to our new public company status. The increase in general and administrative expenses was partially offset by decreases in stock-based compensation expense due to forfeitures of restricted stock unit awards.

Sales and marketing

Sales and marketing expenses increased by $2.4 million, from $4.9 million for the three months ended September 30, 2021 to $7.3 million for the three months ended September 30, 2022.  The increase was primarily attributable to stock-based compensation expense of $1.5 million. The increase was also attributable to higher personnel costs related to growth of our professional sales organization, increased marketing spend, and increased commission expenses.  

Technology and development

Technology and development expenses increased by $1.3 million, from $2.6 million for the three months ended September 30, 2021 to $3.9 million for the three months ended September 30, 2022.  The increase in technology and development expense was primarily attributable to stock-based compensation expense of approximately $450 thousand, with the remaining increase driven by incremental personnel costs to support growth of our product development and client services groups.

Non-Operating Expense

The overall decrease of $1.4 million in non-operating expense from the three months ended September 30, 2021 to the three months ended September 30, 2022 was driven primarily by the decrease in interest expense as result of the repayment in full of the term loan in the fourth quarter of 2021 following the IPO.

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Comparison of Nine Months Ended September 30, 2022 and 2021

The following table sets forth our consolidated results of operations for the periods shown:

	Nine Months Ended September 30,
(in thousands)	2022		2021
	Unaudited
REVENUES:
Platform subscriptions	$	101,064	$	73,697
Managed services		7,130		5,140
Other		1,638		1,010
Total revenues		109,832		79,847
COST OF REVENUES:
Platform subscriptions		28,453		18,539
Managed services		5,059		2,968
Other		292		174
Total cost of revenues		33,804		21,681
Gross profit		76,028		58,166
OPERATING EXPENSES:
General and administrative		53,691		22,385
Sales and marketing		23,285		12,323
Technology and development		12,388		6,844
Total operating expenses		89,364		41,552
(Loss) income from operations		(13,336)		16,614
NON-OPERATING (EXPENSE) INCOME:
Interest expense		(11)		(4,287)
Other expense		(48)		29
Total non-operating expense		(59)		(4,258)
(Loss) income before income taxes		(13,395)		12,356
Income taxes		656		704
Net (loss) income		(14,051)		11,652
Net loss attributable to non-controlling interests		(5,903)		—
Net (loss) income attributable to Enfusion, Inc.	$	(8,148)	$	11,652

Revenues

	Nine Months Ended September 30,
					Increase (Decrease)
(in thousands)	2022		2021		Amount		Percent
Platform subscriptions	$	101,064	$	73,697	$	27,367	37.1	%
Managed services		7,130		5,140		1,990	38.7	%
Other		1,638		1,010		628	62.2	%
Total revenues	$	109,832	$	79,847	$	29,985	37.6	%

Total revenue was $109.8 million for the nine months ended September 30, 2022 compared to $79.8 million for the nine months ended September 30, 2021, representing an increase of $30 million, or 37.6%.

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Platform subscriptions

Platform subscriptions revenue increased by $27.4 million or 37.1%, from $73.7 million for the nine months ended September 30, 2021 to $101 million for the nine months ended September 30, 2022.  The increase was primarily driven by increased revenues from new clients of approximately $9.2 million. Revenue also increased for existing clients; $12.1 million of this increase relates to sales of new services and additional users within existing contracts, and $10.8 million reflects the full-period impact of sales booked in prior periods, partially offset by reductions in revenue due to client churn.

Managed services

Managed services revenue increased by approximately $2 million or 38.7%, from $5.1 million for the nine months ended September 30, 2021 to $7.1 million for the nine months ended September 30, 2022.  The increase was primarily driven by revenue from new clients of approximately $1.2 million and increases in revenue from existing clients of approximately $1.7 million, partially offset by client churn.

Other

Other revenues, primarily consisting of data conversion services, increased by approximately $600 thousand over the comparative period.  The increase was due primarily to higher volume of data conversion projects.

Cost of Revenues, Gross Profit and Gross Profit Margin

	Nine Months Ended September 30,
							Increase (Decrease)
(in thousands)	2022			2021			Amount		Percent
Cost of revenues:
Platform subscriptions	$	28,453		$	18,539		$	9,914	53.5	%
Managed services		5,059			2,968			2,091	70.5	%
Other		292			174			118	67.8	%
Total cost of revenues	$	33,804		$	21,681		$	12,123	55.9	%
Gross profit	$	76,028		$	58,166		$	17,862	30.7	%
Gross profit margin		69.2	%		72.8	%

Cost of Revenues

Cost of revenues increased by $12.1 million or 55.9%, from $21.7 million for the nine months ended September 30, 2021 to $33.8 million for the nine months ended September 30, 2022. The increase was primarily driven by an increase in payroll and payroll-related costs of $8.2 million, largely resulting from headcount additions to support our continued growth. In addition, hosting costs and data fees increased by $2.3 million over the comparative period, reflective of an increased client base and increased usage.  Stock-based compensation expense of approximately $1.1 million also contributed to the increase. 

Gross profit increased by approximately $17.9 million, from $58.2 million for the nine months ended September 30, 2021 to $76 million for the nine months ended September 30, 2022. Gross profit margin as a percentage of revenue decreased by 3.6%.  The decrease in gross profit margin as a percentage of revenues was primarily attributable to increased personnel costs for onboarding and client services.

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Operating Expenses

	Nine Months Ended September 30,
					Increase (Decrease)
(in thousands)	2022		2021		Amount		Percent
General and administrative	$	53,691	$	22,385	$	31,306	139.9	%
Sales and marketing		23,285		12,323		10,962	89.0	%
Technology and development		12,388		6,844		5,544	81.0	%
Total operating expenses	$	89,364	$	41,552	$	47,812	115.1	%

General and administrative

General and administrative expenses increased by $31.3 million, from $22.4 million for the nine months ended September 30, 2021 to $53.7 million for the nine months ended September 30, 2022. The increase in general and administrative expenses was primarily attributable to stock-based compensation expense of $12 million.  Professional fees for accounting, consulting, legal, and tax services increased by approximately $5.6 million over the comparative period. These fees were primarily associated with our transition to a public entity and the Reorganization Transactions. The remaining increase in general and administrative expenses is primarily attributable to increased corporate personnel costs and incremental public company costs such as directors and officers insurance.

Sales and marketing

Sales and marketing expenses increased by $11 million, from $12.3 million for the nine months ended September 30, 2021 to $23.3 million for the nine months ended September 30, 2022.  The increase was primarily attributable to stock-based compensation expense of $5 million. The increase was also attributable to higher personnel costs related to growth of our professional sales organization, increased marketing spend, and increased commission expenses.  

Technology and development

Technology and development expenses increased by approximately $5.5 million, from $6.8 million for the nine months ended September 30, 2021 to $12.4 million for the nine months ended September 30, 2022.  The increase in technology and development expense was primarily attributable to stock-based compensation expense of $2.7 million, with the remaining increase driven by incremental personnel costs to support growth of our product development and client services groups.

Non-Operating Expense

The decrease of $4.2 million in non-operating expense from the nine months ended September 30, 2021 to the nine months ended September 30, 2022 was driven primarily by the decrease in interest expense as result of the repayment in full of the term loan in the fourth quarter of 2021 following the IPO.

Liquidity and Capital Resources

To date, we have funded our capital needs through collections from our clients and issuances of equity and debt. As of September 30, 2022, we had cash and cash equivalents of $63.5 million and $5.0 million in available borrowing capacity under our Revolving Debt (as defined below). As of September 30, 2022, the Company was contingently obligated for a letter of credit in the amount of $0.2 million which bears interest at an annual rate of 2%. We believe that our current sources of liquidity, cash flows from operations and existing available cash, together with our other available external financing sources, will be adequate to fund our operating and capital needs for at least the next 12 months.

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Our future capital requirements will depend on many factors, including those set forth under Item 1A. Risk Factors. As a result of the IPO, we expect that our future uses of cash will also include paying income taxes and obligations under our Tax Receivable Agreement.  Further, between October 20, 2022 and October 20, 2023, we will issue an aggregate of approximately 18.6 million shares of Class A common stock (the “MIU Issuance”), in one or more tranches, to former holders of Award Units and a non-executive employee, as previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 under the risk factor entitled “Our obligations to issue Class A common stock to former holders of Award Units under our former Change in Control Bonus Plan could expose us to a variety of risks, some of which could cause the price of our stock to decline, and will cause us to recognize significant stock-based compensation expense that will substantially impact our net income in the near term.”  Their related individual tax withholding obligations will be satisfied, at our discretion, through methods that may include (i) a “sell to cover” arrangement whereby a certain number of shares would be sold into the market with proceeds from such sale remitted to us in an amount that would satisfy the withholding amount, and (ii) our withholding a certain number of the shares with a value that would satisfy the withholding amount due and using our available capital resources to pay the related tax burden, which could have a material impact on our liquidity and capital resources. Please refer to the aforementioned risk factor for further details, as well as Note 13 – Subsequent Events, in which we discuss the issuance of 1,396,677 shares of the MIU Issuance.

We may in the future enter into arrangements to acquire or invest in complementary businesses, services, which could decrease our cash and cash equivalents and increase our cash requirements. As a result of these and other factors, we could use our available capital resources sooner than expected and may be required to seek additional equity or debt.

Cash Flow Information

The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the periods indicated.

	Nine Months Ended September 30,
						Increase (Decrease)
(in thousands)	2022		2021			Amount	Percent
Net cash provided by operating activities	$	6,635	$	5,494	$	1,141	20.8	%
Net cash used in investing activities		(6,185)		(6,373)		188	2.9	%
Net cash used in financing activities		(917)		(4,533)		3,616	79.8	%
Effect of exchange rate changes on cash		(355)		(94)		(261)	(277.7)	%
Net decrease in cash	$	(822)	$	(5,506)	$	4,684	85.1	%

Operating activities

We generated approximately $6.6 million in cash flows from operating activities during the nine months ended September 30, 2022, resulting from our net loss of $14.1 million, adjusted by non-cash charges of $26.7 million (of which $20.8 million is related to stock-based compensation expense), and offset by $6 million of cash used in working capital activities.  Cash used by working capital accounts was primarily due to increases in accounts receivable, largely related to our revenue growth.

For the nine months ended September 30, 2021,  we generated $5.5 million in cash flows from operating activities, resulting from net income of $11.7 million, adjusted by non-cash charges of $3.2 million, and offset by $9.3 million of cash used in working capital activities.

Investing activities

Net cash used in investing activities in the nine months ended September 30, 2022 was $6.2 million, compared to $6.4 million of net cash used in investing activities in the nine months ended September 30, 2021.

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Financing activities

We used $917 thousand in cash flows from financing activities during the nine months ended September 30, 2022, resulting from payment of withholding taxes on stock-based compensation.  For the nine months ended September 30, 2021, we incurred expenditures of $3.3 million for distributions to members and $1.3 million for the repayment of the Term Loan.

Indebtedness

We have a revolving debt facility with Silicon Valley Bank (the “Revolving Debt”). We did not have any outstanding revolving debt as of September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, the available unused commitment of the revolving debt was $5.0 million. The credit agreement governing the Revolving Debt contains certain covenants with which we must comply, including a fixed charge ratio covenant and a leverage ratio covenant. We were in compliance with all loan covenants and requirements as of September 30, 2022.

Contractual Obligations and Commitments and Off-Balance Sheet Arrangements

We have service agreements for the use of data processing facilities. As of September 30, 2022, these service agreements expire at various dates through 2028. We also lease office space under operating lease agreements.

As of September 30, 2022, our contractual obligations consisted of: (i) operating lease obligations of approximately $7.1 million, of which $933 thousand is due in 2022 and $6.2 million is due thereafter, and (ii) service agreement obligations of approximately $37 thousand, a majority of which are due in 2022.

As of September 30, 2022, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that may be material to investors.

Dividend Policy

Assuming Enfusion Ltd. LLC makes distributions to its members in any given year, the determination to pay dividends, if any, to our Class A common stockholders out of the portion, if any, of such distributions remaining after our payment of taxes, Tax Receivable Agreement payments and expenses will be made at the sole discretion of our board of directors. We currently intend to retain all available funds and future earnings and do not anticipate declaring or paying any cash dividends in the foreseeable future.  Our board of directors may change our dividend policy at any time.

Tax Receivable Agreement

The payment obligation under the Tax Receivable Agreement is an obligation of Enfusion, Inc. and not of Enfusion Ltd. LLC. We expect that as a result of the size of the existing tax basis and basis adjustments acquired in the IPO, the increase in existing tax basis and the anticipated tax basis adjustment of the tangible and intangible assets of Enfusion Ltd. LLC upon the purchase or exchange (or deemed exchange) of Common Units for shares of Class A common stock or distributions (or deemed distributions) with respect to Common Units and our possible utilization of certain tax attributes, the payments that we may make under the Tax Receivable Agreement will be substantial. We estimate the amount of existing tax basis and basis adjustments acquired in the IPO to be approximately $232.9 million.

There may be a material negative effect on our liquidity if, as a result of timing discrepancies or otherwise, the payments under the Tax Receivable Agreement exceed the actual cash tax benefits that Enfusion, Inc. realizes in respect of the tax attributes subject to the Tax Receivable Agreement and/or if distributions directly and/or indirectly to Enfusion, Inc. by Enfusion Ltd. LLC are not sufficient to permit Enfusion, Inc. to make payments under the Tax Receivable Agreement after it has paid taxes and other expenses. Late payments under the Tax Receivable Agreement generally will accrue interest at an uncapped rate equal to one-year LIBOR (or its successor rate) plus 100 basis points. The payments under the Tax Receivable Agreement are not conditioned upon continued ownership of us by the Pre-IPO Owners.

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Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated interim financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these condensed consolidated interim financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures in the condensed consolidated interim financial statements. Our estimates are based on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions or conditions and any such difference may be material. For a discussion of how these and other factors may affect our business, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.

The critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our condensed consolidated interim financial statements presented in this Quarterly Report on Form 10-Q are described under Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations and in the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to our critical accounting policies or estimates from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2021.

Recent Accounting Pronouncements

See Note 3 to our condensed consolidated interim financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and, for so long as we continue to be an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we: (i) are no longer an emerging growth company; or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risk during the quarter ended September 30, 2022. For a discussion of our exposure to market risk, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2021.

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Item 4. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended September 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, legal proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

The following is intended to restate and supplement the risk factor entitled “Our obligations to issue Class common stock to former holders of Award Units under our former Change in Control Bonus Plan could expose us to a variety of risks and will cause us to recognize significant stock-based compensation expense that will substantially impact our net income in the near term,” as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021. Other than the risk factor set forth below, there have been no material changes to the risk factors disclosed under the heading “1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Our obligations to issue Class A common stock to former holders of Award Units under our former Change in Control Bonus Plan could expose us to a variety of risks, some of which could cause the price of our stock to decline, and will cause us to recognize significant stock-based compensation expense that will substantially impact our net income in the near term.

We previously adopted a Change in Control Bonus Plan, which provided for the payment of cash amounts to certain eligible employees upon the occurrence of a change in control of our company. The aggregate amount of payment that could have been made to all participants under the Change in Control Bonus Plan may have been as much as 18% of the gross consideration received by us or our stockholders in a change in control transaction. The board of managers of Enfusion Ltd. LLC elected to terminate the Change in Control Bonus Plan (and all Award Units issued thereunder) effective following effectiveness of the IPO registration statement. The value, based on our valuation at the IPO, of all Award Units that are vested at effectiveness of the IPO registration statement and Award Units that would have vested within one year thereafter will be paid to participants in the Change in Control Bonus Plan in the form of vested shares of Class A common stock between the first and second anniversaries of such date of effectiveness. As of September 30, 2022, we will issue approximately 14,914,206 shares of Class A common stock to former holders of vested Award Units and 1,660,784 shares of Class A common stock to former holders of Award Units that would have vested within one year after effectiveness of the of the IPO registration statement, in satisfaction of the obligations described above and subject to further required withholdings under the Federal Insurance Contributions Act. In addition, in exchange for termination of an agreement pursuant to which we were obligated to pay a percentage of our annual net profits to a non-executive employee, we will issue 2,047,064 shares of Class A common stock to such employee between the first and second anniversaries of the effectiveness of the IPO registration statement. As of September 30, 2022, the number of shares to be issued between the first and second anniversaries of effectiveness of the IPO registration statement in satisfaction of the obligations described above will increase the aggregate number of outstanding shares of our Class A common stock and Class B common stock outstanding by approximately 16.5%, resulting in significant dilution to holders of our capital stock. Any issuance of Class A common stock described above, or the fact of any such impending issuance, may adversely impact the market price of our Class A common stock.

The individual tax withholding obligations to be incurred in connection with the issuance of the shares described above will be satisfied, at our discretion, through methods that may include (i) a “sell to cover” arrangement whereby we would withhold from issuance a certain number of shares, which would then be sold into the market with proceeds from such sale remitted to us in an amount that would satisfy the withholding amount, and (ii) our withholding a certain number of the shares with a value that would satisfy the withholding amount due and using our available capital resources to pay the related tax burden. If we elect to satisfy a significant component of these tax withholding obligations through a sell to cover arrangement, it could cause the sale, at one or more periods of time between October 20, 2022 and October 20, 2023,

35

of a significant number of shares relative to the current average daily trading volume of our Class A common stock. These sales, or the perception that the sales could occur, could cause the price of our stock to decline.

The issuance of shares of our Class A common stock in satisfaction of our obligations to former participants in the Change in Control Bonus Plan has and will result in significant stock-based compensation expense. At the time of the IPO, we recognized stock-based compensation expense of approximately $268.5 million (reflecting a discount for lack of marketability due to the post-vesting restriction because, although fully vested, the shares will not be issued until at least one year after the IPO) in connection with 9 future issuance of shares of Class A common stock to (i) former holders of Award Units under our former Change in Control Bonus Plan and (ii) a non-executive employee in exchange for the termination of a profit sharing agreement. We recognized approximately $16.7 million in 2021 and expect to recognize $10.1 million in 2022 in stock-based compensation expense in connection with the future issuance of shares of Class A common stock to former holders of Award Units under our former Change in Control Bonus Plan that would have vested within one year after the IPO (reflecting a discount for lack of marketability due to the post-vesting restriction because the shares will vest within the next year but will not be issued until at least one year after the IPO). In addition, we recognized approximately $4.6 million in 2021 and expect to recognize approximately $35.0 million through 2025 in stock-based compensation related to restricted stock units granted in connection with the IPO. Further, we expect to recognize approximately $500 thousand in stock-based compensation expense related to stock options issued under the 2021 Incentive Plan. These non-cash charges do not impact our revenues or Adjusted EBITDA; however, they will have a direct and substantial adverse impact on our net income. The impact of these equity-related matters on our net income may adversely affect the trading price of our Class A common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

None.

Use of Proceeds from IPO

On October 20, 2021, our Registration Statement on Form S-1 (File No. 333-259635) was declared effective by the SEC for our IPO.  There has been no material change in the use of proceeds from our IPO as described in our final prospectus filed with the SEC pursuant to Rule 424(b) of the Securities Act.

Issuer Purchases of Equity Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

36

Item 6. Exhibits.

The exhibits listed below are filed or incorporated by reference in this Quarterly Report on Form 10-Q.

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-40949), filed with the Securities and Exchange Commission on December 3, 2021).
3.2	Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-40949), filed with the Securities and Exchange Commission on December 3, 2021).
10.1#	Employment Agreement dated August 21, 2022 between the Company, Enfusion Ltd. LLC and Oleg Movchan (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-40949), filed with the Securities and Exchange Commission on August 22, 2022).
10.2#	Separation Agreement dated August 21, 2022 between the Company and Thomas Kim (incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-40949), filed with the Securities and Exchange Commission on August 22, 2022).
31.1*	Certification of the Principal Executive Officer, pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer, pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of the Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

# Indicates management contract or compensatory plan, contract or agreement.

* Filed herewith.

** Furnished herewith. The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

37

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ENFUSION, INC.
November 10, 2022	By:	/s/ Oleg Movchan
		Oleg Movchan
		Chief Executive Officer
		(Principal Executive Officer)
November 10, 2022	By:	/s/ Stephen P. Dorton
		Stephen P. Dorton
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

38

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Oleg Movchan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Enfusion, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. [Omitted];

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2022	/s/ Oleg Movchan
	Oleg Movchan
	Interim Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Stephen P. Dorton, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Enfusion, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. [Omitted];

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 10, 2022	/s/ Stephen P. Dorton
	Stephen P. Dorton
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Oleg Movchan, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Enfusion, Inc. for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Enfusion, Inc.

Date: November 10, 2022	By:	/s/ Oleg Movchan
	Name:	Oleg Movchan
	Title:	Interim Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen P. Dorton, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Enfusion, Inc. for the period ended September 30, 2022, as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Enfusion, Inc.

Date: November 10, 2022	By:	/s/ Stephen P. Dorton
	Name:	Stephen P. Dorton
	Title:	Chief Financial Officer
		(Principal Financial Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Nov. 09, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-40949
Entity Registrant Name	Enfusion, Inc
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-1268462
Entity Address State Or Province	IL
Entity Address, Address Line One	125 South Clark Street
Entity Address, Address Line Two	Suite 750
Entity Address, City or Town	Chicago
Entity Address, Postal Zip Code	60603
City Area Code	312
Local Phone Number	253-9800
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Title of 12(b) Security	Class A common stock, par value $0.001per share
Trading Symbol	ENFN
Security Exchange Name	NYSE
Entity Central Index Key	0001868912
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		114,055,220
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		68,986,067
Common Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		45,069,153

XML

Condensed Consolidated Interim Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current Assets:
Cash and cash equivalents	$ 63,543	$ 64,365
Accounts receivable, net	28,992	18,223
Prepaid expenses	2,605	6,030
Other current assets	888	1,060
Total current assets	96,028	89,678
Property and equipment, net	15,423	13,051
Other assets	4,151	3,356
Total assets	115,602	106,085
Current liabilities:
Accounts payable	1,185	2,528
Accrued expenses and other current liabilities	10,804	5,578
Total current liabilities	11,989	8,106
Other liabilities	443	538
Total liabilities	12,432	8,644
Stockholders' Equity:
Additional paid-in capital	241,045	226,717
Accumulated deficit	(179,357)	(171,209)
Accumulated other comprehensive loss	(672)	(325)
Total stockholders' equity attributable to Enfusion, Inc.	61,129	55,296
Non-controlling interests	42,041	42,145
Total stockholders' equity	103,170	97,441
Total liabilities and stockholders' equity	115,602	106,085
Common Class A
Stockholders' Equity:
Common stock	67	66
Common Class B
Stockholders' Equity:
Common stock	$ 46	$ 47

XML

Condensed Consolidated Interim Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Common Class A
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	67,009,006	65,583,289
Common stock, shares outstanding	67,009,006	65,583,289
Common Class B
Common stock par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	46,069,153	47,470,971
Common stock, shares outstanding	46,069,153	47,470,971

XML

Condensed Consolidated Interim Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
REVENUES:
Total revenues	$ 39,151	$ 29,045	$ 109,832	$ 79,847
COST OF REVENUES:
Total cost of revenues	11,974	8,095	33,804	21,681
Gross profit	27,177	20,950	76,028	58,166
OPERATING EXPENSES:
General and administrative	13,094	8,546	53,691	22,385
Sales and marketing	7,278	4,901	23,285	12,323
Technology and development	3,864	2,600	12,388	6,844
Total operating expenses	24,236	16,047	89,364	41,552
Income (loss) from operations	2,941	4,903	(13,336)	16,614
NON-OPERATING (EXPENSE) INCOME:
Interest expense	(4)	(1,485)	(11)	(4,287)
Other (expense) income	(52)	29	(48)	29
Total non-operating expense	(56)	(1,456)	(59)	(4,258)
Income (loss) before income taxes	2,885	3,447	(13,395)	12,356
Income taxes	287	154	656	704
Net income (loss)	2,598	3,293	(14,051)	11,652
Net income (loss) attributable to non-controlling interests	1,059		(5,903)
Net income (loss) attributable to Enfusion, Inc.	$ 1,539	3,293	$ (8,148)	11,652
Net income (loss) per Class A common shares attributable to Enfusion, Inc.:
Net income (loss) per Class A common shares attributable to Enfusion, Inc., Basic	$ 0.02		$ (0.11)
Net income (loss) per Class A common shares attributable to Enfusion, Inc., Diluted	$ 0.02		$ (0.11)
Weighted Average number of Class A common shares outstanding:
Weighted Average number of Class A common shares outstanding, Basic	85,156		84,508
Weighted Average number of Class A common shares outstanding, Diluted	131,760		84,508
Platform subscriptions
REVENUES:
Total revenues	$ 35,953	26,950	$ 101,064	73,697
COST OF REVENUES:
Total cost of revenues	10,077	6,878	28,453	18,539
Managed services
REVENUES:
Total revenues	2,504	1,877	7,130	5,140
COST OF REVENUES:
Total cost of revenues	1,776	1,125	5,059	2,968
Other
REVENUES:
Total revenues	694	218	1,638	1,010
COST OF REVENUES:
Total cost of revenues	$ 121	$ 92	$ 292	$ 174

XML

Condensed Consolidated Interim Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Condensed Consolidated Interim Statements of Comprehensive (Loss) Income
Net income (loss)	$ 2,598	$ 3,293	$ (14,051)	$ 11,652
Other comprehensive income (loss), net of income tax:
Foreign currency translation (loss)	(152)	(17)	(591)	(94)
Total other comprehensive income (loss)	2,446	3,276	(14,642)	11,558
Comprehensive income (loss) attributable to non-controlling interests	997		(6,147)
Total comprehensive income (loss) attributable to Enfusion, Inc.	$ 1,449	$ 3,276	$ (8,495)	$ 11,558

XML

Condensed Consolidated Interim Statements of Preferred Units, Stockholders' Equity and Members' Deficit - USD ($)	Preferred Units	Members' Equity	Common Stock Common Class A	Common Stock Common Class B	Additional Paid-in Capital	Accumulated Deficit/Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interest	Total
Balance at Beginning of period at Dec. 31, 2020		$ (233,347,000)					$ (212,000)		$ (233,559,000)
Balance at Beginning of period (in shares) at Dec. 31, 2020		47.968
Members' Equity (Deficit)
Net Income (Loss)		$ 5,494,000							5,494,000
Distributions to members		(1,476,000)							(1,476,000)
Foreign currency translation loss							(94,000)		(94,000)
Balance at end of period at Sep. 30, 2021	$ 53.774	$ (229,329,000)					(306,000)		(229,635,000)
Balance at end of period (in shares) at Sep. 30, 2021		47.968
Balance at Beginning of period at Dec. 31, 2020	$ 165,515,000
Balance at Beginning of period (in shares) at Dec. 31, 2020	53.774
Preferred Units
Net income	$ 6,158,000
Distributions to members	(1,807,000)
Balance at end of period at Sep. 30, 2021	$ 169,866,000
Balance at end of period (in shares) at Sep. 30, 2021	53.774
Balance at Beginning of period at Jun. 30, 2021		$ (230,594,000)					(289,000)		(230,883,000)
Balance at Beginning of period (in shares) at Jun. 30, 2021		47.968
Members' Equity (Deficit)
Net Income (Loss)		$ 1,553,000							1,553,000
Distributions to members		(288,000)							(288,000)
Foreign currency translation loss							(17,000)		(17,000)
Balance at end of period at Sep. 30, 2021	$ 53.774	$ (229,329,000)					(306,000)		(229,635,000)
Balance at end of period (in shares) at Sep. 30, 2021		47.968
Balance at Beginning of period at Jun. 30, 2021	$ 168,369,000
Balance at Beginning of period (in shares) at Jun. 30, 2021	53.774
Preferred Units
Net income	$ 1,740,000
Distributions to members	(243,000)
Balance at end of period at Sep. 30, 2021	$ 169,866,000
Balance at end of period (in shares) at Sep. 30, 2021	53.774
Balance at Beginning of period at Dec. 31, 2021			$ 66,000	$ 47,000	$ 226,717,000	$ (171,209,000)	(325,000)	$ 42,145,000	97,441,000
Balance at Beginning of period (in shares) at Dec. 31, 2021			65,583,289	47,470,971
Members' Equity (Deficit)
Net Income (Loss)						(8,148,000)		(5,903,000)	(14,051,000)
Stock-based compensation, net of taxes paid					11,875,000			8,496,000	20,371,000
Share exchange			$ 1,000	$ (1,000)	2,453,000			(2,453,000)
Share exchange (in shares)			1,401,818	(1,401,818)
Issuance of restricted shares (in shares)			23,899
Foreign currency translation loss							(347,000)	(244,000)	(591,000)
Balance at end of period at Sep. 30, 2022			$ 67,000	$ 46,000	241,045,000	(179,357,000)	(672,000)	42,041,000	103,170,000
Balance at end of period (in shares) at Sep. 30, 2022			67,009,006	46,069,153
Balance at Beginning of period at Jun. 30, 2022			$ 67,000	$ 46,000	240,501,000	(180,896,000)	(582,000)	40,670,000	99,806,000
Balance at Beginning of period (in shares) at Jun. 30, 2022			67,001,652	46,069,153
Members' Equity (Deficit)
Net Income (Loss)						1,539,000		1,059,000	2,598,000
Stock-based compensation, net of taxes paid					544,000			374,000	918,000
Issuance of restricted shares (in shares)			7,354
Foreign currency translation loss							(90,000)	(62,000)	(152,000)
Balance at end of period at Sep. 30, 2022			$ 67,000	$ 46,000	$ 241,045,000	$ (179,357,000)	$ (672,000)	$ 42,041,000	$ 103,170,000
Balance at end of period (in shares) at Sep. 30, 2022			67,009,006	46,069,153

XML

Condensed Consolidated Interim Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net (loss) income	$ (14,051)	$ 11,652
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	4,654	2,659
Provision for bad debts	1,261	278
Amortization of debt-related costs	19	222
Stock-based compensation expense	20,788
Change in operating assets and liabilities:
Accounts receivable	(12,030)	(7,097)
Prepaid expenses and other current assets	2,246	(5,505)
Accounts payable	(1,383)	1,825
Accrued expenses and other liabilities	5,131	1,460
Net cash provided by operating activities	6,635	5,494
Cash flows from investing activities:
Purchases of property and equipment	(6,185)	(6,373)
Net cash used in investing activities	(6,185)	(6,373)
Cash flows from financing activities:
Repayment of Term Loan		(1,250)
Payment of Member distributions		(3,283)
Payment of withholding taxes on stock-based compensation	(917)
Net cash used in financing activities	(917)	(4,533)
Effect of exchange rate changes on cash	(355)	(94)
Net decrease in cash	(822)	(5,506)
Cash and cash equivalents, beginning of period	64,365	13,938
Cash and cash equivalents, end of period	63,543	8,432
Supplemental disclosure of non-cash investing activities:
Accrued Property, Plant and Equipment	40
Capitalized Stock-based compensation expense	500
Supplemental disclosure of cash flow information:
Interest paid in cash		$ 3,806
Income taxes paid in cash	$ 1,053

XML

Organization and Description of Business

9 Months Ended

Sep. 30, 2022

Organization and Description of Business

Organization and Description of Business

Note 1   Organization and Description of Business

Enfusion is a leading provider of cloud-based order and execution management, portfolio management and risk systems. Enfusion’s clients include large global hedge fund managers, institutional asset managers, family offices and other institutional investors. Enfusion provides its clients with innovative real-time performance, risk calculations, and accounting capabilities for some of the most sophisticated financial products. The Company is headquartered in Chicago, Illinois and has offices in Chicago, New York, London, Dublin, Hong Kong, Singapore, São Paulo, Mumbai, Bengaluru, and Sydney.

Enfusion, Inc. was incorporated in Delaware on June 11, 2021 for the purpose of facilitating an initial public offering, which was completed on October 25, 2021, and other related transactions in order to carry on the business of Enfusion Ltd. LLC.

Enfusion, Inc. has three wholly-owned subsidiaries: Enfusion US 1, Inc., Enfusion US 2, Inc. and Enfusion US 3, Inc.; as well as a substantial financial interest in Enfusion Ltd. LLC and its majority-owned subsidiary, Enfusion Softech India Private Limited, as well as the wholly-owned subsidiaries of Enfusion Ltd. LLC: Enfusion Systems UK Ltd, Enfusion HK Limited, Enfusion Software Limited, Enfusion (Singapore) Pte. Ltd., Enfusion do Brasil Tecnologia da Informacao Ltda, Enfusion (Australia) Pty. Ltd. and Enfusion (Shanghai) Co., Ltd. Enfusion, Inc., through its control over the managing member of Enfusion Ltd. LLC, manages and operates Enfusion Ltd. LLC’s business and controls its strategic decisions and day-to-day operations. As such, Enfusion, Inc. consolidates the financial results of Enfusion Ltd. LLC, and a portion of Enfusion, Inc.’s net income is allocated to non-controlling interests to reflect the entitlement to a portion of Enfusion Ltd. LLC’s net income by the Pre-IPO Common Unitholders.  As of September 30, 2022, Enfusion, Inc. owned approximately 59% of Enfusion Ltd. LLC.

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Basis of Presentation

9 Months Ended

Sep. 30, 2022

Basis of Presentation

Basis of Presentation

Note 2    Basis of Presentation

Principles of Consolidation

These statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations, and all adjustments are of a normal recurring nature. The operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results expected for the full year ending December 31, 2022. The condensed consolidated interim financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The unaudited condensed consolidated interim financial statements include the accounts of Enfusion, Inc. and its wholly or majority-owned subsidiaries.  All intercompany balances and transactions are eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated interim financial statements and accompanying notes. Actual results could differ from those estimates. The effect of the change in the estimates will be recognized in the period of the change.

In order to better align with industry standards, the Company revised the presentation of its condensed  consolidated interim statement of operations for the three and nine months ended September 30, 2021 to reclassify certain immaterial expenses to cost of sales for Platform subscriptions.  These expenses were previously classified in cost of sales

for Managed services and Other revenues.  This change in presentation has no effect on our gross profit or other consolidated results.  In addition, the Company revised the presentation of certain credit charges that were previously recorded in Other revenues to reclassify these charges to Platform subscription and Managed services revenues, respectively.  This change in presentation has no effect on the Company’s total revenues or other consolidated results.  

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 3   Summary of Significant Accounting Policies

A description of the Company’s significant accounting policies is included in the audited financial statements within its Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes in the Company’s significant accounting policies during the three and nine months ended September 30, 2022.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an initial maturity date of three months or less to be cash equivalents. Funds held as investments in money market funds are included within cash and cash equivalents.  As of September 30, 2022, the Company had approximately $55 million invested in money market accounts.  

Financial Instruments and Fair Value Measurements

The Company has investments in money market accounts, which are included in cash and cash equivalents on the condensed consolidated balance sheets. Fair value inputs for these investments are considered Level 1 measurements within the Fair Value Hierarchy, as money market account fair values are known and observable through daily published floating net asset values.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification 606 (“ASC 606”), Revenue from Contracts with Customers. The Company derives its revenues primarily from fees for platform subscription and managed services provided to clients. Revenues are recognized when control of these services are transferred to the Company’s clients in an amount that reflects the consideration the Company expects to be entitled to in exchange for these services. Revenues are recognized net of taxes that will be remitted to governmental agencies applicable to service contacts.

Historically, platform subscription contracts have typically had a one-year term and were cancellable with 30 days’ notice.  Beginning in the first quarter of 2021, our default platform subscription contract has had a multi-year term and did not allow termination for convenience, though each contract has and can be negotiated with varying term lengths, with or without a termination for convenience clause.  Clients are invoiced each month for the services provided in accordance with the stated terms of their service contracts. Fees for partial term service contracts are prorated, as applicable. Payment of fees are due from clients within 30 days of the invoice date. The Company does not provide financing to clients. The Company determines revenue recognition through the following five-step framework:

● Identification of the contract, or contracts, with a client;

● Identification of the performance obligation in the contract;

● Determination of transaction price;

● Allocation of the transaction price to the performance obligations in the contract; and

● Recognition of revenue when, or as, performance obligations are satisfied.

Platform subscription revenues

Platform subscription revenues consist primarily of fees for providing clients with access to the Company’s cloud-based platform. Platform subscription clients do not have the right to take possession of the platform’s software, and do not have any general return rights. Platform subscription revenues are recognized ratably over the period of contractually enforceable rights and obligations, beginning on the date that the client gains access to the platform. Installment payments are invoiced at the end of each calendar month during the subscription term.

Managed services revenues

Managed services revenues primarily consist of client-selected middle and back-office services provided on our clients’ behalf using the Company’s platform. Revenue is recognized monthly as the managed services are performed, with invoicing occurring at the end of the calendar month.

Other revenues

Other revenues consists of non-subscription-based revenues, such as data conversion and services that integrate a client’s historical data into our solution. The Company recognizes revenues as these services are performed with invoicing occurring at the end of each month.

Service contracts with multiple performance obligations

Our service contracts with clients can include multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. However, all distinct performance obligations within a contract are satisfied over a similar period of time with the same measure of progress. Accordingly, each distinct performance obligation within a contract has the same pattern of revenue recognition. The Company has determined that implementation services are not distinct from the ongoing platform subscription services due to the highly specialized knowledge required to execute on our solution. Such services are recognized with the platform subscription services revenue over time.

Remaining performance obligations

For the Company’s contracts that exceed one year and do not include a termination for convenience clause, the amount of the transaction price allocated to remaining performance obligations as of September  30, 2022 and December 31, 2021 was $32.1 million and $23.4 million, respectively. The Company expects to recognize this amount over the next one to five years.

Disaggregation of revenue

The Company’s total revenues by geographic region, based on the client’s physical location is presented in the following tables (in thousands):

	Three Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	25,109	64.1	%	$	18,821	64.8	%
Europe, Middle East and Africa (EMEA)		5,113	13.1	%		3,631	12.5	%
Asia Pacific (APAC)		8,929	22.8	%		6,593	22.7	%
Total revenues	$	39,151	100.0	%	$	29,045	100.0	%

* The Company’s total revenues in the United States were $24.5 million and $18.4 million for the three months ended September 30, 2022 and 2021, respectively.

	Nine Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	70,386	64.1	%	$	52,220	65.4	%
Europe, Middle East and Africa (EMEA)		14,063	12.8	%		9,607	12.0	%
Asia Pacific (APAC)		25,383	23.1	%		18,020	22.6	%
Total revenues	$	109,832	100.0	%	$	79,847	100.0	%

*   The Company’s total revenues in the United States were $68.8 million and $51.0 million for the nine months ended September 30, 2022 and 2021, respectively.

Accounts Receivable

As of September 30, 2022 and December 31, 2021, no individual client represented more than 10% of accounts receivable. For the three and nine months ended September 30, 2022 and 2021, respectively, no individual client represented more than 10% of the Company’s total revenues.

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the guidance in former ASC 840, Leases, to increase transparency and comparability among organizations by requiring recognition of right-of-use assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements (with the exception of short-term leases). In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new Leases (Topic 842) standard. ASU 2016-02, as subsequently amended for various technical issues, is effective for private companies and emerging growth companies in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, and early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, it has not yet determined the full impact the adoption of this standard will have on its consolidated financial statements and related disclosures.  However, the Company expects the adjustment to retained earnings to be immaterial.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13, as subsequently amended for various technical issues is effective for annual reporting periods beginning after December 15, 2022, for private entities and emerging growth companies. The Company is evaluating the impact of this standard on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for private entities and emerging growth companies in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, with early adoption permitted, including adoption in an interim period. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its consolidated financial statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. The guidance is temporary and can be applied through

December 31, 2022. The guidance has not impacted the condensed consolidated financial statements to date. The Company will continue to monitor the impact of the ASU on our consolidated financial statements in the future.

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Property and Equipment, Net

9 Months Ended

Sep. 30, 2022

Property and Equipment, Net

Property and Equipment, Net

Note 4   Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):

	September 30, 2022		December 31, 2021
Computer equipment	$	16,631	$	14,163
Software development costs		8,487		4,866
Leasehold improvements		1,833		1,947
Furniture and fixtures		426		540
Total property and equipment, cost		27,377		21,516
Less accumulated depreciation and amortization		(11,954)		(8,465)
Total property and equipment, net	$	15,423	$	13,051

As of September 30, 2022 and December 31, 2021, property and equipment, net located in the United States was $13.2 million and $10.4 million, respectively. The remainder was located in our various international locations. Included in property and equipment are the capitalized costs of software development. Software development costs capitalized during the three months ended September 30, 2022 and 2021 were $1.1 million and $400 thousand, respectively.  Software development costs capitalized during the nine months ended September 30, 2022 and 2021 were $3.6 million and $1.4 million, respectively.  

Depreciation and amortization expense related to property and equipment, excluding software development costs, was $892 thousand and $700 thousand for the three months ended September 30, 2022 and 2021, respectively. Depreciation and amortization expense related to property and equipment, excluding software development costs, was $2.5 million and $1.8 million for the nine months ended September 30, 2022 and 2021, respectively. Amortization expense related to software development costs was $582 thousand and $300 thousand for the three months ended September 30, 2022 and 2021, respectively. Amortization expense related to software development costs was $1.5 million and $900 thousand for the nine months ended September 30, 2022 and 2021, respectively.

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Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2022

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Note 5   Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30, 2022		December 31, 2021
Accrued compensation	$	8,845	$	3,180
Accrued expenses and other		1,684		1,182
Accrued taxes		275		1,216
Total accrued expenses and other current liabilities	$	10,804	$	5,578

Accrued compensation includes accrued expenses for bonuses, sales commissions, compensated absences, and other compensation-related expenses.

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Operating Leases and Service Agreements

9 Months Ended

Sep. 30, 2022

Operating Leases and Service Agreements

Operating Leases and Service Agreements

Note 6   Operating Leases and Service Agreements

Operating Leases and Service Agreements

The Company leases office space in various locations under operating lease agreements in the normal course of business, which expire at various dates through 2025. Certain operating leases are secured with cash security deposits or letters of credit.

The Company has service agreements for the use of data processing facilities. These service agreements expire at various dates through 2023. Monthly base payments as of September 30, 2022 range from $6 thousand to $16 thousand.

Future aggregate minimum rental payments under the noncancelable operating leases and service agreements noted above, excluding the Company’s share of real estate taxes and other operating costs, are as follows (in thousands):

	Amount
2022 (remaining three months)	$	951
2023		3,319
2024		2,010
2025		901
Total	$	7,181

Total expense related to these lease agreements, which is included in Cost of revenues and Operating expenses, was $1.0 million and $3.2 million for the three and nine months ended September 30, 2022, respectively, and $1.0 million and $2.8 million for the three and nine months ended September 30, 2021, respectively.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies

Commitments and Contingencies

Note 7   Commitments and Contingencies

The Company records accruals for contingencies when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. A description of a contingent payment arrangement under the Company’s Tax Receivable Agreement is included in Note 12 – Related Party Transactions.  No accruals for contingencies were recorded as of September 30, 2022 and December 31, 2021, respectively.

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Preferred Units, Stockholders' Equity and Members' Deficit

9 Months Ended

Sep. 30, 2022

Preferred Units, Stockholders' Equity and Members' Deficit

Preferred Units, Stockholders' Equity and Members' Deficit

Note 8   Preferred Units, Stockholders’ Equity and Members’ Deficit

Prior to the Reorganization Transactions, Enfusion Ltd. LLC was organized as a limited liability company owned by its members, each of whose membership interests consisted of an equal number of: (i) “Economic Units”, which represented a Member’s economic interest in Enfusion Ltd. LLC; and (ii) “Participation Units”, which represented a Member’s right to participate (vote) in the affairs of Enfusion Ltd. LLC.

As a limited liability company, the Enfusion Ltd. LLC issued more than one class of Units. The Class A Units were considered to be Members’ Equity, whereas all of the other Unit classes were considered to be Preferred Units because of provisions in the Company’s former Operating Agreement that conferred certain rights and privileges to the members owning these Units, such as voting rights, redemption rights and liquidation preferences.

Holders of the Class C-1, C-2 and D Preferred Units had the option to require the Company to redeem their Units. In accordance with the guidance in ASC 480, Distinguishing Liabilities from Equity, outstanding Class C-1, C-2 and D Preferred Units were classified outside of permanent equity and within temporary equity due to their optional redemption features and liquidation preferences.

In connection with the Reorganization Transactions, the Amended and Restated Operating Agreement of Enfusion Ltd. LLC (the “LLC Operating Agreement”) was amended and restated to, among other things, modify its capital structure by reclassifying each of the outstanding Class A Units and C-1, C-2 and D Preferred Units into the Common Units through a stock split on a 1,000,000 to 1 basis. The number of Common Units outstanding following the Reorganization Transaction reflect the 1,000,000 to 1 stock split. Pursuant to the adoption of the LLC Operating Agreement, Enfusion US 1, Inc., a newly-formed wholly owned subsidiary of Enfusion, Inc., was appointed the sole managing member of Enfusion Ltd. LLC.

Amendment and Restatement of Certificate of Incorporation

In October 2021, the Company amended its certificate of incorporation. The amended and restated certificate of incorporation of Enfusion, Inc. provides for 1,000,000,000 authorized shares of Class A common stock, 150,000,000 authorized shares of Class B common stock and 100,000,000 shares of preferred stock. Each share of the Company’s Class

A common stock is entitled to one vote per share and is not convertible into any other shares of the Company’s capital stock. Holders of shares of the Company’s Class A common stock are entitled to receive dividends when, as and if declared by the Company’s board of directors. Upon the Company’s liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors, and subject to the rights of the holders of one or more outstanding series of preferred stock, as applicable, having liquidation preferences, the holders of shares of the Company’s Class A common stock will be entitled to receive pro rata the Company’s remaining assets available for distribution. Each share of the Company’s Class B common stock is entitled to one vote per share and is not convertible or exchangeable for a share of Class A common stock or any other security. Holders of the Company’s Class B common stock do not have any right to receive dividends or to receive a distribution upon a liquidation, dissolution or winding up of Enfusion, Inc.

Preferred Stock

The Company’s board of directors has the authority, without further action by the Company’s stockholders, to issue up to 100,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting, or the designation of, such series, any or all of which may be greater than the rights of Class A common stock. As of September 30, 2022, the Company has not issued any shares of preferred stock nor has the Company’s board of directors established the rights and privileges related to any series of preferred stock.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation

Stock-Based Compensation

Note 9 Stock-Based Compensation

The Company recognized total stock compensation expense for the three and nine months ended September 30, 2022 of $0.8 million and $20.8 million, respectively.  No stock compensation expense was recognized in the comparative periods.

In connection with obligations to issue Class A common stock to former holders of Award Units under the Company’s former Change in Control Bonus Plan, the Company paid approximately $1.4 million of tax withholding obligations for federal and state payroll taxes. Of that amount, $917 thousand related to employee payroll tax withholdings and has accordingly been recorded as a reduction to additional paid-in capital. The Company’s stock compensation expense was recognized in the following captions within the consolidated statements of operations:

(in thousands)	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Cost of revenues	$	406	$	1,100
General and administrative*		(1,478)		12,034
Sales and marketing		1,454		4,939
Technology and development		451		2,715
Total stock compensation expense	$	833	$	20,788

*Includes forfeitures of restricted stock primarily resulting from Chief Executive Officer transition in the three months ended September 30, 2022.

Total unrecognized stock compensation expense related to unvested restricted stock units (“RSUs”) and contingently issuable shares of Class A common stock that will vest within one year of the IPO contingent upon continued employment requirements (“Contingently Issuable Shares”) was $25.9 million as of September 30, 2022, which is expected to be recognized over a weighted-average period of 2 years from the date of grant.

In connection with the IPO, the Company adopted the 2021 Incentive Plan (the “Plan”). The Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, bonus stock, dividend equivalents, other stock-based awards, substitute awards, annual incentive awards and performance awards intended to align the interests of participants with those of the Company’s shareholders.

During the three months ended September 30, 2022, there were no stock options granted under the Plan.  For the nine months ended September 30, 2022, there were 84,000 options granted under the Plan, at a weighted average exercise

price of $9.86 per option.  During the three months ended September 30, 2022, 32,000 stock options were forfeited. As of September 30, 2022, there was approximately $296 thousand of unrecognized equity-based compensation expense related to the remaining stock options issued during 2022, which is expected to be recognized over a weighted-average period of approximately 3 years.  No stock options were granted prior to the quarter ended June 30, 2022.  The total fair value of the stock options that vested in the nine months ended September 30, 2022 was immaterial.

The assumptions used for the options granted under the Plan during the nine months ended September 30, 2022 were as follows:

Assumptions
Expected volatility	64.54%
Expected term of award	6.5 years
Risk-free rate	3.39%
Dividend yield	0.00%

In connection with the IPO, the Company also adopted the 2021 Employee Stock Purchase Plan (“2021 ESPP”). Under the 2021 ESPP, eligible employees may be granted options to purchase shares of Class A common stock at the lower of 85% of the fair market value of the stock at the time of grant or 85% of the fair market value at the time of exercise. As of September 30, 2022, no options were granted to employees under the 2021 ESPP.

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Net Income (Loss) Per Class A Common Share

9 Months Ended

Sep. 30, 2022

Net Income (Loss) Per Class A Common Share

Net Income (Loss) Per Class A Common Share

Note 10  Net Income (Loss) Per Class A Common Share

Basic income (loss) per share is computed by dividing net loss attributable to Enfusion, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted loss per share is computed giving effect to all potentially dilutive shares.

Prior to the IPO, the Enfusion, LLC membership structure included Common Units and multiple classes of Preferred Units. The Company analyzed the calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that would not be meaningful to the users of these Condensed Consolidated Financial Statements. Therefore, earnings per share information has not been presented for periods prior to the IPO on October 20, 2021.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net income (loss) per share of Class A common stock is as follows:

	Three Months		Nine Months
(in thousands, except per share amounts)	Ended September 30, 2022		Ended September 30, 2022
Net income (loss)	$	2,598	$	(14,051)
Less: Net income (loss) attributable to non-controlling interests		(1,059)		5,903
Net income (loss) attributable to Enfusion, Inc.	$	1,539	$	(8,148)
Numerator:
Net income (loss) attributable to Enfusion, Inc.	$	1,539	$	(8,148)
Adjustment to income (loss) attributable to common stockholders		142		(897)
Numerator for Basic Earnings per Share	$	1,681	$	(9,045)
Adjustment to Income for Dilutive Shares		917		-
Numerator for Diluted Earnings per Share	$	2,598	$	(9,045)
Denominator:
Weighted-average shares of Class A common stock outstanding		66,648		66,296
Vested shares of Class A common stock and RSUs		18,508		18,212
Weighted-average shares of Class A common stock outstanding--basic		85,156		84,508
Add: Dilutive Shares		46,604		-
Weighted-average shares of Class A common stock outstanding--diluted		131,760		84,508
Net income (loss) per share of Class A common stock--Basic	$	0.02	$	(0.11)
Net income (loss) per share of Class A common stock--Diluted	$	0.02	$	(0.11)

The following number of potentially dilutive shares were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been antidilutive:

	Three Months		Nine Months
(in thousands)	Ended September 30, 2022		Ended September 30, 2022
Class B common stock		-		46,765
Contingently issuable shares of Class A common stock		-		540
Restricted stock units		-		2,766
Stock options		52		52
		52		50,123

Shares of Class B common stock do not share in earnings and are not participating securities. Accordingly, separate presentation of loss per share of Class B common stock under the two-class method has not been presented. Shares of Class B common stock are, however, considered potentially dilutive shares of Class A common stock. After evaluating the potential dilutive effect under both the treasury stock method and if-converted method, shares of Class B common stock were determined to be dilutive for the three months ended September 30, 2022, and have therefore been included in the computation of diluted earnings per share of Class A common stock. However, for the nine months ended September 30, 2022, shares of Class B common stock were determined to be anti-dilutive, and have therefore been excluded from the computation of diluted earnings per share of Class A common stock.

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes

Income Taxes

Note 11 Income Taxes

The Company is taxed as a corporation for income tax purposes and is subject to federal, state, and local taxes on the income allocated to it from Enfusion Ltd. LLC based upon the Company’s economic interest in Enfusion Ltd. LLC. The Company is the sole managing member of Enfusion Ltd. LLC and, as a result, consolidates the financial results of Enfusion Ltd. LLC.

Enfusion Ltd. LLC. is a limited liability company taxed as a partnership for income tax purposes. Enfusion Ltd. LLC does not pay any federal income taxes, as income or loss is included in the tax returns of the individual members.

Additionally, certain wholly-owned entities taxed as corporations are subject to federal, state, and foreign income taxes in the jurisdictions in which they operate, and accruals for such taxes are included in the Condensed Consolidated Financial Statements. For periods prior to the IPO, the Company’s taxes represent those of Enfusion Ltd. LLC.

The Company’s effective tax rate for the three months ended September 30, 2022 and 2021 was 9.94% and 4.47%, respectively. The Company’s effective tax rate for the nine months ended September 30, 2022 and 2021 was (4.89)% and 5.7%, respectively. In the three and nine months ending September 30, 2022, respectively, the Company’s effective tax rate differed from the U.S. statutory tax rate of 21% primarily due to non-controlling interest and having a full valuation allowance in the U.S. Conversely, in the three and nine months ending September 30, 2021, respectively, the Company’s effective tax rate differed from the U.S. statutory tax rate of 21% primarily due to the pass-through income generated.  

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Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions

Related Party Transactions

Note 12  Related Party Transactions

Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial or operating decisions. Since transactions with related parties may raise potential or actual conflicts of interest between the related party and the Company, upon the completion of the IPO the Company implemented a related party transaction policy that requires related party transactions to be reviewed and approved by its nominating and corporate governance committee.  

The Company used the proceeds (net of underwriting discounts) from the issuance of 5,526,608 shares in the IPO ($87.8 million) to purchase an equivalent number of Common Units from the Company’s Pre-IPO Common Unitholders.

In connection with the IPO, the Company entered into the Tax Receivable Agreement with certain of the Pre-IPO Owners, which provides for the payment by Enfusion Inc. of 85% of certain cash tax benefits that Enfusion, Inc. actually realizes, or in some cases is deemed to realize. As of September 30, 2022 and December 31, 2021, the Company has not recorded a liability under the Tax Receivable Agreement related to the tax benefits originating from the Reorganization Transactions, IPO and subsequent purchase of Enfusion Ltd. LLC units during the year ended December 31, 2021 as it is not probable that the Company will realize such tax benefits. 

On May 6, 2022, a Pre-IPO Common Unitholder delivered an exchange notice pursuant to Article XII of the LLC Operating Agreement, relating to the exchange of 1,401,818 Common Units and an equal number of shares of class B common stock for an equal number of shares of Class A common stock.

Pursuant to the terms of the LLC Operating Agreement, the Pre-IPO Common Unitholder surrendered 1,401,818 Common Units and an equal number of shares of Class B common stock. In connection therewith, the Company issued 1,401,818 shares of Class A common stock to such Pre-IPO Common Unitholder, canceled an equal number of Class B Common Stock, and received an equal number of Common Units, increasing the Company’s ownership of Common Units by 1,401,818.

On August 21, 2022, the Company appointed Oleg Movchan to the position of Interim Chief Executive Officer of the Company.  In connection therewith, on August 21, 2022, the Company and Enfusion Ltd. LLC entered into an employment agreement with Oleg Movchan, who as of such date was a director of the Company and beneficial owner of more than 5% of the Company’s issued and outstanding class B common stock.  Under the employment agreement, among other things, Enfusion Ltd. LLC will provide Mr. Movchan with an annual base salary of $650,000 and a cash bonus of up to $650,000 (pro-rated based on the term of Mr. Movchan’s service during the 12 months following the date of the Agreement).

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Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events

Subsequent Events

Note 13  Subsequent Events

Share Exchange

On October 12, 2022, a Pre-IPO Common Unitholder delivered an exchange notice pursuant to Article XII of the LLC Operating Agreement, relating to the exchange of 1,000,000 Common Units and an equal number of shares of class B common stock for an equal number of shares of Class A common stock.

Pursuant to the terms of the LLC Operating Agreement, on October 19, 2022, the Pre-IPO Common Unitholder surrendered 1,000,000 Common Units and an equal number of shares of Class B common stock. In connection therewith, the Company issued 1,000,000 shares of Class A common stock to such Pre-IPO Common Unitholder, canceled an equal number of shares of Class B Common Stock, and received an equal number of Common Units, increasing the Company’s ownership of Common Units by 1,000,000.

Issuance of Shares

On October 20, 2022, the Company issued 107,046 shares of Class A common stock in connection with the vesting of certain RSUs that were granted at the time of the IPO to U.S. and foreign employees.  On October 25, 2022, the Company issued 1,396,677 shares of Class A common stock to the former U.S. and foreign holders of Award Units and a non-executive employee.

The individual tax withholding obligations to be incurred in connection with the above issuances were satisfied through our withholding 526,662 shares from issuance (with a value as of the date of issuance that satisfies the withholding amount due), and using approximately $6.96 million of the Company’s cash to remit the related withholding tax amount to the applicable U.S. and foreign tax authorities.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Principles of Consolidation

Principles of Consolidation

These statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the Company’s financial position and results of operations, and all adjustments are of a normal recurring nature. The operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results expected for the full year ending December 31, 2022. The condensed consolidated interim financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The unaudited condensed consolidated interim financial statements include the accounts of Enfusion, Inc. and its wholly or majority-owned subsidiaries.  All intercompany balances and transactions are eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated interim financial statements and accompanying notes. Actual results could differ from those estimates. The effect of the change in the estimates will be recognized in the period of the change.

In order to better align with industry standards, the Company revised the presentation of its condensed  consolidated interim statement of operations for the three and nine months ended September 30, 2021 to reclassify certain immaterial expenses to cost of sales for Platform subscriptions.  These expenses were previously classified in cost of sales

for Managed services and Other revenues.  This change in presentation has no effect on our gross profit or other consolidated results.  In addition, the Company revised the presentation of certain credit charges that were previously recorded in Other revenues to reclassify these charges to Platform subscription and Managed services revenues, respectively.  This change in presentation has no effect on the Company’s total revenues or other consolidated results.  

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an initial maturity date of three months or less to be cash equivalents. Funds held as investments in money market funds are included within cash and cash equivalents.  As of September 30, 2022, the Company had approximately $55 million invested in money market accounts.  

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

The Company has investments in money market accounts, which are included in cash and cash equivalents on the condensed consolidated balance sheets. Fair value inputs for these investments are considered Level 1 measurements within the Fair Value Hierarchy, as money market account fair values are known and observable through daily published floating net asset values.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification 606 (“ASC 606”), Revenue from Contracts with Customers. The Company derives its revenues primarily from fees for platform subscription and managed services provided to clients. Revenues are recognized when control of these services are transferred to the Company’s clients in an amount that reflects the consideration the Company expects to be entitled to in exchange for these services. Revenues are recognized net of taxes that will be remitted to governmental agencies applicable to service contacts.

Historically, platform subscription contracts have typically had a one-year term and were cancellable with 30 days’ notice.  Beginning in the first quarter of 2021, our default platform subscription contract has had a multi-year term and did not allow termination for convenience, though each contract has and can be negotiated with varying term lengths, with or without a termination for convenience clause.  Clients are invoiced each month for the services provided in accordance with the stated terms of their service contracts. Fees for partial term service contracts are prorated, as applicable. Payment of fees are due from clients within 30 days of the invoice date. The Company does not provide financing to clients. The Company determines revenue recognition through the following five-step framework:

● Identification of the contract, or contracts, with a client;

● Identification of the performance obligation in the contract;

● Determination of transaction price;

● Allocation of the transaction price to the performance obligations in the contract; and

● Recognition of revenue when, or as, performance obligations are satisfied.

Platform subscription revenues

Platform subscription revenues consist primarily of fees for providing clients with access to the Company’s cloud-based platform. Platform subscription clients do not have the right to take possession of the platform’s software, and do not have any general return rights. Platform subscription revenues are recognized ratably over the period of contractually enforceable rights and obligations, beginning on the date that the client gains access to the platform. Installment payments are invoiced at the end of each calendar month during the subscription term.

Managed services revenues

Managed services revenues primarily consist of client-selected middle and back-office services provided on our clients’ behalf using the Company’s platform. Revenue is recognized monthly as the managed services are performed, with invoicing occurring at the end of the calendar month.

Other revenues

Other revenues consists of non-subscription-based revenues, such as data conversion and services that integrate a client’s historical data into our solution. The Company recognizes revenues as these services are performed with invoicing occurring at the end of each month.

Service contracts with multiple performance obligations

Our service contracts with clients can include multiple performance obligations. For these contracts, we account for individual performance obligations separately if they are distinct. However, all distinct performance obligations within a contract are satisfied over a similar period of time with the same measure of progress. Accordingly, each distinct performance obligation within a contract has the same pattern of revenue recognition. The Company has determined that implementation services are not distinct from the ongoing platform subscription services due to the highly specialized knowledge required to execute on our solution. Such services are recognized with the platform subscription services revenue over time.

Remaining performance obligations

For the Company’s contracts that exceed one year and do not include a termination for convenience clause, the amount of the transaction price allocated to remaining performance obligations as of September  30, 2022 and December 31, 2021 was $32.1 million and $23.4 million, respectively. The Company expects to recognize this amount over the next one to five years.

Disaggregation of revenue

The Company’s total revenues by geographic region, based on the client’s physical location is presented in the following tables (in thousands):

	Three Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	25,109	64.1	%	$	18,821	64.8	%
Europe, Middle East and Africa (EMEA)		5,113	13.1	%		3,631	12.5	%
Asia Pacific (APAC)		8,929	22.8	%		6,593	22.7	%
Total revenues	$	39,151	100.0	%	$	29,045	100.0	%

* The Company’s total revenues in the United States were $24.5 million and $18.4 million for the three months ended September 30, 2022 and 2021, respectively.

	Nine Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	70,386	64.1	%	$	52,220	65.4	%
Europe, Middle East and Africa (EMEA)		14,063	12.8	%		9,607	12.0	%
Asia Pacific (APAC)		25,383	23.1	%		18,020	22.6	%
Total revenues	$	109,832	100.0	%	$	79,847	100.0	%

*   The Company’s total revenues in the United States were $68.8 million and $51.0 million for the nine months ended September 30, 2022 and 2021, respectively.

Accounts Receivable

Accounts Receivable

As of September 30, 2022 and December 31, 2021, no individual client represented more than 10% of accounts receivable. For the three and nine months ended September 30, 2022 and 2021, respectively, no individual client represented more than 10% of the Company’s total revenues.

Recent Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the guidance in former ASC 840, Leases, to increase transparency and comparability among organizations by requiring recognition of right-of-use assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements (with the exception of short-term leases). In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new Leases (Topic 842) standard. ASU 2016-02, as subsequently amended for various technical issues, is effective for private companies and emerging growth companies in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, and early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, it has not yet determined the full impact the adoption of this standard will have on its consolidated financial statements and related disclosures.  However, the Company expects the adjustment to retained earnings to be immaterial.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13, as subsequently amended for various technical issues is effective for annual reporting periods beginning after December 15, 2022, for private entities and emerging growth companies. The Company is evaluating the impact of this standard on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for private entities and emerging growth companies in fiscal years beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022, with early adoption permitted, including adoption in an interim period. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on its consolidated financial statements.

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU is effective for all entities beginning as of its date of effectiveness, March 12, 2020. The guidance is temporary and can be applied through

December 31, 2022. The guidance has not impacted the condensed consolidated financial statements to date. The Company will continue to monitor the impact of the ASU on our consolidated financial statements in the future.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Significant Accounting Policies

Schedule of total net revenues by geographic region

The Company’s total revenues by geographic region, based on the client’s physical location is presented in the following tables (in thousands):

	Three Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	25,109	64.1	%	$	18,821	64.8	%
Europe, Middle East and Africa (EMEA)		5,113	13.1	%		3,631	12.5	%
Asia Pacific (APAC)		8,929	22.8	%		6,593	22.7	%
Total revenues	$	39,151	100.0	%	$	29,045	100.0	%

* The Company’s total revenues in the United States were $24.5 million and $18.4 million for the three months ended September 30, 2022 and 2021, respectively.

	Nine Months Ended September 30,
	2022				2021
Geographic Region	Amount		Percent		Amount		Percent
Americas*	$	70,386	64.1	%	$	52,220	65.4	%
Europe, Middle East and Africa (EMEA)		14,063	12.8	%		9,607	12.0	%
Asia Pacific (APAC)		25,383	23.1	%		18,020	22.6	%
Total revenues	$	109,832	100.0	%	$	79,847	100.0	%

*   The Company’s total revenues in the United States were $68.8 million and $51.0 million for the nine months ended September 30, 2022 and 2021, respectively.

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Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2022

Property and Equipment, Net

Schedule of Property and equipment, net

Property and equipment, net consists of the following (in thousands):

	September 30, 2022		December 31, 2021
Computer equipment	$	16,631	$	14,163
Software development costs		8,487		4,866
Leasehold improvements		1,833		1,947
Furniture and fixtures		426		540
Total property and equipment, cost		27,377		21,516
Less accumulated depreciation and amortization		(11,954)		(8,465)
Total property and equipment, net	$	15,423	$	13,051

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Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Accrued Expenses and Other Current Liabilities

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

	September 30, 2022		December 31, 2021
Accrued compensation	$	8,845	$	3,180
Accrued expenses and other		1,684		1,182
Accrued taxes		275		1,216
Total accrued expenses and other current liabilities	$	10,804	$	5,578

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Operating Leases and Service Agreements (Tables)

9 Months Ended

Sep. 30, 2022

Operating Leases and Service Agreements

Schedule of future aggregate minimum rental payments

Future aggregate minimum rental payments under the noncancelable operating leases and service agreements noted above, excluding the Company’s share of real estate taxes and other operating costs, are as follows (in thousands):

	Amount
2022 (remaining three months)	$	951
2023		3,319
2024		2,010
2025		901
Total	$	7,181

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Stock-Based Compensation

Schedule of stock compensation expense

(in thousands)	Three Months Ended		Nine Months Ended
	September 30, 2022		September 30, 2022
Cost of revenues	$	406	$	1,100
General and administrative*		(1,478)		12,034
Sales and marketing		1,454		4,939
Technology and development		451		2,715
Total stock compensation expense	$	833	$	20,788

*Includes forfeitures of restricted stock primarily resulting from Chief Executive Officer transition in the three months ended September 30, 2022.

Schedule of assumptions

Assumptions
Expected volatility	64.54%
Expected term of award	6.5 years
Risk-free rate	3.39%
Dividend yield	0.00%

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Net Income (Loss) Per Class A Common Share (Tables)

9 Months Ended

Sep. 30, 2022

Net Income (Loss) Per Class A Common Share

Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share

	Three Months		Nine Months
(in thousands, except per share amounts)	Ended September 30, 2022		Ended September 30, 2022
Net income (loss)	$	2,598	$	(14,051)
Less: Net income (loss) attributable to non-controlling interests		(1,059)		5,903
Net income (loss) attributable to Enfusion, Inc.	$	1,539	$	(8,148)
Numerator:
Net income (loss) attributable to Enfusion, Inc.	$	1,539	$	(8,148)
Adjustment to income (loss) attributable to common stockholders		142		(897)
Numerator for Basic Earnings per Share	$	1,681	$	(9,045)
Adjustment to Income for Dilutive Shares		917		-
Numerator for Diluted Earnings per Share	$	2,598	$	(9,045)
Denominator:
Weighted-average shares of Class A common stock outstanding		66,648		66,296
Vested shares of Class A common stock and RSUs		18,508		18,212
Weighted-average shares of Class A common stock outstanding--basic		85,156		84,508
Add: Dilutive Shares		46,604		-
Weighted-average shares of Class A common stock outstanding--diluted		131,760		84,508
Net income (loss) per share of Class A common stock--Basic	$	0.02	$	(0.11)
Net income (loss) per share of Class A common stock--Diluted	$	0.02	$	(0.11)

Schedule of effect of dilutive shares antidilutive

	Three Months		Nine Months
(in thousands)	Ended September 30, 2022		Ended September 30, 2022
Class B common stock		-		46,765
Contingently issuable shares of Class A common stock		-		540
Restricted stock units		-		2,766
Stock options		52		52
		52		50,123

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Organization and Description of Business - IPO and reorganization (Details)	9 Months Ended
	Sep. 30, 2022 subsidiary
Number of wholly-owned subsidiaries.	3
Enfusion LLC
Ownership Percentage	59.00%

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Summary of Significant Accounting Policies - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($) customer	Sep. 30, 2021 customer	Sep. 30, 2022 USD ($) customer	Sep. 30, 2021 customer	Dec. 31, 2021 USD ($) customer
Revenue remaining performance obligation					$ 23.4
Investment in money market accounts.	$ 55.0		$ 55.0
Major Customer | Revenues | Customer Concentration Risk
Number of customers | customer	0	0	0	0
Major Customer | Accounts Receivable | Customer Concentration Risk
Number of customers | customer			0		0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue remaining performance obligation	$ 32.1		$ 32.1
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Remaining performance obligation satisfaction period	1 year		1 year
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Remaining performance obligation satisfaction period	5 years		5 years

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Summary of Significant Accounting Policies - Disaggregation of revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Total revenues	$ 39,151	$ 29,045	$ 109,832	$ 79,847
Revenues | Geographic Region
Disaggregation of Revenue [Line Items]
Total revenues	$ 39,151	$ 29,045	$ 109,832	$ 79,847
Total net revenues percent	100.00%	100.00%	100.00%	100.00%
Americas | Revenues | Geographic Region
Disaggregation of Revenue [Line Items]
Total revenues	$ 25,109	$ 18,821	$ 70,386	$ 52,220
Total net revenues percent	64.10%	64.80%	64.10%	65.40%
Europe, Middle East and Africa (EMEA) | Revenues | Geographic Region
Disaggregation of Revenue [Line Items]
Total revenues	$ 5,113	$ 3,631	$ 14,063	$ 9,607
Total net revenues percent	13.10%	12.50%	12.80%	12.00%
Asia Pacific (APAC) | Revenues | Geographic Region
Disaggregation of Revenue [Line Items]
Total revenues	$ 8,929	$ 6,593	$ 25,383	$ 18,020
Total net revenues percent	22.80%	22.70%	23.10%	22.60%
United States
Disaggregation of Revenue [Line Items]
Total revenues	$ 24,500	$ 18,400	$ 68,800	$ 51,000

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Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property and Equipment, Net
Total property and equipment, cost	$ 27,377	$ 21,516
Less accumulated depreciation and amortization	(11,954)	(8,465)
Total property and equipment, net	15,423	13,051
Computer equipment
Property and Equipment, Net
Total property and equipment, cost	16,631	14,163
Software development costs
Property and Equipment, Net
Total property and equipment, cost	8,487	4,866
Leasehold improvements
Property and Equipment, Net
Total property and equipment, cost	1,833	1,947
Furniture and fixtures
Property and Equipment, Net
Total property and equipment, cost	$ 426	$ 540

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Property and Equipment, Net - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Property and Equipment, Net
Property and equipment, net	$ 15,423		$ 15,423		$ 13,051
Capitalized software development costs	1,100	$ 400	3,600	$ 1,400
Depreciation and amortization expense	892	700	2,500	1,800
Amortization expense related to software development costs	582	$ 300	1,500	$ 900
United States
Property and Equipment, Net
Property and equipment, net	$ 13,200		$ 13,200		$ 10,400

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Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued Expenses and Other Current Liabilities
Accrued compensation	$ 8,845	$ 3,180
Accrued expenses and other	1,684	1,182
Accrued taxes	275	1,216
Total accrued expenses and other current liabilities	$ 10,804	$ 5,578

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Operating Leases and Service Agreements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Total
2022 (remaining three months)	$ 951		$ 951
2023	3,319		3,319
2024	2,010		2,010
2025	901		901
Total	7,181		7,181
Expense related to lease agreements	$ 1,000	$ 1,000	3,200	$ 2,800
Minimum
Operating Leases and Service Agreements
Monthly base payments			6
Maximum
Operating Leases and Service Agreements
Monthly base payments			$ 16

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Commitments and Contingencies (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies
Accruals for contingencies	$ 0	$ 0

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Preferred Units Stockholders' Equity and Members' Deficit (Details)	1 Months Ended
	Oct. 31, 2021 Vote shares	Sep. 30, 2022 shares	Dec. 31, 2021 shares
Class of Stock [Line Items]
Preferred stock authorized	100,000,000
Common Class A
Class of Stock [Line Items]
Common stock, shares authorized	1,000,000,000	1,000,000,000	1,000,000,000
Number of Voting Rights | Vote	1
Common Class B
Class of Stock [Line Items]
Common stock, shares authorized	150,000,000	150,000,000	150,000,000
Number of Voting Rights | Vote	1
Capital Units
Class of Stock [Line Items]
Stock exchange ratio	1,000,000

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Stock-Based Compensation- Narratives (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended
	Oct. 31, 2021	Sep. 30, 2022	Sep. 30, 2021	Jun. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Management Incentive Plans
Total stock compensation expense		$ 833	$ 0		$ 20,788	$ 0
Payment of tax withholding obligations for federal payroll taxes					1,400
Payment for employee payroll tax withholding obligations on stock-based compensation					$ 917
Employee stock option
Management Incentive Plans
Options granted to employees		0		0	84,000
Weighted average grants in period					$ 9.86
Stock options forfeited					32,000
Nonvested award option		$ 296			$ 296
Stock based compensation recognition period					3 years
Common Class A | 2021 ESPP
Management Incentive Plans
Purchase price of common stock, percent	85.00%
Options granted to employees					0

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Stock-Based Compensation- Equity-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Management Incentive Plans
Total stock compensation expense	$ 833	$ 0	$ 20,788	$ 0
Restricted Stock Units And Class A Common Stock Vested
Management Incentive Plans
Unrecognized stock compensation expense	25,900		$ 25,900
Stock based compensation recognition period			2 years
Vested (in years)			1 year
Cost of revenues
Management Incentive Plans
Total stock compensation expense	406		$ 1,100
General and administrative
Management Incentive Plans
Total stock compensation expense	(1,478)		12,034
Sales and marketing
Management Incentive Plans
Total stock compensation expense	1,454		4,939
Technology and development
Management Incentive Plans
Total stock compensation expense	$ 451		$ 2,715

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Stock-based compensation - Assumptions for Performance-based shares (Details) - Employee stock option	9 Months Ended
	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	64.54%
Expected term of award	6 years 6 months
Risk-free rate	3.39%
Dividend yield	0.00%

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Net Income (Loss) Per Class A Common Share - Diluted net loss per common unit (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator:
Net income (loss)	$ 2,598	$ 3,293	$ (14,051)	$ 11,652
Less: Net income (loss) attributable to non-controlling interests	(1,059)		5,903
Net income (loss) attributable to Enfusion, Inc.	1,539	$ 3,293	(8,148)	$ 11,652
Adjustment to income (loss) attributable to common stockholders	142		(897)
Numerator for Basic Earnings per Share	1,681		(9,045)
Adjustment to Income for Dilutive Shares	917
Numerator for Diluted Earnings per Share	$ 2,598		$ (9,045)
Denominator:
Weighted-average shares of Class A common stock outstanding	66,648		66,296
Vested shares of Class A common stock and RSUs	18,508		18,212
Weighted-average shares of Class A common stock outstanding--basic	85,156		84,508
Add: Dilutive Shares	46,604
Weighted-average shares of Class A common stock outstanding--diluted	131,760		84,508
Net income (loss) per share of Class A common stock--Basic	$ 0.02		$ (0.11)
Net income (loss) per share of Class A common stock--Diluted	$ 0.02		$ (0.11)

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Net Income (Loss) Per Class A Common Share - Dilutive shares (Details) - shares shares in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022
Antidilutive securities amount	52	50,123
Common Class B
Antidilutive securities amount		46,765
Contingently issuable shares of Class A common stock
Antidilutive securities amount		540
Restricted Stock Units
Antidilutive securities amount		2,766
Employee stock option
Antidilutive securities amount	52	52

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Income taxes - Narratives (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Taxes
Effective tax rate (as a percent)	9.94%	4.47%	(4.89%)	5.70%
U.S. statutory tax rate (as a percent)	21.00%	21.00%	21.00%	21.00%

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Related Party Transactions (Details) - USD ($)	Aug. 21, 2022	May 06, 2022	Oct. 20, 2021
Related Party Transaction [Line Items]
Percentage of Entity's Share of Tax Benefits Under Tax Receivable Agreement			85.00%
Common units exchanged (in shares)		1,401,818
Common units surrendered (in shares)		1,401,818
Increase in common units (in shares)		1,401,818
Oleg Movchan | Interim Chief Executive Officer
Related Party Transaction [Line Items]
Annual base salary	$ 650,000
Employment Term	12 months
Oleg Movchan | Interim Chief Executive Officer | Maximum
Related Party Transaction [Line Items]
Cash bonus payable	$ 650,000
Oleg Movchan | Investment in Enfusion Ltd LLC [Member] | Interim Chief Executive Officer
Related Party Transaction [Line Items]
Percentage of Ownership	5.00%
Common Class A
Related Party Transaction [Line Items]
Stock issued (in shares)		1,401,818
IPO
Related Party Transaction [Line Items]
Purchase of Common Units			5,526,608
Payments to acquire newly issued common units			$ 87,800,000
Stock issued (in shares)			5,526,608

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Subsequent Events (Details) - USD ($) $ in Thousands							9 Months Ended
	Oct. 25, 2022	Oct. 25, 2022	Oct. 20, 2022	Oct. 19, 2022	Oct. 12, 2022	May 06, 2022	Sep. 30, 2022
Subsequent Event
Common units exchanged (in shares)						1,401,818
Common units surrendered (in shares)						1,401,818
Increase in common units (in shares)						1,401,818
Payment of withholding taxes on stock-based compensation							$ 917
Common Class A
Subsequent Event
Stock issued (in shares)						1,401,818
Subsequent Event
Subsequent Event
Common units exchanged (in shares)					1,000,000
Common units surrendered (in shares)				1,000,000
Stock issued (in shares)				1,000,000
Increase in common units (in shares)				1,000,000
Shares Withheld for Tax Withholding Obligation	526,662
Payment of withholding taxes on stock-based compensation	$ 6,960
Subsequent Event | Common Class A | Employee
Subsequent Event
Shares issued		1,396,677	107,046