Clearwater Analytics Holdings, Inc. (CWAN) Earnings Call Transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Clearwater Analytics Investor Update Conference Call. [Operator Instructions] And now I would like to welcome Joon Park, Head of Investor Relations. Please begin the conference.

Thank you, and welcome, everyone, to Clearwater Analytics Investor Update Conference Call where we will discuss our transformative acquisition of Enfusion. Joining me on the call today are Sandeep Sahai, Chief Executive Officer; and Jim Cox, Chief Financial Officer. I would like to remind all participants that during this conference call, any forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Expressions of future goals, including business outlook, expectations for future financial performance, expectations for the timing of the Enfusion acquisition and its expected benefits and similar items, including, without limitation, expressions using the terminology may, will, can, expect and believe, and expressions which reflect something other than historical facts, are intended to identify forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, including those discussed in the Risk Factors section of our filings with the SEC. Actual results may differ materially from any forward-looking statements. The company undertakes no obligation to revise or update any forward-looking statements in order to reflect events that may arise after this conference call, except as required by law. For more information, please refer to the cautionary statement included in our press release relating to the acquisition of Enfusion issued this morning. Lastly, all metrics discussed on this call are non-GAAP unless otherwise noted. With that, I will hand over to our CEO, Sandeep Sahai.

We are very happy to announce Clearwater's planned acquisition of Enfusion, a global software company that has built a strong and widely respected cloud-dated SaaS platform for asset managers and hedge funds. Over the past few years, Clearwater has built a market-leading single-instance multi-tenant platform that has been adopted by an increasingly wider set of clients across industries and geographies. Clients have adopted our platform in part because we have a modern cloud-native platform in an industry that is littered with inflexible and unscalable legacy solutions. We have coupled that with a strong track record of customer delight that has resulted in consistently high Net Promoter Scores of greater than 60, which is an outstanding metric. Our clients want to do more with us and have frequently asked us to lean into adjacent areas to build out a true front-to-back platform, but we have resisted the opportunity to buy legacy solutions to continue the build-out and have always had a very high bar for any acquisition. Enfusion provides a unique opportunity. In many ways, they have traveled down a similar road as we have, but we have focused on the hedge fund industry and on asset managers. They built a single-instance, multi-tenant, cloud-native platform using a very similar technology stack. Importantly, given their industry focus, they have outstanding capabilities in the front office, while we have traditionally focused on the middle and back office. This makes the combination unique and complementary. We have a proven track record of impeccable execution. Delivering disruptive innovative solutions to the market, while simultaneously improving unit economics, profitability and cash flow, consistently delivering above expectations. Given that, we believe that this strategic acquisition will be attractive for our clients, our employees, and our shareholders. Now let me pivot to the specific strategic value of this combination. Number one, front-to-back platform. This combination accelerates our journey towards building a front-to-back platform for the investment management industry, built uniquely and entirely on modern cloud technologies using a single-instance, multi-tenant architecture. Why does it matter to our clients? Our clients will have the ability to get a comprehensive solution from a trusted partner who has delivered to them consistently over many years; and given the single-instance, multi-tenant architecture, a platform that does not periodically need to go through expensive, laborious and disruptive upgrades. Additionally, and more importantly, they would be able to avoid the error-prone data handoff that happens between the front, middle and back office which in turn creates all kinds of reconciliation issues, resulting in inefficiencies, inaccuracies and increased risk. Clearwater would be able to provide front-to-back management of the data, which we believe is a significant value add for our clients. Number two, increased right to win in the asset management market. Approximately 2/3 of our core total addressable market comes from the asset management industry, but roughly 1/3 of our revenues comes from it. Enfusion has built and continues to build a next-generation platform for asset managers, but it has done so starting from the front office. Clearwater is on the same journey, but started from data ingestion, aggregation and reconciliation, accounting, compliance, regulatory reporting and comprehensive client reporting, essentially the middle and back office. By combining the intellectual property and engineering talent within Enfusion and Clearwater, we believe that we will meaningfully increase our right to win across segments, geographies and sizes. Number three, cross-selling, and in particular, taking Enfusion's IBOR, portfolio management and order management functionality to Clearwater clients. As you are aware, we have a very strong and expanding presence among asset owners, defined as insurers, corporates, governments, pensions, endowments, foundations and REITs. Since this group accounts for more than 2/3 of our revenue, 2 years back, we outlined a robust back-to-base strategy to expand our offering to these clients. We embarked on an effort to build new products that can address the customer pain felt with other components of the investment management technology stack. The combination of Clearwater and Enfusion will allow us to offer an industry-leading front office solution to our clients who currently partner with us for the middle office, accounting, reporting and back-office solutions. We expect this combination to accelerate our 1 bp to 4 bp journey and improve NRR. Number four, the hedge fund industry. The hedge fund industry is one that Clearwater has limited presence in. Enfusion has an outstanding track record and wide acceptance as the disruptive end-to-end platform for hedge funds and more broadly the liquid alternatives market. By increasing our focus and allocating dedicated engineering and product expertise to the hedge fund industry, we expect to continue innovating and growing our presence there. We also expect to bring our world-class client servicing and operations to hedge fund clients around the world. Finally, this expansion is expected to increase our overall TAM by approximately $1.9 billion. Number five, international markets. The international geographies account for more than half our TAM, but we currently derive only 18% of our revenue from outside the U.S. That opportunity has led us to make continued and significant investments in building infrastructure across Europe and Asia. Enfusion, on the other hand, has built a global company with international geographies accounting for approximately 38% of their revenues. We believe this combination will increase our presence on the ground in these key geographies and accelerate our growth. Number six, synergies and operational excellence. We see significant synergy opportunities in this combination on several fronts. Firstly, we believe we should be able to accelerate growth based on the increased right to win, higher back-to-base sales, greater presence across geographies and increased TAM. Secondly, we have built a highly robust execution infrastructure across India, Edinburgh, and Boise that is operating effectively and at scale. Over the past few years, our operating rigor and our ability to harness Generative AI has allowed the Clearwater team to aggressively improve gross margin while improving client satisfaction. We expect to bring those skills to Enfusion and have very high confidence that we can drive meaningfully improved unit economics while also growing the emerging managed services business. And thirdly, we expect considerable synergies in G&A. Number seven. This confidence in driving synergies is what makes us so excited about this transaction. We plan to reaccelerate Enfusion's growth, improve gross margins and deliver $20 million in operating cost efficiencies. Our ability and proven track record to drive these improvements allows us to make this a financially compelling transaction, where we are paying approximately 24x post-synergy EBITDA to buy Enfusion. Therefore, this is very accretive for our clients, our employees and finally our shareholders. Our vision is to be the world's most trusted and comprehensive technology platform that simplifies the entire investment life cycle and eventually revolutionizes the world of investing. Our platform is built and will continue to evolve entirely on cloud-native technologies using a single-instance, multi-tenant architecture. It will remain an open platform that allows for easy integrations with other technologies our clients may have for portfolio management, advanced risk and analytics and alternative data sources. Thirdly, we don't manage money ourselves, meaning there is no conflict of interest with our clients. We devote all of our attention to building better technology to serve them. Finally and most importantly, this acquisition will allow us to seamlessly manage data from the front office all the way to the back office, unlocking the full potential of our platform's unique network effect. This combination, therefore, represents a giant step towards the realization of our goal. This acquisition and the related funding we are securing allows us to remain opportunistic about other capabilities we may acquire to have best-in-class functionality for every step of the investment management life cycle. With projected combined revenues of approximately $750 million in 2025, this acquisition positions Clearwater to deliver scale, global reach and innovation. With that, I will hand over to our Chief Financial Officer, Jim Cox to provide additional details.

Thank you, Sandeep, and thank you all for joining us today. I'm pleased to provide you with further details on our acquisition of Enfusion. We are incredibly excited about this combination and believe that, together, we will build a modern, cloud-native, front-to-back platform capable of addressing the increasingly complex and global needs of our clients. We are an ambitious company. that wants to revolutionize the world of investing and the technology used by investment managers everywhere. This acquisition is a strong building block to realize those ambitions. First, we should take a moment to understand that now is the time to act upon this strategic acquisition. Through consistent, durable and reliable growth, focus on our clients and a relentless passion for continuous improvement, we are in a privileged position of trust from our employees; our clients; and even you, our investors, to execute on the integration of this transaction. Let me start with discussing our own financial performance. While this is not a Clearwater earnings call, we want to provide a brief overview. You will recall our impressive Q3 results, which included strong revenue growth, 26% growth in ARR year-over-year; and NRR, net revenue retention of 114%. While December numbers have not been finalized, I'm very happy to report that through the first 2 months of Q4, we have seen continued strength in our business, consistent with what we saw in Q3. We therefore expect to meet and exceed the guidance provided for the fourth quarter and full year 2024. Our ARR growth and the booking momentum we have gives us high confidence as we look ahead to Q1 and the full year 2025. Looking back, I could not be more pleased with our performance over the past few years. Clearwater has delivered durable, reliable top line growth while also improving unit economics, profitability and cash flow. We have continued to invest aggressively in R&D to ensure we're building products that are important for our current clients, and we have also invested aggressively in products for the future. We have successfully evolved our business model beginning in 2022 to drive more revenue stability, lower churn and make our gross revenue retention more consistent. Our client satisfaction and back-to-base sales growth have resulted in world-class net revenue retention metrics. We have managed costs very prudently throughout this journey. Put this all together, and it results in a very strong and balanced financial profile as we have become more profitable each quarter, making room for us to utilize debt to optimize our capital structure for you, our shareholders. We believe that the lessons we have learned in improving our own business over these past years can be applied across the Enfusion business as well. Now let me turn my attention to the details of this transaction. All the details can be found in our 8-K filing, but I will summarize it for you now. Under the terms of the merger agreement, Enfusion shareholders will receive $11.25 per share. The $11.25 per share consists of $5.85 per share in cash and $5.40 per share in Clearwater Class A common stock. This price represents a 13% premium over the January 10, 2025, closing price of the Enfusion stock. Additionally, we will pay $30 million to enable the retirement of the Enfusion TRA arrangement. The ultimate exchange ratio will be determined at close with a reference to a 10% collar around Clearwater Class A common stock price of $27.79. The actual price will be determined using the volume weighted average price of the 10-day trading period ending on the second to last trading day prior to the closing date. In total, therefore, we expect to pay approximately $760 million in cash and issue between 23 million and 28 million shares to Enfusion shareholders. This equates to approximately 10% to 12% of our current fully diluted share count. To facilitate the cash payment, we have received debt financing commitments for a $800 million term loan and a $200 million revolving line of credit. This results in a combined gross leverage of approximately 3.7x at close. With our strong free cash flow characteristics, we expect to return to a leverage level below 3x gross leverage in a reasonably short time frame. As you can see from the sources and uses slide included in our investor deck, we currently expect to use about $60 million in cash from our balance sheet. The remaining cash and investments on our balance sheet and the increased revolver will provide us with over $350 million of liquidity. Lastly, the transaction is nicely accretive with mid- to high single-digit percentage accretion in non-GAAP EPS expected in 2026. Let me also communicate a 2024 financial update for Enfusion. This has been provided by Enfusion management as part of the due diligence process. Enfusion management expects revenue for the full year 2024 to be approximately $201 million to $202 million. This equates to 15% to 16% year-on-year growth. Enfusion management expects the end of year ARR to be approximately $210 million to $211 million. This equates to a 13% to 14% year-on-year growth. So what should investors expect to see from us as a result of this acquisition? First, what you've counted on: Continued strong execution on the core Clearwater business, with revenue growth, gross margin expansion and overall profitability achievement, all consistent with the expectations we set in our Investor Day back in September 2023. Second, looking ahead, we expect to reaccelerate growth at Enfusion over the next 2 years, reaching a 20% growth rate at that time. We believe this will be achieved through a dedicated focus on the hedge fund industry; significantly enhanced penetration of the asset management industry; and finally, the ability to cross-sell front office solutions to Clearwater clients. Third, with Enfusion being roughly 28% to 29% of our revenue going forward, we expect the joint company GRR to be in the mid- to high 90s and joint company net revenue retention to be close to 110%. We expect to work on their current commercial and contracting model to improve these metrics overall. Number four, we plan to deliver 400 basis points EBITDA margin expansion within the Enfusion business in the first year after close and an additional 400 basis points in the second year after close, a total of 800 basis points improvement. We expect these improvements to be achieved through improved gross margins and delivering on the cost synergies Sandeep described. With that, I will hand it off to Sandeep to provide some closing thoughts.

We are all very thankful for the trust that our customers, our employees and our investors continue to show in Clearwater. This is an exciting opportunity, and we have strong conviction that this combination will allow the teams at Clearwater and Enfusion to deliver an industry-leading disruptive solution for our customers. By integrating the best-in-class platforms the 2 companies have built, we will finally be able to deliver a front-to-back platform for our clients. We will strive to deliver consistent, reliable growth while improving unit economics and profitability as we have done in the past. . That ends our presentation, and we look forward to answering your questions.

[Operator Instructions] We have the first question from Kevin McVeigh with UBS.

Great. And congratulations, looks like a really, really nice opportunity. Obviously, this is Sandeep, Jim and the team overall, take -- really, really helpful in terms of disclosures on the deck. I know you talked a little bit about the 20% growth in Enfusion over the next 2 years. How should we think about that in terms of the contribution of Clearwater overall in terms of growth? And then is there a way to think about, it's all kind of one question, the module overlap? And how does this enhance kind of JUMP and Wilshire as you think about kind of just the overall enterprise?

Yes. Thank you for your question, Kevin. See, from our perspective, the first and the most important thing is growth. Obviously, we want profitable growth and we have done that in the past, but reaccelerating Enfusion's growth to 20% is priority #1. So where could we help? Number one, our ability to provide a front-to-back solution to medium and large customers, I think, will help them with their growth quite a bit. But the most important one is asset management. As you know, our clients in the asset management world tend to the very large asset managers. While Enfusion came in it from the other side: Hedge funds, the smaller asset managers and medium-sized asset managers. The intellectual property required for both of these are different, and our expectation is to merge them together and create a comprehensive solution for asset managers. And that of course will accelerate growth on both sides. The third thing is Enfusion has a really, really respected platform, but specifically, they do really well with an IBOR, a portfolio management system and an order management system. We can take all of that functionality to our customers, really, asset owners, who have sort of the mainstay of our business with 2/3 of our revenue coming from there. Hedge funds itself. I think we have a lot more scale, and therefore, we will be able to accelerate their growth in hedge funds also. So it is -- mostly when you think about it, about growth, the good news is when you look at the business, we also see this 800 bps expansion opportunity with EBITDA. So it is about growth and growth and growth, but also ability to deliver this expansion. I don't know, Jim, would you add anything to that?

I guess the only thing to add is just, overall, nothing has changed about the way we think about the world, 20% top line growth, consistent margin expansion, and we see that progressing over time.

We now have Michael Infante with Morgan Stanley.

Echo the congratulations. Sandeep, I just wanted to ask one from the technology perspective. If you sort of think about the nature of Enfusion's customer base, they've historically had to allocate to a handful of SMAs, but not necessarily thousands and thousands of accounts, right? So if you think about the nature of your customer base, skewing mega cap asset managers and insurance companies, how should we be thinking about what has to be done from a technology perspective in order for Enfusion to have solid attach rates with some of your largest customers?

Yes. Thank you, Michael. That's a really good question. I think the place where you got to start, Michael, is the technology itself. And as you know, there are many technologies in our industry which are more legacy. And it sounds easy that you can sort of repurpose all of that with new technology, and that's horribly hard to do. The biggest strength about Enfusion compared to us is they use the same technologies we do. So if you look at how Enfusion got built and the architecture of the platform, single-instance, multi-tenancy, cloud-native in the technologies they use. So really, the foundation on both sides is really, really strong. When our CTO went out and met with them, it was literally a pretty short meeting to figure out what technology they use and what we use and how we might integrate technologically. But your question is not about just the tech, it's about the functionality in the business. And that's where I think it is, this combination, is so very interesting. But the point is that we went to the largest asset managers, and so we have that capability. And we've been trying to bleed down and sort of make that functionality work for medium- and small-sized asset managers. And when you think about what Enfusion is doing, it's been doing exactly the opposite. They start with the smaller ones, and coming up. So I don't want to make it sound like it's really easy and we have it on day one. But one thing is for sure. All of that intellectual property needed for end-to-end asset managers of any size will be available in the house and using a tech stack which is common. So it gives us a really clear path, I think, of building this platform, which, frankly, the industry has been asking for a long period of time. So we feel really confident about the technology. And frankly, unless both parties thought that way, we would not do it because, as I'm sure you agree, we have a business which is doing really well. I mean, the Q3 results were great. I think Jim talked about Q4. We looked at 2025 with a very high degree of confidence. So unless we felt like this is something which is going to work for our clients and our employees, and [ therefore shareholders ], we just simply wouldn't have done it. So again, a high degree of confidence on the technology front, but it does take time and effort.

Understood. That's very helpful. Maybe just one quick follow-up for me. Jim, just on the mid-single-digit to high single-digit adjusted diluted EPS accretion in '26. I take your point that part of that is driven by the $20 million in G&A-related cost savings you're going to be able to generate over the next couple of years. But as I think about the close to 900 clients that Enfusion has, I would imagine there's fairly little overlap between your existing customer base. So is there any framing or sort of high-level mental model we should be keeping in mind just in terms of how you thought about baking revenue synergies into that '26 EPS accretion number?

Yes. So thanks, Michael. So the 2 pieces that are in that '26 EPS accretion number are obviously the operating expense synergies which we talked about for $20 million as well as the incremental improvement in gross margin. Sandeep spoke about that. I don't want anyone to lose kind of that. We have done a tremendous job incrementing and improving our own gross margins, and I think that we will be able to replicate those lessons we have learned within our own business across the entire portfolio. And so those are the 2 significant pieces to that kind of margin expansion. On top of that, then, you're exactly right. I talked about all the costs first, but we should think about growth, growth, and growth. And so we see a lot of cross-sell opportunity and all of those elements that Sandeep spoke to on the growth elements. But to be specific on that EPS number, we think that EPS number is exclusively through gross margin and operating expense. And so we'll give ourselves some grace to perhaps even improve upon that as we think about the revenue synergies.

We now have Rishi Jaluria with RBC on the line.

Wonderful. Really exciting to see this news. I have 2 questions. One for Sandeep, one for Jim. Sandeep, for you, just a follow-up on the prior one on integrating the technology. One of the huge benefits you've had over your -- the incumbent legacy competitors has not just been the cloud nature, but it's also been a fully integrated stack, whereas a lot of the others have been reliant on M&A and they kind of created the Frankenstein stack. Can you walk us through the technological road map to actually integrate this and not only say, "Hey, we have 2 platforms that are truly multi-tenant, single-instance, cloud-native," but have it be seamless on one single code base, one single architecture. And then I've got a quick follow-up for Jim.

Yes, Rishi, thank you for that question. Look, it's widely important. I think what you asked right now is really the core of a platform. If we talk about a true front-to-back and that's made up of 20 different technologies and 10 different code bases, then that is just not what the industry needs. So -- but let's talk about that. Where does Clearwater start? Clearwater sort of starts post-trade. Once the trading is down, it starts post-trade, and I'm generalizing for effect. But the point that we start the data ingestion from the trading sources and data aggregation and so on and so forth, and the accounting and things like that. And if we look at where Enfusion is, their strength is in the trading itself, the front office systems. Do they do some accounting? Of course they do. But the strength of that company and the platform they have built is in the front office. And that's what we hope to do, is take components of what Enfusion has built, marry that with the components Clearwater has built, and then come up with one platform which is end-to-end. Now like I was saying before, if it wasn't built on the same technology stack, this would have been very hard to do, some might say even impossible to sort of achieve in a reasonable period of time. But the fact that they use the same technology stack gives you a bunch of confidence that this can be done in a reasonable period. So -- but I do think that the mental model you might wish to have is sort of a lot of the pre-trade strength comes from the Enfusion platform and a lot of the post-trade strength comes from the Clearwater platform. And both of us do a little bit of both sides, but the mental map I would love for you to create is that break between the 2 technologies and the platforms.

Got it. That's really helpful. Jim, for you, we appreciate all the detail that you provided and that impact. Maybe if you could help us understand, after the deal closes, what sort of metrics and kind of information are you willing to give us? And the reason I ask that is we talk about synergies, talk about cross-sell. But I think underlying, what investors are going to see is the core Clearwater ex Enfusion is still growing above 20%. And at the same time, you're able to take where Enfusion is growing and potentially accelerate that. I get it becomes, over time, difficult to disaggregate them. But maybe can you help us understand, as you think about bringing these 2 pieces of the business together, how we should be thinking about what the cadence of disclosures going forward may look like?

Sure. Thanks. So I think that if you go to Slide, I think it's 12 of the deck, you'll see a number of the financial impact metrics that we've shown. I think it's important to understand that we continue to focus on 40% overall margin, net revenue retention of 115%, revenue growth of 20%. Those long-term goals remain unchanged. And when you look at Q3, we were nearly at 115% for Clearwater ourselves there in net revenue retention. And so what we wanted to do is provide a reset for our clients to understand that kind of our initial joint company and let folks understand kind of, even if you weren't to impact in any way the Enfusion metrics, what would it look like on a combined basis between us so that investors had an understanding of that. And that's that mid- to high 90s gross revenue retention and that about 110% net revenue retention. Now we will drive that -- those metrics right back to the levels that we kind of have articulated in our long-term goals. So I think we will obviously share more updates as we go through. But you're exactly right, Rishi. At some time, these 2 entities will combine together and we will think about things together. But I think our brand is to be very transparent and very clear with investors and do what we said. And so I think, to be blunt, I'm not sure we've thought through all of those pieces 3 quarters out, exactly what we'll do. But I think you have our commitment to be transparent and be able to show transparently how we're doing as a business.

We now have Alexei Gogolev with JPMorgan.

This is Ella on for Alexei. Our first, we were hoping that you could clarify a bit more, how is the acquisition of an Enfusion integrate with previously acquired assets, particular on JUMP?

This is Sandeep. So when you think about the 2 other acquisitions we have done, 1 is Wilshire and 1 is JUMP. So the Wilshire thing is pretty straightforward. I think the risk and analytics they bring to the market is, we didn't have that capability earlier any way near at that depth, and Enfusion does some already but nowhere nobody near that debt. So I think Wilshire is just easily accretive to our offering for clients. The second one is about JUMP. So JUMP is somewhat in a similar business, but it is obviously a much smaller business compared to Enfusion, which is a fully scaled globally leading platform. I do think that JUMP has built out capabilities of which are very, very important for the European market and perhaps very specifically also for the French market. And while we've been building out capabilities in bringing JUMP's business to the U.S., this sort of takes that away. It allows us to combine what Enfusion is built along with the capabilities of JUMP and create one comprehensive platform. And that's why in my remarks I was talking about bringing the 2 engineering teams together and sort of delivering for asset managers and hedge funds around the world. I just think that whole power becomes stronger with more IP on both sides.

That's really helpful. And for my second question, so if you look at the assets under administration right now at Clearwater, it's mostly fixed income and alternative assets. What work has to be done to accommodate the other asset classes in Enfusion ecosystem, primarily equities?

Could you just repeat that question, please?

Yes, absolutely. So if you look at Clearwater's existing assets under administration, the majority of them are fixed income and alternative assets. But Enfusion, of course, has a lot of equities on its platform. So I'm curious, as the assets under administration change at Clearwater due to the acquisitions and the introduction of -- more introduction of more equities, what has to change at Clearwater to accommodate the new asset classes?

Yes. Very much, I get your question. Thank you for repeating that. Look, if you think about Clearwater's book of record today, it has all the assets. So we may do a lot more work on the fixed income side, on the alternative side, but we do account today for all equities clients have. So we do provide clients with a comprehensive view today. As a matter of fact, as you might know, we've taken feeds from all kinds of front office systems, like Bloomberg AIM or whether that's a CRD or BlackRock's Aladdin. So we already bring in trades related to equities, fixed income instruments and structured products on our platform, so we see that as a pretty easy fix. I think we -- frankly, I think we integrate with more than 20 front-office systems, so becoming more natively integrated with Enfusion, I think that should be relatively easy to execute on.

Your next question comes from Dylan Becker with William Blair.

Jim, Sandeep, congrats guys. Maybe kind of jumping off of 2 other ones here. But on the data set in and of itself, you made an interesting point, Sandeep, that pairing with that general ledger functionality, kind of pre-trade and post-trade. How should we think about the opportunity to scale this data set across kind of different asset class types now, but pairing that with kind of some of the incremental workflows in delivering greater automation capabilities for both asset owners and managers kind of tied to that SaaS proposition?

Yes. Thank you for that question. When Oleg and Neal had talked to us, this was one of the most exciting things, which is that they have a really rich data set sort of on the pre-trade side of the house. And because they take the feed from the end result of the positions from that, we have a really, really rich data set on post-trade basis. So can we integrate both of these and derive insights and analytics? I think that is a really exciting possibility. That's number one. But the more obvious one is when you think about the reconciliation that happens between data we get from the front and middle office. Can we go out, and for clients, manage the data from the very front office all the way through the middle office and back office? And the benefits are enormous. Because every handoff, if you will, sort of creates reconciliation issues. And if it's all on one platform flowing seamlessly bidirectionally, then you obviate the need for reconciliation. And if we can do that, then of course, the efficiencies are higher, the risk related to the data reconciliation is much lower. So we do feel that the management of the data and the insights we can drive is, frankly, a very, very interesting aspect of this combination. So thank you for asking that question. It is super exciting that we would be able to do that for our clients.

Okay. That's very helpful. Maybe sticking on the international side. I know you touched on kind of JUMP was an initial expansion opportunity there, Enfusion has a pretty healthy presence. Maybe thinking about kind of the opportunity larger than it is today relative to the share of the business mix by incremental investment, but how you drive global brand awareness, I think about from the international segment.

Yes, we're very excited about this international business. And I know you all have been covering us for a while. We have continued to make investments and frankly seen good growth. But you also see us continue to spend money. And for example, if you look at Asia, the number of employees we have is single digit, and Enfusion has a very solid presence in Hong Kong, in Singapore and in Australia. So does that give us an ability to go to market more forcefully? Absolutely. Do clients get more confidence because we have boots on the ground? I think so. So all of that, I feel, is still in the service of can we accelerate their growth and ours? I think the same thing is true in Europe but somewhat a lower degree because we have considerable presence and so do they. And so can we combine these 2 and be more present, if you will? I absolutely believe that. And it's -- we haven't stressed on it enough, but being able to go globally to our clients and have the support infrastructure globally, I do think is a big part of this combination.

We now have Andrew Schmidt with CitI.

Congrats on this deal. A lot of good industrial logic here. Look forward to seeing how the deal progresses. First question on just the bridge to the 20% growth for Enfusion. Maybe you could -- I know you talked about this in the prepared remarks. Maybe break that down a little bit more. Some of it sounds like it's intensifying the core bits a little bit more and then there's some cross-sell activity. But maybe you could talk a little bit about the drivers there and the confidence level in the reacceleration? And as a part of that, as I alluded to, part of this seems to be intensifying the hedge fund business. I know we talked a lot about traditional asset management business. But maybe you could talk about more specifically just how you can intensify the growth in hedge fund side of things.