SS&C Technologies Holdings, Inc. (SSNC) Earnings Call Transcript & Summary

Hi, everyone. I'm Justine Stone, Head of Investor Relations for SS&C. Thank you for joining us this afternoon, both in person and on the webcast. It's great to see so many familiar faces in the audience as well as some new ones. One small but important item before we can begin the customary safe harbor disclosures, which you can see right behind me here. We'll be making some forward-looking statements today. So just take a quick look at those. I won't read the whole thing. But we have a great program for you this afternoon. We're excited to introduce you to our executive leadership team, who will walk you through some of our strategic priorities. Our technology initiatives, our markets and our financials, we'll reserve all Q&As for the end of the formal presentations, and we'll take Q&A both from the live audience as well as from the webcast. Also, for those who are here attending in person, we have a great kind of set of demonstrations going on. To the left of me, we have DomaniRx, we have Black Diamond, Blue Prism and Intralinks stations setup. So when you get a chance, make sure to take a look at those. There will be a brief break in the middle of the presentations for everyone to stretch their legs, get a coffee or whatever you may need. And then we'll conclude the presentations with Q&A and I invite everyone to stay for a cocktail reception when we're done here. So with that, I think we are ready to kick things off. Here's pictures of everyone so you can point them out of a crowd or pick them out of a crowd. But please join me in welcoming to the stage SS&C's Chairman and CEO, Bill Stone.

Well, let me reiterate what Justine said, is that we really appreciate all of you taking some time out of your schedules to come chat with us. I'm going to kind of just go over SS&C at a pretty high level. We have an awful lot of our smart people here. Some not so smart, but an awful lot of smart ones. So we're pretty happy about that. And I think you'll have an opportunity to ask any questions that you want and you'll get to understand why we believe that we have really a great future with lots of opportunity. When you look at us, it's like why did you buy this and why did you buy that, you're such a d****** and all that stuff, and I'm always smiling and going, yes really. And what are you worth? So don't think, I'm not competitive because I am. And we do things like Blue Prism because we believe in AI, and we believe in RPA, and we believe in machine learning, and we believe in natural language processing. And we also don't think you can dabble. If you're really going to lead and lead in these things, you got to spend money and you got to get the best people and you got to back them up. And so that's what we do. And same thing you have all probably read about that we bought Battea, which is a class action administrator kind of they take the payments and pay it out to the institutional shareholders. It's a great business, and we'll get into that a little bit more in a minute. But those are things, again, that we do and we do quickly, and we -- it's funny about us as we'd like to make money. I know you can really get Wall Street happy if you lose a whole lot of money and then give them back half of it. So we'd prefer to give you back several times what you invest in us, and that's what we try to do. So you can see we have a broad range of products and services. We like to think of it as a toolbox. We like to think of it as pieces to the puzzle. So things like Innovest, which we bought in the middle of COVID, we get to use InnoTrust. We got to take InnoTrust and put it with Black Diamond and create a product called Trust Suite so that RIAs can now offer trust services without having to buy a very large trust system. So it's something that we move and move a lot quicker than a lot of our competitors. And as you look at us, we're a $5.5 billion in revenue, and we're going to generate a $1.3 billion, $1.4 billion in operating cash flow and probably $2.2 billion, $2.3 billion in EBITDA. So it's a pretty big place with a lot of opportunities. If I go the right way, it will be better. So these are some of the things that we're going to try to touch on today, right, that we really do manage our costs and our costs primarily are our people, and we like to pay them well. And even during the great resignation and stuff like that, we kept paying people well. and then we try to get them cash faster. So we split our bonuses up into 3 -- I think 3 or 4 payments a year. So that everything doesn't come after the year-end when people might need the money during the year, stuff like that, we do all the time. We think that things being faster in your world, more complex in your world and more scrutiny. That's usually all good for us. So whether it was Form PF that came out or now going to T+1 for settlements, all that kind of stuff, people need to have people that understand technology and can deliver it in a way that they want to see it. Again, we bring a lot of products to bear. You'll hear about Genesis today. You're going to hear about DomaniRx. You're going to hear about a number of other of our products and services that we've brought out over the near term. And we think that's going to give us additional momentum. We also have new initiatives on really trying to move product into individual clients and services and the individual clients. Obviously, the digital worker process that we have in Blue Prism, where we've deployed, I think, 1,700, and that is really reducing our need to hire as many people and allows us to take some of the drudgery work and put it into bots. So that's been pretty effective. And we also are pretty focused on capital allocation. Besides the acquisitions we do, we spend a ton of money on R&D. And since we have such a big services component of our business, probably 80%, maybe, maybe a little more, we get 2 bites of the apple. We sell our technology. I think there's 40, 50 fund administrators that run Geneva, almost every large sophisticated fund administrator runs Geneva and we own it. And we run it too. And we think, arrogant as we are, we run it better than anyone else, given that we have the source code. So you can kind of see, even though we were spending $470 million in 2020, we're going to spend about $700 million this year. On our software businesses, really, the software we sell is the software we use in our services businesses. So we're getting 2 bites out of our investment in R&D, and that's why our margins have been and will continue to be quite strong. We still win. We win all the time. We win the biggest, most sophisticated ones. And when we lose them, we don't lose them for very long because people get frustrated and come back to see us. Now that's not true every time. But a lot of times, we were able to show them how we can do things in an automated fashion and other people are doing it in a manual fashion. And then they say, "No, we're not going to a manual fashion, we use excel." I rest my case. I keep going the wrong way, just one of my day in life. So on client relationships, we're trying to continue to improve our retentions. We realized that allows us to have an easier path to higher organic revenue growth. And you've all taught me, I pray to the organic revenue growth god, even though sometimes he's not the nicest dude in the world, but we do that. We pray to probably her and try to make sure that we focus on retaining our clients and our customer satisfaction is high. Our ability to cross-sell and upsell into them is tied to their satisfaction levels. And so we focus on that. And I think we continue to make progress. And I think we, hopefully, in the next quarter or 2. We'll also give you net revenue retention as well as gross -- as well as gross retention level. So I think it's something that when you have as many products and services as we do, it's somewhat more of a monumental task of pulling all those numbers together. And I'm very sensitive to our finance and accounting group, so we don't ever want to overwork them for God sakes. You know how that goes, right, Brian. Great. I talked a little bit about our digital worker process. We have some clients that are -- that might have in a fund might have 1,100 LPs, 1,200 LPs. And to proofread those statements on a monthly basis, it would take 2 or 3 days, 2 or 3 people. So we put a digital worker on that process and it takes 3 or 4 hours. They don't take breaks. I've never had a digital worker b******* me yet. They don't ask for raises. We don't give them any vacation, mean as we are. And they don't even get holidays off. So it really is a productivity enhancer, but you have to define what it's going to do, and you have to have a really smart person making that definition. Otherwise, what happens is that you had not such a bright person to design the process, and then you have not such a bright digital worker. So I think that's something that has become -- something that we're all focused on is making sure that we really pay attention to building the right specs and not going so fast has to be sloppy. Because I think digital workers do things very, very well, very, very fast. And if they're doing it very, very poor, they do it very, very fast. So we prefer they do it well and do it fast. It's amazing how we think that way. So we think that as we keep going through this process, Blue Prism gets better, we get better, we know more, and more people get trained, and you really get an opportunity. And I think that's something that's going to pay benefits for the next 10 or 15 years and probably long after that. I keep going the wrong way, I swear to God. They switched the button. So we look at capital allocation. We have been an acquisitive company for probably, maybe 34 -- 33, 34 years of our 38 years of existence. I think we bought 78 companies. I know it's more than 75. And they range from DST at $5.4 billion to Advent at $2.7 billion to Eze at about $1.450 billion, I think, and Intralinks at $1.5 billion. GlobeOp at $800 million. So we've bought a lot of companies, but we generally bought them when we were talking about times EBITDA. Now people that follow us pay times revenue, we still prefer times EBITDA. And also when interest rates were quite a bit lower than in some ways where they are today. So you can buy these companies and generate 40% EBITDA margins, and you're paying 4% or 5% interest rates, you can do that math, it works really, really well. When it starts to become 10, 12x revenue, and it gets a little more daunting. And I much prefer to protect your cash and mine rather than try to go out and stick our neck out too far. We raised the dividend again, 4%, I think, a little over 4% this year. We pay $1 a share out in cash dividends. I think we generate about $5 a share in cash. So we are very well covered on that. We do think our stock is undervalued, and we're buying it. We bought a ton in the second quarter. We've continued to buy in the third quarter. As we do acquisitions, the window kind of closes on us for buybacks for a while, but we're still aggressively buying our stock, and we believe we will continue unless we can find some more acquisitions that really meet our criteria and then we'll drive hard to do those. And again, when we go up against PE, we think we can outbid them. We know, as I tell them, they don't give us good synergies as we do. So I think it's something that is a valuable way of looking at these companies and continuing to comb the various markets that -- and various products and services that we're interested in. We hired Ezra Baylin about 7, 8 months ago, and he's done a good job for us and Battea, he shepherd into us. So that was very, very good for us. I went the right way. That's pretty good. Battea is a class action services, a lot of you might get them to on your personal portfolios. I don't know about all of you, but I generally toss some in the trash because it's too much of a pain in the neck. But with Battea, they have a great service, they do it for you and it's like found money. And when you have found money, most people are pretty excited about getting it. Some other great traits about Battea are they don't have any receivables. So when they collect -- when the court dishes out the money, Battea collects the money and then it takes their 15% and then sends the rest of the money on to the institutional investor. That's a pretty good model. So we think it's really going to fit well with our client base. Peter Hansen is principal shareholder, individual shareholder in Battea, has really been a good mentor for us on this. And Mike McCreesh, who's here, is the CEO, and we're really excited to bring him into our fold. We think there's a lot of stuff left internationally. We think there's a lot of things where we can get more clients. People want to know if how many of our clients are Battea's clients or vice versa. Battea has got about 800, 900 clients. We've got 20,000, 22,000 clients. If you do the math, at most, it could be 5%. So we think there's a 95% greenfields not that everybody buys securities in class actions, but there's plenty that we have. I think as you will see, as we go through all the different presentations today that we have something like 14,000 funds that we do fund administration on. We have something like $50 trillion in assets that we do various accounting procedures and processes. So I think you'll see a lot of things that we're able to cross-sell and upsell with Battea. I think it's a pretty interesting slide that I know everybody says that we can't grow, but we've grown from $1.7 billion to $5.8 billion from '17 to '24, that's a 19% CAGR and EBITDA has grown at an 18% CAGR. So I think those are reasonable numbers. And I can assure you, from my portfolio, it's worked out. But all down the way from operating cash flow, alternative assets under administration, and then also managing our leverage. I have a lot of people that tell me, you go private again if you wanted to. Oh! really. Yes, yes, we think so. Good. You'd be about 11x levered. I said, "Look, I can run this place 11x levered, but I'm taking my equity out." So again, we're prudent, right? We're prudent. We know how to take risk, I think. We try to measure it, try to understand it. And then we try to move fast when we have an opportunity that is going to really pay dividends for us. And I think that's been the secret for SS&C. I know sometimes we're a little boring, but I don't let cash burn a hole in my pocket. Wall Street with all the different bankers and helpers that come to see me all the time. They look at that golden goose. And I said, we have time to rip out golden goose and get those golden eggs out of there and they look at those golden eggs and say, wow, beautiful golden eggs and I say, looks like a dead goose, right? Because you've got to build the next golden eggs, right? You can't just stop. You got to keep going. And I think that's something, again, that we have tried to do as a company is to recognize that it's not always springtime. When it is wintertime, bundle up. We don't need to go out and prove we can spend more money than anybody else. So that we don't. And I think that's, again, something that has served us well. And given that you've heard me for about 20 minutes, I just want, again, to reiterate that we're focused. We work at it. We like to win. And I really appreciate that I have a partner in this like Rahul Kanwar, who I will introduce now.

Thanks, Bill. That's how it goes. So Bill obviously set the stage for the kinds of things we do. A couple of things on just the markets that we're in. right? We're mostly financial services and then we've got a health care business that we have really high hopes for. Both of those markets, we view as being really good for us, lots of growth, lots of activity, plenty of new products and services we can offer. And in general, our customers really across the world are sophisticated. We do very mission-critical kinds of things for them. So that contributes to the high retention rate that Bill had up on the screen. But it also means that if we can do a really good job for them because it's so important, they're willing to pay us more, they're willing to buy more things from us. And that's really what we do. So just kind of looking at the depth and breadth, and we've got a health care business where we're doing pharmacy claims and medical claims We've got the leading or one of the leading M&A diligence providers and virtual data rooms. We've got some of the, Bill talked about, Geneva and a few other products like that. Well, we've got some of the leading asset management, investment workflow, front office, middle office, back office software and our Wealth and Investment Technologies business. We've got intelligent automation and analytics that we have, once again, really high hopes for, and that includes the Blue Prism company that we acquired, but also our regulatory tech business, which we think has a lot of opportunity. We've got the world's biggest independent transfer agency business in GIDS, along with a host of other capabilities and the world's biggest fund administrator, right? And that's our GlobeOp business. So if you kind of go across that, once again, really good markets, leading products and lots of opportunity. So some of those products, and once again, Bill had a slide up on R&D and our investment in R&D. We take it really, really serious. I think there's a couple of things that jump out, and these are some of our products and services. But a couple of things that jump out are: one, we're integrating capabilities, right? So we've got maybe 100 different things we do. And when it makes sense to bring them together to be able to offer a larger product or service or solution for a customer, that's what we're trying to do. So Black Diamond and Innovest, Trust Suite. That's one example. Genesis, which really reflects the latest and greatest that we have in our new platform for asset managers. We've got -- the other thing that I would point out on this page is -- we finished development efforts, right? We're not afraid to take on large projects. We make sure we complete them. We make sure they're market tested, validated, we can get revenue off of them. So DomaniRx is 1 example of that, where multiple years of development, hundreds of thousands of development hours. We went live in January of this year, and it's been incredibly successful. Eclipse is another example where, once again, when we acquired the Eze business, it was sort of development underway. Now we have a thriving business. So that's kind of -- and maybe one final point I'd make on R&D is we are embracing AI, but unlike some of what we see in the marketplace, we're trying to do it in a way where we can -- it's practical. We can implement it reasonably quickly, and we can turn it into revenue pretty quickly. So as an example, in our Intralinks Deal center product, we now have an AI tool that can digest the thousands and thousands of documents that go into a data room. And you can converse with in a natural language query format and say, tell me about this company, tell me about risk factors, tell me about growth rates, Tell me about who the peer group is or anything else that you want to do. And what it might do is take a diligence process that might have taken you a couple of days to try to figure out what's in there and turn that into a couple of hours. And those are the kinds of things that contribute to better win rates. Similarly, in our Blue Prism product in the next generation of our Blue Prism product, we're using generative AI to, once again, on a chat prompt, be able to say design my workflow to do this or add this step to my process, the same way you would talk to somebody as opposed to going out and trying to figure out how to put it into the code, right? It makes it easier to use, we think that translates to bigger deployments. So we've got great capabilities. We're in great markets. We need to make sure continuously that we're investing in the sales process, right? And that's what we've always tried to do, it's what we're trying to do. There's a lot of things on here. There's really a couple of themes. One, it's all about people. right? And that's not just true for salespeople. It's true for really all of the functions that we have. But we're investing heavily in our sales force. We're making sure we're hiring the right people, we make sure we're training the right people. We're spending a lot of time on, both on training, but also direct access to our senior executives and our subject matter experts. And then we're making sure we're supporting them, right? We get into sometimes these complicated what can be longer sales cycles, and there's a lot of information. There's a lot of information that customers have that they give us that we have to digest. There's a lot of information and a lot of things they would like to see about our capabilities. A sales force well supported by the experts. They show up, they show up prepared, they impress and in a lot of cases, are able to demonstrate things that are different than what that customer prospect has today. That's one of our advantages. It's what we try to do. The other part of this is process. We are continuously taking a look at our process for collecting leads, how coordinated we are across the different parts of the company, who's going in to do that initial fact-finding, what's our process for proof of concept and other things. So really, the steps that turn a prospect into revenue. And then the final point, accelerating sales and implementation time lines done well, that translates to a contract getting signed faster, right? And then done well using things like Blue Prism and other automation capabilities, we can implement faster, right? And all of that means the revenue shows up faster, and we've got a happier customer that is taking advantage of really what they wanted to take advantage of when they selected us. We have 20,000-plus customers, right? We think we already have access to the best names in the markets that we're in. And a big part of our opportunity set is, right now, while we're -- some of them are really big customers for us. We represent a really small portion of their budgets and what they spend money on with others or in-house. And so a big opportunity for us is to make sure that we're listening to them. We're disciplined about collecting feedback. We're disciplined about monitoring satisfaction levels. We're disciplined about making sure projects get done. And really the -- one of the big things we have done in the last couple of years is, we've made sure that, that feedback, right, whether it comes through our account managers, whether it comes to our sales teams, makes its way back into the products. So that the product road map and how we figure out what we're going to build yet next or how we figure out where kind of the investment needs to be is driven by, let's go make that customer even happier, right? Or let's -- this is another capability that they need. And if we keep doing that, things at the bottom, which are all kind of the good things, the rewards, right? They pay us more. They buy more things from us. They act as great references and send us their friends. Those are all good things that happen, right? And it all kind of comes back to high levels of execution, paying a lot of attention. So just looking forward, this is an effort that we have spent a fair amount of energy on and we're probably going to continue to. Taking those 20,000 customers, taking the 100-plus products and services, making sure that where it makes sense, and it doesn't make sense everywhere. But where it makes sense, we've got a holistic coverage model and that we are approaching that customer as really a relationship where we have an opportunity to deploy a solution, right? So much more what's good for the entire enterprise, bringing all of SS&C to bear, making sure our -- the right experts are in the room, making sure we've got good touch points and matchups and relationships. We think translates to, and we've seen early signs of it already, translates to better win rates, more satisfied customers and for us, more of an ability to make sure that we're successful in deploying our products. So some of that is a little more targeted in terms of here's a sector or an industry or a type of client or a type of fund or a fund structure that we have these 4 capabilities for and just making sure that, that story is backed up by great integrations, great implementations, lots of references, right? And that's just going to keep trying to do that. So Bill talked about some of these things and I have as well. We're in really good markets. We have lots of great products and services. We've got a good sales process, right? We think all of that should translate into win rates and it does. But those prospects when they're sitting across from you and they're looking right at you, they're trying to assess a couple of different things, right? And that's really how we try to set ourselves up. They're trying to assess the expertise and knowledge of the people that are going to be, in particular, the people that are going to be on their teams. People that they're going to interact with every day. They're trying to assess, is this a solution that they're going to buy that's just going to stay static? Or are we going to invest in it, and we're going to keep evolving and enhancing. They're trying to figure out how that technology matches up with others in the marketplace. Many of them, as I've said, are extremely complicated, right? So whether you're deep in the structured loans or you're deep in credit derivatives or you have millions and millions of transactions every day because you're higher frequency and you need to do trade compression in order to get a system to handle. Whatever that is, they want to make sure that you have some expertise in that specific problem that they're trying to solve and that you're going to back it up with a commitment to client service, right? So that's really how we're organized. It's what we try to do every single time. And this is who does it, right? So it really does come back to our strengths, some of our most important things that we have are the technology but it's the people that built those systems. It's the people that maintain those systems, it's people that take care of our customers. So we try really hard to make sure we take care of our people, right? And what that means has evolved, right? But today, what that means flexible work, right. Lots of flexibility to balance kind of where you work from. And then being SS&C, we have lots of metrics to make sure the work gets done, right? So that's -- those things go together. We pay a lot of attention to compensation, to benefits. There's maybe 70%, 72%, 73% of our employees around the world, 27,000 people around the world have equity in the company, right? So we're really trying to -- and this comes from Bill goes through the place. We're really trying to have an ownership culture. And we tell people all the time, act like it's your own money. And so that's a part of what we're trying to do. I think the final point on this is the work is interesting, right? If the work is not interesting, you can pay people really well, and they likely will stick around for some period of time, but the best ones will get bored, right? And they'll go do something else. But with what you can do is take things like Blue Prism and other automation efforts that we have and take the routine, the repetitive, the mundane out of it a little, right? And in effect, elevate the job to be more analytical, make sure that you're solving problems, make sure that you're making a difference, that translates into a far more rewarding cycle. And that's a big part of what we're trying to do. With that, I will turn it over to Anthony Caiafa, our Chief Technology Officer, to take you through his organization.

Make sure the button works. Everybody. So one thing I want to walk everybody through is the size of the SS&C technology and engineering department. So we have 5,500 technologists plus globally across the world, right? And we're roughly working with 500 million-plus lines of code throughout all of the different products, repositories, internal services, external services, et cetera. One big initiative that we focus on is building out global standards, global design practices and global architectures where we could standardize that across the entire firm. Because it allows and it helps us to get product out faster because we're continuously deploying code and it helps us get different services and different features out to market. It additionally helps us reduce costs, right? So if we have multiple teams across the globe working on similar platforms, we're not putting together all these disparate systems and trying to plug things together. We're just focusing on building out that standard component. And the nice piece of that, additionally, also, it helps all of these engineers, there are quite a few, collaboratively work together in a lot of these development environments. I wanted to highlight some of the numbers here, right? So again, 5,500 global technologies across the world, about $700 million in R&D budget. We're supporting 2,300-plus internal and external services and applications. Those are the ones that are powering the customers in the front end, but also powering customers behind the scenes. We have a private cloud, which I'll go into later, that's hosting about 60,000-plus virtual machines across the world, across 65 different data centers that we're operating in. We store roughly about 80 petabytes of customer data, and we see 35 billion API calls a month. And we're managing 750 billion connections -- network connections that are coming into our environment. The scale that the engineers and the teams are working on, it's an enormous scale. And while -- they're doing it all while building out modern architectures, building out scalable systems and getting products out to the market very quickly. You'll hear -- you heard Bill mention it, you heard Rahul mention about AI, and you heard the other teams mention different components of where they're working in AI. Here's a peek on some of the things that we're doing. But as you could imagine, what needs to happen behind the scenes to power all of this infrastructure, to power all these LLMs to manage all of the data flow to keep everything secure. It's a really nice, tightly built technology stack, right? So we'll have -- whether we're improving developer time with code generation that's looking into our different repositories or we have LLMs that are built that are focused on detecting wire fraud. All of these different pieces, again, are built on simple simplified architectures that all of the teams can go across. So while we're doing that, one of the biggest things that we're always thinking about is the security of these pieces. So one thing that we -- that was worth highlighting for us is we built out a service called Tarvos. It's an internal service for now. But what it does is it focuses on the auditing of all the data that comes in and it helps us build guardrails around the data. So we could build all different types of safety, whether it's protecting against prompt injection or doing data redaction against sensitive information. And it allows us to essentially filter all LLM requests through a proxy, which is what Tarvos, and then really protect the customer data and then our internal data. So our big focus for that is security because we want the developers to move fast. We want them to keep building. We want them to not have to worry about making any mistakes. This helps them remove all of that worry, right? And it also really heavily assists with a lot of the hallucination problems that you'll see inside of the AI services. So this service has been very beneficial for all of us. One thing to mention is that we -- as we've been building infrastructure, we've had 36 years of being able to build infrastructure. We know financial services, we know health care. We know how to build out large scalable technology stacks. So one thing that we have been focused on releasing on is SS&C managed IT services. So we're helping firms manage their IT department from the top of the stack all the way down. So whether it's desktop as a service, whether we're managing your infrastructure in our private cloud, whether we're hosting you in our data centers, whether we're helping you with [ BC-PDR ] or we're helping you with cybersecurity services. We're now bundling this up and selling it to customers. So one area that we've had a significant investment has been our private cloud. So within our private cloud, we're hosting all of the different applications that you'll hear about today, plus a lot of the other back-end services that power all of those applications. Just going over some of the numbers, we're seeing 20,000-plus changes a day in firewalls. We have thousands of products, thousands of users that are running in here. We have 100 gig circuits that are uplinking everything. We've built this for -- we initially started building this internally, so we could remove developers' time to have to worry about managing infrastructure. We have things like Kubernetes as a service, database as a service, Kafka as a service. So a lot of those technology and more modern technology components, we've baked into this private cloud. It has entire GPU environments for folks to train models. And it has really changed the way that our developers and our customers have been interacting with a lot of our technology. It's globally deployed. So concentration domestically, but we have them across Canada, Amsterdam, Australia and there's a few new ones launching in the U.K. this year. One area that we should mention is our security. We've spent a significant amount of time focusing on how we've reformed our security and our security framework within SS&C. So if you see over to the left, we're processing quite a bit of whether identity jobs, which is all happening through Blue Prism or between the incidents, the amount of tests that we're doing. And we've changed everything in our security space to act as code. So it's little bit further away from the policy side of how most security firms kind of look at it, and we focus heavily on the engineer being able to build security through code. We pick our partners pretty widely. We go -- we do heavy vetting on all of them. And these partners will change from time to time as security evolves and as things become more intelligent out there. But we have built this architecture, and it's -- we're very comfortable with where we're sitting with it, and our partners are constantly working with us and we're constantly evolving their platforms as well.

Thank you, Anthony. We're going to take a quick 10-minute break that came quickly, and then we're going to dive into the business units for them to present after. So take a look at the demo stations, grab a bite to eat, grab a water, and we'll meet back in about 10 to 15 minutes. [Break]

Great. We are going to get started with our business unit presentations and we'll start with Bhagesh, who will go over SS&C GlobeOp.

Thanks, Justine. Just a quick intro. My name is Bhagesh Malde. I joined the firm 7 years ago. I run the GlobeOp business unit, which is primarily our fund administration business. Prior to SS&C, ran similar businesses at State Street and JPMorgan. And just before we came on, myself and my fellow business leaders, we all voted and they unanimously agreed that I have the best business, right? And I'm sure they're going to confirm that when they come on later on. So just a simple introduction to the GlobeOp business. Rahul and Bill mentioned we're the biggest global fund administrator, multitude of people, 7,000 people across the globe, considerably bigger than any of our competitors. But really, I think what's important is we go across all of the asset classes, a customer comes to us and they start out as a hedge fund. Then they want to launch a private equity fund or they want to go into private credit or beyond into our natural resources. We have the capability of servicing all of them. And so we are that true one-stop shop for our clients. We tend to attract the biggest and most complex clients in the industry. So even if somebody starts with another administrator, they work their way up towards us. So we're proud of the business that we've got. And as you can see, this was actually a unique year for the business. So we grew more than we grew last year but we actually added no people in terms of overall headcount. We added a number of digital workers over 600 digital workers between last year and this year, and we've been able to increase our capacity without adding headcount. So that's significantly different to any other competitor in the industry. And so when it comes to the war for talent, we've been able to -- we have some natural attrition going on, and we certainly weed out the low performers, but we've been able to go out and hire the best people in the industry, but overall, not increase our head count. I think what's also important is the geographic growth that we've had in our business, we've set up new locations. I'll talk a little bit about that later on. The competitive strengths that you see here and the client logos that we put just underneath, I'll just give you a few examples that bring out those competitive strengths. So Lighthouse, large hedge fund client. They started fund administration with us, then moved on to us providing BPO services to them. We then lifted our key people from them. Now we offer them a managed IT service as well. And that's an area that Anthony and I collaborate on together to provide that world-class IT infrastructure that this client can leverage. We plan to expand that product out across our marketplace of clients. Ares obviously well-known private credit focused private markets fund. We support their middle office globally, and we do fund administration for them as well. We recently got a mandate from them for their Asia business. They're in acquisitive mode out there and new firms that they buy will come on to our platform. Affinius was a spinout of USAA. It's a real estate focused manager. We lifted out 60-plus people last year, and we're the exclusive provider of fund administration services to them. And right now, we're helping them expand into Europe. Elliott Management, well-known activist hedge fund. We got a mandate from them to service a complex array of mid-tier entities that they have. They have over 1,000 SPVs globally, and we're providing the accounting services for those. But more importantly, we're extracting data from those layers of SPVs and giving that back to Elliott. ADIA, sovereign wealth fund from Abu Dhabi. We established presence last year in Abu Dhabi, and we've gained mandates from ADIA, and we're helping them transform their operation. We're very confident about the footprint in Abu Dhabi and where that's going to take us into the Middle East. Point72 and Millennium are just 2 examples of the dominance that we have in the multi-manager sector of hedge fund space. So we service 6 out of the top 10 multi-managers, and we attract new ones every quarter. And that's because with the depth of experience that we have and the technology infrastructure that we have, we can support those complex hedge funds as they move into high-frequency trading, many of them doing millions of trades a month. We don't have many competitors that can offer that service to them. So as they get bigger and more complex, they tend to gravitate to SS&C. This slide gives you an overview of the landscape in the market, and you can see that the industry is over $22 trillion as measured as of last year. We expect that to grow at sort of 7% to 10% rate for the next several years. What you see, if you add up the slices of the pie is the private markets, private equity, real estate, private debt, some of the other categories here, add up to about 75% to 80% of the market overall. And that also reflects the investment we've been making in our private markets business. Our private markets business is just over 30% of our total fund admin business, which has been growing at a faster rate, really given what's happening in the marketplace. Most forecasters expect alternatives industry to grow at 7% to 10% for the next 5 years. One area where we've seen an explosion of growth is in the democratization of alternatives with a lot of our clients offering retail offerings to the retail market. And again, where you switch from institutional investor base to a retail investor base is not something many of my competitors can offer. So the capabilities we have, we tend to attract all of that business. The biggest trend that I see from our client base is looking for more technology solutions from their administrator. They want to extract data from the investments that they're making and use those in the investment making process. And again, the capabilities of SS&C tend to put us head and shoulders above our competitors. Here what you see are some of the priorities that we have in the business. We expanded into Abu Dhabi. We've expanded into the Indian market, which is growing at a very rapid rate. We've expanded and put more boots on the ground in Australia. Again, deep pools of capital, heavily investing in alternatives. We established a solutions group that can go and help clients figure out what they need and that's been a real source of business for us where we go in and consult and then we have so many solutions available and clients tend to buy from us. I mentioned the expansion into managed IT services. We think that's a great future product for us. Biggest investment we've made across the board is our next-generation platform. which is a data-focused platform. So we have lots and lots of tools to extract data, and we put them into a common platform and as clients are looking for more data. We can provide that enhanced service to them. I think that's been especially useful to us as we've seen a rapid growth in hybrid funds that are investing in liquid areas, but also illiquid areas. Those tend to pose big problems to other administrators. And finally, Bill mentioned the Battea acquisition, we hope to close that deal soon. The cross-sell benefits to have both ways, selling out my products and services into their client base, but also taking our existing client base and offering those services, which are pretty compelling as well. And I want to thank you.

Well, let me just move this mic up to a normal person's foot. All right. Hello, everyone. My name is Nick Wright, based in the U.K. And yes, apparently, the #2 most important business line here. And so if you think of Bhagesh's world as servicing alternatives, think of my world as servicing -- here we go -- so my name is Nick Wright. So think of my world as service in non-alternatives. So asset managers, wealth managers, insurance companies, brokerage houses, the full range of services. So we grew up, you heard Rahul talk about transfer agency. So the business pretty much grew up as a transfer agent servicing regulated funds. Increasingly, we're evolving it from that into broader services to those clients, whether that's accounting, middle office, other types of services. But still, the bulk of it is around servicing and investors. And you'll see and we announced, I think, 6 months ago, that we've brought the traditional GIDS business, so that's Global Investor and Distribution Solutions and our retirement business together. Why have we brought them together? Because fundamentally, they're all about servicing end investors. Not just the end investors, but their advisers and distributors, anybody who's focused on that end investor. So a lot of what we do is helping our clients grow how can they retain investors? How can they gain new investors? What tools can we give them to grow, whether they launch new products, whether they try and attract new investors into their products, et cetera. We are providing to some clients just technology. We're providing to a broader range of clients, technology plus outsourcing and then increasingly the full range of the SS&C product range. So working with Bhagesh's team, Anthony's team, Karen's team, across everything we do. So in terms of the market trends and you see the markets we're in, we've got strength and you'll see on the charts on the right-hand side, we're pretty much in strong market position wherever we are. But we've got huge opportunities across that by launching new products. So how can we support broader ranges of funds? How can we build new solutions, how can we get into new market segments? How can we close the gap on looking at ETFs, get into that space. And we're looking at new markets where we do. Bhagesh touched on Australia. We're also looking at Australia. We've grown down there. We did the acquisition from Iress down there. You'll see that makes us the #1 player in Australia, but also broader Asia, Continental Europe, South America, South Africa. So the desire for our range of services really stretches globally and then the broader point about how do we offer new solutions and services. So that's where we join up across all the business lines, so we can provide the full front to back. I'd say we've got an unparalleled client list. But the point here is a number of people will say, well, what are the rest of your business is your service in regulated funds and our U.S. mutual funds as an example, are they going to survive? Are they not? Is there a trend to ETFs? Maybe. But the point is that end investor isn't going anywhere. They may change what they invest in, which is why these different channels of asset manager, banks, insurance, retirement, wealth, superannuation specific to Australia, but global trends. Those end investors are just moving between those different channels. Our business is around servicing those end investors. And as you look at those names, there's some of our largest clients that we have across SS&C. They are also very long-tenured clients, and they're also typically on long-term contracts. Now that gives us the growth. And if you look across asset management and banks, you'll see a bit of a who's who of the firms in that space, great relationships, as Rahul and Bill touched on but how can we cross sell? How can we bring other services to those organizations across insurance, retirement, wealth, superannuation, that's really the growth engine in terms of bringing in new names. So you look at some of those names there. They are the more recent clients that we've brought on board. But as we touched on and when you think about those secular trends, One of the ones we called out was that transfer of wealth. That transfer of wealth is exactly what we're talking about that the wealth is just moving into different products and through different channels. It's not leave in the market because people are still looking to invest their wealth. And then as you look at strategic priorities for us, some of what you've heard already. I've touched on geographic expansion. That's really important to us. We -- by having that geographic footprint, we can truly offer 24/7. So if you think about a global model in the world becoming more of a global place. And our clients want 24/7. They don't want -- when we've got a couple of thousand people answering phones from end investors. They don't want to think, "Oh, I better call by 5:30 or the phone line or I got to call it 9:00 in the morning." They want to be able to call 24 hours a day. As we're global, there's no point in us having a Western working week. We've got to have a global working week, which is 7 days. We're rolling out, which Anthony and his team are working on, a new contact center technology and solution, which will enable us to do that. and we'll look to do that more and more as we go forward. And I think I've rolled out 660 digital workers. So slightly behind the #1 most important business line, but pretty close. And exactly what Bhagesh said is the benefit we get. It creates capacity. It also means we can improve service. It also means we can do things quicker. It also means we can attract and retain talent because people are doing fun things, right? And that's been a big, big success for us. And then look like and you heard it of Bill's mantra, we like to innovate. We like to build new things. So for me, that's all about the things we touched on. How do we help our clients grow. So how can we create a customer book of record, so they can see where their customers are truly investing. How can we provide data and analytics and working with Rob and team on that. We're playing around with using the meter for investor education. How can we help our clients around that. We've built, using AI, an advice assistant, where we take a lot of the work away from the clients. So they can focus on attracting the assets in, we can get them on board their channels quickly enough. So lots going on, excited about where we are. Maybe next time we'll be here, I can be the #1 and most important business line. But with that and propose after this, Bhagesh, can I introduce Karen Geiger and Steve Leivent.

All right. Now we're going to have the awkwardness of sharing 1 mic at 2 different heights. But we will try. I'm Karen Geiger.

Steve Leivent. Boy, the duet later is going to be really awkward, right? So Steve Leivent, both of us came here through the acquisition of Advent in 2015, so coming up on 9 years now. And we run the Wealth & Investment Technologies business. If you're wondering what that business is, it basically is a roll-up of our technology assets, largely focused on the investment life cycle and comprises of businesses like Advent and Eze and Innovest and most recently, the I&IM business. I think one of the things that is important about the way that we're running the business right now is we're not running them like the legacy names that I just rattled off. We're basically running them really in structured, focused market segments. And so the thing we think that this is important is basically, some of our competitors try to bring a one-size-fits-all tool to serve multiple markets. We think that by taking the tools that were built to service the hedge fund market or the wealth management market or the asset management market and wrapping it with people in sales and implementation and service and R&D. That really understand those end markets and how our clients ultimately make a living is one of the things that's going to make us very successful. And so you're going to hear that a bit about the way that we're focused and really the trends and strategy in each of those markets. We highlighted a handful of products here. As you can imagine, this business ultimately, I think, is made up of something like 30 of the 78 acquisitions that Bill mentioned before. We have dozens of products, but these are the ones that we're seeing the most traction with today, the ones we're leading with and the ones that we're going to be talking about today. All right. So I'm going to start with wealth. And just for context, we gave you a little bit of a sort of market size and what we think the total opportunity is in each 1 of these markets. So you have sort of a relative understanding of as we talk about these, how big the opportunity is. So starting first and foremost is wealth, Black Diamond is the product that we lead with, right? It is the product that originally grew up in the independent adviser space. The advantage there is that's a rapidly growing market, perhaps 1 of the fastest growing in the wealth segment. And we've created basically a great brand, a great reputation and it's 1 that we plan on continuing to lead in. What we then did, as Bill mentioned, with the 2020 acquisition of Innovest, we realized that advisers that were sitting in trust companies and banks also had a need for great solutions. And really, the only thing that was missing was that back-end accounting and trust custody platform. And so what we've done is we've connected Black Diamond with the InnoTrust product we call Trust Suite. And we've really had a lot of success selling into the Bank trust base. And we think, as Bill mentioned, it's about $1.5 billion total addressable market. We think it's going to be a big one for us over the next couple of years. Partly because the incumbents in that space are aging. And we feel like we have a real opportunity to win market share as firms are looking for the platform to run for the next generation of their business. Going back to the independent space, those competitors are struggling as well. What we see is lots of leadership turnover, some acquisitions. And so there's a lot of things happening in the market causing larger and larger firms to come and look at our solutions. So we think it is a great opportunity for us. And lastly, we have a great back sell opportunity. We have about 2,500 firms that we serve in our wealth offering today. We can sell them our CRM solutions. We could sell them a cord, which is basically alternatives aggregation delivered out of Fund Services business. We're pretty excited about selling them managed models delivered by our [ alts ] business as well.

Okay. I will talk about our alternatives business. So in this space, we operate at all the way from the very high end of the market, so things like a Millennium or Point72 down to the lower end of the market where you might be dealing with a new start-up hedge fund. At that high end of the market, we lead with Geneva as our fund accounting solution, coupled with our Eze OMS solution for the front office capabilities. And the trends that we're seeing in that space is just growth and complexity. So firms are diversifying into different strategies. We're seeing a rise in loan strategies in firms launching private equity and private credit funds and the structures are getting more complex as a result. You'll have structures that have characteristics of both open-ended and closed-ended funds. Bhagesh talked about the same trend that he sees in his fund administration business. And why Geneva is well positioned in this space is that it was purpose-built to handle any type of asset class in any currency in any type of structure. So if a firm is looking for a system that can do any of these various permutations, of strategies and structures. That's where we're really well positioned, and we continue to be the market leader. And with Geneva being the system behind our GlobeOp fund administration business, the largest fund administrator in the world, we have thousands of our own internal employees using the system every day that's feeding into our product road map. So there's really no use case that we haven't seen, and we continue to heavily invest in R&D on that product. At the lower end of the market, we lead with our Eclipse platform that is a cloud native front-to-back solution. Its original mission was in the long-short equity hedge fund space, but we're also seeing that market evolve as well and get more complex, where firms are wanting to diversify into fixed income and derivatives. Even if they're not trading those types of assets on day 1, they are looking for a system that they can grow with. And what we've done to address that need is that we've actually combined the Geneva and the Eclipse product development teams, they are 1 team now. And that's enabled us to take the Geneva accounting calculation engine and use that behind the scenes in Eclipse. So this is an active project that's going on right now. It's going to be completely invisible to an Eclipse end user. They're thinking they're just using this modern cloud-native solution, which they are, but we've unlocked the ability for them to have the capabilities for all the asset class coverage that Geneva has. So that's going to be rolling out over the next year. I will then move on to the investment management space. So of the 4 markets that we're going to be talking about today, I would say it's probably the most crowded in terms of competitive landscape where there's both established providers as well as newer start-ups that are looking to get into this market. But we do see an opportunity here as well in the sense that firms are really looking to displace aging tech and in many cases, wanting to consolidate platforms across their business lines. So for example, they might have an investment arm and a wealth arm and they're wanting a single platform that can cover both, and we're really well positioned there. How we are tackling that is we're taking our best-of-breed applications that have come out of Advent as and most recently, I&IM, and we're transforming those applications into a single cloud-based platform that we're calling Genesis. So you heard Bill talk about that. It is a -- it's a modern data platform. It offers a lot of modularity and optionality to cover everything from portfolio management, to trading, accounting, reconciliation and operations, and we also offer managed services for firms that want to outsource pieces of that. So that is coming to life, and it is an area that we're very invested in. Did want to point out that you might have heard us talk about the Aloha product, which is a new product that was built in our I&IM division. That product is now being merged with this Genesis platform. So the tech is remaining, but we are simplifying it and having a single platform, single brand that this is going to be taken to market under.

All right. Last but not least, our insurance business. So it's obviously the foundation of SS&C, really the original business here. And it's one that we intend to continue competing in and winning and really, what the storyline here is singularity is the platform for insurance that is going to modernize the way that these large complex portfolios for insurance companies are ultimately managed. We have lots and lots of clients today running camera. They've been on camera and some cases for multiple decades. We think the singularity platform is going to be the thing that allows us to retain those relationships for many more decades. And then we're planning on leveraging those relationships and successful implementations to extend into the relationships we have in our health business. And the interesting part is what we are seeing is as firms make this shift into a platform like singularity, they're often almost always signing up for managed services as well. And so the benefit there is it's not just the license, it is the license plus ongoing operations, which increases the ticket 2 to 3x.

Okay. So our strategic priorities are mainly around bringing these businesses together that were previously operating in silo. So Advent, Innovest, I&IM, really thinking about that as 1 team organized by function. So starting with sales, we've brought the sales team together. We now have a single global sales team organized by those market segments that we've been talking about. Then within those market segment focused teams, we have sub teams that are focused just on new logo sales. So we have a real focus on growing top line revenue through new logos and new wins. And we support those teams through our marketing engine, our influencer programs and our inside sales team. On product transformation, we've talked a lot about this platform strategy. There's work behind that. There's development work where we're bringing together technology and transforming them from products into platforms. And our goal is to make sure that there's seamless access to data and there's a seamless user experience across these platforms. Our go-to-market strategy is evolving in the sense where we have a real focus on branding and simplifying our story to the market. So as Steve said, we have dozens of products. And we really want to simplify that and quite frankly, eliminate some confusion that might have been in the market where we have lots of products and clients are coming to us and prospects are coming to us wanting to understand what are the similarities and differences between these products, help us understand. So what we want firms to be able to do is come to SS&C, and we take a consultative approach to say what is the right platform for you based on your firm profile. And then lastly, I talked about expanding new logos, but we really continue to have a focus on existing clients and maintaining excellence in client satisfaction, client tension, our ability to increase prices by adding value back to our customers and then upselling them on new modules, new products and our expanding menu of managed services. Great. And that's it. And I think next, we have Ken and Bob.

Hello, everyone. This is Ken Bisconti and Bob Petrocchi, and we are here to brief you on the SS&C Intralinks business. Briefing point number one, we really have a great business. Really great. And we're excited to be at the helm. At the opening, Rahul talked a little about some of the advancements we've made with AI technology. And if you think of the markets that we serve, it's really a perfect space for it, huge amounts of data that have to be piled through compiled and check for accuracy. So we are really excited about the way we're positioned to go help our customers drive that transformation securely through their organizations. So a little about the business from a statistical standpoint. Last year, we did $496 million in revenue, 19% growth. So 19% growth is absolutely a solid number, but I think the thing that jumps off the page from our perspective is the fact that the M&A markets overall, the last few years have been on a pretty steep decline, and we've still been able to grow the business. So how do we do that? And the answer is largely around our diversification process. So M&A is definitely a big part of our business, but we also have a significant presence in the alternative space. Most of the large banks across the world globally are using us to do secure document exchange externally. So anything that they want to exchange with our platform is also a big part of the use case that we use. And our Genesis is the beginning of the business is in our -- from our debt capital markets business. So diversified there, for sure. We have 1,100 employees globally, and I think very impressive statistic that we have over 6.6 million users on our platform at any particular time. The business is highly transactional. Many of the transactions are multiple transactions from the same group of users, but we have, again, a globally distributed sales organization that is knocking out about 10,000 deals a year. So if you do the math, about 370 sellers doing 10,000 transactions a year, it's a really significant and impressive. So if you wrap all that up, you get a very, very successful award-winning provider of M&A technology.

It's a high-margin, multi-tenant SaaS-based business, primarily a software based business. We have focused on creating portfolios of offerings that fit our markets. So a deal center portfolio that you'll see a demo in the kiosk that's focused on deal execution in the full life cycle of deal execution, whether that's creating IPOs, managing carve-outs, creating corporate bonds, syndicated loans, et cetera. We have a focused portfolio on deal execution. We also, on the alternative side, serve the entire fund life cycle. So from fundraising to fund reporting, portfolio management, deal execution and investor portals, we also serve that. This network that Bob talked about of over 6 million users is something that we use to our advantage in that we have half a million, over 0.5 million LPs that enjoy getting their fund reporting information through our investor portals. That drives demands on the 3,000-plus GPs out of 9,000 GPs that have over $1 billion funds that come to the Intralinks platform because their LPs prefer it. We do about 1,000 fundraises a year across these GPs and again, leverage this network effect across the millions of users that we have. These users enjoy and choose Intralinks usually because of our technology, our white glove service and support our security and, frankly, also our synergies with SS&C. We can provide not only software that you can manage yourself, but we also provide the ability to manage it for you. Just commenting on that. There's a lot of questions around our portfolio, given the transactional nature of a lot of our business. People always ask us, how do we manage in downturns in the market and how dependent are we on deal count. About -- Brian will mention this, about 75% of our business is through recurring revenues, whether subscriptions or reoccurring transactions from the same customers. We've seen over the last several years. We've been able to maintain double-digit growth despite double-digit declines in deal count. And we do that primarily because we're winning bigger deals. They're taking longer. They're more complex, and we've been growing our portfolio of offerings and services that we offer to them. And we're very excited by the opportunity that generative AI advances offer us, you'll see some in the kiosk, if you want to see that. Rahul mentioned some of those as well. Our portfolio is very well aligned to those technologies, and we see in the lower right chart that many of our customers are embracing and expecting to invest more in those themselves.

So if you think about the -- how do we grow the business? We think of the TAM in 3 different ways. The TAM that's largely addressed by BDR players today is around $2 billion. And I would say a lion's share of our $496 million from last year came specifically from that market. But there's a $30 billion TAM around advisory services. So we're not doing transactions, but we think we can start to take a little of the TAM as we go up the stack. So we -- to Ken's point, if you look at our diligence platform, and you think about how we're applying AI, it's driving us up the value within a transaction. And then the other thing that we've been able to do very well is sell adjacent services. So I think everyone has a little bit of a different definition on managed services and adjacent services. But we've found that when we're selling more services to our current customers, it's received well, partially because we've had a very good long track record of people the platform. So some of the areas that we've invested to learn about prove and now we're in the scaling phase is around managed services. So redaction as a service. So we are -- we can do it through AI, but some people like a different player and they actually want to use us to redact documents. Same thing with NDA management and also translation is 1 of the 3 big use cases that we've been and we're starting to take into more of a mainstream as we're presenting all our products. The next step of it is it will just be a component of all our contractual obligations. So if we can just grow every transaction, 10% or 15%, obviously, it helps our overall equation from a growth perspective.

Yes. So we're very focused. In fact, tomorrow morning, we have an all-hands call with our team just to guide through the last 4 months of the year and making sure that we meet or exceed the targets that Bill has set for us.

4,000 deals and 4 months.

4,000 deals to go. But as we think about building new muscle in the business, there's really 4 areas across our business that we're building new muscle that will help us not just in the short term, but in the longer term, continue to deliver double-digit growth. The first of these is we really believe that we can reimagine the way that deals are executed. Today, these complex transactions are probably some of the last friction-filled, highly manual processes dependent on network relationships and people and a lot of manual effort. We believe that through AI as well as automating the entire deal life cycle from deal pipeline management, deal roadshows, deal preparation, due diligence, a sign and close and all the way through post-merger integration that provides great opportunity for us. And we've been able to monetize some of the AI that we've already put into our products, like the redaction that Bob mentioned. We -- that generates more content in our data rooms, which generates more money for us as well, and we believe that we have a path to monetizing the type of AI that we're adding into our portfolio.

The second priority is around market expansion with some of the managed services that I talked about. So we incubated in North America. And we learned about -- a lot about it, and now we're ready to go broadly globally with the services. So we have to train our global sales organization. And again, just make it a natural extension to the services that we're already providing. So we've had good -- really good traction in North America, and we will be in Europe in a strong way soon. And then Asia.

We've done hundreds of those types of adjacent deal services. In fact, what we're doing later this quarter is including those services in all of our contracts, so our customers will already be contracted to be able to just turn them on rather than a separate sales process. The third area is creating an integrated full end-to-end front office suite for our GPs. Today, our typically go to a myriad of small software vendors, separate 1 for fund reporting, a separate 1 for deal execution, a separate 1 for investor portals. We can provide all of that together in an integrated suite we call Fund Center. And uniquely, because we're part of SS&C, we also have the opportunity to offer to manage that for them. So we're -- part of our goal is not only to provide the best software in the market, but to arm Bhagesh's team with the best armament as we enter the administration business.

And the last priority is around evolving our go-to-market to more of a digital experience. So we like to brag about the fact that we do 10,000 transactions across the globe every year. We really do have a focused sales organization. But what we're learning is every buyer wants to interact differently. So we're trying to come -- we're really evolving to something that's a more modern experience for a buyer -- similar if you went on to Amazon Prime bought a golf club, they would be advertising of golf club and golf balls, and we want to really do more in platform marketing for customers given the ability to use the platform to provision exchanges, to launch deals at any time that they want to. So we're trying to meet our users where they want. We still have a lot of people who want high touch, handholding, managed services, and we have other people on the other end of the spectrum who really just want low-touch, self-service. So we're going to be able to provide both in a very secure way with still the right tool sets to support and to make sure that right type of value throughout the deal.

So we invite you to our kiosk later if you have interest in seeing some of the new AI tech in motion. And with that, we'll introduce Tori Dargati who leads our Health business.

Thanks, Ken. Thanks, Bob. I'm going to just raise this a little bit, not too much. But I appreciate you guys giving me the opportunity today to talk a little bit more about our health business. If you take a step back, our health business -- I have to move this forward. Our health business processes high volumes of medical and pharmacy claims. So if you think about the medical claims, doctors' visits, surgeons visits, labs, x-rays and then pharmacy claims, which essentially is just any prescription that's still at a pharmacy. And why is that important? So if you think about it, there's a lot of different ways you could obtain health care. I mean if you just look at those 5 blocks here, you can go to a traditional hospital setting, ER setting, a wellness clinic. I usually like the CVS Minute Clinics are quick and easy. But there's a lot of different opportunities for you to get health care. The downfall that where a lot of health care entities are struggling, is that data is very fragmented and siloed, and there's -- with a lot of also archaic technology. Where we come in is that we aggregate and convene large volumes of health care data. We cleanse it, sanitize it and deliver it back to our clients. We deliver that information so they can actually make real-time insights, whether it's clinical insights, whether it's even where they want to make some of their investment bets. And a lot of people talk and ask us, hey, where does SS&C Health fit in from a strategic perspective, right? We really think about it very similarly, and we see a lot of parallels to our fund services business, our insurance business, where again, we're capturing high volumes, lots of trades, lots of securities. We take that data, we're able to sanitize it, convene it, aggregate it and deliver it back to clients. And again, just like in our Fund Services business, where we're not investment bankers, et cetera, right, we've got technologists, we've got subject matter expertise and operational expertise. Same with our health care business. We don't have physicians, pharmacists, right? Again, we've got technologists, subject matter expertise and operational expertise. So we really see how we think about our health care business very similarly to how we look across the business in the firm. We process, like I said, pharmacy and medical claims at scale. Last year, we processed 500 million claims, which is not insignificant. A lot of the new health entrants come in, they've got maybe some modern technology, but they don't process that scale, and they don't process across all important lines of business. We process again across all lines of business, which is commercial, Medicare, Medicaid and exchange. If you think about Medicare, we're very poised to be successful is that there's some interesting sort of data out there. Every single day, 10,000 Americans turn 65, it's pretty significant. In last -- in 2010, there was 8 million Medicare enrollees, in 2024 we're on track for 34 of Medicare enrollees. So we believe we've got the expertise, along with the modern technology to really kind of take advantage of where we see the market moving and see that market growth. We do that with our own expertise, but we also process claims for Humana, which is behemoth in the Medicare space. We've been processing their claims since 2004. So we believe, again, we're able to kind of capture where we see the market going. From an operational perspective, very similar to what Ken and Bob were talking about. We've got clients that want us to meet them where they are. We're kind of moving away from that one-size-fits-all from an operational perspective. And so we're able to meet our clients and give them that choice and customization. We do that very similarly to the rest of the business, whether it's front office, middle office and back office. Similar to Nick, our health care business operates a contact center. We're open 24/7. Only day we don't do business or not open as Christmas Day. We're able to leverage the firm's investment into Blue Prism to really bring some operational efficiencies, some capacity in our contact centers. We've got about 85 digital workers, both in our operations and our call center. Again, the health care business has been able to leverage our investment in Blue Prism. We play in 5 strategic markets, high-impact markets from our business place in 5 strategic high-impact markets. In our technology is really the enabler. So each 1 of these markets, and you can see some of the big -- the key names we have in here, GoodRx, Humana, Mount Sinai, some big names. We are the back-end technology, again, providing data. And each 1 of these markets needs this data in a different way. So as an example, regional health plans, there's about 1,600 regional health plans across the U.S. They need this data really to be able to understand what are those communities that they're going to serve and how do they tailor their message, how they tailor their markets, how they tier their benefits and how do they make sure that they're really reaching across and having some of those strategic partnerships in their backyards. The integrated systems. Last, I think the health plans that own health or health systems that own health plans. In the last, I would say, 5 years, we've seen about 40 of these partnerships and again, they really got to be able to balance both risk and delivery. So again, having that minor technology and all the different integration points that we have, I think, really kind of enable us to be successful in this market. There's 2 more that I want to touch on, the drug discount card and the co-pay assistance. I think a lot of people in this room have probably gone up to get a prescription, you offered a drug discount card to help offset some of your co-pay. But the other market that we've really been able to see a significant uptick this year is the co-pay market. and co-pay assistance programs are really fueled by the drug manufacturers to really alleviate cost of high specialty drugs. And we believe that we've been very attractive to the pharma community for 2 reasons. One, we don't have any channel conflict. So we're not competing with them. We don't own health plans. We're not a health insurance company. So we do not have any channel conflict. And so that's been a big component of why we believe that we've been really attractive. Second reason is that it's their data. So they've got transparency and they can control their data. And I think, again, it's made us really attractive in this market. And then lastly is the provider space, which is health systems, hospitals. There's about 2,000 health systems across the United States. We've got an exclusive reseller arrangement with Johns Hopkins, which as many of you know that name. It's a pretty well-known academic medical center. We've got an exclusive reseller arrangement we've got, with their population health analytics tool, which basically just says, hey, it identifies for hospitals who their highest risk patients are for being admitted. We have about 600 licenses with -- in this space across the country with some pretty big names. Kaiser, Mount Sinai, which is right near here, obviously, North Shore. So we're really proud of our Johns Hopkins relationship. It's 30 years strong and going. So as Rahul mentioned, we start development projects and we finish them. I would say Rahul, it was 1 million development hours. You kind of shortchanged us a little bit, but who's counting? Yes. That's okay. But our thesis statement back in 2021, we formed Domani with our 2 minority partners, Humana and Anthem, which is now Elevance, they renamed but for all intents and purposes, was really that the market was looking for kind of a scaled alternative. We know that there was a lot of -- some new health entrants that come into the market, but they didn't have the scale. And they didn't have the combined expertise that these are 3 -- the founding members brought to bear. Obviously, SS&C is DNA and heritage is in technology is what we brought to the table. And then Humana and Elevance, for some of the subject matter expertise around the health care market in general. Between the 3 of us, we've got about 170 years of combined expertise in the health care market. Domani launched January 1, 2024, we test the heck out of it, 90,000 different test scenarios. Like I said, it was 1.1 million development hours. We went live, there's no wood up here, so I'm going to go out on a limb here, but we haven't had any defects, haven't had any outages. We feel really optimistic about our opportunities moving forward. And we know that there's a big market out there. And for those of you that know some things about health care market, there's 3 major players, 3 major health care insurance companies, right? Aetna CVS, Optum United Healthcare Group and Cigna/ESI. And we're not here to compete with them. We actually believe that we can be a technology enabler even for the big 3. They are very focused on providing care delivery which is great and which all of us in this room need and want and need to have, but that's not where we're focused. And actually, we believe, like I said, that we can actually be an enabler for them in a partner as they're looking at their technology. Many of the big 3, based upon their acquisitions over the years, around 4 or 5, 6 different systems, difficult to aggregate. They've got latency issues. So again, big opportunity, big market. We brought our new first new client on in July 2024 seamlessly. We've got another release in September and made another major release in January. [ Seth Parkinson ] is back there, he led our development efforts with Domani, so nobody better to be able to give a Damoni demo than [ Seth ]. So look forward to hopefully seeing some of you at our kiosk. Lastly, from a strategic priority standpoint, it's really simple. Our health care business has to continue to take advantage of the breadth and the depth of the firm, whether it's our -- things that Anthony talked about from an infrastructure standpoint, from a technology, our robust data centers or world-class data centers, our private cloud, 5,000 folks in IT and the 20,000 clients we have. Karen and Steve mentioned the CVS, you saw Cigna on their slide. So there's a lot of opportunity for our health care business to cross-sell. And there's a lot of opportunity within our health care entities as well. Many of them have significant assets under manage that they're managing that I believe there's a lot of opportunity for us to cross-sell within the business. And then lastly, it's important that we're part of a winning culture. Bill said it best this morning at the opening bell that SS&C likes to win. I think he actually said always. He really said that, he likes to win always. But it's important that we are part of a winning culture, winning breeds, winning we believe that we've got the opportunity. We've got an opportunity ahead of us. We're optimistic about it, and we think the future is bright. So thank you. I'll now turn it over to Rob Stone, who will talk about Intelligent Automation & Analytics.

Guys. My name is Rob Stone. I've been with the company my entire life, but I've been working for the company since 2010. I started as a salesperson in fund administration. Had some opportunities to take on sales leadership roles, including with a lot of the business unit leaders over here, including health and fund admin and insurance and transfer agency, helping to drive the growth that they needed. So I have a lot of favors to call in and they're coming now that I have my own business unit. So I'll talk a little bit about what the business is. I'll give you some stats. I'll talk about who our customers are and what we do for them and talk a little bit about strategic priorities. I am the last business unit leader to present before I hand it to Brian Schell, who's our CFO. So bear with me for a few minutes. So I think -- well, let me just talk a little bit about the whole business, and then I'm going to zoom in on Blue Prism, which is really the intelligent automation suite. But Intelligent Automation & Analytics sort of is made up of 4 major businesses. So there's some stats that show the scale, intelligent automation, RPA, business process orchestration, AI the fun stuff. Distribution solutions, where we provide intelligence to mutual fund product developers to understand where they should be selling through in terms of intermediaries. Regulatory solutions, which is helping financial services participants comply with global regulations like Form PF and FATCA 20, 30, 40 other ones around the world and analytics, which is risk and performance for financial portfolios, which you probably remember as kind of or now as algorithmic. So around the business, it's 2,000 employees, 4,000 customers, $600 million in revenue. The group was founded in 2012 with Dodd-Frank. We built Form PF as an application of help hedge funds, comply with that regulation and that's been a great business for us. But I want to focus in on Blue Prism and intelligent automation. Almost everyone who talked before me talked about a vertical right, whether it's banks or insurance, asset management, alternatives, health, pharmacy, banking, right? Those are the major constituents of SS&C's client base across Wealth and Investment Technologies, GlobeOp, GIDS. I really represent the horizontal technologies, right? The horizontal capability of robotic process automation and other intelligent automation technologies that can be sold across those different types of clients and beyond, right, which is exciting. I know I went last. I don't know if that means I'm the least important business. But I did notice that there was a $52 billion total addressable market figure, which is the biggest. And I do think that it represents an unbelievable amount of opportunity. So Blue Prism founded in 2001 is one of the pioneers in RPA. Think about RPA, where it just makes a machine do a task that a person typically would have done. I think the combination of Blue Prism and this horizontal capability with the vertical expertise and the client base that these folks represent give us a real advantage. There's no other company like SS&C that's got a robotic process automation capability embedded in it. So I'm going to partner up with these guys. I think -- again, I started in this job two weeks ago, from a sales role. But what I'm already -- what I already think I've got conviction around is all of the digital workers that have been embedded in these folks businesses. So how could you take those processes, package them up and go sell them out to the end markets. So I think there's a bunch of avenues that we're going to be able to explore, and I will be calling in all of those favors. So Intelligent Automation is an exciting space, right, especially with AI. And if you haven't gone over to [ Leo ] and [ Pino ] station, they've got some pretty sophisticated demos. And I think a lot of this stuff would be relevant to even your jobs. I've heard stories about just internally at SS&C, taking a process of logging into an investor portal, going through multi-factor authentication, finding a file, downloading it, finding the figure on that file, copying and pasting it, making sure it's correct. And it takes 8 minutes. You put a digital worker in that, and then you -- it does it real time, you extrapolate that out to all the people that are doing that process. And you can see how powerful that time savings is as well as the uplift and sort of interesting nature of the work. But it goes from basic to really sophisticated. And so the stuff that [ Pino ] is going to show represent sort of our next-gen platform. Part of the challenge with any technology, but RPA included is kind of the lead time it takes to get trained up on it, right? I think that's why you're seeing an increased rate of the deployment internally is because now we have our own center of excellence but with AI and chat prompts, you're really cutting down that lead time in terms of deploying automation in various processes. So [ Pino ] has got some pretty cool things to show. And then the combination of various technologies that already existed within SS&C around business orchestration, give us an opportunity to capitalize on a pretty dynamic market, where you're going from pretty simple to really sophisticated. We think we've got a big advantage. These are some of the things we're doing, right? I think we want to do bigger deals. I think the fact that we've already got 1,700 bots deployed at SS&C shows that you can do this at scale quickly. So that's going to be kind of kind of tool in my sales arsenal as I go out to the market to do those deals. And it's all about innovation here. So again, suggest you go just take a look, it will speak for itself. Again, doing bigger deals. We're looking at enterprise agreements where firms can contract for larger estates as we call it within the organization. Partnering further with the global systems integrators like Accenture and EY and the others to get them to help us deploy globally and then going further around the world and opening new markets. So I think that's where I'm at 2 weeks in. I think that the future is bright. We've got a talented team. Obviously, Bill and Rahul are supporting me and the group. And we're excited to see how we can drive this to be a really big player in this space. So I'll pass it on to Brian Schell, CFO.

Hi, everyone. Good to see you all again. I'm going to start off with an overview with 4 key categories: revenues, margins, cash flow and capital allocation. The revenue base, high-quality recurring revenues, core to our client operations often time tied to longer-term contracts and high retention rates. As we look at high level, as you look at the margins, we talked about this a few times today, again, with the high margins, reflecting our scale, the cost discipline and repeatedly focus on productivity and efficiency. As we look at the free cash flows, that's reflecting a very high conversion of net income to the cash flow. Again, demonstrating operational efficiency and importantly, it enables the strategic utilization for the balance sheet. And then finally, a proven capital allocation approach. And again, our goal is to maximize long-term shareholder value, and we try to use a framework to help lay that out to make it clear of what we're doing. So if we talk about each of these individually, One of the things that we have introduced this metric not too long ago, is looking at financial services recurring revenue. Again, we define that as something you can pretty much find in the face of the income statement of software-enabled services and maintenance fees for the financial services. It makes up about 85% of the revenue base. Again, that metric eliminates some of the fluctuations of licensing fees that we have to do with respect to 606 that sometimes makes that a little bit lumpy in any one particular quarter and some of the -- over the last year or so, some of the decline in the health care revenue. So if you look at that core, we think it's a nice metric as far as some of that organic growth. And as you can see, as it's improved its rate, you can see the overall growth rate or organic revenues continuing to grow also. And then this point was made also a few times. Within the software-enabled services, you do have asset-based revenues, you have transaction-based revenues. Those tend to be actually much more stable than what it just sounds on the surface because those AUA-based revenues, again, are based on minimums and tiering. And you heard the Intralinks team talk about how a lot of that transaction revenue is coming from a high repeat rate of clients. So for the next few slides, again, just want to high-level address the -- gone too far -- here we go. Is the revenue composition. First and foremost, and I've said this, the revenue streams are stable and they're supported by just a variety of pricing approaches, which I'll talk about here, right, 80% of them are contractually recurring. As you look at the slide here, you saw this slide a couple of times, Rahul introduced the basis of this slide, and I've repeated it here, but a little bit more description about, how do you price the revenues? How -- where does that come from, from that standpoint, right? So there are several different pricing models across the page. There's fixed fees, there's subscriptions. You can see the AUA base, which we talked about, account base, license base, professional services. Some are transaction based. Again, we talked about how those tend to be stable with the tiering in the AUA and the repeat customers there. And over time, we think there's going to be some bundling opportunities as well as we continue to bring and integrate the products and services together. So this provides a really nice layout of what about some of the composition within the revenues that we do have. Next, if you look at just a more traditional revenue distribution. All we did was lay out here is our geographic revenue distribution and our currency exposure. You can see it did no surprise. The bulk of the revenues are derived out of the Americas and the currency exposure is primarily the U.S. dollar. So again, not a lot of surprise here, but you can see the major currencies there listed and broken out. Shifting to margins. what we just laid out here is a historic look at our EBITDA and EBITDA margins, what they look like over time. Again, it's a strong profile. It reflects the scale and especially with the investments that we make in the software solutions that are used across a client base, a large client base, right? You heard that multiple times within each of the business units of how they drive efficiency and what they're able to do and what gives them a competitive advantage. It shows up right here too in the financials. You can see the dip in 2022, again, highlighting that does reflect the wage inflation that -- and Bill made this in some of his introductory remarks about that we want to make sure we retained our people. We did see some of that wage inflation, which did hit the margins a little bit. It also reflects the initial onboarding of the Blue Prism business, which was operating at, I'll call it, below where the rest of the company was operating from margin. So that dragged down the entire margin for the organization. But again, you can see them starting to creep back up. You've seen the improvement in last year, and you're seeing from our guide an equal improvement again for 2024. A few words about productivity. To help expand the margins, we work towards annual productivity targets. We've already noted our plans to continue the digital worker in RPA implementation across the businesses including finance and accounting group in and of itself. We do set efficiency goals and productivity goals for every single business unit and what they're trying to achieve every year in addition to delivering, obviously, the revenue targets and the earnings targets. And the other part on here that we're just highlighting is that we also look at our fixed cost base, right? I mean every fixed cost can be variable over time, but give it enough time. So we've chosen a metric here with facilities costs. We have brought this cost down over the last several years, both in absolute terms, also on a relative basis, relative to head count and relative to revenues. So we will continue to work through that and continue to drive those costs where we think we can get the most efficiency across the board. Next, I want to talk a little bit about the -- I mentioned earlier about the cash flow, the cash flow conversion ratio. Well, producing strong cash flows is obviously key to support the capital that we want to reinvest in the business as well as continue to drive value. We have a high net income to cash flow conversion percentage due to the low working capital needs that we typically have and our cash collection process. We are on track to exceed 100% again this year. You see a little bit of that dip in '22, reflecting the implementation of a midyear bonus that we started to put in place. Bill mentioned that also early on. So we pulled some of that cash into a year from the year future. And some of the M&A expenses that we get associated with the Blue Prism transaction, were adjusted out of the net income for adjusted earnings. So that shows up in a slightly lower conversion rate in that particular metric. As we then go to capital allocation, I've always -- I think this is where the proof is in the pudding of you say you do this, but what does it look like? What have you done? And so we laid out kind of the '20 to '22 time frame as well as '23 to year-to-date. And again, I want to emphasize our goal is, again, is how are we driving that long-term shareholder value. What are you doing with the money? And beyond the -- funding the internal investment opportunities of our capital allocation framework. It's listed on the right side of the chart here that you see is to consider the multiple alternatives that, frankly, every company faces. We look at the acquisitions and our approach is to maintain that price discipline. Again, no surprise. You heard that in the introductory comments today. We want to be accretive to growth and pursue returns in excess of what we can achieve with our share buyback program. And speaking of share buyback, it's always been an important part of returning that capital back to shareholders. And market conditions, acquisition pipeline, existing leverage, leverage ratio, level of interest rates. Again, that can help dictate and influence in any 1 particular year, how much share buyback actually occurs. And as you can see, the shift to a much greater percentage in share buyback on the right side of the page there as far as the '23 through '24 time frame. And in this rate environment, we still have continued to pursue some debt reduction. It still has a meaningful impact to EPS because the interest rate is still at least prior to today, for us, is still trading around at least our variable rate was trading around 7.35%. So it's still a material benefit to reduce our overall levels of debt for an EPS accretion standpoint. And finally, we think it's still important to have a reasonable dividend payout, right? We think it widens the universe of investors who may acquire a dividend. It hasn't been a primary focus of where we shifted out capital to, but we do think it's an important part to continue to have a dividend there for our investors. I spend a little bit of time on debt, and this has been an important part of how we've supported the growth that we've experienced. And we have a history of deleveraging as we fund and then delever from the acquisition with the debt. As a result, we've established real credibility with the debt capital markets, along with the strong credit profile with -- so that we have really good access to the capital markets if we do need to raise funds. And I would say that we probably have the lowest cost of debt for a company in our rating, just given -- again, given our size, the reputation and what we've been able to do. And with today's 50 basis point rate cut, we have about $3.9 billion of SOFR-based -- short-term based rate funding and with the Term Loan B that we have outstanding as of the second quarter, that's probably -- that's about just doing the simple math of 50 bps on the roughly $4 billion. It's $20 million pretax savings annually, right? And you can tax effect that down to roughly $14 million or you get close to $0.06 a share just from the rate cut from today. So again, we will continue to see that. Hopefully, that rate environment continues to work in the favor given the amount of debt that we have tied to short-term rates. So we're excited about that trajectory. And then we mentioned the Battea transaction. We also expect to have that funding in place, most likely looking at kind of medium-term paper in a debt maturity level that's in a different year than where we have the rest of our debt stack, and that should be probably a sub-6.5% rate. So again, the markets are attractive and we continue to like to be able to tap into the debt capital markets. Speaking of acquisitions, here's our track record, which I just think is absolutely fascinating. So as you may or may not remember, I joined the company about a year ago, but this is one of the slides that is just -- I just marvel at how well this leadership team has done with taking hold of a transaction and improving its operations, right? So we have a pre ownership and then, I'll call it, post period ownership of looking at what it's done to its overall EBITDA contribution, right? So if you look at some of the metrics here and you look at what's happened over the last, I think, roughly 9 years of some of the larger transactions that we've done and you say, what's the takeaway from what has this organization done? Well, a, they pay a reasonable purchase price on the front end, right, when you look at those EBITDA multiples. And then when you look at it 3 years later, you see a demonstrated materially improved earnings under this leadership team and what they've been able to do. The absolute EBITDA growth over those -- just over that 3-year period, excluding Blue Prism, because it's even much higher, has been 48% growth rate if you just do a simple average of that. So that's a pretty strong track record of looking at transactions and how do you add value by why is this transaction best in the hands of this leadership team and this company. So where does that leave us? So we're establishing the medium-term revenue guidance of 4% to 8% organic revenue growth, plus the additional revenue growth from future M&A, organic growth. You've heard about it all day today. You've heard about from the business units. You heard about it upfront with strategic priorities of looking at new products, cross-sell, upsell, looking at price increases as part of that equation mix looking into the new markets and looking through some international expansion. You heard Nick talk a little bit about that and then overall market growth. We think there's a lot of secular trends that were also positive in the markets that we're looking at. And as we look at some of those factors that have been involved in looking at M&A transaction and why does that make sense, is the revenue growth going to be accretive to SS&C? Is there a path to continue to grow margins and expand that and be additive to SS&C? Is there an opportunity to sell incremental services across this asset base and what we do within SS&C and does it leverage our core competencies overall, and again, contributing to that profitable growth. I would say looking at that and listening to the description earlier heard about Battea, I'd say it checks off every 1 of those boxes. So again, we're excited about that team joining SS&C. Just as a side note, our Q3 and 2024 guidance has not changed. And so we want to make sure that there wasn't anything different from that. As far as the key takeaways, and again, just wrapping this up here before we go to Q&A, again, we're -- why am I excited about being here and being part of the SS&C leadership team is, look, we have a high level of recurring revenue growth. And again, they're propelled by diverse growth drivers, and we just operate a really strong business model. There's a proven track record of success, both operationally as well as allocating capital and finally, the elevated revenue guidance that we're issuing today. With that -- Bill.

Hi, everyone. We're going to give the team a couple of minutes to set up some chairs for our executive leadership team so we can start to field Q&A questions. There will be people walking around with mics. Just raise your hand. If you have a question, we also have some questions that have come in from the online audience to that we will address.

We'll start with the ones that are online first. So the first 1 comes from Patrick O'Shaughnessy from Raymond James, it's about Battea. Does Battea operate on a subscription model at all? And how volatile have the results been historically?

Very de minimis on a subscription basis. And year-over-year, it has not been particularly volatile. But quarter-over-quarter can be pretty volatile because it depends when the courts release the funds and you can't. So we will have a lot of commentary around Battea every quarter. And it can be pretty remarkable how much money, especially it's like courts like anything in the courts. They're just like the software business. the third month of the quarter is always the most and December is by far the most. So fourth quarter will be the biggest month for Battea and the other 3 quarters will be pretty much spread equally .

We found the mic. So just raise your hand if you'd like to ask a question. The next online question comes from Colin Casey at Vulcan Value Partners. How are you thinking about using Gen AI for our call center functions?

Yes. So we've been embedding generative AI into a lot of the call center workflow, so they have the ability to identify the caller, be able to pull up their profiles ahead of time and be able to pull up quite a bit of information. So the end user or the caller itself has the ability to really interact with the customer much faster and get -- and the calls quickly.

Great. It's Kevin McVeigh from UBS. I think you outlined 4% to 8% organic growth over 3 years. That feels like an acceleration from, I think, the last 2 was about 5% or so. You dimensionalized that a little bit. But is there any way to maybe think about what's driving that because it's off a higher base, number one. And then just given the efficiencies you're going to have from a Gen AI perspective as well, any thoughts as to the margin impact of that? And just philosophically, is that reinvestment in the business? Or just obviously, it will drive more cash flow, but just any thoughts around that just given the optionality really you're creating.

Rahul, you want to take that.

Sure. Sure. I think in general, we see that the markets that we're in are as healthy as they've ever been. And our products and services mix is -- continues to get stronger, right? So as we integrate these capabilities that you've heard about for like the last couple of hours, we can go into customers and sell bigger deals, implement them faster. And that's really where the confidence in the elevated revenue guidance comes from. A lot of that should fall to the bottom line, right? And we haven't gotten really precise yet in our future plans about how much and where. But in general, we're doing more with technology, and we think that ought to translate into better margins.

And we're not driving margins to where we don't get paid. Doesn't seem to make a lot of sense. So praying to the organic revenue god or goddess, we would probably pour more money back into things we thought would drive organic revenue higher. Maybe more salespeople, maybe more marketing, maybe larger development projects, but still maintaining a margin profile of 38% to 42% or 43% or something like that. So even when our margin dropped, I think 34.7% in the second quarter last year, people say, is it going to keep going down. Now that was the great resignation and making sure that you paid out in a way that you maintained the expertise that we had and the capability. And obviously, it quickly came back.

Andrew Schmidt from Citi. Thanks for doing this. rely I appreciate all the information. Two questions. I'll work on both in. There was a -- first one, there was a strong focus on just consistency in branding and also product integration. And I guess, as you go through that work, does that create sort of opportunities to reevaluate the portfolio from portfolio optimization perspective, sunsetting or divestitures and things like that. That's the first question. And then just the second question, just maybe more mechanical one. The 4% to 8% organic growth. How does that drop down to EPS growth over the next 3 years, taking into account things that you were just talking about in terms of margin expansion, deleveraging, buybacks, things like that.

I'll take the first half of that. If I can remember what you said. Yes. I've always been a better acquirer than I have been a seller. Because to be a seller means that you have to admit that somebody else can run that business better than you can. That's not good for my ego. But reality is that we have looked at it a number of times. We've had people come in and want to buy different pieces of our business. Obviously, we have a number of real golden eggs, as they say. But you start pushing back, right? Can we get through HSR, right? And what happened all you want a 2-year financing window, yes, but that's really good. Oh, and you're a PE firm, so we have to be a minority. So you take 1 of these business units and you tell the people run it, you're not going to work for your biggest competitor. And they go, you know what this is, it's 5 of something. So you try to make sure that you don't blow a hole in your own business, because some banker convinced you that this is going to be the godsend of all godsends. So -- and again, we're interested, and we've had very, very attractive offers. But as soon as you really start pushing on it, we have to talk to the lawyers. We got to talk to the lawyers, we're going to talk to whole lawyers again, maybe we're going to see if we could get some feedback from our regulator. Let's go see if some of the customers are going to b**** that you merged with 1 of these companies. So it really does become, can you get it done? How quickly can you get it done? And then what kind of margin improvement are you going to get because you got it done? And then the second half was about what EPS happens with 4% to 8% revenue growth. Brian?

Spend some time to talk a little bit that. So I've talked to a few of you about what does it look like on the margin on incremental revenue. As you look at last year, you look at kind of some of the midpoint of projection where we are, it's been historically around 45% of what we've seen as far as kind of the midpoint and then where we were last year. And we spent a lot of time talking about productivity. Now Rahul has said that we haven't said explicitly, here's the incremental margin contribution, and we're going to drive towards X percent based on the, I'll call it, revenue growth opportunities it might have that might pursue that actually might take a little bit more OpEx versus CapEx. So we always want to be cautious in making sure we build the appropriate amount of -- we don't box ourselves in for having to say, well, we said we were going to do this, but we really want to pursue that opportunity. So we don't make sure they're lots. We want to make sure that we're transparent as we can and say, look, there are going to be some operating expense opportunities for us that we think is going to pursue -- that we're going to pursue that's going to grow that revenue. I would say that any of us up here would be disappointed if we don't see that translate into a seemingly higher earnings growth at the end of the day, right? So if you just take flat out the business model and you grow by a 1% delta of revenue versus expenses, you're going to see margin expansion of, call it, 50 to 60 basis points in and of itself, then you could take that incremental 50 to 60 bps, you can tax effect it, roll to the bottom line of EPS. And again, all along the way, you have a complex formula of how much debt it is going to pay down, where is rates going. Now I do feel really good about where rates are going. Again, no -- I lost a small minor bet about what the rate reduction is going to be today. So that's why they don't pay me to be an economist to forecast rates. But I think there is a lot of tailwinds for us. I think that's going to continue to be positive for us. We're going to continue to buy back shares, and we're going to continue to put that formula together that, again, my limited tenure here of a year, that's exactly what this team has been doing. They're growing revenues. They're being more productive. We're paying down debt. We're buying back stock. It's a nice formula for a higher stock price.

And we're making sure you can't ask too many questions.

The next question from the webcast audience comes from Adam Brenner at Oribel Capital regarding health care. So how much growth should we expect from the health care business in 2025 and 2026. And is Elevance coming on board to Domani in 2025?

Tori, do you want to take that?

Yes. I think we've stabilized our operations. I think -- we've answered a lot of questions, I think, to the analyst community last few years around some of the revenue that we've seen, the revenue losses, right? And I think we've seen the fact that -- these are long deal cycles. And I think we've had customers who have exited the markets in 2019 and 2020 that were no longer paying us any type of fees to keep on our platform, et cetera. So we think we've stabilized the business. We think that there are -- there's opportunity for us to see an uptick in revenue. We know that we're going to see a better year this year for health care for revenue. And we think '25 and '26 is when we really start to see the traction and the fruits of our labor. From an Elevance perspective, we're working with them on their implementation plan. They're still committed to Domani. They just funded the additional capital call, which we think that, that was a really positive sign. So I think they've also showed signs that they're [indiscernible] less and less dependent on CVS. They've pulled some things in-house like specialty pharmacy and mail order, which again, just signals that they're becoming less and less dependent on CVS, and we think that Domani is a great alternative to them.

And we had -- our biggest client when we bought DST in Healthcare was Cigna. And you're not going to believe this, but after they spent $69 billion for ESI, I think they wanted to move their platform to ESI. So even though they were paying us $80 million, $90 million, they moved it to ESI anyway. They didn't even ask me if I wanted to move anything. But when they spend $69 billion, that's usually what happens.

Surinder Thind from Jefferies. In terms of just the technology spend at this point, it seems like part of the strategy is to take a lot of the individual products and move them into more of a platform-type offering. That's across almost all of the verticals here. Can you comment upon where we are in that journey, given that you guys have made so many acquisitions and really what the end game here is and how we get there?

Well, I think in each one of the business units, if you corner one of the people afterwards and talk to them, I think what they would tell you is that here's where we compete against our competitors. Here's where we do very, very well. Here's where maybe we could do a little better. So if you took Wealth and Investment Technologies, I think Black Diamond is a pretty dominant player in the wealth space, but they got some competitors. There's Orion, there's Tamarac, there's Addepar. So there are certain things that we would like to do with Black Diamond that would compete even stronger against them. One of the things you heard about was Trust Suite. So adding some of the capabilities we already have. So the idea is kind of do the old, here's our capabilities, here's their capabilities, how do we run over them? And I think we do this thing with, we call it, our version of the shark tank where each of the different business units can come and try to get a non-charge to their business unit capital allocation up to $25 million to build something that they convince us to build. And one of them was, I can't remember who the competitor was, but it was a killer, such and such a killer. And so we put a bunch of assets in that, and now we're going at it hard. I think that might have been genesis is what we built. and then we get great reviews on Genesis, and we had all the capabilities that we had in Aloha. So now we get to target places like SimCorp or we get to target places that are embedded in these like Aladdin or we get to go after other big ticket software products that traditionally we haven't done as well as we'd like to do.

And what does it mean for CapEx?

I don't think CapEx has changed a whole lot from where we have it now. I mean, probably Anthony can answer that better. But I think the one great thing about technology is generally the cost per terabyte or compute power almost always goes down.

Yes. Our CapEx is pretty consistent. And as we -- as the businesses get bigger and as we need to -- we have more buying power, our costs continue to go down, right? So the vendors are looking at us and since our purchases are becoming larger and larger, the cost just continues to decrease. So our CapEx stays pretty flat.

Right. And you saw that come out of the guidance last time as we reduced it slightly to relative to the revenue base, a, the revenues were growing at a nicer rate. But b, you're also seeing probably a little bit was more of a peak of the Domani spend that was required. That's not as much as required, obviously, as much on a go-forward basis.

Another question from the webcast audience from Colin Casey at Vulcan Value Partners. This is about the growth outlook, how much will price contribute to our organic revenue growth outlook and then what are our EBITDA margin expectations over the next 3 years?

Again, I think pricing is going to be probably 2% to 3% of the overall growth rate. And I think that our margin, as I said before, will probably be between high 38s and 43 maybe.

All right. Well, that looks like that's it. So thank you guys all for coming. Please stay for cocktails and refreshments afterwards and also visit the demonstrations that we've got set up, and thank you again for coming.