Q4 2023 SS&C Technologies Holdings Inc Earnings Call
Thank you for standing by my name is Greg and I will be your conference operator today at this time I would like to welcome everyone to the S. S. N C Q4, and full year 2023 earnings call.
Operator: Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the SS&C Q4 and full year 2023 earnings call. All lines have been placed on mute to prevent any background noise.
Speaker Change: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad once again, the star one and if you'd like to withdraw your question simply press Star one again. Thank you.
Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, press star one. And if you'd like to withdraw your question, simply press star one again.
Operator: Thank you. I would now like to turn the call over to Justine Stone, Investor Relations with SS&C. And with that, Justine, excuse me, you have the floor.
I would now like.
Speaker Change: To turn the call over to Justine Stone Investor Relations with S. S N C.
Speaker Change: And with that Justin excuse me Justine if you have the floor welcome and thank you for joining us for our Q4 2023 earnings call I'm Justine Stone Investor Relations for F. N. B with me today is Bill Stone, Chairman and Chief Executive Officer, Rahul Kanwar, President and Chief operating Officer, and Brian <unk>, Our Chief Financial Officer.
Justine Stone: Welcome, and thank you for joining us for our Q4 2023 earnings call. I'm Justine Stone, Investor Relations for SS&C. With me today is Bill Stone, Chairman and Chief Executive Officer, Rahul Kanwar, President and Chief Operating Officer, and Brian Schell, our Chief Financial Officer. Before we get started, we need to review the Safe Harbor Statement.
Justine Stone: Before we get started we need to review the Safe Harbor statement. Please note that various remarks, we make today about future expectations plans and prospects, including the financial outlook. We provide constitute forward looking statements for the purposes of the Safe Harbor provisions under the private Securities Litigation Reform Act of 1995.
Justine Stone: Please note that various remarks we make today about future expectations, plans, and prospects, including the financial outlook we provide, constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factor section of our most recent annual report on Form 10-K, which is on file with the SEC and can also be accessed on our website. These forward-looking statements represent our expectations only as of today, February 13th, 2024. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so.
Justine Stone: Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the risk factors section of our most recent annual report on Form 10-K, which is on file with the SEC and can also be accessed on our website.
Justine Stone: These forward looking statements represent our expectations only as of today February 13th.
Justine Stone: 24, while the company may elect to update these forward looking statements. It specifically disclaims any obligation to do so.
Justine Stone: During today's call, we will be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com. I will now turn the call over to Bill.
Justine Stone: During today's call, we will be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at Www Dot S. S. C Tech Dot Com I will now turn the call over to Bill.
William Charles Stone: Thanks, Justine, and welcome, everyone, to our fourth quarter results, which are record adjusted revenue of $1,412,000,000, up 5.5 percent, and our adjusted diluted earnings per share were $1.26, up 8.6 percent. Adjusted consolidated EBITDA was $563 million for the quarter, the highest in our history, and our EBITDA margin was up to 39.8 percent. This is a 300 basis point increase from the second quarter of 2023. Our fourth quarter adjusted organic revenue growth was 4.5%. The fourth quarter revenue acceleration was driven by strength in our alternatives, retirement, and interlinks businesses. We also saw acceleration in GIDS, Advent, and SBIS.
William Charles Stone: Thanks, Justin and welcome everyone to our fourth quarter result, which are record adjusted revenue of $1 billion and $412 million up five 5% and our adjusted diluted earnings per share were $1 26.
William Charles Stone: Up eight 6% adjusted consolidated EBITDA was 563 million for the quarter the highest in our history and our EBITDA margin was up to 39, 8%. This is a 300 basis point increase from the second quarter of 2023.
William Charles Stone: Our fourth quarter adjusted organic revenue growth was four 5% in the fourth quarter revenue acceleration was driven by strength in our alternatives.
William Charles Stone: <unk> and interlinked businesses, we also saw acceleration in goods.
And as businesses are recurring revenue growth rate for financial services was six 9%, which includes all software enabled services and maintenance revenue.
William Charles Stone: Our recurring revenue growth rate for financial services was 6.9%, which includes all software-enabled services and maintenance revenue. This is a sequential increase from 5.9% in Q3. For the year, total organic growth was 2.8%, and financial services recurring revenue growth was 4.9%. Our financial services revenue retention remains over 97% on a last 12-month basis. In 2023, SS&C generated net cash from operating activities of $1,215,000,000. We paid down $150 million in debt in Q4 2023, bringing our net leverage ratio to 3.05 times and our net secured leverage ratio to 2.1. We bought back 2.4 million shares for $131 million at an average price of $54.74 per share. For the year, we have allocated $375 million towards debt paydown and $472 million towards stock buyback. We anticipate a similar higher focus on share repurchase in 2024. On January 1, Domani Rx, our brand new pharmacy benefits platform, went live with our Phase 1 drug discount client.
William Charles Stone: This sequential increase from five 9% in Q3.
William Charles Stone: For the year total organic growth was two 8% in financial services recurring revenue growth was four 9% our financial services revenue retention remains over 97%.
William Charles Stone: Last 12 month basis.
William Charles Stone: 2023, <unk> generated net cash from operating activities of $1 $215 million.
William Charles Stone: We paid down 150 million in debt in Q4, 2023, bringing our net leverage ratio to three five times and our net secured leverage ratio to two one times. We bought back two 4 million shares for 131 million at an average price of $54.74 per share.
William Charles Stone: For the year, we have allocated $375 million towards debt pay down and $472 million towards stock buybacks, we anticipate a similar or higher focus on share repurchase in 2024.
William Charles Stone: January one.
William Charles Stone: Any Rx our brand new pharmacy benefits platform went live with our phase one drug discount.
William Charles Stone: We have processed 15 million claims in January over 10% more than what we had originally anticipated for the month of January and our response time of under one second is quite better than industry standards.
William Charles Stone: We processed 15 million claims in January, over 10% more than we had originally anticipated for the month of January, and our response time of under one second is quite better than industry standards. We project we will process 45 million claims by the end of the first quarter. Customers who have migrated have touted the cutover to Domani was frictionless.
William Charles Stone: We project, we will process 45 million in claims by the end of the first quarter customers, who have migrated have touted the cutover to the money was frictionless. Our second release of demand <unk> is scheduled for June one 2024 and will include full commercial Medicare and Medicaid functionality.
William Charles Stone: Our second release of Demoni RX is scheduled for June 1, 2024 and will include full commercial Medicare and Medicaid functionality. We are pleased with the successful launch of Dhawani RX, and we look forward to adding new clients in the second half of 2024. We also completed a major retirement system implementation with one of the world's largest insurance companies. Regulatory change has driven a lot of activity around our retirement income solution and rollover. We look forward to capitalizing on this opportunity. I'll now turn the call over to Rahul to discuss the quarter in more detail. Thanks, Bill. In Q4, we saw acceleration in revenue and healthy margin expansion. Notably, alternatives grew 7.8%, interlinks grew 18.6%, and retirement grew 12.8%. Our EBITDA margin exit rate was 39.8%, a result of higher revenue growth, cost controls, and our digital worker initiative. For the year, we obtained approximately 2,000 full-time equivalents in digital worker productivity, which we expect to yield 100 million savings annually.
William Charles Stone: We are pleased with the successful launch of <unk> Rx and we look forward to adding new clients in the second half of 2024. We also completed a major retirement system. It's one patient with one of the world's largest insurance companies.
William Charles Stone: Regulatory change has driven a lot of activity around our retirement income solutions and rollovers, we look forward to capitalize on this opportunity.
William Charles Stone: I'll now turn the call over to Rahul to discuss the quarter in more detail.
Speaker Change: Thanks Bill.
Rahul Kanwar: Q4, we saw acceleration in revenue and healthy margin expansion.
Rahul Kanwar: Notably alternatives grew seven 8% <unk> grew 18, 6% and retirement grew 12, 8%.
Rahul Kanwar: Our EBIT margin exit rate was 39, 8% a result of higher revenue growth cost controls and our digital worker initiative.
Rahul Kanwar: For the year, we obtained approximately 2000 full time equivalents and digital worker productivity, which we expect to yield $100 million savings annually.
Rahul Kanwar: We are optimistic about our ability to continue to drive additional benefit from digital workers and other automation strategies.
Rahul Kanwar: We're seeing a lot of opportunities across the financial services industry is large firms to look for ways to drive down costs within their back office operations, while improving their front end technology. These market dynamics can be beneficial for our <unk> retirement and alternative fund services businesses.
Rahul Kanwar: We are optimistic about our ability to continue to drive additional benefit from digital workers and other automation strategies. We're seeing a lot of opportunities across the financial services industry as large firms look for ways to drive down costs within their back office operations while improving their front-end technology. These market dynamics can be beneficial for our gids, retirement, and alternative fund services businesses. Across the company, we have focused on offering comprehensive solutions to our customers, comprised of multiple products and services in an integrated and holistic manner. As one example, in 2023, we signed 12 TrustSuite clients, a new platform for banks and trust companies combining back office and regulatory reporting from InnoVest, the front office experience of Black Diamond, and Similarly, the integration of EZ, EZ Eclipse, and Advent Geneva has been positively received.
Rahul Kanwar: Across the company, we are focused on offering comprehensive solutions to our customers comprised of multiple products and services in an integrated and holistic way as one example in 2023, we signed 12 Trust suite clients, a new platform for banks and trust companies, combining back office and regulatory reporting from <unk>.
Rahul Kanwar: The front office experience of Black Diamond and our CRM capabilities through <unk>.
Rahul Kanwar: Similarly, the integration of ads as eclipsed that advent Geneva has been positively received we also signed over 70, new eclipse clients in 2023, bringing the total number of clients on ASIC lifts to over 250, we.
Rahul Kanwar: We are gaining momentum and have an opportunity to increase market share from here I will now turn it over to Brian to run through the financials.
Thanks, Raul as noted in our press release, our Q4 2023 GAAP results reflect revenues of $1.412 billion net income of 194 million and diluted earnings per share of.
Rahul Kanwar: 77.
Brian: And as Bill noted earlier in the call our adjusted revenues hit a record level at $1.412 billion up five 5%.
Brian: Adjusted EBITDA also hit a record at $563 million up eight 5% or $44 million.
Brian: And adjusted diluted EPS was $1 26, and eight 6% increase over Q4 2002.
Rahul Kanwar: We've also signed over 70 new Eclipse clients in 2023, bringing the total number of clients on EZ Eclipse to over 250. We are gaining momentum and have an opportunity to increase market share from here. I will now turn it over to Brian to run through the finances. Thanks, Raul.
Brian: The adjusted revenue increase of $73 million over Q4, 2002 was primarily driven by the incremental revenue contributions from alternative interlink and get.
Brian: Our acquisitions contributed $4 1 million or approximately 30 basis points.
Brian: Foreign exchange had a favorable impact of $11 million or 80 basis points.
Brian: As a result, adjusted organic revenue growth on a constant currency basis was four 5%.
Brian: Our cost structure has been impacted by general inflation higher personnel cost and increased professional fees compared to 2022. However.
Brian Essex: As noted in our press release, our Q4 2023 GAAP results reflect revenues of $1,412,000,000, net income of $194,000,000, and diluted earnings per share of $0.77. Additionally, as Bill noted earlier in the call, our adjusted revenues hit a record level at $1,412,000,000, up 5.5%. Adjusted EBITDA also hit a record at $563 million, up 8.5% or $44 million, and Adjusted Diluted EPS was $1.26, an 8.6% increase over Q4-22.
Brian: By maintaining a cost discipline approach and the use of digital workers are core expenses, only increased 2% or $17 million, excluding acquisitions and on a constant currency basis.
Brian: Acquisitions added $5 million and foreign currency added an additional $8 million of expenses.
Brian: With the combination of our revenue growth outpacing our expense growth adjusted EBITDA margin of 39, 8% reflects both a sequential and year over year expansion of 70, and 110 basis points respectively.
Brian: Net interest expense for the fourth quarter of <unk> 23 was $119 million, an increase of $14 million from Q4 'twenty two.
Brian Essex: The adjusted revenue increase of $73 million over Q4-22 was primarily driven by the incremental revenue contributions from Alternative, Interlinks, and Git. Our acquisitions contributed $4.1 million, or approximately $30 billion; foreign exchange had a favorable impact of $11 million, or $80 billion. As a result, adjusted organic revenue growth on a constant currency basis was 4.5%.
Brian: The average interest rate in the quarter for the amended credit.
Brian: Credit facility, including the senior notes was 693% compared to 564% in the fourth quarter of last year.
Brian: Adjusted net income was $317 million and adjusted diluted EPS was $1, 26% effective tax rate used for adjusted net income was 26% share.
Brian: Share repurchases of $2 4 million helped drive the diluted share count down to $252 1 million from $253 9 million in Q3.
Brian: While Q4 reflects strong results our 2023 annual earnings per share reflects a slight decline of <unk> <unk> per share compared to last year. The single biggest contributor to this decline was the impact of the rising short term interest rates, increasing the interest expense on our debt by approximately $164 million or nearly <unk> 47 per share on an.
Brian Essex: Our cost structure has been impacted by general inflation, higher personnel costs, and increased professional fees compared to 2022. However, by maintaining a cost-disciplined approach and the use of digital workers, our core expenses only increased 2% or $17 million excluding acquisitions. On a constant currency basis, acquisitions added $5 million, and foreign currency added an additional $8 million of expenses. With the combination of our revenue growth outpacing our expense growth, the adjusted EBITDA margin of 39.8% reflects both a sequential and year-over-year expansion of 70 and 110 basis points, respectively. Additionally, that interest expense for the fourth quarter of 23 was $119 million, an increase of $14 million from Q4-22. The average interest rate in the quarter for the amended credit facility, including the senior notes, was 6.93% compared to 5.64% in the fourth quarter of last year. Adjusted net income was $317 million, and adjusted delivered EPS was $1.26. The effective tax rate used for adjusted net income was 26%.
Brian: After tax basis, assuming a 26% tax rate.
Brian: <unk> ended the fourth quarter with $432 million in cash and cash equivalents and $6 8 billion in gross debt.
Brian: <unk> net debt as defined in our credit agreement, which excludes cash and cash equivalents of $100 million held at <unk> Rx was $6 4 billion as of December 31.
Brian: Our year end total leverage ratio was three five times and our secured leverage ratio was two one times.
Brian: As our term loan B, three four and five totaling approximately $3 5 billion approach maturity in April of 2025, we anticipate refinancing them in the near term.
Brian: As previously noted FMC generated net cash from operating activities of $1 $215 million, an increase of seven 1%. The increase reflects the incremental earnings as well as improved working capital management.
Brian: As we move into 2024 and establishing our guidance note that we will continue to focus on product innovation and enhancements as well as client service.
Brian: We assume that retention rates will continue to be in the range of our most recent results. We will also continue to manage our expenses with a cost disciplined approach by controlling and aligning variable expenses to ensure efficiency rationalizing our real estate footprint.
Brian Essex: Share repurchases of $2.4 million helped to drive the diluted share count down to $252.1 million from $253.9 million in Q3. While Q4 reflects strong results, our 2023 annual earnings per share reflects a slight decline of $0.04 per share compared to last year. The single biggest contributor to this decline was the impact of the rise in short-term interest rates, increasing the interest expense on our debt by approximately $164 million, or nearly $0.47 per share on an after-tax basis, assuming a 26% tax rate. SS&C ended the fourth quarter with $432 million in cash and cash equivalents and $6.8 billion in gross debt. SS&C's net debt, as defined in our credit agreement, which excludes cash and cash equivalents of $100 million held at Domani RX, was $6.4 billion as of December 31st. Our year-end total leverage ratio was 3.05 times, and our secured leverage ratio was 2.12.
Brian: Increasing productivity to improve our operating margins to leverage our scale and effectively investing in the business through marketing sales and R&D to take advantage of future growth opportunities.
Brian: For the full year 2024, we have assumed adjusted organic revenue growth in the range of two 7% to six 3%.
Brian: Foreign currency exchange rates to be consistent with 2023 levels.
Brian: Short term interest rates to remain flat through the first half of the year with small declines in the second half of the year.
Brian: GAAP tax rate of approximately 26% on an adjusted basis, which is unchanged from the prior year.
Brian: Capital expenditures to be consistent with 2023 at four three to four 7% of revenues a continued slight overemphasis to share repurchases.
Brian: Similar to how we allocated capital in 2023.
Brian: As a result for the full year 2024, we expect revenue to be in the range of $5 billion $668 million to $5 billion $868 million.
Brian: Adjusted net income in the range of $1 $221 million to $1 billion $321 million into.
Brian: Interest expense, excluding amortization of deferred financing costs and original issue discount and the range of 438 million to $448 million.
Brian Essex: As our term loans, three, four, and five, totaling approximately $3.5 billion, approach maturity in April of 2025, we anticipate refinancing them in the near term. Also, as previously noted, SS&C generated net cash from operating activities of $1,215,000,000, an increase of 7.1%. The increase reflects incremental earnings as well as improved working capital management. As we move into 2024 and establish our guidance, note that we will continue to focus on product innovation and enhancements, as well as client service. We assume that retention rates will continue to be in the range of our most recent results.
Brian: Diluted shares in the range of $252 7 million to $255 7 million.
Brian: Adjusted diluted EPS in the range of $4 85.
Brian: To $5 15.
Brian: And cash from operating activities to be in the range of $1.292 billion to $1 billion $392 million.
Brian: For the first quarter of 2024, we expect revenue to be in the range of $1 billion $397 million to $1 billion $437 million adjusted net income in the range of $300 million to $316 million.
Brian: Interest expense, excluding amortization of deferred financing costs and original issue discount and a range of $113 million to $115 million.
Brian: Diluted shares in the range of $253 2 million to $254 2 million shares.
Brian Essex: We will also continue to manage our expenses with a cost-disciplined approach by controlling and aligning variable expenses to ensure efficiency, rationalizing our real estate footprint, increasing productivity to improve our operating margins to leverage our scale, and effectively investing in the business through marketing, sales, and R&D to take advantage of future growth opportunities. For the full year 2024, we have assumed adjusted organic revenue growth in the range of 2.7% to 6.3%, and foreign currency exchange rates to be consistent with 2023 levels. Short-term interest rates remained flat through the first half of the year, with small declines in the second half of the year. The gap tax rate was approximately 26% on an adjusted basis, which is unchanged from the prior year.
Brian: And adjusted diluted EPS in the range of $1 19 to $1 25.
Brian: Now I'd like to turn it back over to Bill for final comments.
William Charles Stone: Thanks, Brian I'd also like to welcome Deborah Walton Ruskin as the newest director on our board.
William Charles Stone: Walton Ruskin has had an impressive career at the London stock Exchange group definitive Thomson Reuters and Thomson financial her expertise in Fintech global market executive sales leadership and financial data fit well with <unk> strengths and focus we look forward to collaborating with Debra.
William Charles Stone: We have recently recruited a senior executive as Balan, who will head up mergers and acquisitions as what has the experience and expertise to guide us in our M&A pursuits.
William Charles Stone: Q4 was a good quarter and we look forward to reporting throughout 2024.
Speaker Change: Now, we'll open it up for questions.
Speaker Change: Thanks, Bill and at this time I.
Speaker Change: We'd like to remind everyone that in order to ask a question press Star and then the number one on your telephone keypad once again star one on your Touchtone keypad.
Speaker Change: In the interest of time, we kindly ask you that you limit your questions to one initial question and one follow up. Thank you in advance and we will pause just a moment to compile the Q&A roster.
Brian Essex: Capital expenditures to be consistent with 2023 at 4.3 to 4.7% of revenues, a continued slight overemphasis on share repurchases, similar to how we allocated capital in 2023. As a result, for the full year 2024, we expect revenue to be in the range of $5,668,000,000 to $5,868,000,000, and adjusted net income in the range of $1,221,000,000 to $1,321,000,000. Interest expense excluding amortization of deferred financing costs and original issue discount in the range of $438 million to $448 million, and diluted shares in the range of $252.7 million to $255.7 million.
Speaker Change: Okay. It looks like our first question today comes from the line of Dan Perlin with RBC capital markets. Dan. Please go ahead.
Dan Perlin: Thanks, Good evening.
Dan Perlin: Bill I wanted to ask your question kind of what's embedded in guidance as you think about jumping off point for organic growth.
Dan Perlin: Three 5% in the first quarter, but then for the full year clearly ramping to four five so I'm just wondering what.
Dan Perlin: Kind of connect the dots to that acceleration as you think about your line of sight going into the back half of the year.
Dan Perlin: Hi, Dan Hey, we got a lot of stuff accomplished in the fourth quarter of 2023 and that gives us a lot of confidence going into <unk> to 'twenty four.
Dan Perlin: Kind of said in the <unk>.
Dan Perlin: Remarks about a large insurance company.
Dan Perlin: Going live on our track system, and that's going to drive a lot of revenue. We also completed another large retirement system in 2023, and we've been winning.
Brian Essex: Adjusted diluted EPS in the range of $4.85 to $5.15, and cash from operating activities to be in the range of $1,292,000,000 to $1,392,000,000. For the first quarter of 2024, we expect revenue to be in the range of $1,397,000,000 to $1,437,000,000, and adjusted net income in the range of $300,000,000 to $316,000,000. Interest expense excluding amortization of deferred financing costs and originalist discount in the range of $113 to $115 million, diluted shares in the range of $253.2 million to $254.2 million, and adjusted diluted EPS in the range of $1.19 to $1.25.
Dan Perlin: Awful lot of the major era.
Hedge fund of launches and and conversions. So we have a lot of stuff that we think are in our pipeline and we think as that rolls through.
Dan Perlin: We will accelerate throughout the year.
Dan Perlin: Two increased organic revenue growth.
Speaker Change: That's great.
Speaker Change: Just a quick follow up on alternatives again, another strong quarter and called out private markets continuing to be a key contributor to that.
Speaker Change: I guess a couple of things is there a way to kind of contextualize, how big that.
Speaker Change: Has become embedded in alternatives and then.
Speaker Change: In that same vein is private equity continues to move down private credit or you haven't you seen more success potentially as we think about this year in terms of signing up more within the P side of the equation. Thank you.
Speaker Change: Yes.
Speaker Change: Dan I think the whole the whole.
William Charles Stone: Now, I'd like to turn it back over to Bill for his final comment. Thanks, Brian. I'd also like to welcome Deborah Walton Ruskin as the newest director on our board. Ms. Ruskin has had an impressive career at the London Stock Exchange Group, Refinitiv, Thomson Reuters, and Thomson.
Speaker Change: Fun business hedge funds and private equity funds fund of funds is about close to $1 billion in revenue.
Speaker Change: In the private market side private equity and private credit.
Speaker Change: Al.
Speaker Change: Probably pushing 350 million Bucks, so youre getting close to $35, 40% of our revenue in the funds business coming from private and have you seen as well as everyone else's theme there is tremendous amount of money going into <unk>.
William Charles Stone: Her expertise in fintech, the global market, executive sales leadership, and financial data fit well with SS&C's strengths and focus. We look forward to collaborating with Debra. We have recently recruited a senior executive, Ezra Bailyn, who will head up mergers and acquisitions.
Speaker Change: In the private debt private credit every everything private and they get better returns.
Speaker Change: I don't think thats going to change in and we think we're very well positioned.
Speaker Change: That's great. Thank you.
Speaker Change: Alright, Thanks, Dan.
Speaker Change: And our next question comes from the line of certain Dear Linda surrender. Please go ahead with Jefferies by the way <unk> the floor is yours.
William Charles Stone: Ezra has the experience and expertise to guide us in our M&A process. Q4 was a good quarter, and we look forward to reporting throughout 2024. Now, I will open it up for questions. Thanks, Bill. And at this time, I would like to remind everyone that in order to ask a question, press star and then the number one on your telephone keypad. Once again, press star one on your touchtone keypad.
Linda: Thank you for the first question just in terms of <unk> as you think about.
Linda: <unk> and <unk>.
Linda: As you as you look ahead through the rest of the year.
Linda: Is there anything within guidance said that you've included there and how should we think about the progression or the uptake of the business as you think about this year versus next year.
Operator: In the interest of time, we kindly ask you to limit your questions to one initial question and one, Thank you in advance. And we'll pause just a moment to compile the Q&A room. Okay, looks like our first question today comes from the line of Dan Perlin with RBC Capital Markets. Dan, please go ahead. Thanks, good evening.
Linda: Well I think the rollout was.
As close to flawless of any of the Rollouts, we've had which which bodes well for <unk>.
Linda: Sure.
Linda: Word of mouth cone across the.
William Charles Stone: Bill, you know, I wanted to ask you a question kind of what's embedded in guidance as you think about the jumping off point for organic growth, you know, at three and a half percent in the first quarter, but then for the full year, clearly ramping up to four and a half. So I'm just wondering what kind of connects the dots to that acceleration as you think about your line of sight going into the back half of the year. Hi Dan.
To the house.
Linda: Health industry is pretty.
Linda: It's a pretty.
Linda: And an awful lot of people talk and so we have great relationships across.
All kinds of health care organizations.
Linda: We said.
Linda: In my earlier remarks that the 15 million claims that we processed in January.
William Charles Stone: Hey, we got a lot of stuff accomplished in the fourth quarter of 2023, and that gives us a lot of confidence going into 2024. You know, we kind of said in the remarks about a large insurance company going live on our track system, and that's going to drive a lot of revenue. We also completed another large retirement system in 2023.
Linda: We're 10% more than we anticipated, which would be a $1 billion five claims so.
So we think there is some embedded growth in there and then we think we're going to add clients throughout the year and as we rollout commercial and then.
Linda: Medicaid and Medicare.
Linda: It is increasingly going to be.
Imperative on all kinds of.
Linda: Claims processors and other other healthcare companies to get into new technology.
William Charles Stone: And we've been winning an awful lot of the major, major hedge fund launches and conversions. So we have a lot of stuff that we think is in our pipeline, and we think as that rolls through, that we will accelerate throughout the year to increase organic revenue. That's great.
Linda: You can't run this on spreadsheets and you really can't run this on.
Linda: <unk> technologies that are not.
Or not.
Linda: Flexible enough.
Linda: Awful lot of stuff coming out in 2025.
Linda: Im HIPAA and other regulation and I don't see any inflation reduction act and all this stuff and I don't think that.
William Charles Stone: Just a quick follow-up on alternatives. Again, another strong quarter, and you called out, you know, private markets continuing to be a key contributor to that. I guess a couple things.
Linda: 40 year old 50 year olds 60 year old technology is going to save the day and I think that the brightest minds.
William Charles Stone: Is there a way to kind of contextualize how big that has become, you know, embedded in alternatives? And then, you know, in that same vein, as private equity continues to move down to private credit, are you seeing more success, potentially, as we think about this year, in terms of signing up more within the PE side of the equation? Thank you.
Linda: Running these big places are going to come to us and.
Linda: And recognize that we can.
Linda: Dreamliner operations save them a lot of money and we can make a lot of money in the process.
Speaker Change: Got it it sounds like obviously a positive outlook.
Speaker Change: Was any of that included within the guidance or is that all upside at this point.
Speaker Change: Well I think as far as healthcare is concerned we were we were measured.
William Charles Stone: Well, you know, Dan, I think that the whole fund business, hedge funds and private equity funds, fund to fund, is about close to a billion in revenue. And the private market side, private equity and private credit, et al, is probably pushing 350 million bucks. So, you know, we're getting close to 35, 40% of our revenue in the funds business coming from private. And as you've seen, as well as everyone else has seen, there's a tremendous amount of money going into private debt, private credit, everything private. And they get better returns.
Speaker Change: We think that if anything we have upside to that.
Speaker Change: And we think that.
Speaker Change: We.
Speaker Change: So young as a management team we have a lot of time in order to really execute on our strategy. So that we can.
Speaker Change: We can really reap the benefits.
Speaker Change: Got it.
Speaker Change: And then just as a follow up here just on that in the margin part of the story.
Speaker Change: Obviously, great execution.
Speaker Change: Have you thought about.
Speaker Change: The target for digital workers as you as the year progresses.
Speaker Change: Ultimately, where you might be able to get to obviously there is there is always going to be some level that.
Speaker Change: That you can do in any given year, but is there another ramp coming at some point or is it more of a smooth.
William Charles Stone: So, I mean, I don't think that's going to change. And we think we're very well positioned. That's great, thank you.
Speaker Change: I'll call it curve in terms of the adoption of the number of digital workers from Hereon outwards.
William Charles Stone: All right. Thanks, Dan. And our next question comes from the line of Surinder Thinda. Surinder, please go ahead with Jeffrey. I'm Chris Thinda, the floor is yours.
Well I would just say that that the digital worker initiative at <unk> is a very focused.
Speaker Change: Managed process then.
William Charles Stone: Thank you. For the first question, just in terms of as you think about Damani Rx and as you look ahead through the rest of the year, is there anything in guidance that you've included there? And how should we think about the progression or the uptake of the businesses as you think about it this year versus next year? Well, I think the rollout was as close to faultless as any of the rollouts we've had, which bodes well for, Yeah, you know, word of mouth going across the to help the health industry is pretty, is pretty vibrant, and an awful lot of people talk.
Speaker Change: And everybody understands that.
Speaker Change: To get onboard.
Speaker Change: And then they understand that you don't get onboard pretty quick and you don't have to worry about it. So so we're pretty bullish about those kinds of things and it's been effective for us.
Speaker Change: And as they embrace it.
Speaker Change: They kind of go Wow I should've done this sooner.
Speaker Change: Those kinds of things are.
The horses to water right and I think that's what we've done and we've got.
Speaker Change: A lot of opportunities going forward, the technology keeps getting better.
Speaker Change: It is capable of more things in as we integrate.
Speaker Change: No.
William Charles Stone: And so we have great relationships across all kinds of healthcare organizations. And, you know, as I said in my earlier remarks, the 15 million claims that we processed in January were 10% more than we anticipated, which would be a million and a half claims. So we think there's some embedded growth in there, and then we think we're going to add clients throughout the year and as we roll out commercial and then Medicaid and then Medicare. It is increasingly going to be imperative for all kinds of Claims Processors and other health care companies to get into new technology. Right, you can't run this on spreadsheets, and you really can't run this on... technologies that are not, are not flexible enough.
Speaker Change: Large language models into the process it will even get better. So we're optimistic about where we go from here.
Speaker Change: So we went from I think about 36 to eight in the second quarter to 39, 8% EBITDA margin in the fourth quarter. So we're.
Speaker Change: We're looking forward to continue to be able to expand our margins.
Speaker Change: Improve our customer service to satisfy more customers.
Speaker Change: Excellent. Thank you very much bill.
Speaker Change: Alright, Thank you for the question.
Speaker Change: And our next question comes from the line of Andrew Schmidt with Citi. Andrew. Please go ahead.
Andrew Schmidt: Yeah, Hey, Bill Lytle will Brian can speak with you take some time.
Andrew Schmidt: Actually a good segue from that last question to my question you mentioned I think get built.
Andrew Schmidt: 39, 8% EBITDA margin in the fourth quarter, which is a good jumping off point into 2024.
William Charles Stone: You know, there's an awful lot of stuff coming out in 2025 about HIPAA and other regulations, and I don't think an Inflation Reduction Act and all this stuff, and I don't think that 40-year-old, 50-year-old, 60-year-old technology is going to save the day. And I think that the brightest minds that are running these big places are going to come to us and recognize that we can.
Andrew Schmidt: Yeah, historically I think the target margin had been 40% I guess the question is with the efficiencies that you're seeing digital workers.
Andrew Schmidt: Other areas is that long term target now is a ceiling that higher and what might that look like over the longer term. Thanks a lot.
William Charles Stone: It sounds like a positive outlook, but was any of that included within the guidance, or is that all outside of it? Well, I think as far as health care is concerned, we were measured, you know, and we think that, if anything, we have an upside to that, and we think that, you know, we're so young as a management team, we have a lot of time in order to really execute on our strategies so that we can, and really reap the benefits. I got it.
Yes, Andrew I think I think we need to define the longer term. So if you look out over the next couple of years that we probably have opportunities too.
Andrew Schmidt: <unk> increased our margins through through that that digital worker process.
Andrew Schmidt: <unk> to 200 basis points.
Speaker Change: Going to spend money on a lot of things too. So so the margin is not just driven by by.
Speaker Change: Blue Prism deployment.
Speaker Change: We're spending money on sales we are spending money on marketing, we're spending money on a lot of R&D initiatives and and we we are quite.
William Charles Stone: And then just as a follow-up here, just on the margins part of the story, obviously, great execution. Have you thought about the target for digital workers as the year progresses? And ultimately, where you might be able to get to? Obviously, there's always going to be some level that you can do in any given year. But is there another wrap coming at some point?
Speaker Change: Focused on defending our IP.
Speaker Change: And thats not a cheap process, but it's also that's our lifeblood as a company.
Speaker Change: And we wanted people to understand that.
Speaker Change: We don't take it with anything except <unk>.
Speaker Change: Extreme.
Speaker Change: Defense.
Speaker Change: And then it becomes extreme offense, but.
William Charles Stone: Or is it more of a smooth, I'll call it, curve in terms of the adoption of the number of digital workers from here on out? Well, I would just say that the digital worker initiative at SS&C is a very focused, very managed process, and everybody understands that they need to get on board. And then they understand that if you don't get on board pretty quick, then you don't have to worry about it. So we're pretty blunt about those kinds of things, and it's been effective for us, and as they embrace it, And, you know, they kind of go, wow, I should have done this sooner. But, you know, those kinds of things are meant to lead the horses to water, right?
Speaker Change: We're very focused.
Speaker Change: We're very protective of our customers and our employees and our communities.
Speaker Change: And that means that we have to be very protective of our IP.
Speaker Change: Got it thank you for that Bill.
Speaker Change: And then if I could ask just on license revenues for 2024, obviously, it's not a huge part of the business, but it can create some volatility as we saw in 2023.
What's the expectation for 2024, and I guess there is a broader question about just outlook philosophy, and whether thats changed at all in terms of taking.
Speaker Change: Yes.
William Charles Stone: And I think that's what we did. And we've got a lot of opportunities going forward. The technology keeps getting better. It is capable of more things.
Speaker Change: Finer point to let's call it sales cycles and bookings assumptions like that I guess kind of two part question license revenues and then just broader kind of outlook philosophy. When it comes to organic growth. Thank you guys I appreciate the time.
William Charles Stone: And as we integrate, you know, large language models into the process, it will even get better. So we're optimistic about where we go from here. And, you know, we went from, I think, about 36.8 in the second quarter to 39.8 in the fourth quarter.
Speaker Change: So I think similar to what.
Speaker Change: Bill said, a second ago about healthcare.
Speaker Change: We're trying to be measured in terms of what's what's in our guidance on licensed revenue. So clearly there was some softness in 2023.
William Charles Stone: We're looking forward to continuing to be able to expand our margins and improve our customer service and satisfy more customers. Excellent. Thank you very much, Bill. All right, thank you for the question. And our next question comes from the line of Andrew Schmidt with Citi. Andrew, please go ahead. Yeah, hey, Bill, Rahul, Brian, good to speak with you. Thanks for the time.
Speaker Change: But at the same time, the pipelines that we have and the deals that we have that are in fairly advanced stages.
Give us a little bit more sure about 2024 going into 'twenty four or so so we actually think license ought to do better in 'twenty four than it did in 'twenty three and I think to your second comment or question on the forecasting process and not so much a change in philosophy I just think that as we continue to do this we just get better information in.
Andrew Schmidt: Actually, a good segue from that last question to my question. You mentioned, I think, Bill, the 39.8% even-down margin in the fourth quarter, which is a good jumping off point into 2024. Historically, I think the target margin was 40%.
We can make better guesses on whats happening and Thats, a continuous and ongoing process.
Speaker Change: Got it thank you very much guys.
Thanks, Andrew and again as a reminder, if you'd like to ask a question star one on your telephone keypad once again star one.
Andrew Schmidt: I guess the question is, with the efficiencies that you're seeing, digital workers, and other areas, is that long-term target now higher? And what might that look like over the longer term? Thanks a lot.
Speaker Change: And it looks like our next question comes from Alexa, Google <unk> with J P. Morgan Lexi go ahead.
William Charles Stone: Yeah, Andrew, I think, you know, we need to define the longer term. So, you know, if you look out over the next couple of years, you know, we probably have opportunities to increase our margin through the digital worker process. You know, 100 to 200 basis points that look like we're going to spend money on a lot of things too. So, the margin is not just driven by Blue Prism Deployment.
Alexa: Thank you everyone Hi, Bill I was wondering if you could maybe elaborate a little bit more on the comments you made around winning major hedge fund launches some conversions.
Alexa: Any additional.
Alexa: Food that they're in.
Alexa: Fewer.
Speaker Change: Fencing and the.
Speaker Change: Acceleration in hedge fund and market consolidation, that's been going on for some time now, but it sounds like it's been accelerating lately.
Speaker Change: Yes.
Speaker Change: I think if you go.
Speaker Change: Go back through our press releases and our client wins and stuff you Youll see that an awful lot of the major macro hedge funds for our clients.
Speaker Change: And for the last several years, an awful lot of the new funds and the hedge funds went into these macro funds.
William Charles Stone: You know, we're spending money on sales, we're spending money on marketing, we're spending money on a lot of R&D initiatives. And, and, you know, we are quite focused on defending our IP. And that's not a cheap process, but it's also our lifeblood as a company, and And, you know, we want people to understand that we don't take it with anything except extreme. Defend, you know, and then it becomes extremely awful.
Speaker Change: We have a concentration on the largest most complex funds because what that does is make sure that.
Speaker Change: We have the expertise and technology.
Speaker Change: To really support them.
Speaker Change: As they grow and then also as they expand their geographic.
Speaker Change: Asset selection reaches so.
William Charles Stone: We're very focused. We're very protective of our customers and our employees and our communities. And that means that we have to be very protective of our IP.
Speaker Change: That's what we do so when you.
Speaker Change: I think we had a press release.
Speaker Change: Just recently on Hudson Bay.
Speaker Change: $20 billion hedge fund that we just we just added to our to our lineup.
Andrew Schmidt: Thank you for that, Bill. And then, if I could ask just on licensed revenues for 2024, obviously, it's not a huge part of the business, but it can create some volatility, as we saw in 2023. What's the expectation for 2024? And I guess there's a broader question about just outlook philosophy and whether that's changed at all in terms of taking, you know, a finer point to, let's call it, sales cycles and booking assumptions like that. I guess it's kind of a two part question, you know, licensed revenues and then just a broader kind of outlook philosophy when it comes to organic growth. But thank you, guys. I appreciate the time. Sure. So, you know, I think it is similar to what?
Speaker Change: And we've got a number of those throughout the throughout the world and we are we are marching.
Speaker Change: Both in EMEA, and Asia Pac as well as North America, and we spend more money at this than anyone else, but we think that.
Speaker Change: That we're spending a Wi fleet will continue to.
Speaker Change: Increase our win rates.
Speaker Change: Perfect. Thank you Bill and a quick question to Brian.
Speaker Change: Have you been able to assess the potential implications to your free cash flow from the tax relief for families and workers.
Speaker Change: 2020 for Bill.
Speaker Change: <unk>.
Speaker Change: Do you have any visibility.
Speaker Change: We're in this could take your tanks.
Speaker Change: Thanks.
Speaker Change: And this bonus depreciation change.
Speaker Change: Yes, so we haven't done a full assessment at this point <unk> preliminary to give any direction as to any changes, but obviously working through.
Brian Essex: Bill said a second ago about healthcare. We're trying to be measured in terms of what's in our guidance on license revenue. So, you know, clearly, there was some softness in 2023. But at the same time, the pipelines that we have and the deals that we have that are in fairly advanced stages, you know, give us a little bit more cheer about 2024 going into 25. So we actually think license ought to do better in 24 than it did in 23.
Speaker Change: Any tax law changes, making sure we have the appropriate.
Speaker Change: Our positioning if there is a strategy that we need to take.
Speaker Change: Look at we'll continue to to implement.
Speaker Change: And obviously, it's not too aggressive, but we think as complies with with obviously the appropriate tax laws and tax jurisdictions. So at this point too early to.
Brian Essex: And I think your second comment or question on the forecasting process is not so much a change in philosophy. I just think that as we continue to do this, we just get better information, and we can make, you know, kind of better guesses on what's happening. And that's a continuous and ongoing process.
Speaker Change: Two assessor and impact us.
Speaker Change: We're quite focused on on our taxes.
Speaker Change: We've been able to keep it constant 26% tax rate for <unk>.
Speaker Change: Over the last five or 10 years and we'd like to see if we can't have that start sloping downward and that might mean that we do different things than we do now.
Andrew Schmidt: Thank you very much, guys. Thanks, Andrew. And again, as a reminder, if you'd like to ask a question, press one on your telephone keypad. Once again, press one. And it looks like our next question comes from Alexei Gogolev with J.P. Morgan. Alexei, go ahead.
Speaker Change: We might move some more of our people to lower tax states.
Speaker Change: As our clients have moved to places like Florida, North Carolina, Georgia.
Speaker Change: We might we might start following with groups that are have specific expertise.
Speaker Change: We already have a large office in Jacksonville, and we have some people down in the Miami area. So we're we're optimistic that if we get some focus.
Alexei Gogolev: Thank you, everyone. Hi Bill, I was wondering if you could maybe elaborate a little bit more on the comments you made around winning major hedge fund launches and conversions. Any additional feedback there?
Speaker Change: And and have some ideas that we will be able to.
Speaker Change: Hopefully.
William Charles Stone: And also if you're sensing any acceleration in hedge fund and market consolidation that's been going on for some time now, but it sounds like Accelerating Weight. Yeah, actually, I think if you, you know, if you go back through our press releases and our client wins and stuff, you'll see that an awful lot of the major macro hedge funds are our clients. And for the last several years, an awful lot of the new funds into hedge funds went into these macro funds.
Speaker Change: Our tax rate down.
Speaker Change: Thank you Bill Thank you, Brian Congratulations with great results.
Speaker Change: Thanks Alexia.
Speaker Change: And our next question comes from Kevin Mcveigh with UBS, Kevin. Please go ahead.
Kevin Mcveigh: Great. Thanks, so much and I'll add my congratulations as well.
If you think about the organic growth.
Kevin Mcveigh: Growth guidance for 'twenty four it looks like the range is $2 7 million six three any thoughts as to what would that.
Kevin Mcveigh: At the lower end of the range as opposed to the higher end.
Speaker Change: Well, that's pretty pretty pretty sizable range, Kevin and I.
Speaker Change: Think that.
<unk>.
Speaker Change: We're certainly hoping to.
Speaker Change: Beat the low end, we'd love to beat the high end.
Speaker Change: We'd also love to beat the midpoint so.
William Charles Stone: So, we have a concentration on the largest and most complex funds because what that does is make sure that we have the expertise and technology to really support them, you know, as they grow and then also as they expand their geographic and Asset Selection Reach. So that's what we do. So when you, I think we had a press release just recently on Hudson Bay. That's a $20 billion hedge fund that we just added to our lineup. And we've got a number of those throughout the world, and we are marching.
Speaker Change: I don't think that we think that.
Speaker Change: That the low end.
Speaker Change: The 228 I think it is.
Speaker Change: As the high hurdle.
Speaker Change: But it's also <unk>.
Speaker Change: When you are $5 5 billion in revenue and you went to 3% growth and you have about 3%.
Speaker Change: Attrition that means you need 6% on $5 5 billion, which.
Speaker Change: No Mike.
Speaker Change: Early math tells me that's $330 million worth of sales that we have to do so it's not a walk in the park.
Speaker Change: But we've got a talented sales team with talented Implementers, we've got talented developers and we have a talented support organization. So.
William Charles Stone: You know, both in EMEA and AsiaPAC, as well as North America, and we spend more money on this than anyone else, but we think that we're spending it wisely, and it will continue to increase our win rate. Thank you, Bill. And a quick question to Brian. Have you been able to assess the potential implications to your free cash flow from the Tax Relief for Families and Workers Act of 2024 bill?
Speaker Change: We are cautiously optimistic that we're going to have a really good 2024.
Speaker Change: It sounds like it and then.
Speaker Change: Can you remind assured.
Speaker Change: It would be best just the philosophy on the incremental margin you get from.
Speaker Change: Got it.
Speaker Change: Blue Prism and just the deployment of the <unk>, how much of that goes to maybe margin as opposed to reinvestment.
Speaker Change: As we think about that going forward.
Speaker Change: I think we feel pretty good about the investment levels that we already have in our business whether that spending on R&D or other things. So really the productivity enhancements do a couple of things for us.
Brian Essex: Do you have any visibility of where this could take your career... Thanks.
Brian Essex: , from this bonus depreciation change. So we haven't done a full assessment at this point, so it'd be premature to give any direction as to any changes. But obviously, working through any tax law changes, making sure we have the appropriate. If there's a strategy that we need to take a look at, we'll continue to implement that. Obviously, it's not too aggressive, but we think it complies with, obviously, the appropriate tax laws, so at this point, it's too early to assess an impact.
Speaker Change: We think they make the customer experience better.
Speaker Change: We think it gives the employees better jobs and then.
Speaker Change: Does most of it does go straight to the bottom line.
Speaker Change: Terrific. Thank you.
Speaker Change: Alright, Thank you Kevin.
Speaker Change: And one final reminder, again, if you'd like to ask a question star one on your telephone keypad once again star one.
Speaker Change: And our next question comes from the line of James Faucette with Morgan Stanley James. Please go ahead.
William Charles Stone: Yeah, and we're quite focused on our taxes. And, you know, we've been able to keep a constant 26% tax rate for the last five or ten years, and we'd like to see if we can't have that start sloping downward, and that might mean that we do different things than we do now. You know, we might move some more of our people to a lower tax state. You know, as our clients have moved to places like Florida and North Carolina, Georgia, you know, we might we might start following with a group that has specific expertise. We already have a large office in Jacksonville, and we have some people down in the Miami area.
Speaker Change: Hi, everyone. It's Michael upon town for James Thanks for taking our question.
Speaker Change: I just wanted to ask on M&A clearly there is capacity here from a leverage perspective, and you called out a senior hire to assess with M&A earlier in the call.
Michael: What does the deal pipeline look like right now and what types of assets and geographies are you targeting.
Michael: Well right now we're only targeting earth. So we're going to try to get wherever we can.
Michael: Our planet and as far as the types of organizations that we would acquire we're very interested in expanding fund administration, if we can buy.
William Charles Stone: So, we're optimistic that if we get some focus, then we'll be able to get some of that done and have some ideas that we'll be able to. Hopefully, we'll move our tax rate. Thank you, Bill. Thank you, Brian. Congratulations on a great job. Thanks, Alexi. And our next question comes from Kevin McVeigh with UBS. Kevin, please go ahead.
Michael: By existing businesses in and figure out ways to to help help current clients maybe.
Michael: Improve their businesses by.
Michael: By collaborating with us on a lift out or something along those lines.
Michael: Secondly, we like technology.
Michael: We think thats the steep carnivore business Thats why you can get somewhat passionate about.
Kevin Mcveigh: Well, that's a pretty, pretty, pretty sizable range, Kevin. And I think that we're, you know, we're certainly hoping to beat the low end. We'd love to beat the high end. We'd also love to beat the midpoint. So, you know, I don't think that we think that... Is that the low end?
Michael: <unk> our IP.
Michael: I think our key key things on this stuff is to find pockets. So we just had some seminars and some and some people out in the in the far east where in Mccall we were in Hong.
Michael: Hong Kong.
Michael: And pitched in a bunch of clients and we have a really nice business in Australia.
William Charles Stone: It is a high hurdle. But it's also, you know, when you're five and a half billion dollars in revenue and you want 3% growth and you have about 3% attrition, that means you need 6% on $5.5 billion, which is, Now my. Early math tells me that's $330 million worth of sales that we have. So, you know, it's not a walk in the park, but we've got a talented sales team, we've got talented implementers, we've got talented developers, and we have a talented support organization. Now, we're cautiously optimistic that we're going to have a really good 2024. I think we feel pretty good about the investment levels that we already have in our business, you know, whether that's spending on R&D or other things. So really, the productivity enhancements do a couple things for us. You know, we think they make the customer experience better. We think it gives employees better jobs, and then it does; most of it does go straight to the bottom.
Michael: And I think that there is opportunity we have a pretty nice business in China too.
Michael: Somewhat of a.
Michael: Ah crap shoot as to whether or not it's going to grow really faster or to stop.
Michael: But I think it's we haven't a lot of great clients.
Michael: We think we provide some good services. So we think there is opportunity we think theres a lot of opportunity throughout Europe.
Michael: We think that we have a number of initiatives that we're executing on and then.
Michael: We're pretty much.
Michael: Pretty big powerhouse here in North America.
Got it that's helpful and then maybe just on pricing.
Michael: In terms of the incremental revenue contemplated in 24, how much of it.
Do you expect to come from from price increases and how does that compare to what you were able to sort of an act in 'twenty three.
Okay.
Michael: <unk>.
Michael: We feel really good that we have a.
Michael: Much more predictable view on this we've been through a couple of rounds of this over the last couple of years. So we expect a sort of a similar amount of price lift in 'twenty four as we actually achieved in 'twenty three.
Kevin Mcveigh: All right. Thank you, Kevin. And one final reminder, again, if you'd like to ask a question, press 1 on your telephone keypad. Once again, press 1.
Operator: And our next question comes from the line of James Faucette with Morgan Stanley. James, please go ahead. Hi, everyone, it's Michael Infante. I'm on behalf of James Faucette.
Michael: And the process for getting it is.
Michael: Lot more laid out now so and then that ought to be just a continuous uplift for us in future years as well.
Michael Lewis: Thanks for taking our question. Bill, I just wanted to ask about M&A. Clearly, there's capacity here from a leverage perspective, and you called out a senior hire to assist with M&A earlier in the call. What is the deal pipeline like right now? And what types of assets and geographies are you targeting?
Speaker Change: Got it thanks al Thanks Bill.
Alright.
Thank you for your patience, everyone and it looks like there are no further questions. So I'd now like to turn the call back over to Bill Stone for closing remarks build the floor is yours.
William Charles Stone: Thanks, and thanks, everybody we appreciate.
William Charles Stone: Well, right now, we're only targeting Earth, so we're going to try to get wherever we can on the planet and as far as types of organizations that we would acquire, we're very interested in expanding fund administration if we can buy it from existing businesses and figure out ways to help current clients maybe improve their businesses by collaborating with us on a lift out or something along those lines. Secondly, you know, we like technology. We think that's the seed corn of our business. That's why you hear me get somewhat passionate about protecting our IP. So I think our key, key things on this stuff are to find pockets. So we just had some seminars with some people out in the Far East. We were in Macau, we were in Hong Kong, and we pitched to a bunch of clients.
Speaker Change: You come into this this call I know in New York City was a little Snowy for you and some of you might have forgotten goloshes and all that so we really appreciate that you came out in.
William Charles Stone: And we look forward to seeing you.
William Charles Stone: Sometime in April and talking about.
William Charles Stone: Where we're going from here. So thanks, again, and we're working hard for you.
William Charles Stone: Thanks.
Speaker Change: Thanks, Bill and ladies and gentlemen that does conclude today's call. Thank you all for joining and you may now disconnect have a great day everyone.
Speaker Change: [music].
William Charles Stone: And we have a really nice business in Australia, and I think that there's an opportunity. We have a pretty nice business in China, too.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: [music].
William Charles Stone: That's somewhat of a crapshoot as to whether or not it's going to grow really fast or stop, you know, but I think we have a lot of great clients and we think we provide some good services. So we think there's an opportunity. We think there's a lot of opportunity throughout Europe. You know, we think that we have a number of initiatives that we're implementing. And then, you know, we're pretty much a pretty big powerhouse here in North America.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
William Charles Stone: Got it. That's helpful. And then maybe just on pricing, in terms of the incremental revenue contemplated in 24, how much of it do you expect to come from price increases, and how does that compare to what you were able to sort of enact in 23?
Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Sure.
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Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Okay.
Speaker Change: [music].
Speaker Change: Yes.
Michael Lewis: Thanks. I think that we feel really good that we have a much more predictable view on this. You know, we've been through a couple of rounds of this over the last couple of years. So we expect a sort of a similar amount of price lift in 24 as we actually achieved in 23.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yes.
Okay.
Speaker Change: Thank you.
Speaker Change: [music].
Rahul Kanwar: And the process for getting it is, you know, a lot more laid out now. So, and then that ought to be just a continuous uplift for us in future years. Got it. Thanks, Rahul. Thanks, Bill. All right. Thank you for your patience, everyone. And it looks like there are no further questions. So I'd now like to turn the call back over to Bill Stone for closing remarks. Bill, the floor is yours.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Yes.
William Charles Stone: Thanks, and thanks everybody. We appreciate you coming on this call. I know that in New York City it was a little snowy for you, and some of you might have forgotten your galoshes and all that, so we really appreciate that you came out, and we look forward to seeing you sometime in April and talking about where we're going from here. So thanks again, and we're working hard for you. Thanks. Thanks, Bill. And ladies and gentlemen, that does conclude today's call. Thank you all for joining, and you may now disconnect. Have a great day, everyone!
Speaker Change: Okay.
Speaker Change: [music].
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Speaker Change: Yes.
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Speaker Change: Okay.
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Speaker Change: Yes.
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Yes.
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Speaker Change: Okay.
Sure.
Speaker Change: Yes.
Speaker Change: Sure.