Q3 2024 SS&C Technologies Holdings Inc Earnings Call
Speaker Change: Ladies and gentlemen, this is your offer speaking. To these conference call, we'll begin momentarily. You will be placed on easy call until then. Thank you for your patience.
John: Thank you for standing by. My name is John and I'll be your conference operator for today.
John: At this time I'll do like to welcome everyone to the SSNC Technologies, 3rd quarter, 2000 in 24 early skull.
John: All lives of increase and need to prevent any background noise.
John: After the speaker's remarks, there will be a question and answer session. If you would like to ask questions during this time, simply press star, followed by the number one on your telephone keypad. So we draw your question, these press star went again. Thank you. I would not like to turn the call over to justine Stone, head of investor relations. Will you still ahead?
John: Hi everyone, welcome and thank you for joining us for our Q32024 earnings call. I'm justine Stone and Best Relations for SSNC Technologies.
John: with me today is Bill Stone, Chairman and Chief Executive Officer, Robil Kanwar, President and Chief Operating Officer, and Brian Schell, our Chief Financial Officer. Before we get started, we need to review the State Harbor statement. Please note that various remarks we make today about future expectations plans across this.
John: including the financial outlook we provide constitute correlative statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.
John: 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.
John: These forward-looking statements represent our expectations only as of today, October 24th.
John: 2024. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so.
John: During today's call, we will be referring to certain non-GAAP financial measures. 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.org.
Speaker Change: I will now turn the call over to Bill.
Bill Stone: Thanks Justine and welcome everyone. Our third quarter results are a record adjusted revenue of $1,466,800,000, up 7.3%.
Bill Stone: Our adjusted diluted earnings per share were $1.29 up 10.3%. We also reported record adjusted consolidated EBITDA of $566.2 million.
Bill Stone: with 38.6% EBITDA margins.
Bill Stone: Our third quarter adjusted organic revenue growth was 6.4%. This growth was driven by strength in our alternatives, gids, WIT, and interlinked businesses.
Bill Stone: Thank you. Bye.
Speaker Change: and John O'Connor. Thank you. Thank you.
Speaker Change: Distribution
Speaker Change: Solutions Business
Speaker Change: Global Investor Distribution Services business drove the outperformance. Our recurring revenue growth rate for financial services was 7.2%, which includes all software-enabled services and maintenance revenue.
Speaker Change: Third quarter cash from operating activities was $336.6 million, up 39% from Q3 2023. Our cash flow conversion percentage for the quarter was 103%.
Speaker Change: We bought back 1.2 million shares for $89.4 million at an average price of $72.72 per share.
Speaker Change: Absent high-quality acquisitions, we continue to believe share repurchases are the best capital use.
Speaker Change: In September, we closed the $670 million Bataea Class Action Services acquisition. Bataea meets our financial criteria, about $95 million in annual revenue, growing high single digits and 45% plus EBITDA margins.
Speaker Change: The acquisition
Speaker Change: will immediately be attributed to earnings.
Speaker Change: The TAYS offering is synergistic with our fund administration business and we are already making progress cross-selling.
Speaker Change: I'll now turn this call over to Rahul to discuss the quarter in more detail.
Rahul: Thanks Bill. We had another strong quarter with organic revenue growth of 6.4 percent.
Rahul: The Wealth and Investment Technology Business Unit grew 10.9% for the quarter.
Rahul: The reorganization from earlier in 2024 has brought development teams together and we're currently integrating the capabilities of our ALOHA solution.
Rahul: into the new Genesis platform.
Rahul: This will accelerate our ability to deliver the deepest set of cloud-native front-to-back technology to the investment management market.
Rahul: Our global investor and distribution solution business had another strong quarter and in addition to new business wins we have brought in additional revenue through special projects at our largest clients.
Rahul: The healthcare industry is facing higher than expected utilization and rising costs for Medicare and Medicare Advantage. SSNC is poised to support our healthcare clients and prospects through these headwinds.
Rahul: With the integration of our Domani RX platform, automation opportunities, and lift-outs, we can reduce operating costs for health insurers over time.
Rahul: Q4 is off to a strong start for SS&C Health. We signed two large license deals for about $8 million in revenue at the beginning of October that will push from Q3.
Rahul: Our internal automation efforts are progressing as well. Since acquiring Blue Prism in 2022, our total revenue has grown about $600 million.
Rahul: and our headcount is down. For 2024 year to date, we estimate a benefit of approximately 1050 full-time equivalents, thus far in the year, because of rolling out Blue Prism Digital Workers as well as automating and optimizing the existing processes.
Speaker Change: We'll now turn it over to Brian to run through the financials.
Brian Schell: Thanks Rahul and good day everyone. As noted in our press release, our Q3-24 gap results reflect revenues of 1.466 billion dollars, net income of 164 million dollars, and diluted earnings per share of 65 cents.
Brian Schell: Our adjusted non-GAAP results include revenues of $1.467 billion, an increase of 7.3% over Q3-23, and adjusted diluted EPS of $1.29, a 10.3% increase over Q3-23.
Brian Schell: The adjusted revenue increase of a hundred million dollars over Q3'23 was primarily driven by incremental revenue contributions from the WIT, Alternatives, GIDS, and interlinked businesses.
Brian Schell: Acquisitions contributed $8 million, with about $4 million attributable to Battea, and foreign exchange had a favorable impact of approximately $5 million.
Brian Schell: As a result, adjusted organic revenue growth on a constant currency basis was 6.4%.
Brian Schell: Our core expenses increased 6.8% or $58 million excluding acquisitions and on a constant currency basis.
Brian Schell: Adjusted Consolidated Budget was 566 million dollars or 38.6% of adjusted revenue, an increase of 32 million dollars or 6% from Q3'23.
Brian Schell: Net interest expense for the third quarter of 2024 was $110 million, a decrease of $11 million from Q3 of 2023.
Brian Schell: Adjusted net income was $327 million, up 10%. And adjusted diluted EPS was $1.29, an increase of 10.3%. The effective tax rate used for adjusted net income was 26%.
Brian Schell: An increase in the average share price drove the diluted share count up to $254.1 million from $252.3 million at Q2'24.
Brian Schell: The SEC entered the third quarter with $694.7 million in cash and cash equivalents and $7.2 billion in gross debt. The higher-than-normal cash balance reflects opportunistic borrowing that will be deployed during the fourth quarter.
Brian Schell: SS&C's net debt, as defined in our credit agreement, which excludes cash and cash equivalents of $159 million held at Domani RX, was $6.7 billion.
Brian Schell: Our last 12-month consolidated EBITDA used for covenant compliance was $2.279 billion.
Brian Schell: Based on net debt of approximately $6.7 billion, our total leverage ratio was 2.9 times.
Brian Schell: As we look forward to the fourth quarter and the remainder of the year, with respect to guidance,
Brian Schell: Note that we will continue to focus on client service and assume that retention rates will remain in the range of our most recent results.
Brian Schell: We will continue to manage our expenses with a cost-disciplined approach by controlling and aligning variable expenses to ensure efficiency, increasing productivity, improve our operating margins and leverage our scale and create capacity.
Brian Schell: and effectively investing in the business through marketing and sales and R&D to take advantage of future growth opportunities.
Brian Schell: Specifically, we have assumed foreign currency exchange and interest rates to remain at current levels.
Brian Schell: tax rate of approximately 26% on adjusted on an adjusted basis which is unchanged from prior guidance
Brian Schell: Capital expenditures to be 4.1 to 4.5% of revenues, which is also unchanged from prior guidance. And a stronger weighting to share repurchases versus debt reduction, subject to changes in market conditions or financing needs.
Brian Schell: For the fourth quarter of 24 we expect revenue to be in the range of 1.46 to 1.5 billion dollars and 2.4 percent organic revenue growth at the midpoint.
Brian Schell: adjusted net income in the range of $329 million to $345 million.
Brian Schell: interest expense excluding amortization of deferred financing costs and original issue discount in the range of 110 to 112 million dollars.
Brian Schell: The looted shares in the range of $254.6 to $255.6 million and adjusted the looted EPS in the range of $1.29 to $1.35.
Brian Schell: For the full year 2024, we expect revenue to be in the range of $5.815 to $5.855 billion and 4.9% organic revenue growth at the midpoint.
Brian Schell: Adjusted net income in the range of $1.299 to $1.315 billion dollars.
Brian Schell: Diluted shares in the range of $253.6 to $253.8 million.
Brian Schell: adjusted diluted EPS in the range of $5.12 to $5.18 and cash from operating activities to be in the range of 1.33 to 1.37 billion dollars
Brian Schell: And now, back to Bill.
Bill Stone: Thanks Brian. We feel our business is strengthening and we were able to expand our horizons.
Speaker Change: The Bataea Purchase is already showing very positive signs.
Speaker Change: Our Deliver client conference was a great success and I would like to thank David Rubenstein for being our keynote speaker. I will now open it up for questions.
Speaker Change: Thank you. Ladies and gentlemen, we will now begin our question and answer session.
Speaker Change: If you are dialed in and would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: As a reminder, please limit yourself to one question and one follow-up only. You may rejoin the Q&A if you have any additional questions.
Speaker Change: Your first question comes from the line of Jeff Schmidt from William Blair. Please go ahead.
Speaker Change: Thank you.
Jeff Schmidt: Could you discuss the market opportunity for Domini RX just because I think the top three players in that
Jeff Schmidt: space handle, you know, maybe 70 or 80 percent of prescription claims, I think.
Jeff Schmidt: And you've just mentioned before you don't plan on kind of focusing on that group.
Speaker Change: We would say you're right, it's probably about 70-80% is what the UnitedHealthcare, Aetna, CVS, and Cigna Express scripts process. I think there's something like 5-6 billion scripts a year in the United States, so if you take
Speaker Change: 20% of 6 billion, you got 1.2 billion, and if you take 30%, you got 1.8.
Speaker Change: Right, so that's a lot of scripts.
Speaker Change: You know, so we think we have a lot of run room. We also think that we can license our technology
Speaker Change: Maybe one of those three or maybe more and we also have a large number of others that are you know, like like us Or like the big three but a lot smaller so they might do
Speaker Change: You know two three hundred million scripts rather than rather than the You know one and a half one and a half billion scripts, so you know we think there's plenty of run room We think there's a lot of things in health care that need help with and so
Speaker Change: Pharmacy claims is one, but there are other things like medical claims and other things that we think we're well positioned to be able to help the healthcare industry.
Speaker Change: Okay, great. And then just on the TrustSuite business, I think you've mentioned it last quarter, but it's the InnoTrust combination. Could you discuss kind of the size of that business and the type of growth you're seeing there? How does that stack up versus competitors like an FDI product?
Speaker Change: Yeah, I think, you know, the TrustSuite product really does take...
Speaker Change: Pleasing user interface and a lot of capability with technology that is, you know,
Speaker Change: multi-decade old
Speaker Change: and we think that we have a lot of run room and we've been pretty pleased with the...
Speaker Change: with the acceptance rate of TrustSuite.
Speaker Change: Any sense just on the size of that, size of that business today from a revenue perspective or in the growth?
Speaker Change: Well, you know, it's still a little nascent, but we would expect it to do probably in 2000.
Speaker Change: 24 you know upwards to 10 million dollars in revenue and then in 2025 we would we would expect to see perhaps a multiple of that
Speaker Change: Got it. Okay, thank you.
Speaker Change: Your next question comes from the line of surrender, Tind, from Jefferies. Please go ahead.
Speaker Change: Thank you. Bill, can you provide maybe any color on the outlook for 4Q in terms of the slowdown in the organic growth rate?
Speaker Change: That's implied. And then is there some maybe some licensing noise or unlicensing deals and things like that, or how should we think about 4Q number?
Bill Stone: Yeah, I think the major thing with Q4 in 24 compared to 23 is Q4 of 23 was substantially better than any of the other quarters in 23. So we're kind of getting...
Bill Stone: a little bit of
Bill Stone: of Comp Challenge to us. We have a big pipeline, we have a lot of stuff going on.
Bill Stone: You know, we're always cautious, you know, we've had three or four pretty good quarters in a row and we expect Q4 to be a pretty good quarter too.
Speaker Change: Got it. And then in terms of the follow-up, just obviously, you know, a lot of news in the health care space with, you know, potentially Cigna and Humana back in merger talks, some weak results out at Elevance and some other things.
Speaker Change: What's the potential impact or is there any read-through there or things something that we should be aware of related to Demonte RX?
Speaker Change: I think as Rahul spoke earlier, we got a pretty big uplift in revenue for healthcare in October.
Speaker Change: The stuff that it pushed from September, you know, I still think we have a great opportunity here. Domlani RX is really new technology that there's nothing like it out in the marketplace that can handle scale.
Speaker Change: You know, a lot of people that used RxNova.
Speaker Change: system considered it the gold standard for Medicare and Medicare Advantage already in DuMonte RX is far exceeding RX Nova's capabilities.
Speaker Change: So, Bill, I guess just to clarify, is the commentary there that...
Speaker Change: There shouldn't be any strategic impact on the relationship there that you have, or I guess that's what I was trying to get at, rather than the actual near-term business.
Speaker Change: You mean Humana and Cigna?
Bill Stone: That is correct, yes.
Bill Stone: You know, that's certainly a rumor at the present and, you know, I think...
Bill Stone: I think there's opportunity no matter what happens.
Bill Stone: We've had Humana as a client for a long time, Cigna was our biggest healthcare client when we acquired DST.
Bill Stone: We didn't think they'd keep keep using us as you could imagine
Bill Stone: So, you know, we think there's plenty of opportunity for us.
Bill Stone: Whatever happens with the Humana Sigma, we think it will be positive towards us.
Bill Stone: and lots of stuff is happening in health care as Rahul had alluded to before and we just have to play it out. But everybody's concerned about their health. People are not going to stop spending money on their health and we think it's a very good spot for us to be in.
Speaker Change: Thank you, Bill. That's helpful.
Speaker Change: http://TheBusinessProfessor.com
Speaker Change: Your next question comes from the line of Andrew Schmidt from Citi. Please go ahead.
Speaker Change: Medium-Term Organic Growth Outlook out there.
Andrew Schmidt: similar to the medium term. And then, you know, if you could just talk about maybe the pipeline or the sales cycles accordingly, because I know obviously, you know, there's a lot of work that's done in advance to hit those targets. So if you could comment on just your visibility there in terms of what you're seeing in the pipe, that'd be great. Thanks a lot.
Speaker Change: Yeah I think that we have you know I think our sales force is the strongest it's been so we have a lot of people out there banging on doors and we have a lot of capable people we have
Speaker Change: Tremendous number of
Speaker Change: And we have the resources, we have the cash, we have the access to markets. We're really excited about the cross-sell opportunities with Pataya. I think that we have an opportunity to...
Speaker Change: Surprise you positively!
Speaker Change: Got it. That's great to hear, Bill. Very constructive. And then if I could just ask about R&D.
Speaker Change: I think one of the highlights of the Analyst Day was just the breadth of the product pipeline. It's bigger than I've seen in some time.
Speaker Change: Has there been a shift towards more spend on organic, you know, R&D? Obviously, you know, with the step down in M&A and more focus on organic growth, it would make sense. But I'm just curious about just the philosophy in terms of new product R&D spend. Thank you very much.
Speaker Change: Yeah, why don't I give you a little answer and I'll let Rahul kind of get in a little deeper. But, you know, if you notice on our percentage of CapEx, you know, we're at 4.1 to 4.5.
Speaker Change: You know, historically we've been at, you know, three, three and a half. So, you know, we have...
Speaker Change: poured a lot more money into R&D and our CTO Anthony Chaoffa is You know, he's gotten a little older. He's 38. So he knows how to spin faster. So we think that that will probably continue
Speaker Change: What we need to build has become increasingly, you know, clearer. So we get a lot of good feedback from our sales force. We get a lot of good feedback from the folks covering those accounts.
Speaker Change: And a lot of times we can get anchor clients and folks that want to partner with us on funded development, which then results in revenue a lot faster. So it's easier to back those kinds of things, and that's part of the positive dynamic that's going on.
Speaker Change: Got it. Thank you very much.
Speaker Change: Your next question comes from the line of Dan Perlin from RBC Capital Markets. Please go ahead.
Dan Perlin: Thanks. Good evening. I just want to revisit the fourth quarter organic number again. Sorry, maybe to beat a dead horse here.
Dan Perlin: The 2.4 versus the 6.4 you did this quarter and I went back and just was looking at your comps so it's definitely easier across some of them but by no means all of them so at 400 basis point deceleration is there any way you can just help kind of contextualize?
Dan Perlin: Maybe the areas where we should be focused on that as we think about modeling across those those segments And then in that same kind of question Bill I thought I heard you say there was some some maybe some bigger license fees that you pulled in
Dan Perlin: And to this quarter around wealth and investment, and did that influence maybe this kind of fourth quarter, I guess, guidance around the organic number as well? Thanks.
Speaker Change: Yeah, again, I'll give you a little of Dan and I'll have Rahul give maybe a little bit more for Brian. You know, we did have a really good Q3 for wealth and investment technology.
Speaker Change: and the Global Investor and Distribution Services business, so, you know, we're not quite ready to see if they can repeat that in Q4, although we're optimistic they'll have good quarters.
Speaker Change: So I think that's a little bit, and then as I said before, I think the comp is a little more difficult in Q4 than it was in Q3.
Speaker Change: Yeah, and I would bill a I would just you know just add on that last point on comp
Speaker Change: If you look at the 2023 by quarter, you know, the first three quarters we did about $1,360,000 in each quarter, right? Approximately. And in Q4 we did $1,411,000. So Q4 was $45 to $50 million higher than the other three quarters, and that's really what you're seeing. If you kind of look at our...
Speaker Change: Q4 guidance in absolute numbers, you know, we're ahead of any other quarter this year. Our low point is $40 million ahead of our low point the prior quarter. So we feel good about where we are. Most of this is accomplished.
Speaker Change: Thank you. Thank you.
Speaker Change: Got it. Okay. No, that's really helpful. That's really helpful. Thank you Just on on blue prism for the moment in terms of cost opportunities, and I think you said you're like a I don't know a little over a thousand fifty maybe
Speaker Change: kind of automated employees, like where how much further can we go with that? Are you expecting that to continue to be a meaningful contributor to the ability to have a more efficient cost structure as you go into next year or are we kind of top-ticking that a little bit for the organization? Thank you.
Speaker Change: Yeah, Dan, I think that's a great question and I think we are are pretty enthusiastic about where we can go with
Speaker Change: with our Blue Prism digital workers.
Speaker Change: We've done an awful lot of acquisitions, so we have an awful lot of systems. We'd like to have fewer systems and more digital workers, and I know we have plans to do that throughout the year.
Speaker Change: throughout accounting and finance and, you know, Nick Wright in the global investor and distribution services business has done a great job of deploying digital workers and Vagesh Maldi in our
Speaker Change: and our fund administration businesses, as well as many others. And so we're pretty optimistic, I think, on Blue Prism's capabilities.
Speaker Change: That's great. Thank you very much.
Speaker Change: I was just going to add to that that I just across I'll call it more infrastructure to Bill's point right so we don't want to create, you know, the digital worker for, you know,
Speaker Change: 10 different systems and then be able to have to rebuild so we're leveraging that the broader consolidated system And so to echo Bill's point we are
Speaker Change: pretty enthusiastic about what we're going to be able to leverage.
Speaker Change: and the other is that I think the level of sophistication continues to increase over time as well about the impact that some of the digital workers can have as we mature as an organization and our learnings continue to increase about how to utilize the digital workers.
Speaker Change: But we also are integrating... Thank you.
Speaker Change: We're integrating AI into this too, so...
Speaker Change: Alright, I'm going to say thank you for the last time, but I never really want to cut you off, that was my mistake, so my apologies.
Speaker Change: Your next question comes from the line of Kevin McVay from UBS. Please go ahead.
Kevin McVay: Great. Thank you, Brian. I think you were.
Kevin McVay: You may have mentioned that you were carrying a higher than expected cash balance that you expect to deploy in Q4.
Kevin McVay: Would that be a capital return M&A, just any thoughts around that?
Speaker Change: Yeah, I wouldn't necessarily assume M&A and any material size for Q4 as far as anything around that purposes. But we are, like I said, we took an opportunistic point of view on the funding given where rates were and what we're able to raise that at versus our current cost structure. So we're looking to, again, effectively deploy that share repurchase in combination with the rest of our operating cash flow and further debt reduction, again, utilizing that lower cost of funds.
Speaker Change: We'll have executed that in Q4.
Speaker Change: got it and then just obviously the organic growth was really strong but it sounds like there were was it eight million in total health care licenses that were pushed so
Speaker Change: Is there a way to think about it, would it have been that much stronger if that was in there and now that could shift it to Q4? Is that right?
Speaker Change: That's right. Thank you.
Speaker Change: Your next question comes from the line of Peter Heckman from DA Davidson. Please go ahead.
Peter Heckman: Hi. Good afternoon. Thanks for taking the questions. As regards to Bethea,
Peter Heckman: Thank you for your time. Thank you.
Peter Heckman: I understand or at least I inferred from a comment you made the investor day that that revenue can be somewhat project-oriented. I guess how should we think about modeling that? Is there something to think about in terms of seasonality or is it just a kind of look to you guys in terms of one quarter out in terms of how you expect that business to contribute?
Speaker Change: Yeah, I think, first of all, it's interesting you call class lack.
Speaker Change: class action lawsuits, projects, we would tend to call them lawsuits. And so you got the vagaries of the court system. But I think additionally,
Speaker Change: There is some seasonality in Battea, and U4 tends to be the largest quarter of the four quarters.
Speaker Change: And there's a bunch of court cases that have already been adjudicated. The courts have to release the payments on the class actions, and that's when we get paid. But we're...
Speaker Change: You know, we would say that, you know, we're going to try to give you all as much information
Speaker Change: You know insight into the tape but as we can You know, they have 900 clients. We have 22,000. We think there's an opportunity for a lot of
Speaker Change: A lot of extension in Bethea's business.
Speaker Change: okay that's fair that's fair and then just in terms of thinking about the
Speaker Change: to fund shareholder record-keeping business and to the acceleration.
Speaker Change: I guess, you know, I had speculated just looking at money market flows that...
Speaker Change: You know, the industry may have gotten, you know...
Speaker Change: a number of several million accounts just from flows back into money market accounts. Do you think that affected the GIDS organic revenue, and if so, is there a way to quantify it?
Speaker Change: I think most of our strength in the GIDS organic revenue is really just coming from, as we're building technology, we're attracting more and more customers, and maybe customers that are in slightly different segments than, you know, so we have many more.
Speaker Change: Wealth Management Firms, which some of our biggest clients are Wealth Management Firms, but we've got a number of new prospects. And as we continue to build out our call center capabilities and BPO capabilities, more and more of these customers are willing to lift out internal functions and give them to us.
Speaker Change: and that's a part of it so you know while the macro trends in the market may have had some impact most of it is just us expanding our product suite.
Speaker Change: It also, too, I think, would be...
Speaker Change: It's important for people to understand that
Speaker Change: that an awful lot of the large-scale financial firms in the United States, and more so even around the world, you know, have a very difficult time deploying large-scale new systems.
Speaker Change: So their choices are to try to build a great big system.
Speaker Change: Maybe go to a body shop, Indian body shop, like a Tata or an HCL or an Infosys or one of the other ones. That is fraught with challenges. And there's an increasingly attractive...
Speaker Change: The solution for them is to
Speaker Change: Lift it out to us.
Speaker Change: And, you know, we have world-class data centers, we have world-class developers, we have world-class processes, and I think as they see it,
Speaker Change: they get increasingly intrigued.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of James Fawcett from Morgan Stanley. Please go ahead.
Speaker Change: Hey, it's Michael and Fontaine for James. Thanks for taking our question.
Speaker Change: Uh I-
Speaker Change: In general, I think I would just come back to we feel like our business is strengthening, right? So we do have we haven't been through the 2025 Revenue planning and budgeting processes yet but but we do feel like you know you can you can kind of look at our recurring revenue financial services as a sort of a leading indicator that the The stable reoccurring and recurring revenue base is you know continually growing and that ought to help us in 2025
Speaker Change: The other thing is, you know, if you look at Q3 of 24 compared to Q3 of 23, you know, we added $100 million in revenue.
Speaker Change: You know, so, you know, people look at these fintech companies and...
Speaker Change: talk about them at, you know, they did $200 million in revenue for a year. You know, we added $100 million in Q3, and I think...
Speaker Change: You know, we're not saying that our business is strengthening because we think we're going to slow down
Speaker Change: We think we're going to accelerate.
Speaker Change: So you know with all of that becomes
Speaker Change: You know, some increased analysis, increased negotiation on contracts.
Speaker Change: And so we're being cautiously optimistic, but we're not backing away from it.
Speaker Change: you know, that midterm 4-8.
Speaker Change: That's clear. Maybe just on Blue Prism, obviously a lot of internal expense savings in the form of lower headcount, but I'd be curious to hear just how you're thinking about how the net new opportunity for Blue Prism has evolved of late and some of the initiatives that you have in place to return that business to double-digit growth next year. Thanks.
Speaker Change: Yeah, we think that's a great question. We are doing a lot internally here. We have some management changes we've done.
Speaker Change: We're accelerating our amount of money that we are pouring into Blue Prism. We've moved some really top technologists.
Speaker Change: that Anthony had brought in, so we're excited about what we can do with Blue Prism and re-accelerating the growth. You know, again, we're still getting, you know, magic quadrants.
Speaker Change: when people analyze it and I think the addition of AI
Speaker Change: and the large language models, and then obviously open AI is going to be all the more change in the world, but you've got to be on top of it, and I think we've done a pretty good job of really...
Speaker Change: you know, maximizing the potential internally on Blue Prism, and then, you know, we're going to redouble our focus on the external opportunities.
Speaker Change: Thanks, Bill.
Speaker Change: Your next question comes from the line of Alexei Gogolev from J.P. Morgan's. Please go ahead.
Speaker Change: Hi, this is Ella Smith from Alexei's team. Thanks so much for taking our question. So first, I was hoping you could speak to the strong growth in Alternatives AUM. Can you remind us what's driving that strong growth year-to-date and how do you think about the forward growth of Alternatives?
Speaker Change: We think primarily that strong growth in alternatives is based on brilliant management.
Speaker Change: Other people might think the market's pretty strong, right? So the hedge fund industry traditionally has a...
Speaker Change: a pretty good risk-adjusted return levels. And I think as you look at our client base, almost all the large-scale platforms.
Speaker Change: are SS&C clients.
Speaker Change: and over the last several years...
Speaker Change: They have gotten the lion's share of all the new capital that have flowed into hedge funds.
Speaker Change: Same with private equity funds and now private credit. So we think we're well positioned to continue to be a beneficiary of our clients success
Speaker Change: And so we have a lot of focus on making sure that we're adding value, bringing out new technologies, new capabilities, new processes.
Speaker Change: and then being able to really help like our international clients as they move to T-plus-1. You know, in the U.S. we're going to move to shorter than T-plus-1.
Speaker Change: Right, you know when you look at the Gen Xers, you know, they're used to Venmo. I don't think moving money takes it 24 hours Right. So I think those kinds of things are going to shorten Obviously that takes a lot of the risk out of the system
Speaker Change: But systems that process that have to be really locked and loaded, and that's something we're pretty good at.
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: That makes a lot of sense, Bill. Thank you. And for my follow-up, I'm sorry if I missed this, but I noticed a strong step up in organic growth for wealth and investment technologies. Could you please remind us what drove that? Was there a big deal or two signed there?
Speaker Change: You know we got a couple of large license deals in Q3 and that really helped drive the organic revenue growth.
Speaker Change: Got it. Makes sense. Thank you all so much.
Speaker Change: As there are no further questions at the queue at this time, I would now like to turn the call back over to Bill Stone for closing remarks.
Bill Stone: Again, thank all of you for being on the call, and thank the analysts for asking really poignant questions, which we appreciate. I do think that...
Bill Stone: that we're pretty optimistic about where our business sits and that we hope to talk to you again in 2025 and surprise you positively. Thanks!
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.