Q1 2025 SS&C Technologies Holdings Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the SS&C Technologies [inaudible]
First quarter, 2025 earnings conference calls. 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 that time, press star, follow by the number one on your telephone keypad.
If you would like to withdraw your question, press star, followed by the number one. I will now hand today's call over to Chad, Madaka, Investor Relations, please go ahead.
Welcome, and thank you for joining us for our Q125 earnings call. I'm Sean Zwaraka and Guster 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
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 purposes of the Safe Harbor provisions under the Private Security's litigation reform act of 1995 .
Actual results made different 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 10K, which is on file with the SEC and can also be accessed on our website.
These four-looking statements represent our expectations only as of today, April 24th, 2025 While the company may elect to update these four-looking statements, it specifically disclaims any obligation to do so [inaudible]
I will now turn over the call to bill
Speaker Change: John, and welcome everyone. Our first quarter results are adjusted revenue of one.
Speaker Change: Billion, 514 million, 800 thousand dollars, up five and a half percent, and it just didn't only there is for share of a dollar forty-four, [inaudible]
An 8.3% increase, Adjusted Consolidated Divitile with $591.9 million. [inaudible]
Speaker Change: The first quarter-adjusted organic revenue growth was 5.1%, performance was driven by our globe up.
Speaker Change: Wealth and Investment Technologies and Cologne will invest in distribution services business.
Speaker Change: Lobot posted strong results with organic growth of 10.3% in positive trends in private market and retail alternatives
Speaker Change: Well, the investment technology saw continued strength in the well-segment and good Smith, its client wins and volumes targets.
Speaker Change: We continue to feel good about our health business, which finished the quarter approximately flat. Our recurring revenue growth rate for financial service was 5.9 and Q1, which includes all software enabled services.
and Maintenance Revenant
Speaker Change: For the three months ended March 31, 2025, cash from operating activities with 272.2 million, up 50.8% from Q124
Speaker Change: We bought back 2.4 million shares for 206.9 million at an average price of 87.21
We will continue to by share optimistic.
Speaker Change: CS continues to see success internationally across several of our businesses
Speaker Change: During the quarter, we signed our speech to lift out agreement with Insignia Financial and have since won additional Australian mandates [inaudible]
in March, we hosted.
Speaker Change: One SS&C event in Sydney, which has led to an increased profile and we met with a number of our largest clients [inaudible]
And we remain bullish on Australia.
Speaker Change: Geneva had one of its best quarters in the media history, winning three major deals in the region. We are outpacing our competitors and distributing functional depth and breadth.
Globally
Speaker Change: Private Markets has also enjoyed the fruits of international expansion growing 14% in Q1.
Speaker Change: We are currently focusing efforts on the Middle East with flagship clients driving regional growth. We strengthened our presence in the Middle East by opening a new office in Riyadh, Saudi Arabia, in addition to our offices in Abu Dhabi. [inaudible]
and the body.
Speaker Change: I'm now turning the call over to Rahul to discuss the quarter in more detail
Thanks Bill.
Rahul Kanwar: We had a strong first quarter with organic revenue growth of 5.1%. Globop started 2025 on a high note, posting 10.3% organic growth. The integration of Bataya is also progressing well, and we've already won 10 cross-style customers. [inaudible]
Rahul Kanwar: In addition to these results, we're seeing healthy activity in key areas particularly in retail alternatives in private markets [inaudible]
A wealth investment technology business delivered strong results.
Rahul Kanwar: driven by Alps advisors and the Black Diamond Wealth platform. Our strategic alliance with Morningstar is expanding the opportunity set. We're also advancing customer transitions to the Genesis platform with solid engagement across our prospects.
Rahul Kanwar: Global Investor and Distribution Solutions business saw steady growth supported by key customer renewals and new retirement mandates . .
Rahul Kanwar: We continue to see a healthy flow of opportunities across global markets.
Rahul Kanwar: Demand for AI-driven automation remains high. Earlier this month we launched our global governance first AI platform at Loopism Live in London.
Rahul Kanwar: As part of the launch, we introduced a unified trust layer designed to help regulated customers adopt advanced technologies with confidence.
Using embedded guardrails and policy-based execution
Rahul Kanwar: Dispositions Buprism as a Strusted Partner in Enterprise Transformation [inaudible]
Rahul Kanwar: We also continue to deploy blu-prism and other automation technologies internally and we've achieved a cumulative benefit of more than 3,300 full-time equivalents since we launched this effort in early 2023.
Rahul Kanwar: We recently introduced 20 new AI agents capable of handling complex, unstructured content including vendor contracts and limited partner capital statements
Rahul Kanwar: These innovations are central to efforts to support customers on their own AI journeys.
Rahul Kanwar: With that, I'll turn it over to Brian to talk through the financials. I'll turn it over to you.
Brian Schell: Thanks for holding, good day everyone. As noted in our press release, our Q125 GAP results reflect revenues of $1.5, $14 million, net income of $213 million, and diluted earnings per share of $0.84 per cent.
are adjusted non-gap.
Brian Schell: Results include revenues of $1.51 billion, an increase of 5.5% over Q124, and adjust the diluted EPS of $1.44, an 8.3% increase over Q124.
Brian Schell: The adjusted revenue increase of $79 million over Q-124 was primarily driven by incremental organic revenue contributions from globe-op to $34 million and dollars.
Brian Schell: with a $14 million and gives of $9 million, offset by an unfavorable impact from form.
Brian Schell: Exchange of $7 million. As a result, adjusted organic revenue growth was 5.1% and our core expenses also increased 5.1% or $45 million, which excludes acquisitions and on a constant currency basis.
Brian Schell: Adjusted Consolidated Pedal was $592 million, reflecting an increase of $35 million or 6.3% from Q-124 and a margin of 39.1%, a 30 basis point expansion.
Brian Schell: Net interest expense for the quarter was 105 million dollars, a decrease of 11 million dollars from Q-124, primarily reflecting lower short-term interest rates.
Brian Schell: Adjust the dead income was 366 million, up 9%, resulting in an adjusted diluted EPS of $1.44, the increase of 8.3%.
Brian Schell: Our affected non-GAAP tax rate was 24%. Note for comparison purposes we have recast the 2024 adjusted net income quarter of the results to reflect the full year effective tax rate of 23.1%.
Brian Schell: An increase in the average share price, draw the diluted share count up from $254.9 million, from $253.3 million, you're over a year.
Brian Schell: Cash flow from operating activities grew 51%, which is driven by growth in earnings as well as improved working capital utilization.
Brian Schell: Our quarterly cash flow conversion was 74% up from 54% last year [inaudible]
Brian Schell: SS&C ended the first quarter with $515 million in cash and cash equivalence and $6.9 million in gross debt. SS&C's net debt was $6.4 million and our LTM Consolidate Ibadat was $2.3 billion.
The resulting net leverage ratio is 2.74 times The resulting net leverage ratio is 2.74 times
Transcription by Trans-Expert at Fiverr.com
Brian Schell: We look forward to the second court and the remainder of the year with respect to guidance. We will continue to focus on client service and assume retention rates will continue to be in the range of our most recent results. We will continue to manage our expense.
Brian Schell: by controlling and aligning variable expenses, increasing productivity to improve our operating margins, and effectively investing in the business through marketing sales and R&D.
Brian Schell: Specifically, we have assumed form currency exchange, will be at current levels, interest rates to remain at current levels, and affect the tax rate of approximately 24% on an adjusted basis.
Brian Schell: Capitol expenditures to be 4 to 4.4% of revenues, which is a slight reduction from prior guidance and a stronger weighing to shared repurchases versus debt reduction.
Brian Schell: For the second quarter of 25, we expect revenue to be in the range of 1.489 to 1.529 billion dollars and 2.5% organic revenue growth at the midpoint 2.5% organic revenue growth at the midpoint
Brian Schell: Adjusting that income in the range of 343 to 359 million dollars.
Brian Schell: Intersex expense excluding amortization to deferred financing costs and original issue of discount and the range of 102 to 104 million dollars diluted shares in the range of 254 to 255 million and adjusted the total EPS in the range of $1.35 to $1.41 [inaudible]
Brian Schell: For the full year 2025, we are modestly raising our top line guidance by $13 million at the midpoint and now expect revenue to be in the range of $6.11 to $6.238 billion in dollars.
Brian Schell: Baring in mind, recent macro uncertainty, geopolitical conditions, and market volatility, we note FX translation has influence our organic growth rate guide for the next for the year.
Brian Schell: Current FX rates provide a potential top-line benefit, though we remain appropriately conservative in the current environment. We now expect 4.4% organic revenue growth at the midpoint [inaudible]
Brian Schell: We continue to expect organic growth to ramp up in the second half of the year based on our current view of the pipeline, expected contribution from already sold deals and potato turning organic.
Brian Schell: For the full year 2025, we are slightly raising our earnings guidance. Specifically, we expect adjusted net income in the range of $1.441 to $1.541 billion. Diluted shares in the range of $253.7 to $256.7 million.
Brian Schell: Just of the load EPS and the range of $5.68 to $6.00, up 4 cents at the midpoint, and cash from operating activities to be in the range of $1.458 to $1.558 billion.
Brian Schell: Our 2025 guidance reflects our solid result in Q1 with a continued positive outlook for the remainder of the year.
Bill Stone: We are also positioning ourselves to better support our growth, acquisitions and integration plans with the conversion of our multiple general ledger systems into a single platform by the end of the third quarter this year. And now back to Bill.
Thank you.
Thanks, Brian .
Speaker Change: We also added Francesco Vonig D.R. Teddy to our board in March, and we welcome him.
Speaker Change: He had a very impressive career at Citibank and he currently serves as chairman of the Board of Directors of Euroclear Holdings and as a member of the Board of Mapfreak We are excited about the extensive experience he brings in operational management and corporate transactions [inaudible]
Speaker Change: We are operating an environment of geopolitical and economic uncertainty leading to volatility in the global markets. SS&C has a long history of resilient performance during challenging operating environments and we are confident in our business model.
Speaker Change: We close out a solid first quarter and continue to execute against our plan and I will now open it up for questions [inaudible]
Speaker Change: At this time, if you'd like to ask a question, press star one on your telephone keypad. If your question has been answered and you'd like to remove yourself from the queue, press star one again.
Speaker Change: Your first question is from a mind of Jeff Schmidt with William Blair.
Jeff Schmidt: Hi, good afternoon. On healthcare, would it just seasonally week quarter for that business and how does your pipeline look currently? Okay.
Speaker Change: I think healthcare continues to build this pipeline, or selling into large scale [inaudible]
Speaker Change: I think we first rolled out Domani Rx in January 24 and I think in 25 we're expecting to process several hundred million claims and so we have a lot of interest [inaudible]
Speaker Change: The very large prospects for us, and we remain optimistic.
Speaker Change: Okay. And then your organic growth guide for the second quarter, I think it's 2.5%. Is that assuming a slow down or pause in new business just given all the economic uncertainty? I may have missed that. And if so, could you kind of quantify what you're assuming there? All right.
Speaker Change: I would say basically we're just putting a measure of conservatism into the second quarter given everything that's happening in the world right now.
Speaker Change: So, you know, we're available business and while we don't believe tariffs are really going to be a big impact on us from a financial standpoint, it's opportunity to slow down deals is certainly...
Speaker Change: Certainly possible. So I think we have a good pipeline. We've got a lot of deals we've sold that the revenue has not started flowing in yet. So we're optimistic that we can hopefully surprise you positively.
Okay, great. Thank you
Speaker Change: Your next question is from the line of Peter Heckmann, with the A. Davison's company.
Speaker Change: Hey, good afternoon. Hopefully you can hear me. It's a little choppy on this end, but congratulations on finalizing the insignia deal. Now that it's closed, you think you'd give us a little bit more in terms of...
Speaker Change: Your expectations for its contribution to revenue and how much it might ramp up and whether or not we would be able to see the impact of that ramp on margins in the second half for the first half of 2026.
Speaker Change: Well, I, you know, that the, um, what we're going to rebadge about 1400 people from insignia to us.
And that will happen like July 1, I believe.
Speaker Change: So, most obviously the ramp is going to be in the third and fourth quarter [inaudible]
Speaker Change: So we'll get about a half a year, and that can range anywhere from...
Speaker Change: $35 to $70 million and so we're optimistic that we can really do a great job for them and really take care of their members.
Speaker Change: And that's what we're focusing on, and we've got a great team that's um...
that's really kicking this thing very well planned.
Speaker Change: Okay, all right, that's helpful, and then just as a follow-up on your decision or the announcement to dissolve another one of the joint ventures with State Street.
Speaker Change: As that has dissolved, do you expect to pick up any additional revenue? What would you say would be the net effect to revenue over the additional revenue recognized at the corporate level? And what would you expect the impact to be on the EBIT deadline?
Speaker Change: As of right now, we're not expecting much impact as a result of that, most of that is operational, the processing is done
Speaker Change: within SS&C and in effect what we're doing is simplifying the entity structure. There may be some reduction in costs because it simplifies it but we're not expecting that to be very significant.
Speaker Change: Okay, and then just last thing is, where do you expect that to actually finalize and occur?
Speaker Change: We're working through it right now, we don't have a definitive timeline as yet [inaudible]
Alright, thank you [inaudible]
Speaker Change: Your next question is from the line of Dan Perlin with RBC Capital Markets [inaudible]
Thanks.
Speaker Change: So, you know, just at a high level, again, bill on the demand environment, I know we've heard from other players in the financial services market banks, in particular, talking about some of their clients pausing.
Speaker Change: Doesn't sound like you're seeing that yet, but I just want to kind of make up a finer point that-
Speaker Change: What are those conversations like? Do you get the sense that they feel like there might be an air pocket in the business and decision making so they might want to hold off? I heard your comment on the organic growth being measured conservative, so...
Speaker Change: I get that, but obviously you talk a lot of a lot of these businesses, I'm just curious what those conversations are like [inaudible]
Speaker Change: Well, I think you know, Dan, there's an awful lot of change happening in particular in wealth and asset management and there are sea changes that are...
being caused by things like AI and...
You know, the biggest set of new technologies since...
Save the Internet.
Speaker Change: You know, so I think that there's going to be an awful lot of change.
and I think that, you know, I read that. [inaudible]
Speaker Change: A note that said two-thirds of all CEOs are afraid that if they don't get AI right they're going to lose their job So I think there's a lot of trepidation about what's going to happen in the technological world and SS&C is well positioned [inaudible]
to help our prospects and our clients.
Speaker Change: You know, get through this in a really pretty good fashion. We spend lots of money on this. We have all kinds of different tools and techniques that are very valuable to our clients. And we get lots of inquiries from them to help them.
Speaker Change: Yep, yep, excellent. Can I just ask another quick question in particular on Insignian on Australia, maybe the market in general? I think I heard you say you signed several new mandates, you know, since kind of the announcement and I'm just wondering like...
Speaker Change: Obviously the demand environment there seems high. I feel like almost you guys sound giddy about the opportunity. So I'm just trying to make sure we kind of ring fence like what kind of cadence you expect in terms of how that can potentially ramp. Thank you.
Speaker Change: Well, you know Dan, when you get to be my age being giddy is one of the pleasures in life . . . . . .
Speaker Change: Other than that, you get to push up daisies, I think, so getty sounds better for me. But it really is, you know, they call that superannuation business and I'll stride you the wall of money.
Speaker Change: You know, so, you know, everyone's required to participate, but it's their own accounts [inaudible]
As you know here in the U.S. [inaudible]
Speaker Change: You know, saying that you have your own account and it's in social security [inaudible]
Well, you have more analysis than me, so I think that the...
Speaker Change: The services companies in Australia have maybe not kept up quite as well on the technology like we have.
So we're coming in there as... [inaudible]
Speaker Change: You know, an at-scale company that has technology that they want and a whole cadre of talented people that can help them and that's the feeling we're getting embraced.
Speaker Change: You know now I hope we still get embraced because you know the geopolitical things but I don't think so. I mean we're really doing well. We're investing and they know it. So I think that's going to be a really great market for us. We're going to be doing a great market for us. We're going to be doing a great market for us.
That's great, thank you so much Bill.
Speaker Change: Your next question is from a line of Surrender Thind, with Jeffrey Schmitt?
Speaker Change: Thank you. Bill, just a few questions on some of the segments here.
Speaker Change: When we think about interlinks, and we look at everything that went right last year in terms of the introduction of the new platform, how are we thinking about the performance of interlinks in the current environment?
Speaker Change: How much of a headwind do you think it's going to be? How should we characterize what the current growth rate looks like and how it might evolve over the coming quarters?
Speaker Change: At the, in sort of, you know, appropriately conservative is kind of the way I would, you know, describe us looking at it. And so we think in your links right now, it probably grows mid-single digits. And that's, that's in effect what's implied in our, in our forecast.
Speaker Change: A number of things that we have rolled out in terms of new platforms and some AI-enable technologies that allows us to grow despite...
Speaker Change: Kind of the turmoil in the markets, and then if we start to see things turn around in the second half of the year, you know that that ought to be really pretty positive for that business
Rahul Kanwar: Got it, and then Rahul, can you maybe provide a similar update on kind of blue prism and all the enhancements and the roll-up strategy there?
Speaker Change: And how are you thinking about that over the course of the year? [inaudible]
Rahul Kanwar: You know, you think our primary opportunity or the thing that we're most excited about is there's a lot of, as you know, around the world, enterprises are trying to figure out how to use AI.
and so they need to have... [inaudible]
Rahul Kanwar: Some controls particularly in regulated industries on how people go out and use the various AI tools
Rahul Kanwar: And a big part of what we have invested in is building in, as I mentioned in my comments, the trust layers and the guardrails and things like that, which we think are extremely valuable to us, but they're also really valuable to positioning Blue Prism as that trusted partner. [inaudible]
Rahul Kanwar: So our opportunity set is really strong and we feel good about it and in particular using agents and agentic AI is a big part of what we expect to do over the next couple quarters.
Got it, and then I guess...
Speaker Change: Turning that question internally in terms of the digital workers. Any color in the complexity of the use cases you're now able to address?
And how you're thinking about that on a go-forward basis?
Well, it keeps them to solve bigger problems [inaudible]
at this point.
Rahul Kanwar, Unknown Executive
Speaker Change: Well, that's exactly right. I think that we've got some momentum, we've now been at this.
since the start of 2023.
We are...
Speaker Change: As you said, getting deeper and richer into our own processing . . . .
Speaker Change: And, you know, just as important as the internal efficiencies we're getting, those applications then become...
Speaker Change: really good proof points for our customers and prospects. So they look at what we've been able to achieve and we had recently had a customer tell us that they got a number of demos from our competitors but not a single work in use case. [inaudible]
Speaker Change: and meanwhile within SS&C they could see it already operating at scale so that's pretty powerful.
Speaker Change: And what does that mean for margins? Do you feel like there's...
Speaker Change: A structural tailwind that you have at this point that will continue, or how should we think about that? Not necessarily this year, but as we kind of conceptually think about this, or maybe even this year, so.
Speaker Change: So Surinder, that's a really great question and we appreciate it because you get one question and then apparently four follow ups but...
Speaker Change: But I thought I was the last person in the queue. That's okay, Bill. I think that we still think that, you know, what's allowed us to do is maintain margins. I think the...
Speaker Change: 30, 40 basis points and we're investing heavily.
Speaker Change: Right, so there's a lot of expenses that we're running through and still drive and march and stuff and I think we would attribute a nice portion of that to the ability of our different business units to deploy.
You know, Blue Prism Technologies.
Speaker Change: into their businesses. And as you said, it's getting to be increasingly complex processes that allow us to ...
Speaker Change: Be able to even take some really experienced people and give them capabilities that really extend their ability to help our prospects and our customers [inaudible]
The next question is from Jane Sposetti with Morgan Stanley.
Speaker Change: More than a year now? Like, can you just unpack what's driving that? Is that net new momentum? Is that pricing? What are you sort of seeing just in terms of the complexion of the growth drivers within that business? Thanks [inaudible]
Speaker Change: The great thing that we have with Globe Office is that it's a global business.
Speaker Change: You know, so as we start talking about what we're doing in the Middle East [inaudible]
You know, we're getting large scale.
Customers that are investing increasingly in the way.
Speaker Change: and alternative assets, and they want the best technology supported by the best firm. And that's what we believe we have proven quarter after quarter after quarter. And I think that shows up in how we explain what we're going to do, how we're going to train them. [inaudible]
What Affect Classes? [inaudible]
Speaker Change: You know, that they can invest in whether it's real estate or private credit or whatever, you know, and we bring real expertise that really helps them get.
Speaker Change: Up to speed, in short order, and that is the big secret of our success on global.
Bill Stone: Makes sense maybe just on the on the competitive front bill obviously a lot of
Bill Stone: Acquisition activity in the space, particularly in the hedge fund and investment accounting space. I know...
Bill Stone: And the start-up hedge fund environment, particularly just given some of this integration activity that's obviously coming. Thanks.
Bill Stone: Well, I think, you know, what's happening in that start-up is, is that...
Bill Stone: that it's kind of being led by very seasoned investors and they're starting with larger pools of money, right? So they're already sophisticated and they want to hit the ground running.
Bill Stone: So as they're doing, they're fundraising, they're also planning out what technologies they're going to use and often they turn to us.
and we have also a lot of the...
Bill Stone: of the global macro firms use us and an awful lot of the assets that have been going into alternatives, go into the global macro funds and so we're in a very nice position.
Bill Stone: and we're not resting on our laurels as we continue to bring out additional feature additional functionality and really to the delight of our customers.
Speaker Change: Your next question is from the line of Andrew Schmidt with Citi.
Unknown Speaker.
Hey guys, thank you for taking the question.
Speaker Change: I wanted to go back to this conversation on the demand environment. I totally understand the setup for the second quarter in terms of
Speaker Change: Comments on conservatism and the mission-critical nature of what you guys do. But I'm just curious if you give us a sense of whether...
Speaker Change: Conversations and sales cycles have changed, you know, meaningfully, March and April , obviously wouldn't be surprising a huge amount of distraction out there. But I'm just curious, just put a finer point in terms of your conversation with the clients in decision making. Thanks so much.
Speaker Change: I mean, we still see a pretty good demand environment. We were with a prospect this afternoon and, you know, they're anxious to deploy new technology to get better processes.
to close their books faster. [inaudible]
to get information in their hands.
that helped them run their business.
I think that's the key to our business.
It is me aware.
Speaker Change: and then moving quickly to give our prospects and our clients.
Information
Speaker Change: that they've wanted for a long time and they don't get it in a month, they get it in a day, you know, when I think it's that focus on, you know, process it.
Speaker Change: Slice it and dice it and deliver it. And I think that's something that we do with a lot of accuracy and that gives our clients a lot of confidence. [inaudible]
Speaker Change: Got it. Thanks so much for that bill. And then maybe just on the back half ramp. I knew you articulated a few things that are drivers there. Part of that seems like it's a insignia and other sign deals, but maybe just give more detail on the confidence of the back half ramp. What sign?
Speaker Change: Versus Gogette, I know there's always a level of Gogette, you got to go there and sell in closed deals But just maybe a more detail on the drivers and confidence in that ramp would be helpful Thank you
Bill Stone: Yeah, you know, Andrew, obviously, and you pointed this out, there's always an element to go get. I'd say we feel pretty good. You know, obviously there's a paramount execution left to do and some deals left to close and implementations left to go live and all those things. Let's do this for now.
Speaker Change: By no means certain, right, but we feel pretty good. We have a lot of visibility into some of the big pockets of revenue coming online in Q3 and Q4, and that helps with that.
Speaker Change: Your next question is from a line of Alexei Gogolev with JPMorgs.
Ella Smith: Hi, this is Ellis, my phone for Alexei Gogolev. Thank you so much for taking your question.
Ella Smith: So, first we want to double down on about the strengths and glow-bop. You called out the strengths and the private markets at retail alternatives. How are you thinking about the forward organic growth of those markets in particular? Do you expect them to maintain their strengths or taper off somewhat? And if you could remind us what is driving that strength. That'd be great. Thank you. Thank you.
Ella Smith: Well, I think when you look at why are private credit and other private markets, I think it's because they can structure things.
Ella Smith: in ways that allow them to get additional yield on those assets and some of the brightest people in the business are saying they can structure things in the private market where they can get a couple hundred more basis points than they can get in the public markets.
Ella Smith: A couple hundred basis points on the kinds of billions that...
that our clients manage is worth a ton of money.
Ella Smith: and I think that's the biggest thing and then I also think...
Ella Smith: and they're structuring what they are able to do is really identify where the risk points are and then structure these investments to be able to minimize those risk points.
Speaker Change: Great, that makes a lot of sense. And to my follow-up, I hear your enthusiasm about Agentsica and I am bringing about the customers. Do you expect those offerings to begin to show up in organic growth in the near term, or do you think that there's going to be an investment building out base that needs to transpire in finish first? [inaudible]
Speaker Change: It's going to make what is already a very sticky business, what is already a highly profitable business.
Speaker Change: which is already a high cash flow generation business. And, you know, right now, like someone had asked about acquisitions and even what you see in the market, you know, it's continuation funds and...
Speaker Change: and additional investments in companies that they already own. So I think that the robustness of the M&A market
Speaker Change: might pick up in like the fourth quarter because I think increasingly the private equity funds are feeling like that they need to get.
Speaker Change: Some stuff out into the marketplace so that they can give cash back to their LPs and then the LPs can reinvest it with them [inaudible]
That makes a lot of sense. Thank you so much .
Good next question. It's from the line of Kevin. Thank you very much.
McVeigh with UBS
Speaker Change: Great, thanks so much and congratulations on the results and what's obviously a choppy environment. If I got this question once in a quarter, I got at 30 times about hedge funds decreasing and what that means and obviously your AULA continues to increase.
Speaker Change: Chris Steer on Year, and Chris sequentially. Can you maybe just help remind us because again we got the question a lot. Thank you very much.
Speaker Change: You know, why the AUA and we even analyzed in COVID, it just continues to grow and it's just I think one of the really underappreciated parts of the story, but just maybe help to mention that just you know given obviously some of the volatility in the market we've seen. Let's go.
Speaker Change: Well, carries, you know, when you see volatility, people are looking for safe havens. [inaudible]
Speaker Change: You know, and what they've seen over the last 30-40 years, that the...
Speaker Change: You know, the risk-adjusted returns in the hedge fund industry are pretty non-correlated to it.
Speaker Change: to these different markets and that's why money moves to them and I think that hasn't changed and I don't think it's gonna change. I don't think it's gonna change, I don't think it's gonna change.
Speaker Change: In the near term, if anything, I mean, you know, we've seen them, you know, the hedge fund industry move to cash or more cash, and I think that they're, you know, they're just...
Speaker Change: Waiting to Pounce Again, and I think that's the nature of the brightest investors and I think that will continue.
Gets, it's primarily in Gets.
Permanently gets terrific. Okay, thank you
Speaker Change: As a reminder to ask a question, press star one on your telephone keypad. Your next question is from a line of Patrick Shaughnessy with Raymond James.
Patrick Shaughnessy: Hey, good evening. So Betia seems to be trending well below the revenue that it had in 2023 when you guys acquired it. Is that just a function of the lumpiness of just the nature of the business or is there something else going on? Yeah.
Patrick Shaughnessy: You know what the flows are and in some ways you know I think there's some degree of being conservative reflected in that too but as we get more comfortable we do expect that you know some of those accounting rules will get relaxed a little but on the underlying strength of that business
Patrick Shaughnessy: and our ability to cross sell that to our customers and how the sales force feels like they're being really well supported has is pretty optimistic.
Unknown Speaker
Speaker Change: What sort of forward-looking view do you have into that business? At this point, into the second quarter, do you have a pretty good sense for what 2Q revenue is going to look like or does stuff kind of come in relatively quickly?
Speaker Change: Well, I think we have a pretty good view right now of, you know, the cases that were in.
Speaker Change: and the settlements that have already been announced in our portion of those, so looking out a couple of years, we have a pretty good sense of what the aggregate amount is that is already baked. Well, we don't have as good a sense of which quarter it shows up in, and that's a part of this. [inaudible]
Speaker Change: You guys are so helpful. Thank you. And then maybe just a quick housekeeping question. What is the FX impact on revenue that's embedded into the full your guidance at this point? Thank you very much.
Speaker Change: Well, it's essentially the net difference, the kind of one of the metrics that you would just look at the overall financials, and I think we put this in the...
Speaker Change: Either it's in the cave or the queue, but...
Speaker Change: About 21% of the revenues are non-US dollar, so obviously any impact to that, we'll have the corresponding...
Speaker Change: You know, adjustment, right? So if it's up by 1% it has a whatever roughly 20-bit impact change on the overall growth rate.
Speaker Change: And so we try to be conservative and look at where current rates are today.
Speaker Change: At this time, there are no further questions. I will now hand today's presentation back over to our presenters for any calls and remarks in the next presentation.
Speaker Change: We really appreciate all of you taking your time to sit in our call and we're excited about our business and we'll continue to work hard for our shareholders. Thank you.
Unknown Speaker.
Speaker Change: This concludes today's call. Thank you for joining. You may now disconnect your lines to the end of today's call.