Patrick O'Shaughnessy

Patrick O'Shaughnessy from Raymond James requested a broad overview of MIAX's expectations for the trends in access fees and market data revenue for 2026, without specific quantitative guidance.

Answer

Lance Emmons, CFO, mentioned fee increases in January 2026 for access fees, expecting a couple of percentage points of growth. Thomas Gallagher, Chairman and CEO, noted continued member adoption and growth in proprietary market data offerings. Shelly Brown, CEO of MIAX Futures and Chief Strategy Officer, highlighted new historical data and reports as high-demand offerings.

Patrick O'Shaughnessy asked if there was any evidence of market makers shifting their market share on MIAX exchanges after participating in the secondary offering in December. He also requested broad expectations for the trend of access fees and market data revenue streams in 2026.

Answer

Thomas Gallagher, Chairman and CEO, confirmed no evidence of market share impact from market makers selling shares, attributing continued trading to MIAX's technology and risk protections. Lance Emmons, CFO, mentioned January fee increases for access fees, expecting a few percentage points of growth. Mr. Gallagher and Shelly Brown, CEO of MIAX Futures and Chief Strategy Officer, highlighted continued member adoption and growth in access fees, along with new proprietary market data products launched in Q1 2026, which are expected to further monetize high-demand data.

Patrick O'Shaughnessy inquired about how MIAX's market share might differ between retail and institutional customers, given the increasing participation of retail investors in the options space.

Answer

Shelly Brown, Chief Strategy Officer, explained that MIAX's focus is on enabling market makers to provide liquidity, which in turn attracts orders from both institutional and retail markets due to tighter and deeper markets. She emphasized the importance of customer experience and offering premium products to these customers.

Patrick O'Shaughnessy inquired about how MIAX's market share might differ between retail and institutional customers, given the increasing retail participation in the options space.

Answer

Thomas Gallagher, Chairman and CEO, MIAX Exchange Group, deferred to Shelly Brown, CSO, MIAX Exchange Group. Shelly Brown explained that MIAX's focus is on enabling market makers to provide liquidity, deeper markets, and tighter markets, which in turn attracts orders from both institutional and retail segments. She emphasized that it's about the customer experience, with MIAX continuously improving technology and customer service to offer a premium product.

Patrick O'Shaughnessy posed a broader question about Cushman & Wakefield's multifamily origination strategy, asking if the company might change its approach given the Greystone JV headwinds, and if a joint venture remains the optimal structure.

Answer

CEO Michelle MacKay acknowledged it as an interesting question and something they are considering. She stated that while they wouldn't change the fundamental way the business operates, they are becoming more hands-on in the Greystone JV's operations to guide the management team towards a more profitable business model.

Patrick O'Shaughnessy asked about Cushman & Wakefield's multifamily origination strategy, considering the headwinds facing the Greystone JV, and whether the joint venture structure remains appropriate.

Answer

CEO Michelle MacKay stated that while they are considering the strategy, they are not changing the fundamental business model. Instead, they are taking a more hands-on approach with the Greystone JV's operations to guide the management team toward a more profitable business model.

Patrick O'Shaughnessy from Raymond James inquired about the deceleration of JLL's Workplace Management revenue (net of gross contract costs) to flat year-over-year in Q4, down from 6% in Q3, and its underlying causes. He also asked for the outlook on industrial leasing for 2026, noting its recent improvement from depressed levels.

Answer

President and CEO Christian Ulbrich clarified that, excluding healthcare costs, Workplace Management net revenue growth was approximately 4%, consistent with Q3's 5%, attributing any perceived deceleration to JLL's disciplined focus on margin and declining contracts that do not meet profitability thresholds. He expressed confidence in the business's long-term high single-digit growth trajectory for 2026. CFO Kelly Howe stated that industrial leasing has bottomed out and is gaining momentum, with JLL expecting continued acceleration and strong pipelines for 2026.

Patrick O'Shaughnessy asked about the deceleration of Workplace Management revenue (net of gross contract costs) in Q4 versus Q3 and the outlook for industrial leasing in 2026.

Answer

Christian Ulbrich, President and CEO, clarified that after adjusting for healthcare costs, net revenue growth for Workplace Management was roughly 4%, in line with Q3, and reiterated JLL's focus on margin. Karen Brennan, CFO, stated that industrial leasing has bottomed out, is building momentum, and expects continued acceleration in 2026 with strong pipelines.

Patrick O'Shaughnessy asked about the relative importance of the short-end versus the long-end of the interest rate curve for the industry. He also inquired about the rationale for issuing commercial paper to pay down the credit facility.

Answer

Global CEO Christian Ulbrich explained that short-term rates affect development and high-yield products while long-term rates impact core assets, but the overall interest rate trend remains favorable for a capital markets recovery. CFO Karen Brennan stated the rationale for issuing commercial paper was to reduce the overall interest rate on borrowings, yielding a benefit of approximately 60 basis points.

Patrick O'Shaughnessy asked about the primary obstacles the U.S. Securities and Exchange Commission (SEC) faces when considering exemptive relief requests related to tokenized equities. He then inquired about the potential impact on Broadridge's post-trade processing services if tokenized equities were to clear and settle directly on the blockchain.

Answer

CEO Tim Gokey indicated that a key SEC concern is potential complexity, but Broadridge has emphasized its role in solving this complexity, ensuring feasible front-to-back communication and connectivity regardless of the tokenization model. He suggested that there might not be a significant need for exemptive relief in this area, given the clarity emerging from industry conversations. Gokey asserted that Broadridge expects a significant role, leveraging its multi-asset DLR platform and extending it to other asset classes. He highlighted that asset servicing complexities beyond trading, such as tax, margin, securities lending, and corporate actions, would still require robust solutions. Gokey explained that Broadridge's strategy involves enabling digital assets in its core engines to mirror positions, allowing clients to use existing technology for downstream activities and avoid cost duplication.

Patrick O'Shaughnessy inquired about how tokenized equities clearing and settling on the blockchain would impact the range of services Broadridge provides to its post-trade processing clients.

Answer

CEO Tim Gokey stated that Broadridge expects to have a significant role, leveraging its multi-asset DLR platform. He highlighted that comprehensive asset servicing, including tax, margin, and securities lending, involves complexities beyond simple smart contracts, often tied to individual investor circumstances. He noted that clients are concerned about potential cost increases from maintaining separate infrastructures for digital and traditional assets, and Broadridge's strategy of enabling digital assets in core engines helps mirror positions and utilize existing technology to avoid duplication.

Patrick O'Shaughnessy of Raymond James asked if the recording of tokenized equity trades on the blockchain would impact the need for intermediated communications between corporate issuers and their shareholders. He also inquired about the percentage of the GTO segment revenue tied to trading volumes and the company's view on the durability of this growth.

Answer

CEO Tim Gokey viewed tokenized equities as an opportunity and the next wave of democratization, emphasizing that the SEC considers them securities subject to all existing regulations, including governance. He stated that most tokenized equities would be purchased through intermediaries with ongoing asset servicing obligations, creating opportunities for Broadridge to manage complexity. CFO Ashima Ghei explained that about a third of GTO revenues are tied to trade volumes, with roughly half of that directly from post-trade activities. She noted that while trade volumes have been double-digit for many quarters, the company is not counting on elevated levels but expects continued strong growth.

Patrick O'Shaughnessy asked if the emergence of tokenized equities recorded on the blockchain would diminish the need for intermediated communications between corporate issuers and shareholders. He also inquired about the percentage of GTO segment revenue tied to trading volumes and the durability of this growth.

Answer

CEO Tim Gokey viewed tokenized equities as an opportunity and the 'next wave of democratization,' emphasizing that the SEC considers them securities subject to all existing regulations, including governance. He expects most tokenized equities to be purchased through intermediaries with ongoing asset servicing obligations (proxy, corporate actions), creating opportunities for Broadridge to manage complexity. CFO Ashima Ghei stated that about one-third of GTO revenues are tied to trade volumes, with roughly half of that being direct post-trade. She noted that higher trade volumes typically occur during periods of increased volatility and, while not expecting sustained elevated levels, anticipates continued strong growth.

Patrick O'Shaughnessy of Raymond James Financial inquired about the potential threat of disintermediation from the tokenization of equities, specifically regarding retail investor participation in the proxy process, and asked about the company's strategy for its debt profile, given senior notes coming due.

Answer

CEO Tim Gokey stated that equities are likely to be impacted later by tokenization compared to other asset classes due to the efficiency of the current infrastructure. He emphasized that regulators, like the SEC's Hester Peirce, view tokenized securities as securities, meaning all related obligations, including disclosure, would still apply. CFO Ashima Ghei commented on the debt profile, stating the company is comfortable with its current 2.0x leverage and expects to roll forward the debt that is coming due.

Patrick O'Shaughnessy requested more details on the solutions included in the recent wealth platform sale and asked for an update on current position growth trends and the outlook for the next fiscal year.

Answer

CEO Timothy Gokey described the wealth platform sale's core as a 'wealth operating system' or data layer, with additional components built on top. He highlighted broader momentum, with 34 components live and 40 more being onboarded across various clients. CFO Ashima Ghei reiterated the Q4 outlook for low-double-digit equity revenue position growth and mid-single-digit fund position growth. She noted they have high confidence in the full-year numbers and have not seen any negative impact from recent market volatility on trends for fiscal '26.

Patrick O'Shaughnessy asked for the specific expected revenue contribution from the SIS acquisition and whether guidance would have been raised without it. He also questioned if the strong Q1 closed sales result was due to any pull-forward of deals.

Answer

CEO Tim Gokey and Interim CFO Ashima Ghei clarified that the SIS acquisition is expected to contribute just under $60 million in revenue this fiscal year, adding about one point to growth. They noted that while organic trends are strong, they would likely not have raised the guidance range without the acquisition. Regarding sales, Gokey stated the strong Q1 was not a pull-forward but rather timing of deals, and reaffirmed the full-year sales guidance of $290 million to $330 million.

Patrick O'Shaughnessy of Raymond James sought clarification on the revenue recognition impact of the two large non-recurring sales events in Private Banking, asking about the timeframe over which the associated revenue would be realized. He also inquired about the strategic importance of the UK market to the Institutional Investors business, given the negative sales events tied to UK client losses in the quarter.

Answer

Sean Denham, CFO and COO, clarified that the two large Private Banking wins were recurring SWP wins, while other professional services engagements were non-recurring. Sanjay Sharma, President of Private Banking, explained that professional services revenue can be realized immediately, with complex projects spanning 12-18 months or longer. Michael Lane, EVP, Institutional Group, stated that the UK institutional business is a fraction of the overall OCIO and institutional business but remains important, with efforts to grow it under new leadership. Brad Burke, Head of Investor Relations, added that the institutional business is considered a growth business, with recent leadership changes and an improved operating model under Kevin Matthews.

Patrick O'Shaughnessy asked for clarification on the revenue recognition impact of the two large Private Banking sales events, specifically how to model their revenue over coming quarters. He also questioned the strategic importance of the UK market to the institutional business, given reported client losses in the quarter.

Answer

CFO Sean Denham clarified that the two large Private Banking wins are recurring revenue SWP wins, while other professional services are non-recurring. Sanjay Sharma, President of Private Banking, explained that professional services revenue can be realized immediately and spread over 12-18 months for complex projects. Michael Lane, EVP, Institutional Group, stated that the UK institutional business is a fraction of the overall OCIO business but remains important, with growth efforts underway. Brad Burke, Head of Investor Relations, added that the institutional business is considered a growth area, with recent leadership changes and an improved operating model being implemented.

Patrick O'Shaughnessy from Raymond James asked about the private banking client portfolio, specifically if there are other high-risk relationships SEI is monitoring following the recent chunky client loss. Patrick also inquired about the remaining components and strategic importance of the 'Investment in New Businesses' segment after the divestiture of the Archway Family Offices business.

Answer

Sanjay Sharma, EVP, CEO, and Global Head of Private Banking and Wealth Management, SEI, and Ryan Hicke, CEO, stated that they are not aware of any other large high-risk clients and feel extremely confident about their client relationships in the banking business, emphasizing strong client engagement. Ryan Hicke, CEO, clarified that the 'Investment in New Businesses' segment primarily includes the sphere business and private wealth management business, noting that these are not large revenue streams. He added that this segment will cease to exist upon resegmentation, with its revenue following clients to other related segments.

Patrick O'Shaughnessy followed up on the private banking client loss, asking if there were other high-risk relationships in the existing private banking client portfolio. He also sought clarification on what remains in the 'investment in new businesses' segment after the Archway Family Offices divestiture and its strategic importance.

Answer

Sanjay Sharma (EVP, CEO, and Global Head of Private Banking and Wealth Management) and Ryan Hicke (CEO) affirmed that they are not aware of any other large high-risk clients in private banking, expressing confidence in client relationships. Ryan Hicke (CEO) explained that the 'investment in new businesses' segment primarily contains the sphere business and private wealth management, and that upon resegmentation, this segment will cease to exist, with revenue following the relevant client segments.

Patrick O'Shaughnessy of Raymond James followed up on the Private Banks segment, asking if the recent lack of large negative client events like cancellations or re-contracting was a result of luck or a fundamental improvement in the business.

Answer

CEO Ryan Hicke asserted that the improvement was not luck but the result of hard work and a more aggressive and strategic client engagement model. Executive Sanjay Sharma added that the adoption of an 'enterprise mindset,' offering a broader set of SEI services and professional services, has been a game-changer, repositioning SEI from a vendor to a strategic partner in the eyes of its banking clients.

Patrick O’Shaughnessy asked about the unique challenges to growing electronic market share in high-yield corporate bond trading, given that its electronification lags investment grade and has seen stalled share gains.

Answer

CEO Chris Concannon identified key challenges in high-yield as liquidity and information leakage. He explained that MarketAxess addresses these through its high-yield all-to-all liquidity during volatility, high-yield block trading solutions, dealer content, and an AI tool for selecting likely-to-respond dealers to reduce information leakage. He also highlighted the recent growth of portfolio trading in high-yield, even in heightened volatility, supported by the ETF market, contributing to the electronification of this segment.

Patrick O’Shaughnessy asked about the unique challenges to growing electronic market share in high-yield corporate bond trading, given that its electronification lags investment grade and share gains have stalled across platforms.

Answer

CEO Chris Concannon identified liquidity and information leakage as key challenges in the high-yield market. He highlighted MarketAxess's solutions, including high-yield block trading, dealer content, and an AI tool for dealer selection to reduce information leakage. He also noted the recent growth of portfolio trading in high yield, even during heightened volatility, supported by the ETF market, as a new avenue for liquidity.

Patrick O'Shaughnessy inquired about the expected timeline for utilizing the $3 billion share repurchase authorization and the planned funding sources, specifically the split between free cash flow and incremental debt.

Answer

Henry Fernandez, Chairman and CEO, MSCI, expressed strong conviction in MSCI's value, especially during periods of undervaluation, and stated the company aims to be aggressive with repurchases. He personally invested $20 million in MSCI shares over the last 18 months. He indicated that funding the $3 billion over a reasonable period would involve both free cash flow and leveraging up to around 3.5 times, aiming for over $1 billion a year. Andy Wiechmann, Chief Financial Officer, MSCI, confirmed no change to the company's capital allocation approach or leverage targets, emphasizing a continuation of their consistent strategy.

Patrick O'Shaughnessy asked about the expected timeline for utilizing the $3 billion share repurchase authorization and the planned funding sources (free cash flow versus incremental debt).

Answer

Henry Fernandez (Chairman and CEO, MSCI) expressed strong conviction in MSCI's value, citing $1.5 billion in year-to-date share repurchases and a new $3 billion authorization. He plans aggressive repurchases if the stock remains undervalued, funding through free cash flow and leveraging up to 3.5x, while remaining opportunistic. Andy Wiechmann (CFO, MSCI) confirmed no change to capital allocation or leverage targets.

Patrick O'Shaughnessy noted an anecdotal pickup in the M&A pipeline that hasn't yet translated to improved growth for Intralinks, asking about the current pipeline and competitive landscape for Intralinks. He also questioned the confidence level in the healthcare business's positive inflection, given two consecutive quarters of year-over-year growth.

Answer

Brian Schell, Chief Financial Officer, confirmed that early indicators for the M&A pipeline are improving, with more data rooms opening, and while revenue lags by several weeks to months, positive signs are emerging for Intralinks. Bill Stone, Chairman and Chief Executive Officer, explained that the healthcare business, which runs at 30-35% margins, is lumpy due to large deals. He highlighted SS&C's investment in Domani RX and strong client relationships with Humana and Centene, acknowledging that selling into large healthcare organizations can be a slow process.

Patrick O'Shaughnessy inquired about the M&A pipeline for Intralinks and the competitive landscape, noting that while anecdotal evidence suggests a pickup, it hasn't yet translated to improved growth for Intralinks. He also asked about the confidence level in the healthcare business's sustainable positive inflection after two consecutive quarters of year-over-year growth.

Answer

CFO Brian Schell confirmed seeing early indicators of an improving M&A pipeline for Intralinks, with more data rooms opening, and expects revenue to lag by several weeks to a few months. Chairman and CEO Bill Stone explained that the healthcare business, while lumpy with large deals, runs at 30%-35% margins. He highlighted major clients like Humana and Centene and acknowledged the challenge of selling into large healthcare organizations, comparing their nimbleness to large banks.

Patrick O'Shaughnessy of Raymond James questioned why revenue from the recently acquired Battea business appeared to be trending below its 2023 levels, asking if it was due to business lumpiness. He also asked for the foreign exchange impact embedded in the full-year revenue guidance.

Answer

Rahul Kanwar (Executive) attributed the Battea revenue trend to the inherent lumpiness of the class-action settlement business and a conservative accounting approach during the integration. He expressed optimism about the underlying business and cross-sell opportunities. Brian Schell (Executive) addressed the FX question, stating that approximately 21% of revenues are non-U.S. dollar, so currency fluctuations have a corresponding impact on the overall growth rate, and the guidance conservatively assumes current rates.

Patrick O'Shaughnessy of Raymond James asked for expectations on 2025 adjusted free cash flow and a target conversion ratio, questioned if hiring top talent is becoming more difficult, and inquired about the company's strategic and financial criteria for M&A.

Answer

CFO Michael Rispoli explained that the adjusted free cash flow conversion is about 65% of post-tax adjusted earnings on a trailing twelve-month basis and could range from 65-85% depending on investments in talent. CEO Barry Gosin stated that while hiring is never easy, Newmark's model continues to resonate with high-producing professionals. He described their M&A criteria as focusing on smaller, synergistic bolt-on acquisitions, particularly in management services, to enhance recurring revenue without causing major disruption.

Patrick O'Shaughnessy asked about Newmark's current appetite for M&A versus continuing broker team lift-outs. He also requested the company's current outlook on the multifamily sector, particularly concerning Fannie Mae and Freddie Mac.

Answer

Executive Jason McGruder stated that Newmark is careful with M&A and has found acquiring talent directly is often more cost-effective, though they will pursue acquisitions for white space opportunities. CEO Barry Gosin commented on multifamily, noting the FHFA seems supportive of creating more housing. He believes any potential privatization of Fannie and Freddie is a long-term process and won't have an impact in the foreseeable future. CFO Michael Rispoli added that multifamily debt origination volumes were strong in Q1 and continue to build.

Patrick O'Shaughnessy of Raymond James questioned the low Q4 forgivable loan spend and 2025 expectations, the potential impact of FHFA leadership changes on the multifamily outlook, and the plan for Howard Lutnick's share divestiture.

Answer

CFO Michael Rispoli explained that full-year loan spend was robust at over $200 million and expects similar investment levels in 2025 through loans or M&A. CEO Barry Gosin downplayed the potential impact of FHFA changes, anticipating minimal disruption. Mr. Rispoli added that Howard Lutnick is not expected to sell shares on the open market, with more details to follow his confirmation.

Patrick O'Shaughnessy questioned why the absolute dollar guidance for adjusted EBITDA decreased while revenue guidance increased, inquired about the outlook for incremental margins, and asked for an assessment of debt financing availability.

Answer

Executive Michael Rispoli explained the adjusted EBITDA guidance was impacted by the comparison to a prior-year period that included a $12.8 million favorable legal settlement. CEO Barry Gosin reiterated that incremental margins are expected to be 40-45% as capital markets normalize in 2025-2026. He also described a shift in debt financing, with debt funds and private equity-owned insurance companies increasing activity as banks pull back, ensuring strong market liquidity.

Patrick O'Shaughnessy asked about a business wind-down mentioned in the non-GAAP reconciliations and inquired about the closing date and financial contribution of the Industrious acquisition.

Answer

CFO Emma Giamartino identified the wind-down business as Telford. She confirmed the Industrious acquisition closed in mid-January 2025 and is performing as expected, though she did not provide specific financial contribution details.

Patrick O'Shaughnessy asked for the percentage of revenue tied to delivery and usage-based contracts and the progress in shifting towards more ratable models. He also questioned the decline in North America's adjusted EBITDA margin and the outlook for its recovery.

Answer

CFO Bryan Hipsher stated that roughly 25% of revenue is from delivery and usage contracts, and migrations to modern APIs are steadily increasing the share of ratable revenue, with a goal of reaching an 85-90% ratable mix over time. He explained that North American margins are impacted by bearing corporate innovation costs, but with major migrations complete, he expects improved scale and overall company margin expansion in 2025.

Patrick O'Shaughnessy from Raymond James noted the 26% year-over-year growth in client fixed income assets and asked if this was due to clients using them as cash alternatives. He also requested more color on the 'client pay changes' in early April mentioned in a footnote.

Answer

EVP and CFO Steve Boyle confirmed the growth in fixed income is part of the cash sorting trend, with attractive rates on brokered CDs on the platform driving client interest. Regarding the pay changes, both Boyle and President and CEO Tim Hockey explained they made very minor tweaks to the interest rates in some of the lower, more price-sensitive tiers within the BDA as part of their regular monthly review of client behavior.