SS&C Technologies - Q2 2024

Transcript

Operator (participant)

Ladies and gentlemen, thank you for standing by, and welcome to the SS&C Technologies Q2 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one. I will now hand today's call over to Justine Stone, Head of Investor Relations. Please go ahead.

Justine Stone (Head of Investor Relations)

Welcome, everybody, and thank you for joining us for our Q2 2024 earnings call. I'm Justine Stone, Investor Relations for SS&C Technologies. 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 the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk 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. These forward-looking statements represent our expectations only as of today, July 25, 2024. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. During today's call, we will be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the investor relations section of our website at www.ssctech.com. I will now turn the call over to Bill.

Bill Stone (Chairman and CEO)

Thanks, Justine, and welcome everyone. Our second quarter results are record adjusted revenue of $1.452 billion, up 6.5% and $20 million ahead of our forecast. Our adjusted diluted earnings per share was $1.27, up 17.6%. Adjusted consolidated EBITDA was $558.9 million for the quarter, and our EBITDA margin was up 170 basis points to 38.5%. Our second quarter adjusted organic revenue growth was 6.4%. The revenue acceleration was driven by strength in our alternatives, GIDS, wealth and investment technology, and Intralinks businesses. The surprise upside came largely in our GIDS business, the outperformance driven by seasonality and some accelerated license revenue.

Our recurring revenue growth for financial services was 7.7%, which includes all software-enabled services and maintenance revenue. Second quarter cash from operating, from operations were $385 million, up 16.8% from Q2 2023. Our cash flow conversion percentage for the quarter was over 120%. We paid down $25.2 million in debt in Q2 2024, bringing our net leverage ratio to 2.84 times consolidated EBITDA. In Q2 2024, we bought back 3.7 million shares for $227 million at an average price of $62.17 per share. This is the highest share buyback in one quarter in SS&C's history. Last week, the board of directors renewed a one-year, $1 billion common stock repurchase program.

We continue to believe stock repurchases are a good use of our capital. On the M&A front, valuations are still elevated, but we are seeing an increase in relevant targets coming to market. We will continue to look, but our returns need to be as attractive or greater than buying back our own stock. I'll now turn it over to Rahul to discuss the quarter in more detail.

Rahul Kanwar (President and COO)

Thanks, Bill. Our business had a good quarter with the strongest organic revenue growth since 2021. Our alternative fund administration business had strong growth across the board in private markets, hedge funds, and retail alternatives, where we provide both fund administration and transfer agency services and support registered alternative and interval funds. SS&C is uniquely positioned to serve this growing area with the combination of our transfer agency and fund administration services. We have seen early success in the Wealth and Investment Technologies business unit, collaborating on client relationship management and sales opportunities. Trust Suite momentum continues. The sales pipeline is robust, and we're being invited to participate in the largest RFPs in the market. DomaniRx's second release was put in production on July 1, and the platform can now process claims for all lines of business.

We have processed over 100 million claims since going live in January and have migrated our first new client onto the platform. Domani's key strengths includes enhanced functionality running on the SS&C private cloud, well supported with self-service capabilities and customized reporting. I will now turn the call over to Brian to discuss the financials.

Brian Schell (CFO)

Thanks, Rahul, and good day, everyone. Our Q2 2024 GAAP results reflect revenues of $1.452 billion, net income of $190 million, and diluted earnings per share of $0.75. Our adjusted revenues were also $1.452 billion, an increase of 6.5% over Q2 2023. The increase of $89 million over prior year was primarily driven by incremental revenue contribution from the alternatives within GIDS and Intralinks businesses. Acquisitions contributed $4 million, and foreign exchange had an unfavorable impact of $2 million. As a result, adjusted organic revenue growth on a constant currency basis was 6.4%. Our core expenses increased 3.3% or $29.2 million, excluding acquisitions and on a constant currency basis.

Adjusted Consolidated EBITDA attributable to SS&C was $559 million, or 38.5% of adjusted revenue, an increase of $57 million, or 11.2% from Q2 2023. The 38.5% EBITDA margin reflects a year-over-year improvement of 170 basis points, driven by the positive impact of both revenue growth and disciplined expense management. Net interest expense this quarter was $113 million, a decrease of $5 million from Q2 2023. Adjusted net income was $320 million, up 15.7%, and adjusted diluted EPS was $1.27, an increase of 17.6%. The effective tax rate used for adjusted net income was 26%.

Increased share repurchases drove the diluted share count down to 252.3 million from 253.3 million in Q1 2024. SS&C ended the second quarter with $462.7 million in cash and cash equivalents, and $6.7 billion in gross debt. SS&C's net debt, as defined in our credit agreement, which excludes cash and cash equivalents of $88.5 million, held at DomaniRx, was $6.3 billion. Our last twelve months consolidated EBITDA used for covenant compliance was $2.2 billion. Based on net debt of approximately $6.3 billion, our total leverage ratio was 2.84 times, and our secured leverage ratio was 1.6 times.

In May, we refinanced our Term B loan, consisting of five tranches, with a new single $3.9 billion Term B loan tranche, as well as a $750 million senior note. The refinancing resulted in a $28 million non-cash loss on extinguishment of debt and the capitalization of $35 million of new deferred financing fees. The refinancing activity resulted in extending our debt maturity by approximately 3.7 years and diversifying our funding sources, but still positioned to benefit from any reduction in short-term rates. As we look forward to the third quarter and the remainder of the year with respect to guidance, note that we will maintain our focus on client service and assume that retention rates will continue to be in the range of our most recent results.

We will manage our expenses with a cost discipline approach by controlling and aligning variable expenses to ensure efficiency, increasing productivity and improve our operating margins to leverage our scale, and effectively investing in the business through marketing, sales, and R&D to take advantage of future growth opportunities. Specifically, we have assumed foreign currency exchange rates will be at current levels, short-term interest rates to remain at current levels, a tax rate of approximately 26% on an adjusted basis, capital expenditures to be 4.1%-4.5% of revenues, which is a slight reduction from prior guidance, and a stronger weighting to share repurchase versus debt reduction, subject to changes to market conditions.

For the third quarter of 2024, we expect revenue to be in the range of $1.42 billion-$1.46 billion, and 5.3% organic revenue growth at the midpoint. Adjusted net income in the range of $304.6 million-$320.6 million. Interest expense, excluding amortization of deferred financing costs and original issue discount, in the range of $107 million-$109 million. Diluted shares in the range of 251.6 million-252.6 million shares, and adjusted diluted EPS in the range of $1.21-$1.27.

For the full year of 2024, we are raising revenue guidance by $12 million and expect revenue to be in the range of $5.706 billion-$5.866 billion and 4.9% organic revenue growth at the midpoint. Adjusted net income in the range of $1.246 billion-$1.326 billion. Diluted shares in the range of 250.9 million-253.9 million shares. Adjusted diluted EPS in the range of $4.98-$5.22, and cash from operating activities to be in the range of $1.305 billion-$1.385 billion. Our updated 2024 guidance reflects our strong results in the first half of the year, with a continued positive outlook for the remainder of the year. And now, back to Bill.

Bill Stone (Chairman and CEO)

Thanks, Brian. We obviously had a strong quarter on both the top and bottom line. We continue to be bullish about our business and our updated, updated guidance, as I said, 4.9% organic growth at the midpoint and $5.10 in adjusted diluted earnings per share. I'd also like to announce that on September 18th of 2024, we'll hold an Analyst Day at Nasdaq MarketSite in New York City. Formal invites will go out in the coming weeks, and please reach out to Justine if you have any questions. We'll also be hosting our SS&C Deliver Client Conference in New Orleans, Louisiana, on October 6th to 8th. This premier event is designed for executives and decision-makers across SS&C's solution set and features hands-on learning, industry insights, and many networking opportunities....

I'm pleased to announce this year's keynote speaker is my friend David Rubenstein, co-founder and co-chairman of The Carlyle Group, which SS&C was a portfolio company from 2005 until 2014. We look forward to hosting hundreds of our clients and prospects in October. I'd now like to turn it over to questions.

Operator (participant)

At this time, if you would like to ask a question, press star one on your telephone keypad. Please limit yourself to one question and a follow-up. If you have further questions, you may come back into the queue. Please pause for your first question. Your first question is from the line of Dan Perlin with RBC Capital Markets.

Dan Perlin (Managing Director)

Thanks. Good evening. Great to see the organic trends just continuing to improve here. I just had a quick question on the guidance. It looks like at the midpoint, it seems to suggest if we use kind of the midpoint for third quarter and then take the full year number, that the fourth quarter's organic growth kind of steps down a little bit, maybe more meaningfully. So I'm just trying to understand, like, is this just tougher comps as we kind of look at the numbers, or is there something structural that we need to be mindful of? Or is this just kind of overall conservatism since we're not, you know, we're a little bit away from maybe putting up the numbers on the fourth quarter? Thanks.

Bill Stone (Chairman and CEO)

Yeah, Dan, I would just say that the Q4 is really a comp issue. Q4 of 2023 was particularly strong, and again, you know, as you well know, we're in the process of meeting and beating our numbers, so we're still focused hard on making sure we have a strong number, but a number that we expect to hit.

Dan Perlin (Managing Director)

Yep. Okay. No, that's great. And then just quick follow-up. You know, your leverage is at 2.8 turns now. Obviously, you just re-upped a billion-dollar buyback, and you just did the biggest buyback in the company's history for the quarter. And you kind of mentioned a little bit, Bill, about the M&A kind of environment in the pipeline. I'm just wondering, you know, what do you see out there? How's it stacking up in terms of overall capital allocation? I understand you got a hurdle rate for your buyback versus M&A, but it does sound like M&A is picking back up, and even in kind of, your, I guess, it's your Intralinks report that you recently put out, it sounded like within North America, the deal flow was looking pretty good.

So I would just love to get your thoughts on where you sit today, given your balance sheet's pretty healthy.

Bill Stone (Chairman and CEO)

Yeah, as you well know, we've really built the company, you know, around organic revenue growth and acquisitions. We see a lot of stuff out there. We see things that, you know, are on the low end of ridiculously priced. So we are willing to look hard. We would like to deploy capital in acquisitions. We would like to, you know, further build out our portfolio of products and services. And each of our business units are, you know, kind of beating the bushes for opportunities. So I wouldn't be surprised if we are able to, you know, close a couple of tuck-ins and maybe something a little more substantial.

I don't see any $5 billion or $10 billion acquisitions on the near-term horizon, although SS&C will be in the running if any of those things come on the market.

Dan Perlin (Managing Director)

Excellent. Thank you, Bill.

Operator (participant)

Your next question is from the line of Andrew Schmidt with Citi.

Rahul Kanwar (President and COO)

Hey, Bill, Rahul, Brian. Thanks for taking my questions. Maybe it's just a higher level question for me. Obviously, the last three quarters we've seen, you maintain at least mid-single-digit organic growth. Maybe talk about the sustainability and visibility of consistently delivering that. And, you know, if anything, what's changed? I realize that, you know, we're at a more stable level, in terms of the Eze's performance, healthcare is stable versus one to two years ago. But if there's anything else deeper in the business that drives that stabilization, that'd be helpful. And I realize I might be jumping on the Analyst Day, but anything there will be helpful. Thanks a lot, guys.

Bill Stone (Chairman and CEO)

You know, Andrew, I would just say in general that, you know, we have a strong focus on organic revenue growth. You know, we have looked at a bunch of acquisitions, but, you know, the ones that we really like are pricing at 10x revenue, so we don't like them that much at that price. So when you start focusing on organic revenue, you start looking on how you're pricing. We've done a pretty good job at getting a little more discipline there. And you also make sure that the pitches that we go out in order to cross-sell and up-sell, as well as new names, are crisp and impactful. So I think we've done a good job there, and, you know, I think Rahul probably has a couple of anecdotes or additions that would also give you some clarity.

Rahul Kanwar (President and COO)

Yeah, I think the thing that I would add to that is product development. You know, we've spent a lot of energy over the last, really several quarters, making sure that what we're selling into a particular type of customer will bring in all of SS&C to bear. And so that's starting to show up in larger deals and, you know, better win rates, and we expect that to continue.

Andrew Schmidt (Senior Equity Research Analyst)

Got it. Thank you, Bill and Rahul. Yeah, it's certainly shining through in the product updates that you're putting through the market, so we see that. Appreciate those comments. And then maybe just a question on the outlook. You know, just the raise and the EPS outlook relative to the second quarter result and, you know, that in conjunction with higher level share repurchase. I'm wondering if there was some reinvestment that was baked in, or if there's some that, you know, you're kind of saving for some potential outperformance in the back half. It just looks like the raise was a little bit lighter than the outperformance. So, anything there would be helpful. Thank you.

Bill Stone (Chairman and CEO)

Well, again, as we said, our GIDS business was particularly strong, and we don't expect a repeat of the strength of that business in Q3 or Q4. We have some opportunities, but often they're multi-quarter sales cycles. We have a good pipeline, but that certainly could be a, you know, a little bit of a headwind to us. And then we also are... You know, we're very excited about our trust suite that we're bringing out into the marketplace. It's getting a lot of positive reaction. And I think we are executing and, you know, hopefully, we'll surprise you positively.

Andrew Schmidt (Senior Equity Research Analyst)

Got it. Thank you, Bill. Sorry, just one more housekeeping since you mentioned it. The GIDS business, was the accelerated license revenue, that... Could you shed some light on that? Was that timing? Just any details on that, and then I'll jump back in the queue. But thanks, thanks a lot for your responses here.

Rahul Kanwar (President and COO)

Yeah, it is mostly timing. You know, there were some deals that we had forecast as coming in in Q3 and Q4, and we were able to pull them into Q2.

Andrew Schmidt (Senior Equity Research Analyst)

Perfect. Thank you, Rahul.

Operator (participant)

Your next question is from the line of Peter Heckman with D.A. Davidson.

Peter Heckmann (Managing Director of Equity Research)

Hey, good afternoon. Thanks for taking my question. I guess, how would you characterize the overall spending environment? And, you know, we hear you in terms of where certain areas are producing a little bit better organic growth. But, I guess, what do you view in terms of, like, the next couple years, catalyst that could potentially cause people to look at switching vendors, upgrading? And, what do you think are the demand drivers there? Is it regulatory? Is it technology, or is it price?

Bill Stone (Chairman and CEO)

Well, I think it's all of those. I think price is probably the least important of the three. I also think, as you see of these, you know, these cyberattacks and the outages for large-scale businesses, you know, they start looking hard at who their vendors are and how much money are their vendors putting into their security walls and their expertise and the number of layers they have in order to, you know, kind of stop the bad guys. You know, and similar to things like Madoff and others that caused a real sea change in how people did their books, whether they did them in-house or they did them with an outside administrator.

I think technology is gonna be one of those things that, yeah, you saved a few 100,000 and maybe even a few million over a 3- or 4-year deal, and then you got burned for about 15 or 20. And they're gonna start deciding that, you know, playing technology on the cheap is a risky business. So I think that's gonna be a real driver. I also think how you deploy the newest technologies, whether that's deep learning, machine learning, RPA, AI, ML, all those things, right? I think the key there is, it has to work, and it has to work better than what you had before. You can't go show them something that's really pretty and it's slow or it isn't as accurate. So there's a lot of things that go into deploying new technologies.

You know, it's not just, "Well, we use large language models, and, you know, we're really steeped in AI." Yeah, maybe. But I think those kinds of things are real opportunities for us. And I think as long as we focus and deliver applications that show that, "Hey, we're here for the long term. We're gonna give you improvements every quarter, every six months, every year, and you're gonna see that, that your business improves because you chose the right partner.

Peter Heckmann (Managing Director of Equity Research)

Yes, that's helpful. And then, just any comments just on wealth specifically? You mentioned it as one driver of organic growth, but I guess, how would you characterize there? Is that more on the advisor tech side or more on the long-only side?

Bill Stone (Chairman and CEO)

I think it's on both. You know, you're gonna have, obviously, the wealth and investment technology is a very strong area. You know, just as you've seen on Envestnet, you know, getting sold or at least in the process of being sold, and all the number of mergers and private equity buying into different wealth technology companies. I don't see that stopping. You know, there's however many trillions being transferred from generation to generation, and the younger people getting this money are not gonna wait for a monthly statement or a quarterly statement or something along those lines. They're gonna want instantaneous access to their money.

I think things like you see on the T+1 and other things where, you know, the regulators are understanding when you have, you know, things like Venmo and other instantaneous money movers, people don't wanna wait 24 hours for a trade to settle or the money to be available or anything else. So you're gonna have to be nimble enough to handle the people that are the recipients of the current generations' really large-scale wealth accumulation.

Peter Heckmann (Managing Director of Equity Research)

Okay. Thank you. I appreciate it.

Operator (participant)

Your next question is from the line of Alexei Gogolev with JPMorgan.

Alexei Gogolev (Executive Director)

Hi. Hi, Bill. Alexei Gogolev here. Great to hear from you. Last time we met, you flagged growing confidence that the SS&C will be able to achieve high single-digit organic revenue growth in the midterm. So sort of following up on some of the questions that my colleagues have asked, are you seeing some sort of signs or pockets of opportunity that could drive further growth acceleration?

Bill Stone (Chairman and CEO)

Yeah, I think we see them, Alexei. I think the question is that, you know, you have to not just see them, you have to act on them, and you have to get ink on paper. And I think, you know, the large-scale things that we think are happening are people to outsource, you know, and even for us to take various lift outs, where we can give them tremendous expense savings, better technology, and a happier client base, and we can earn a lot of money in processing that business. So we think there's a number of those that are in the marketplace. We think we're well positioned.

So I think those types of things, and then, you know, things like, you know, what we're rolling out as new products and new services. As they kick in, I think you'll see increasing organic revenue growth. You know, I think the reduction in year-over-year revenue in healthcare went from 8.5% to 4.5%, or 8.5% to 4.8%. I think Q3 will be better than that, maybe break even or even a little better on a growth basis. And then I think we'll start accelerating in Q4 and throughout 2025 and 2026. So, you know, I think there's a number of different catalysts that can drive the mid- to high-single digits, but, you know, it's execution. You know, we got great strategies.

Alexei Gogolev (Executive Director)

Understood, Bill. And just to build up on the answer that you just provided. You've always positioned having your own data centers and infrastructure as a strong competitive advantage. Could you discuss how your customers reacted to outage, outages last week, and if you've seen any incremental demand on the back of that?

Bill Stone (Chairman and CEO)

Well, I think, you know, we've had many follow-up calls with customers of ours that in their tech stack, they had some of the companies that had some real difficulties. You know, in our own tech stack, we have very little of the companies that have had problems. So, you know, knock on wood. We believe that we're well served by our technology team that's very disciplined and also has many layers of security around our data processing centers. You know, we run our own private cloud. It doesn't mean we don't get attacked. Of course, we get attacked like everybody else. But, you know, we're not Amazon, we're not Azure, we're not a Target.

So the number of people coming after us is a mere fraction of what would go after, you know, large-scale disruptions of the U.S. economy. So we're, we're confident in what we're doing. We spend tons of money, and we believe that we're getting value.

Alexei Gogolev (Executive Director)

Understood. Thank you very much, Bill.

Operator (participant)

As a reminder, if you would like to ask a question, press star one on your telephone keypad. Your next question is from the line of Surinder Thind with Jefferies.

Surinder Thind (SVP and Equity Research Analyst)

Thank you. Bill, can you maybe talk about the pipeline at DomaniRx, given that you've now had a few successful clients on the platform, what you're seeing, maybe what the conversations are like, and just timeframe for any new announcements?

Bill Stone (Chairman and CEO)

Well, we have a good pipeline, and we have a pipeline with very large healthcare insurance claims payers. And, you know, I think we have, you know, a better breadbox, so we have a great opportunity if we can execute in a way that those large-scale organizations say, "You can handle this." Not only can you handle it, you know, Domani has very little latency. It processes subsecond. You know, a number of our competitors are processing in multisecond, and when you're doing millions of claims, that's very unpopular. So we think we have some competitive advantage there. As Rahul said before, we have self-service capabilities, we have very strengthened reporting capabilities, and a lot of good things for finance, so that they can really understand where they're spending money and on which drugs and in which markets.

So we think we have great opportunities. You know, there's Safeways in every market. There's Safeways here, too. So, we have to execute, but, you know, we've put 1.5 million hours into DomaniRx. And as I tell our prospects and clients, it works, and that's a pretty big statement.

Surinder Thind (SVP and Equity Research Analyst)

That's helpful. And just as a quick follow, is it larger deals, longer sales cycle than the rest of your business, or how should we think about that?

Bill Stone (Chairman and CEO)

I wouldn't necessarily say longer sales cycles, but most healthcare plans start on 1/1. So, you know, you get big opportunities on January 1, 2024. Oh, damn! It's July 2024, so now we get big opportunities on January 1, 2025. And, for the biggest ones, you know, you're really gonna have to be planning, starting now, and hopefully taking them live on 1/1/2026. You know, but they're enormous type companies that can pay upwards to $100 million a year on some of these claims processing things that they do. And, you know, we just need to be ready. The system has to continue to get better, and we have to continue to delight our customers.

Surinder Thind (SVP and Equity Research Analyst)

Thank you. And then on Blue Prism, just any update there, what you're seeing externally? And then just as a follow-up on the earlier comments about obviously doing a lot of continued work in AI, ML, and it takes a lot of time to prove those technologies. But just update on the internal efficiency initiatives there, and if there's any change that you see coming, not necessarily this year, but as you look out over the next one, two, three years, that maybe you can squeeze a bit more from an efficiency perspective.

Rahul Kanwar (President and COO)

Yeah, you know, we're continuing to roll out Blue Prism within SS&C. In some ways, we're building momentum because as more people get trained up, we have more capacity to have additional processes be, you know, subject to that robotic process automation and AI type enhancements. We're also—we just released the next generation of Blue Prism, which actually, as part of its workflow, has Gen AI capabilities. So you can use Gen AI natural language type interface to design your workflows, which makes it easier for us to roll out internally, but also, you know, improves our product differentiation from others in the marketplace. So we feel really good about Blue Prism and how it's helping us, and we certainly expect it to accelerate from here.

Bill Stone (Chairman and CEO)

And I would just add to that, what we find when people start to embrace it, their jobs get better. You know, and some people, you know, we have a lot of green eyeshades and a lot of warm bodies around SS&C. So, you know, often you have to bring the horses to water multiple times, and it's best if it's really sunny out, so they're thirsty. So I think those opportunities is where we have things where, "Wow, I wish I would have done this a year ago," 'cause it makes their job better. It makes the drudgery parts of their job sort of not drudgery anymore because they're not doing it. You know, they have some digital worker doing it. So I think, you know, we're sticking to the knitting.

We constantly monitor how many digital workers by business unit, and I know they're very happy about all the calls that Rahul and I make to them.

Surinder Thind (SVP and Equity Research Analyst)

Thank you, Bill. That's helpful.

Operator (participant)

Your next question is from the line of James Faucette with Morgan Stanley.

James Faucette (Managing Director)

Thanks a lot. I had a couple of product questions. I want to follow up on the Blue Prism question and appreciate your comments there. Just wondering what you see as the competitive landscape right now, and you know, love to hear how you're thinking about that opportunity having evolved of late, and specifically, whether or not you think you maybe can be the beneficiary of some of the hiccups we've seen from some of the public RPA vendors.

Bill Stone (Chairman and CEO)

Yeah, we think if we keep our hiccups at a very minimum, we will be a big recipient. You know, because our business is profitable, so that means it's sustainable. It means we can invest. You know, I know that a lot of these companies that you follow and a bunch of your colleagues follow, it's how much money, private equity money, can we burn before we have to be profitable? And I think a little bit that fuse has kind of played its way out, so now you have to build sustainable businesses. And I think that's what we've done. We also have to accelerate our revenue growth, you know, and I think, you know, we've added a new chief revenue officer, but we have some high expectations there.

But, but, you know, it's all proof in the pudding. You know, you can get up to bat, but somebody got to hit the ball, you know? And I think that's the thing we're driving at, and I think we are, you know, more than cautiously optimistic, but, but I wouldn't tell you that we're drunkenly optimistic either. So, you know, we're gonna execute, and I think, you know, we should begin to see double-digit revenue growth in Blue Prism for the foreseeable future.

James Faucette (Managing Director)

Got it. Yeah. So, sober forecasting is always appreciated. As far as the Genesis platform, I'd love to hear the early feedback from your customers on the product, and specifically, what you're trying to do with the capability set across Advent, Eze and GlobeOp. Well, I guess I'm trying to get a sense for what portion of your customer base do you think this will be most applicable for, and how do you think that Genesis will impact that segment?

Rahul Kanwar (President and COO)

So, you know, when we combined Advent and AS, and then subsequently institutional and investment management, that combined business is now, you know, maybe a little over $1.5 billion in annual revenue, and has a lot of the different products that are geared towards wealth, asset managers, you know, financial institutions, particularly on the software side. And it's only been a few months, but we find what we're able to do is start to take a look at product roadmaps for products like Genesis and Aloha, and Singularity and others, and make sure that, you know, the things that we think are worthwhile to build, we're putting the right amount of muscle behind them, and we're making sure that we've got a good launch plan and a good customer validation process.

And that's starting to show up in some of the results. So, you know, early days, but it feels like we're on the right track.

James Faucette (Managing Director)

Appreciate that.

Operator (participant)

Your next question is from the line of Kevin McVeigh with UBS.

Kevin McVeigh (Managing Director)

Great. Thanks so much, and congratulations on really just terrific results. Maybe this is for Bill. Bill, given the kind of technology efficiencies that Blue Prism are bringing to bear, is it changing the go-to-market strategy with your clients? I mean, and you've spoken a lot about bigger kind of lift and shift opportunities. Has it accelerated that process? And does the efficiencies that Blue Prism bring to bear afford you kind of a wider lens in terms of go-to-market strategy, just given some of the potential returns as a result of the efficiencies? I wanted to start there 'cause it feels like there's a step function change in the business from a revenue growth perspective that just is beyond kind of some of the segmentation. And I just wanted to maybe try to frame that a little bit.

Bill Stone (Chairman and CEO)

Well, I think, Kevin, that was the intent when we bought Blue Prism, was to buy something that was horizontal, that would act as, you know, almost like the floor for all of our different applications and services, you know, to kind of hang off on or to improve with and be able to, you know, present a technological differentiator that we can train everybody on across the enterprise. Now, the enterprise is pretty broad, and we've done 75 acquisitions, so there's a lot of teaching and training and implementing of Blue Prism, both internally at SS&C, and then as we take people out to pitch externally, you know, they get a lot of confidence because we're using it, right?

We're eating our own dog food, we're processing on Blue Prism across almost every one of our disciplines inside SS&C. And so that's, that's the whole, the whole, holy grail of this thing. And I think that it is... You know, that we think the train has left the station. You know, but I think there was a hill to get the train up first, right? You got to get into those places, and you got to really start to educate the IT departments of our clients, you know, when traditionally we've been functional experts. You know, talk to us about retrospective or prospective accounting rules, or how to value a multi-step bond or whatever it is, right?

But now you got to go in and talk about large language models and how you're gonna deploy machine learning or RPA, and that's an education. And I think we're doing it, and we're doing it pretty well, and we have a very talented tech team.

Kevin McVeigh (Managing Director)

That makes a lot of sense. And then just, does that afford bigger opportunities, Bill? Because obviously, you're talking to a wider audience, so it almost sounds like it's more transformational opportunities. So those clients' scale and size, I guess, given the complexity of what you're taking.

Bill Stone (Chairman and CEO)

It does, but it, you know, it also brings in, you know, every tech-focused consulting firm and, and, and horizontal consulting firm and tech firm, right? Now you run into all the, the, you know, what we used to call, you know, manpower shops out of India, whether that's Cognizant or Tata or, or Infosys, or any of the other ones, plus you start bumping into Accenture and, and, and the ones here in the States. So, you know, it's, it's a different kind of a competitive landscape. You know, we, we really like that we bring expertise in what our clients are trying to do, so we can kind of help their IT people and try to explain to them, "That's not how this really works. This is how it works. This is what really, you know, momentum trading means.

This is you know how traders and portfolio managers are looking at risk in their portfolios, and you know what is the value of real time versus near real time? And being able to go across what they're doing in technology and show them that, "You're going to spend $5 million doing it that way. If you spent $500,000, you'd get the same result, but you'd be a hero because you saved the organization $4.5 million." And you know and some of these places have enormous budgets. You know $200 million for firms that are 200 people or you know 300 people, 400 people. So there's a lot of opportunity in there, but there's a lot of competition.

Kevin McVeigh (Managing Director)

Super helpful. Thank you.

Operator (participant)

At this time, there are no further questions. I will now hand today's call over to Bill Stone for any closing remarks.

Bill Stone (Chairman and CEO)

Thank you, Tamika. Thanks, everybody, for being on the call. We really appreciate it. You know, we're working hard for you as we always have. We like to work hard for you and give you great results. So until, till next time, we'll be out there working on great results. Thanks again.

Operator (participant)

This concludes today's call. Thank you for joining. You may now disconnect your lines.