SS&C Technologies (SSNC) 13 Feb 242023 Q4 Earnings call transcript

Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to the SS&C Q4 and Full Year 2023 Earnings Call. [Operator Instructions]. I would now like to turn the call over to Justine Stone, Investor Relations with SS&C. -- Justine, Justin, floor. have that, with excuse you me, the And

SS&C. is and us Executive Officer; Justine Brian call. for joining you Officer; Stone, Officer. Schell, me our Relations Welcome, and for and earnings Rahul for Kanwar, thank Chief and Stone, Bill Chairman QX President XXXX Investor our With Chief Financial today Operating I'm Chief

statements future statement. expectations, need for Please discussed started, result including recent SEC safe Actual which and important constitute also on we we factors, the as to in make annual of Private various XX-K, is results review of with the website. differ these today safe provide, we file get Litigation provisions a harbor report the about from may that note of the our including those XXXX. materially Reform harbor Factors plans various those Risk prospects, be our the the we section financial Act indicated remarks Before the Form accessed under Securities most purposes on outlook of can statements on forward-looking forward-looking and by

represent statements XX, only as our of XXXX. today, February expectations forward-looking These

it company to these the specifically do update While to disclaims forward-looking elect obligation statements, any may so.

we Investor in reconciliation www.ssctech.com. at is call, included located today's of be of today's in to is will non-GAAP GAAP section A certain the measures financial During release our these referring measures financial measures. to comparable non-GAAP financial Relations earnings website which

to I will Bill. over call the now turn

point per $X.XXX our our our quarter, results revenue from to up million increase the margin consolidated up EBITDA basis the is This and highest are welcome, quarter the billion, was was adjusted a share record X.X% X.X%. $X.XX, of quarter second XXXX. everyone, history, XXX for Adjusted of Justine, and in up to Thanks, XX.X%. were EBITDA and $XXX which diluted earnings fourth adjusted our

revenue revenue acceleration strength growth Retirement fourth businesses. was our was Alternatives, Intralinks adjusted X.X%. quarter and by in The quarter fourth organic Our driven

We also saw acceleration in GIDS, Advent businesses. and

for services This Services in X.X%, increase rate Our software-enabled from recurring was maintenance includes revenue. growth all which revenue QX. Financial is a X.X% sequential and

For X.X%. was growth Financial growth organic year, X.X%, Services recurring was revenue the total and

XXXX, revenue over generated Financial X.XXx, cash to X.X bringing and average back net share. leverage activities last of from in to per our ratio QX $XXX XX-month at leverage XXXX, Our billion. price for down X.Xx. in We shares remains on secured In our XX% retention basis. $XXX debt $XX.XX a ratio net million an $X.XXX Services bought net We paid SS&C million of million operating

year, we the anticipate new in XXXX. have $XXX went pharmacy discount our platform debt For focus We drug a On DomaniRx, clients. towards million higher buybacks. our million on and share similar allocated with benefits Phase towards live X, stock I brand repurchase paydown January $XXX

have response We what standards. more second month under XX% than over processed industry our of of quite January, better time is and than the X XX anticipated originally we January in for million claims had

quarter. first XX migrated We was by cutover DomaniRx who Customers the have to the we end will process a claims of [indiscernible] project million have frictionless.

of Medicaid Our and functionality. XXXX Medicare release full include second commercial, is June and scheduled for will DomaniRx X,

XXXX. look forward successful new the pleased and of are We of with launch DomaniRx, second in the we half clients to adding

of companies. the completed world's a largest system insurance implementation major also We retirement X with

solution We lot income to a has our driven of opportunity. look around on this activity and change forward retirement capitalizing Regulatory rollovers.

the more discuss call to Rahul now over in quarter I'll detail. turn to the

and Retirement grew In grew Thanks, in grew QX, acceleration saw expansion. Bill. revenue and X.X%, Intralinks healthy Alternatives we margin Notably, XX.X%. XX.X%,

growth, a XX.X%, our higher of was cost result and revenue rate initiative. exit controls digital margin EBITDA Our worker

to approximately we year, yield which expect worker digital annually. we equivalents in obtained productivity, savings full-time X,XXX the $XXX For million

front-end our dynamics ability firms continue of our for services businesses. of for GIDS, offering can technology. and opportunities Alternative our beneficial about we customers Fund as benefit optimistic solutions the across focused ways Services their integrated other large market a and These seeing their holistic drive an financial and We Retirement company, have services lot and industry comprehensive to digital be look to costs additional Across automation improving products are while operations multiple from on to comprised strategies. We're the workers to down back-office within way. in drive

and new office Trust and and XX experience signed been Salentica. office for the Diamond combining and clients we XXXX, Innovest our on trust the in Eclipse reporting Black example, CRM clients signed We've a XXXX to of over capabilities of number goods XXX. also front and banks in Eclipse through platform XX bringing Suite Edge as positively integration the one back Similarly, has As and Advent, clients, regulatory companies over total received. new from Geneva

We are to gaining momentum market and an here. share have increase from opportunity

Brian run financials. the to to now will it I through over turn

Thanks, Rahul.

QX adjusted the over X.X% XXXX record over And driven Bill 'XX of increase record revenues EBITDA release, billion, also hit $XXX X.X% QX of The diluted results our GAAP up primarily $XXX at increase QX GIDS. $X.XXX Adjusted in share in and call, as revenue EPS the Alternative, of Intralinks incremental diluted by or a up $X.XX. noted an our $XX $X.XXX of earlier hit and million, contributions was X.X%. level 'XX. revenues and income billion, was per million adjusted As press a at $XX earnings noted net million reflect revenue adjusted million, our $X.XX, from

Our acquisitions approximately XX or contributed $X.X million points. basis

or XX of impact Foreign had exchange favorable basis points. million a $XX

revenue organic adjusted result, X.X%. a was growth basis currency constant on a As

higher structure Our XXXX. to fees impacted costs inflation, has and compared personnel by general increased been cost professional

the of and basis. or However, cost and constant a on workers, expenses our acquisitions only disciplined and currency approach, core use maintaining a $XX by digital X% million, excluding increased

Acquisitions $X million of added additional foreign million and expenses. currency added $X an

a sequential XX.X% and With both growth respectively. our year-over-year outpacing reflects EBITDA the XXX and combination of XX our adjusted margin expansion growth, of revenue basis points, expense of

of Adjusted Share including the quarter from million was The EPS year. senior fourth down count $XXX.X adjusted the in million an from the last rate of increase for fourth for to X.XX% income was facility, million, $X.XX. credit used in million repurchases million XX%. in for $XX income $XXX and X.XX% adjusted diluted was 'XX. quarter net of quarter notes, tax QX. effective expense 'XX diluted was share the the amended $X.X net was QX compared $XXX to the rate of average interest The million drive interest helped to $XXX.X Net

assuming strong single slight results, our reflects compared to $X.XX decline a per per reflects of share XX% was rise increasing debt expense tax nearly the rates $X.XX the interest on contributor short-term after-tax on QX a or $XXX decline of While impact million this in an to share share annual XXXX our interest by year. The basis, rate. biggest approximately earnings last per

gross in defined held with XX billion credit billion and million of and and $XXX cash DomaniRx $X.X in excludes was debt, SS&C ended as quarter equivalents the cash SS&C's in at our million equivalents . cash fourth $X.X December debt. net $XXX as agreement, which cash of

X.Xx. ratio leverage Our ratio year-end was leverage was and our X.XXx secured total

approximately in X our April As be XXXX, of refinancing X, the maturity approach them in loans and anticipate $X.X X, totaling billion, term. we near term

as activities $X.XXX incremental cash management. from SS&C well an improved net X.X%. operating increase reflects of capital increase as billion, as The Also, previously of earnings generated working noted, the

establishing continue into of focus well client we XXXX rates move As and enhancements product on will to results. service. assume guidance, innovation as our Note most in that recent will continue to our range that We be as retention we the

rationalizing investing marketing, with advantage business a sales expenses our manage increasing leverage to effectively scale, R&D variable continue to real our our future our aligning margins the productivity and controlling cost improve and ensure also efficiency, will through to to and We operating approach footprint, growth by opportunities. in take of estate disciplined to expenses

revenue X.X% the year have For assumed to organic in of adjusted the full X.X%. we growth XXXX, range

share be year. similar consistent currency capital second XXXX. levels. with unchanged tax how year expenditure Short-term to XXXX rates XXXX Capital of in and to year. an the the X.X% XX% half approximately X.X% consistent the through to the basis, be we of interest rates allocated Foreign flat at small on remain of which the rate first to overemphasis declines in exchange half GAAP adjusted repurchases, with to of with revenues continued slight is prior to from

result, billion to a $X.XXX range XXXX, year to billion; full $X.XXX $X.XXX the for expect As we net in of in the revenue the billion. income be $X.XXX adjusted to billion of range

billion. $X.XXX to in original of $X.XX million, in $XXX $X.XX million, the EPS to range Interest adjusted activities discount expense, and shares billion of $XXX.X $X.XXX deferred from the the excluding be operating million $XXX financing million costs to of amortization range of cash diluted the of in and to issue in $XXX.X to range diluted range

billion. and and For of shares billion we EPS to shares costs $XXX in $X.XXX amortization million be expense, the of the million. range adjusted first in the of the diluted of to quarter XXX.X excluding of revenue million, million million adjusted the range discount net $X.XX financing to expect range diluted to in $XXX $XXX million of deferred $XXX.X the XXXX, [indiscernible] to $X.XXX in range Interest range $X.XX. income in of $XXX to

turn it back Bill Now like to to I'd final over comments. for

in Reuters London to Ruskin Refinitiv, Board. fintech, collaborating market global also Walton-Ruskin, and forward Financial. and Stock an We impressive executive strengths the focus. has leadership to like Walton Her Debra Director newest Thanks, had Thompson Brian. and Debra. fit Group, welcome financial SS&C's expertise the Ms. with at well our Thomson on with I'd as sales career look data Exchange

and reporting has good our I the QX up senior executive questions. was to mergers for expertise We pursuits. recruited and throughout look we quarter, [indiscernible], us head have a guide [indiscernible] who a experience acquisitions. XXXX. M&A will forward now it up will recently and as open in to

Markets. looks the today Instructions]It first comes like Dan question from RBC Capital line [Operator Perlin our with of

X.X% a of about off guidance Bill, I organic for as in you then question for you to X.X%. full clearly ask what's but jumping at in first ramping think embedded the to growth point quarter, wanted year, the kind

about wondering the sight of the you back going to of half what kind just into connect line I'm of year? acceleration dots the as So that think your

Dan, insurance track live the remarks revenue. of of going a quarter to of said we of in kind large system, into fourth We our got our that a going in that's lot on stuff 'XX. lot drive confidence a a accomplished of lot going company and about and gives us XXXX,

we've awful lot completed hedge fund system in also an retirement conversions. another and winning major launches the XXXX We large and of been

that revenue we we to in that organic that increase year as So pipeline. our a we the of we think through, throughout rolls growth. will have accelerate lot And stuff think are

great. That's

a And move having you same then signing key equation? guess contextualize way to think Are we in alternatives. to that. continuing markets another that the on to private out a become -- a vein of up follow-up quick potentially in there terms a I success you things, down Just couple in has side more private be of are embedded you continues that Again, to called of as alternatives? equity quarter, big kind of strong is PE within how this and seeing in year the more about credit. as private contributor

think equity probably fund Dan, now funds pushing revenue and funds the close market million. the is on side, the billion business, and and in $X credit whole is private funds private I to hedge and about $XXX equity private private

has XX%, And XX% of else private better they seen, as into debt, and amount funds private coming private. private everything get you've in getting revenue going seen from close credit, our business returns. to money the tremendous there's as as you're well So everyone of

I very positioned. we that's we're I going change, think and think So don't well mean to

of from comes the line question next Surinder Jefferies. Thind Our with

you And we the should guidance about ahead terms as next -- -- the included just uptake you progression of think this the you rest there? as For year you've as year, look question, there the the that anything DomaniRx business about or in of think is first the and year? of about through think within versus how

across as lot people of the word health awful talk. we've rollout the of pretty which close industry of for the is mouth bodes flawless and an any well going vibrant rollouts of I had, Well, was to think

that And the great than have we anticipated, January, all across so that more health million claims. said were would $X.X care which organizations. be And earlier claims remarks we we kinds million in processed we XX% relationships XX of as my in

other And Medicaid going embedded growth can't You then clients think There's think other commercial of Reduction on this flexible then and the on stuff. XXXX going right? enough. and we're awful Medicare, some increasingly imperative year. don't Act on to are all in we there's an can't roll regulation, and we then coming in out to to add of stuff So processors HIPAA we all run healthcare get companies that be and new this on there, really spreadsheets I kinds run it throughout out as claims is lot into technology, think inflation and not you and technologies this any and and

XX-year-old, are are of come And that I places recognize technology running XX-year-old, And going operations, money streamline their that them XX-year-old I don't the in can we think of save and to process. can a lot a to that think we mines that going to the brightest big day. make us these lot and is the money, save

a within Or sounds positive that the you're that upside guidance? this like all point? It But included it. obviously is Got of outlook. any was at

think if concerned, were healthcare we a strategy that think management that can we our as far a we're anything, measured. lot really so and we that team, have that, time to to And as of in think young benefit. reap really order I so is we on the as execute Well, upside have we we

And a follow-up it. as just Got then here.

workers the -- you going level execution target great to you the on number do have always able you more on point? [indiscernible] and from progresses as Obviously, there given is ramp ultimately, story, can of Or the to? is that of there's any curve for be the year where terms of the year, workers in here about I'll digital a -- of it, might digital get some but be of obviously, coming smooth to Just outwards? another the some call part adoption at in thought it

Well, -- pretty don't worker board they very have they don't just that you to that that very it. the quick, initiative, on is then about managed and focused, everybody board I and need on say would digital at understands SS&C to process they worry a get understand then get

of we're those And kinds think what it's going effective get things will it, been "Wow, getting of And blunt better. I keeps lot but water, horses they So have And into it and integrate forward. things. And more of -- us. to got this pretty things. go, of The done, that's we've opportunities large about lead done kind technology a we've embrace those capable they right? for even as the language better, should kinds I sooner." of the as models is it we are process,

we from go So here. we're where optimistic about

so we the I in XX.X% think, quarter XX.X% And from, about the quarter. fourth second to in in EBITDA margin

to improve we're to satisfy So able our service margins customer continue looking customers. forward and our be to and expand more

question line from Schmidt Andrew of our And next Citi. with the comes

last Bill, with Brian, segue I question a to Actually, speak from that question. good you. can my

the the longer what ceiling might that margin now a the think, that is off question like efficiencies the XX.X% other guess I quarter, the EBITDA workers margin seeing, I term? the higher? with now jumping XXXX. over is into is point good You build look in is you're target areas, the which and Historically, think that target mentioned, long-term fourth digital been I XX% had And

Andrew, to need think longer the Yes, I define we term.

the look of spend a you over that probably our worker things, we're the years, basis Look, if lot process, to couple we XXX through So have on to to too. going opportunities increase points. of XXX out money digital margins next

defense. it's also we anything, lifeblood Prism we and spending money understand people our marketing. Blue on on cheap defending R&D except a as a not the IP extreme not We're take quite just money that our on spending initiatives. a money that's sales. to are is focused -- it we want by deployment. process, with spending of don't on driven and but So margin And lot that's We're We're company,

then becomes And offense. it extreme

means very and to we're So of IP. employees very our our we customers protective focused. and We're protective that our our of And be have communities. very that

huge about it's broader part XXXX. then there's some but XXXX. I And Got saw it. not volatility What's a create Obviously, business, And can as question just a ask we for revenues license could guess, just for expectation if the XXXX? I outlook of it in and -- the outlook cycles changed philosophy it, of license in like when revenues whether that. call X-part and let's I then to finer broader just sales question, at comes and point terms philosophy assumptions guess kind it kind of all growth. a taking bookings a that's on to organic of

Sure.

think on in health similar in I terms our revenue. a So We're what said to measured what's about Bill trying to guidance second license be ago of care.

So some clearly, advanced us more time, in into are a same fairly about have XXXX that bit stages there going we that 'XX. have and was cheer that pipelines XXXX. the little in deals But softness the we the give at

do as just we a second comment than that or think process. actually not So what's forecasting information, that's better kind and And to ongoing it change in and license better question get just think we a did do on ought make on in the I 'XX better of continuous I happening, your this, to think process, much guesses continue 'XX. philosophy. in we can we to and so

[Operator comes Instructions] Our Gogolev JPMorgan. next question with Alexei from

accelerating was fund on winning for sounds comments it now, maybe if launches, any bit could made if And some a and you're more also some you on it's Any elaborate there? additional major market lately. conversions. but the hedge like acceleration that's I feedback Bill, around you been consolidation time in fund hedge been little sensing wondering going

and client macro the that through and the went funds our lot I of a also our press you'll And macro these funds wins releases hedge hedge Yes. see an the our years, into the go awful funds major clients. are of back last think and Alexei, if funds. new stuff, you several for lot and

what make as have the is geographic does complex funds largest as that a and really expand their most grow because to So concentration and technology sure selection and them on asset also and they that expertise the we have they then we support reaches.

-- So do. what we that's

-- on to continue got the So Asia $XX both that think wisely Bay, we our North I spend as we a win our just throughout Pac we we else, recently but that And we EMEA and just hedge think spending at added number in well marching and money had America. will it world, we're increase those that more billion when our are a as Hudson this that's rates. than you a of lineup. we've release anyone to And press fund and to

Perfect. And a able and been to implications free your take this Bill. this to you change? visibility question depreciation Do to your where quick flow from from the tax Have XXXX, Act Workers Brian. assess relief for cash any tax potential you have the bonus of could of families

Yes.

So assessment a we this at haven't point. done full

be to a making at, appropriate that strategy need give working preliminary but complies obviously would jurisdictions. think it we any continue But we it with through take we any direction if changes, any have sure a tax So there's appropriate to to as that law we'll obviously, changes. tax the obviously implement is and laws tax aggressive, not look the too to positioning

point, at too to So impact this us. an assess to early

that clients states that we we now. rate like as some start quite or groups taxes. focused to our do we move if we've with moved things last North X different sloping our expertise. might Florida that we're have have to and of downward keep can't than we'd to specific Georgia, constant XX% tax might following able And places to like Carolina, lower And have more people might do for Yes. we tax been a we and start and mean that years, XX see on the our

and in We we office Miami some have have area. large a down the people Jacksonville, already in

we'll that able have get that our and to down. we're if be optimistic focus some some So and hopefully move rate tax we ideas

with And McVay our next question comes UBS. from Kevin

I want as well. congratulations to my

to you to opposed would looks to about Any 'XX, the is to what the the If think X.X% lower you it thoughts guidance range as get end? organic growth range X.X%. the the of end as for higher like

high the beat beat pretty end. certainly to And that's Kevin. end, the hoping also midpoint. to that range, to think we'd we're low love sizable love Well, We'd beat I the

think So we don't X.X%. the the think that's I that low that end,

math means to I in me $X.X that X% think when it billion, which is a $X.X but attrition we you million growth, about and billion high worth want revenue also tells sales you're hurdle that's that X% have and you might need do. $XXX have on you of it's X% -- early

got So a it's the talented talented in talented not We've talented have a a we support park, but got We've we organization. walk and developers got sales implementers. team.

we're to a good So really optimistic have we're that cautiously going XXXX.

of -- we reinvestment? maybe best Prism be of you get And you margin can the us deployment that the margin it. about like opposed that remind your Blue just goes from the Sounds going philosophy bots, then just how and on would think as to as incremental forward. the much to

that have feel our in we spending things. already think the we other about pretty on I levels good investment whether or R&D that's business,

productivity think a straight of customer So it better then most really, We -- it of line. does jobs. make couple enhancements do think does they better. And the employees bottom go things us. gives to the experience for it the the We

line And [Operator the our from question Instructions] Morgan James Faucette with of Stanley. next comes

here are and just of like earlier you you to M&A. assets for what the look called Clearly, from out there's deal with now? and I right pipeline types And does targeting? perspective, on geographies Michael on call. assist to ask capacity Infante leverage the It's senior in James. hire a wanted what Bill, M&A a

we're Well, right now, targeting earth. only

we're to planet. So we're of try acquire, interested can that would as expanding fund types the in organizations wherever on far going very the we to as get administration we And improve we their us lift and ways help current by along something those on if by buy businesses or out lines. maybe a businesses can with figure collaborating out to existing clients

seed that's our why somewhat corn of protecting hear That's our passionate We me technology. about think like you we Secondly, business. the IP. get

find to So stuff I think this our key pockets. is on things

clients, we bunch Far Australia. pitching we some Kong had in business and have in we Macao, in some So just the were that and were really out of And nice think people opportunity. a in We there's I and a Hong East. seminars

business We we That's or as too. think a to have grow we of I it's some good or a great in to whether a China, pretty think it's it's stop we -- services. crapshoot going -- lot not really provide going and fast nice to have somewhat but clients of

So we We opportunity. powerhouse a think here much think there's throughout a executing of that on. pretty pretty then there's a think opportunity have of And number big we that lot we're -- we're initiatives We Europe. in North America.

helpful. pricing, Got you to just sort revenue then And of of how compare to the 'XX? 'XX, it. it That's of maybe in And enact does on contemplated come in increases? you're incremental what expect able price terms to in much how do that from

think couple that predictable feel the that of of been we rounds We've good the over a much this. view a have on I really of this more -- through we couple last years.

lot laid actually So expect 'XX. as 'XX we for lift now. achieved is of price more process the a getting similar a in sort And out a in of amount we it

So -- and continuous then future as us that in ought to well. just years for a uplift be

thank patience, looks no everyone. it -- there And All your questions. further for right are you like

remarks. So to Stone Bill the Bill, the for I'd to over back yours. is like floor call turn now closing

that. little Thanks, of it I York coming to New might appreciate and you this all you know a some thanks, and was -- and you have We forgot your for City, everybody. in glasses snowy call.

that where here. and forward in from about appreciate look we you came to going we're you talking and April seeing out sometime really we So

So thanks working again, for we're and hard you.

ladies does now today's And gentlemen, Thank and and disconnect. joining, all day, you Thanks, conclude Bill. call. great may Have you everyone. that a for