SS&C Technologies Holdings Inc at Nasdaq Investor Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Infante - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>So Brian, I just wanted to start with the question that's often most topical as we speak with investors on the name, and that relates to organic growth. I think if I think about the medium-term organic outlook of 4% to 8%, over the last several years, you've been operating a touch below that. I think most of the underlying business segments you can make the case for near- to medium-term acceleration. How do you feel about your confidence level in being able to durably execute on that 4% to 8%? Brian Schell - SS&C Technologies Holdings Inc - Chief Financial Officer, Executive Vice President Great. Thank you. And first of all, let me just say thank you for inviting us and hosting, and this has been a terrific event, and putting this all together. What brings confidence, I think -- and I think you started to hear some of that confidence starting to grow midyear last year when we started to see a little bit of that dynamic shifting after maybe a little bit less uncertainty in the markets coming off of COVID, maybe people had a sense of where the economy was going, interest rates, that as a positive backdrop, but I think what you saw is you saw certainly fewer negatives, and you saw positive momentum of different events and different investments starting to show up as far as driving that organic revenue growth rate. You saw a what we believe was going to be a flattening of some of the health care business. We knew there was going to be some client losses and that was kind of dragging it down. We started to see improvement in our GIDS business, right? So we're being slightly negative to now being slightly positive and approaching mid-single-digit type of growth rates as it was -- continued to increase its share of wallet with its clients and some international expansion. You saw the organic REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 3:00PM, SSNC.OQ - SS&C Technologies Holdings Inc at Nasdaq Investor Conference growth efforts of some big client wins in 2023 that were starting to take effect in incremental AUM that was occurring. You saw a portfolio starting to grow. You saw us winning more outsourcing agreements, winning more PE firms, more real estate, more of the alt assets. So kind of across the board, we really saw a strengthening in each of those services that we offered. And then I'll cap it off with the largest growth rate of our business units was Intralinks, right? Intralinks, early in the year, we saw that strong double-digit growth rate as we saw the backdrop of the M&A environment already improving.

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. Maybe from a product perspective, it'd be great to hear the early feedback from your customers on the Genesis platform and some of the early cross-sell opportunities you're seeing there. I think one of the things that's underappreciated about SS&C is not only your relative position in the fund admin space, but just the breadth of capabilities that you can bring across front, middle and back office. So I would be curious to hear how you sort of re-incentivize the sales force to drive adoption of that?

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. How about just with the inflection we've seen in private credit over the last couple of years and effectively over the last 12 months with the acceleration? What have you seen or what have you done from a product perspective to position SS&C to be a beneficiary there? I think of things like Black Diamond and what you're doing in terms of alternative asset reporting. But any highlights here that you would call out?

Question: Michael Infante - Morgan Stanley - Analyst : Perfect. Maybe just progressing to the health care business. I know this has been a challenge over the last, call it, 12 to 18 months. I think Bill has been of the view that we would see that business sort of stabilize and get back to growth. What caused the drivers of some of the sequential deceleration that we saw in 3Q? What gives you the confidence that, that business is close to or at a trough?

Question: Michael Infante - Morgan Stanley - Analyst : One of the more exciting components about the healthcare business is DomaniRx. Maybe just unpack what you're doing there, what the opportunity set looks like and how you think about the potential for that business to be a real growth driver in the health care business specifically?

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. Maybe progressing to some of your earlier commentary on M&A. The Intralinks business has been growing well north of the corporate average for quite some time. I think if you look at the level of announced M&A relative to US nominal GDP, it's been running well below historical levels for quite some time. There's a view that we're not only going to get an inflection in '25, but that inflection is going to prove durable in '26 and '27. How do you sort of think about the capacity of that business to continue to grow in this mid- to high teens range over the next several years?

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. One of the assets that you've acquired in the last couple of years is Blue Prism. You have been pretty prescriptive just in terms of the level of savings that you're able to generate per digital worker deployed. I think one of the things that's been interesting is that asset was growing. It was growing at a really healthy rate at the time at which you acquired it. That growth rate has now stepped a little bit below 10%. How do you think about, not only the level of expense savings that you're able to generate, but also the capacity to sort of incentivize the sales force to really reaccelerate the growth profile?

Question: Michael Infante - Morgan Stanley - Analyst : Perfect. Maybe just on the GIDS business, great to see that business reaccelerate to mid-single-digit growth in the most recent quarter. I think one of the things that we've been monitoring is if you look at the commentary from some of the asset managers and brokers about the potential for tokenization and what that might mean in terms of bringing down the unit cost of transfer agency. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 10, 2024 / 3:00PM, SSNC.OQ - SS&C Technologies Holdings Inc at Nasdaq Investor Conference What have you all done to sort of position SS&C to continue to grow at this low to mid-single-digit type growth rate in the GIDS business?

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. One of the key metrics that I tend to look at to determine whether or not a business is sort of being successful at sort of exerting pricing power is churn, right? And if you look at the churn metrics that you all have been producing and how retention continues to sort of sequentially uplift while you're continuing to take price, I think it's evidence of the fact that our SS&C is still pretty dominant in the space. With that said, there's obviously been a cohort of businesses that came public around the '21 IPO period that compete with you across certain segments, and there have also been some European competitors that are incrementally more interested in sort of penetrating the US market and probably getting creative with price to do that. So maybe just the state of the union on what you've seen competitively over the last, call it, 12 months and whether or not anything has sort of changed from a rate of change perspective?

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. Maybe just on the margin front, I think if you sort of listen to Bill over the years and you sort of think about the trade-off between growth and profitability, he's often expressed this view that there is a level of diminishing marginal returns as margins sort of proceed to the low 40s type range. How do you sort of think about your willingness to reinvest and push margins beyond 40%? Or is it more of a function of driving higher levels of organic growth?

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. Continuing on this M&A theme, talk to us about the strategic rationale of the Battea acquisition, the type of financial performance that business is putting up. I know it obviously is running at some pretty high incremental margins relative to the existing opportunity there. So what interested you there? And sort of how do you think about what you can do to drive higher levels of growth in that business?

Question: Michael Infante - Morgan Stanley - Analyst : Helpful. Just given the perspective that you have in private market valuations, I'd be curious to get your thoughts on how you're thinking about capital allocation on a go-forward basis. What are you seeing in terms of private market valuations? And if there is an asset that is particularly interesting, any particular vertical and/or geography that you think would tick the box?