Thrilled to close out the day today with SS&C. We've got CEO Bill Stone. Really appreciate you taking some time out. Brian Schell, new CFO, and Justine Stone, who does a terrific job with IR. I'm Kevin McVeigh, the UBS, one of the UBS software analysts. I recently came over from Credit Suisse, and really thrilled to be covering SS&C as part of our application software effort here. I'd like to keep this as collaborative as possible. We're going to start with a couple of questions, but they'll, we're gonna pass around a microphone. But anyone who has any questions, you can come through the iPad or just email me, kevin.mcveigh@ubs.com, and that's M-C-V-E-I-G-H. We'll try to keep it as collaborative as possible. Again, we really appreciate you folks taking some time out, and Bill, especially. So Bill, you know, I feel like I started the same question last year, and I think it's really important because you've been one of the most effective CEOs in the sector for a long time. I think from starting the company, you've seen a lot of different tech cycles, and I think one of the things that always impressed me is your ability to identify trends early and really attack those trends, but also the opportunities around the people you hire or retain and create. I think it's a real strategic rationale. So I wanted to start maybe talking about specific points in time for SS&C, from maybe the founding up until maybe the first buyout and then the second buyout, and kind of where we are today, with maybe a little bit of an emphasis on DST Intralinks b ecause I think there were just specific events that really helped position you for where you are today, and then we'll go into kind of more the current environment. But I think it's one of the things I don't think the market fully appreciates, is the optionality and the embedded IP you've created over three decades a nd there's a real skill to that, that manifests itself, in my mind, at least through the cash flow, the mortgage profile of the business, and what I think and feel very confident about is accelerating organic growth. Well, thanks for having me, Kevin. Yep. I appreciate all of you taking some time. You know, it is. I appreciate he said I was one of the most effective rather than one of the oldest, so both which have been, or may have been more. I'm not sure which one would have been more accurate. But you know, I started this business in 1986, right? I wasn't 21, I was 30 years old, and I'd been an operations executive at a broker-dealer. I'd been a CPA at KPMG. I'd worked in St. Louis. I got transferred to Hartford. I got to run the Aetna audit as a kid, you know, so I got to learn a lot of things. When I started in 1986, you know, it was kind of the golden age of entrepreneurs getting into technology: Gates, Jobs, Joy, a few others that were all about the same age a nd the reason that it was so effective is that the technology was changing. You know, for those of you that are too young, you know, the Charlie Chaplin and the IBM PC was 1981. You know, by 1986, they were up to, say, the 386, then the 486, and then the Pentium chip came out, and then Novell networks a nd Novell networks, really, since the late 1980s until now, has been the primary way in which people get data and access all the data out in server farms. Smart client, server farms, client goes out, grabs the data that you want, you get to ask questions, then, you know, you get things like what Google did and others, and they make it easier and more broad and all those kinds of things. But fundamentally, it was client-server technology from the late eighties to really until about now. N ow, this ChatGPT or generative AI and, you know, intelligent automation and, you know, natural language processing and so forth and so on, you know, machine learning, pick, pick, pick one. You know, but what that's doing is changing the world. So, you know, I'm pretty proud that I was kind of a driving force of us buying Blue Prism. You know, and if you go way back in SS&C's history, you know, General Atlantic came into SS&C in 1994. Bill Ford, who now runs General Atlantic, we were his first investment. So Bill and I go back for, you know, almost 30 years, I guess a nd, you know, I thought those guys knew everything. Organize like this, do this, go hire these people. Go use this headhunting firm, use this. The best lawyer in the country is John Burgess, if you don't use him, use Dave Segre. Burgess is at Hale and Dorr, Segre is at Wilson Sonsini. I didn't know who these people were, you know, but I was smart enough to say, "He seems to know, so let's, let's do what he said." You know, and so we did that. We started growing pretty fast. We bought something called Chalke, which was one of the biggest actuarial firms in the country in 1995. Shane Chalke was the founder, and we were doing about $14 million in revenue, and they were doing about $10 million. S o when we went public that year, we did $26 million in 1996. You know, managing 62 actuaries was not something that I had always had my heart set on, and that didn't last that particularly long, you know, but it was a very good acquisition for us. We made a lot of money. T hen in 1996, we went public, and, you know, our red herring was 9-11, and we priced at 19. I'll never forget being at Strong Management in Milwaukee, and the guy holds up our red herring and goes, "This is gold, pure gold." I'm going, "Oh, my God. He's buying this hook, line, and sinker. This is a bad thing." You know, it's like, how do you dampen this enthusiasm? Well, we didn't. S o we went public May 31, 1996 at $19. Stock went up to $25. August, we reported we missed by $0.01. Stock went to $3. So I don't know if any of you know, but when you're the CEO, you get 5% of the shares for friends and family. So we sold $3.75 million, so I got about 175,000 shares I got to hand out to friends and family, and by September, I still had family. But, you know, we were, you know, we recovered, and we went, we went back up to $27, and, you know, we were really kind of booming. We opened an office in London. We went from 3 - 100 people in London. Then, you know, Y2K stopped. You know, as soon as they figured out that all the computers weren't going to stop at Y2K, when it turned 2000, you know, all the consulting projects stopped. You know, so Y2K stopped, and there were euro conversions. So, you know, like the Swiss franc and the Deutsche Mark and all this stuff, French franc, all was converting to the euro, and that all stopped. So I mean, like, half our business stopped. So we were at 27, we went to five. You know, not fun, but by that time, I had friends again, and I didn't give them any stock, so I wasn't in any trouble. Then you go back, you go through this then, and in 2005, we were going private with Carlyle, and there was a company called Financial Models Corp, based in Toronto, a really good company a nd what we felt, you know, they were going to merge with Linedata, which is a French company. Y ou know, what I learned about Canadian takeover rules is that if you can come make a superior bid, then you're going to win. So we started analyzing it, and I thought that the price that they were going to pay was way too cheap a nd they were at about $12.20, and we ended up paying $17.70. So we paid $165 million, and they were making about $11 million in EBITDA. This was, like, April 19th of 2005. By the end of 2005, they were making $34 million. By April of 2006, they were making $44 million, and by the end of 2006, they were making $48 million. So we took something that was making $11 million, turned it into $48 million in about 18 months. But what it taught me was, is, you know, there's a lot of people that spend a lot of money on a lot of things that make no sense. So when I first went up and looked at their space, which is in Mississauga, very nice, a nice building. Walk around, and they named all their conference rooms after cities. So you'd see London and New York and Toronto and Paris and Montreal and yada, yada. I saw Nairobi. I mean, how many conference rooms do you have to have to have Nairobi as one of your conference room names? I figured, too many. So, you know, we cut their space way back, and we saved, like, $700,000 per floor in this space, you know? I t's like, wow! You know, and so that was a great, a great deal in 2005 a nd we went back public in 2010. T hen in 2012, we saw it again. So now it's GlobeOp, and GlobeOp traded on the London Stock Exchange. They're gonna go private with TPG. So we look at this, and, you know, we were, like, the number nine fund administrator, and GlobeOp was number eight, or vice versa. They were nine, we were eight. But if we merge, we're gonna be three. So we were really interested. S o, you know, we went to get an investment bank. So all the investment banks that I'd used, J.P. Morgan turned me down, Morgan Stanley, Goldman Sachs, Bank of America, one more, Credit Suisse. F inally, Deutsche Bank would be our banker. S o we go in there, and the, the guys at GlobeOp says, "You know, I did a survey of our clients, nobody wants you." The guy's name was Hans Hufschmid. I says, "You know, Hans, you know, you were an FX trader at, Long-Term Capital, right? Salomon Brothers before that. So what you're saying is all your clients want this FX trader to be their accountant and not this CPA to be their accountant. Well, that might be so, but I bet you if I bid more than you and TPG bid, I bet everybody comes to me. He goes, "Nobody wants you." I said, "Story of my damn life." You know, so of course, we bid more, and we won, right? S o that vaulted us to number three in fund administration in 2012, and literally, right, we've made a fortune. TPG was based in San Francisco, and we made our final bid. San Francisco Forty-Niners were playing, I think, the Dallas Cowboys in the Super Bowl. I sent it at kickoff time. I sent that to TPG, kickoff time. So when we put our final bid in. So we won that. That really vaulted us to number three in fund administration, and, you know, shortly thereafter, we became number two, took over from Citco. Then it was State Street, us, and we finally passed up State Street a nd State Street ultimately bought all of our technology and jettisoned all their technology. It was a little bit like Pepsi going to the Coke formula. So we did that one, and that was in 2012, and then in 2015, we bought Advent a nd we were the biggest user of Geneva, and I kept telling Rahul that we either got to go buy Geneva or we got to get off a nd, you know, he was a grown man. I hate to see him cry. So we ended up buying Geneva. But we're in Morgan Stanley's trading room or something, and they're going, "W e were at $44.25. They wanted $44.75." Morgan Stanley says, "Don't offer them another nickel. Don't give them another nickel. You guys are out of your mind." I'm at $44.25. I offered them another quarter. It's going to make no difference. Either this is going to work or it's not going to work, and that quarter ain't going to amount to a hill of beans. So we bought that. That was a great acquisition in 2015. It's those things in the Blue Prism, which we bought, and we also did DST and Eze and Intralinks in 2018, and we probably have, you know, $3 billion in revenue and almost $1 billion in EBITDA out of those three acquisitions. We paid $8.3 billion, which in today's dollars would be a bargain of all bargains, right? But since I did it in 2018, it's, you know, since that time, I ate all dumb pills. But it's not really true. So, you know, we did Blue Prism about maybe 20 months ago. When we bought them, they had about a -4% EBITDA margin. They'll come out of the fourth quarter, probably close to 35%. So we've changed that almost 40% in margin expansion in about 20 months. So, you know, we still know what we're doing, and the acquisitions aren't as attractive as they used to be because of the price, you know? Y ou know, we don't like to do things where we have to be perfect, so we don't, you know, but we still... Last quarter, we made $533.9 million of consolidated EBITDA. We had the most revenue in our history. You know, we'll probably do $2 billion-$2.1 billion in EBITDA for the year. We'll generate pretty well in excess of $1 billion in cash flow a nd, you know, we're going to buy back $500 million or so in cash, I mean, in stock, and we bought $500 million last year. We bought $500 million the year before. You know, as long as we're that cheap, we'll just keep buying our stock. So, you know, and we feel like it's a good store for our shareholders, and, and, you know, we're, we're pretty confident. Y ou know, and, you know, my financial advisor thinks I'm a little light on SS&C, and I gotta kind of stock up. The scale is one of the things I've marveled at in terms of to your point, you're almost $6 billion of revenue, $2 billion EBITDA, $1 billion free cash flow, and I think you were up around 6.5 x at the time you did DST Intralinks, and, you know, now you're back down to three. I mean, the cash flow gives you a lot of opportunity to continue to perpetually reinvest in the business, which you do both organically and inorganically. I want to spend a minute on Blue Prism because I think not only operationally, how much you've improved it, but what it can do for your clients as well as internally. So you've scaled their margins. There's a huge opportunity across SS&C in and of itself. Maybe take us through that a little bit and what that can mean from a reinvestment perspective. Yeah, you know, Blue Prism is kind of, you know, its two biggest competitors have been UiPath and Automation Anywhere, and we bought, we bought, Blue Prism after Vista went after. So, you know, we've followed those private equity firms, and when they go after somebody, you know, they do a proctology exam on due diligence. T hen we looked at what they're selling for versus what UiPath was selling for and what Automation Anywhere was selling for, and we viewed it as cheap, you know, so, so we went after it and won a nd, you know, we think that we have $100 million in run rate savings by the deployment of digital workers, which is what we call the robots. W e've managed to keep it growing at 10%-15% in the outside world. So we're still selling, it's, it's very vertical. You know, some of, some of the productivity enhancements are unbelievable. You know, for the state of New Mexico, we took enrollment in Medicaid from 3 - 30 days to get one person onto Medicaid in New Mexico to 15 minutes. You know, so when you can do those kinds of productivity enhancements, you really have something that is valuable to, valuable to people, and I think that's what we, we keep getting smarter. We make smarter digital workers. They do things that humans don't like to do, or humans get bored. When humans get bored, they get lazy, w hen they get lazy, they make mistakes. You know, so, you know, the digital workers are very good. They don't get tired. They work 24/7. Never one of them has ever asked me for a raise, and I've never heard them bitch. So they're really good workers. One thing I think that maybe it's helpful to frame a little bit is I keep coming back to the concept of the IP you've created over time, and, you know, the digital work is only as good as the IP you're layering on top of, right? T hat's, to me, at least, a huge competitive advantage to some of the other LLM models out there a nd, you know, you're in the business of regulation, recurring, and you've perfected that art, maybe help the-- just I think that help frame the audience a little bit. Some of that IP that is 30 years in the making continues. Well, I mean, you, you all are in financial services, and you know how many regulators there are, right? You know, whether it's the SEC or the Federal Reserve or, or, you know, the Ministry of Finance in Tokyo or the Office of the Superintendent of Financial Institutions in Ottawa, or 100 others. You know, there's, there's always something coming at you, whether it was Form PF or some other kind of regulation and form that, that all of you had, had to fill out. I mean, we went into Australia probably 15 years ago, and everybody talking about, you know, "Can you do short sell reporting for the Australian Stock Exchange?" Oh, you have to report again. I guess we can do it, right? But, you know, knowing about these things and being able to, you know, naturally know who all these regulators are and what they're going to ask for, and getting ahead of it and understanding that it can't be wrong. You know, you file those reports, they have to be right, you know, so you have to hire people and train people and stay on top of them. T hat's what that IP does, is that it creates a moat, right? Where people can't really come and you can start a fintech company relatively easy, but building it to have where you have 27,000 people in 100 offices in 40 countries and a couple 100 products and services, that's not so easy. You see that in the scale of the clients. I mean, it's been amazing, kind of the average client sizes that's evolved over time. You know, when I started SS&C, people always, "God, you ever believe you'd be this big?" Y ou know, of course not. But, you know, I started as a C corp and started as S corp, you know, and I was a CPA, and I knew as a C corp, I had to pay taxes twice, right? I got to pay on my salary, whatever I take, and I got to pay it on whatever earnings the corporation has. I f you're an S corp, you only pay once. But no S corp goes public, you know, so I wasn't going to try to convert an S corp to a C corp when I want to go public, and I want to go public. T he reason I wanted to go public is, is I thought that's how you got rich. It's true, too, you know, so... I f you take them public twice, you get richer. Yeah. So, so, so those things are pretty effective things to do a nd, you know, it's— I think Jack Welch said, "Look, this isn't philosophy or religion. This is business." There's one or two answers, you know, I have 50. You know, when people say, "Well, why do you keep working?" I say, "I don't know. I like it," you know and I keep score, you know, and I like to win, and I'm lucky enough to work with a lot of really smart people, and, it's a privilege. So as long as I'm healthy, I'll probably do it for a while. Any questions in the audience? Sure. What does winning look like five years from now? I would say that we have better margins than we do today. Our organic growth rate is now climbing towards double digits. We have a high customer satisfaction percentage, and we run our retention rates above where they were last quarter, which was the highest in our history, or close to the highest in our history, at 97.3%. So we'd like to run them at 98%, 99%. So that'd be a very highly profitable company that rewarding our shareholders and our employees, our suppliers, and you know, and our debt holders, people that loan us money. We appreciate that, too. Stock trades 14x. What do you think? I think, you know, there are several things that the market is not particularly enthralled about us. One is that we're more of a conglomerate than we are a pure play. So we're one of the biggest wealth providers, one of the biggest hedge fund admin or the biggest hedge fund administrator, the biggest private equity administrator, the biggest mutual fund transfer agent. We're also a reasonably good-sized player in virtual data rooms, probably the biggest with about $500 million business there a nd we also have a big private markets business that grew 20% last quarter. Geneva is the number one player in large-scale investment accounting systems, you know. S o there's a lot of things that SS&C is and, and, you know, most analysts, you know, not Kevin, but most analysts don't want to really, really dive in and, and understand, "Oh, I haven't had time to look at your healthcare business," but we think that's going to be a pretty good grower in 2024. You know, so... The second thing is, is that the market really doesn't like hedge funds. You know, if you look at hedge funds and you think about, wow, you know, I, I think the market likes, community banks and credit unions that Jack Henry serves better than it likes hedge funds that we serve. Now, I think on balance, we get a lot more money out of the hedge funds that we serve than they get out of the credit, credit unions and community banks that they serve. You know, there are multiples of triple what ours is. I want to pivot to the organic growth because I think a certain amount of it is mechanical. Like, I think, you know, there's been a target out there of 4%-7%. Seems like you're somewhere in the 2.5% reported today, recurring probably closer to 5.5%. But when you think about the success on the retention, the pricing, but also, I think it's fair to say, inflection in the healthcare business as well as the GIDS business, I mean, those are two bigger percentages of the revenue that have been headwinds for a while. It feels like we're on a more sustainable path, particularly as the retention continues to improve. So maybe any thoughts around that? Because I think, you know, my view of the world has been that's always been one of the debates in the stock, too, is kind of the sustainability of that reaccelerating growth a nd I think part of that is just the narrative that's been in the market relative to some of your competitors that are newer entrants. Yeah, yeah, we view them as net, but, but, you know, we grow more than they're big, right? So, you know, I think a little bit of that. You know, we bought DST. They were 14,400 people, 1,600 contractors. People said: "Boy, that's a pretty sleepy business." I said, "Well, it proved to be asleep, right? So you got to wake it up, you got to get it to be competitive again. You got to get it to understand that we got to bring some new technology, we got to have a marketing program, we got to have a sales force, and, and you got to teach people how to win, right?" You know, you, you don't get into the ring, and they hit you with a two-by-four. You don't go, "Boy, that's not very sporting of you." No, you hit them in the head with a two-by-four yourself, right? You got to, you got to compete. S o we've taught them again to compete. You know, they've gotten a mutual fund business in 1968. Good business to get in in 1968 until about 2012. You know, then ETFs and passive versus active and all kinds of stuff started coming out, and, and, and they were ill-prepared to, to compete, you know? So, yeah, we got Nick Wright in charge of, you know, the Global Investor and Distribution Services, GIDS business, you know, transfer agency, and he's done a great job. We're up to 3%. He's pretty confident going into 2024. Same thing with healthcare. We buy it, and Cigna is our biggest client, but Cigna has just bought Express Scripts. Express Scripts, they paid $59 billion for it. Something tells me they're not going to keep using us, right? So that was probably a $100 million client. You know, so healthcare loses a $100 million client and, you know. But we did sign a four-year contract on the way out, you know, so it just ran out. You know, so that looks like headwinds, but we didn't lose that this year. You know, that got lost when we bought DST in 2018. You know, I've gone through five heads of healthcare, you know, but, but I'm pretty confident that that's an enormous business, an enormous market, and there's no new entrants. Haven't been any new entrants in a long time, and we have a chance to really have a big business in healthcare, and it might take, you know, 3-5 years, but it will be on that kind of trajectory, I think. Maybe talk about, because I think you frame it pretty eloquently, the opportunities in kind of healthcare prescriptions relative to a trade ticket a nd I think it's a pretty powerful analogy that maybe helps drive to, to anyone listening or participating, because it's the optionality there on the prescription side and, and both sides really seems pretty, pretty powerful. Yeah, I mean, you know, one of the reasons we're so successful on the fund administration side is we can handle volume. So Millennium is a great client of ours, and, you know, they might do 1-5 million trades in a day. Very few fund administrators could handle that. You do it every day, you know, so when we look at a trade ticket, you know, number of shares, symbol, CUSIP, price, and maybe trader, you know? Y ou look at a prescription, it's number of pills, RX number, you know, some sort of symbol, and maybe doctor, you know, and five, six pieces of information. We did 400 million of them last year. So, you know, you have to be able to process them. You have to be able to kind of collate all that information and then slice it, and dice it, and give it back to whoever is a user. It could be a regulator, could be a physician practice, could be an insurer. You know, there's a lot of constituents in that, and it's highly regulated. HIPAA is a pain in the neck, but those are the kinds of businesses that people don't like to get into, that you have a lot of margin opportunity because you're doing stuff they don't want to do. S o we think that's a really great analogy to what we did in fund administration. In 2002, we had no assets under administration. Now we have about $3 trillion, you know, and we constantly grow faster than our, than our competitors. The one competitor that has outbid us on a number of acquisitions is something called Apex. I just read a Fitch report that said they're 9.6 x levered. You know, that seems to me to be a lot of leverage, you know, and a lot of leverage with interest rates up 500 basis points. Ouch! I'd imagine they don't have the same free cash flow you do. Not according to this report. Anyone else in the audience? Obviously, should have requested a meeting. Bill, can you just... I don't want to hammer the same issue again, but, like, organic growth, you mentioned the high single digits. He mentions 4-7. Like, what is the path to the higher organic growth so that we look back and see this is, you know, growing business, generating cash flow, et cetera? Yeah. You know, I think some of it's pricing increases, right? Then obviously it's cross-sell and upsell, which has meant trying to, as much as we can, merge our sales forces. Now, you do 72 acquisitions, and people think they know everything, and then I think they don't. So then we have to change how people operate. T hat's not simple, right, b ecause you can stop everything that was good that was going on, not just what was bad. So we think our cross-sell and upsell opportunity is probably worth a couple of points to us, as is pricing 2-3 points maybe. You know, and then I think the new logos. You know, we still win big deals. We won Dell Family Office, we won Elliott. We just recently, you know, and we won Nationwide and J.P. Morgan and a whole bunch of other ones. S o, you know, we're executing better. You know, we put an overlay of sales executives on top of all the sales forces, you know, and so that's different. You know, we just had our user group in Austin, Texas. We had 1,000 people there, you know, and one of our big clients going down the escalator looks at me and goes, "You have 1,000 people here, and you guys ran this flawlessly." You know, and for the first time we didn't have any. You know, you didn't see any ads, you didn't see any Advent, you didn't see any Intralinks, you didn't see any of our acquisitions. All you saw was SS&C all over the place, you know, and it was. Deliver is our best one we ever had, and I think that that's given us a lot of momentum coming out of it, and I think that we will continue to have momentum going forward a nd, you know, you got to execute, right? You got to win. You know, you got to win, then you got to get them installed, and they got to be happy, and you got to go back and see them and sell them some more, and the, you know, the whole cycle. One thing to add on that, though, Bill, correct me if I'm wrong, pricing wasn't something, you know, relative to some of your peers, 2021, 2022 wasn't nearly the level of the industry. So that's, you know, I don't think there's any fatigue there. So where some may see some decelerating benefit, you're really not going to be impacted by that. It's-- you're probably still on a- Yeah, we're on a growth incline because we, you know, we're—we've got focus, you know, and we've done training, and we teach people, you know, you don't have to say, "Stick them up." You know, you can be nice to them and show them some new value that we've given them and things that we're doing, and people get reasonable with, "You want to keep your same team, and they've really done a great job. Now they have another year of experience. I got to pay them more, you know, and you guys have to help me." You know, so those are those kinds of processes that we're—we've been going through, and it's been pretty effective. Then you have all the leverages. Blue Prism comes in even from an absolute hiring level. It seems like there's a lot of benefit from that as that continues to scale within the organization. It was, you know, there's 1,200 techies. They marry all these functional experts. You know, it works really well about building really strong digital workers, and that's the key. The key is the functional expertise and knowledge that creates that digital worker. You know, you can't be kind of good. You got to be the best, you know, b ecause they're going to do exactly what you program. Anything else? We're good. Okay, thanks, Kevin. Thank you, Bill. Terrific.