Ladies and gentlemen, thank you for standing by, and welcome to the SS and C Technologies 4th Quarter and Full Year Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. And without further ado, I would like to welcome your host for today, Ms.
Jocelyn Stone. Ma'am, the floor is yours.
Hi, everyone. Welcome and thank you for joining us for our Q4 and full year 2020 earnings call. I'm Justine Stone, Investor Relations for SS and C Technologies. With me today is Bill Stone, Chairman and Chief Executive Officer Rahul Kanwar, President and Chief Operating Officer and Patrick Hadanti, our Chief Financial Officer. Before we get started, we need to review the Safe Harbor statements.
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 ks, 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, February 10, 2021. 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 atwww.ssctech.com. I will now turn the call over to Bill.
Thanks, Justine, and thanks, everyone, for joining. Our results for the Q4 are $1,206,000,000 In adjusted revenue, it's down 0.5 percent and $1.13 in adjusted diluted earnings per share, which is up almost 5%. For the full year, we had $4,681,000,000 in adjusted revenue, up 0.3% and $4.30 in adjusted diluted earnings per share, up 12.3%. Our adjusted consolidated EBITDA was $475,800,000 for the 4th quarter and our adjusted consolidated EBITDA margin was 39.4 percent. Our Q4 adjusted organic revenue was down 2%, and for the full year, our 2020 organic revenue was down 0.5%.
As expected, we had weakness in our large license software business in the 4th quarter, but our alternatives business, our InterLink and our Edge business grew nicely and the DST business saw improvement from the previous quarter. Operating cash flow was $1,840,700,000 $1,840,000,000 for the 12 months ended December 31, 2020, up 10% if you exclude a one time $250,000,000 upfront license payment paid in the second half of 2019. $1,184,700,000 represents a 103% cash conversion rate on our adjusted net income of $1,146,800,000,000 We put cash to good use in 2020. We paid down $738,000,000 of debt, bringing our secured net leverage ratio to 2.31 times and our total net leverage ratio to 3.39 times. We bought back 3,700,000 shares of common stock at an average price of $60,990,000 for total consideration of $227,000,000 This year, we faced many challenges which were unprecedented in our 35 year history.
SS and C adjusted quietly and with authority. We moved 99% of our workforce to remote, supporting clients with expertise and resources. We continue to meet our deliverables, engage with our prospects, and we built and deployed solutions. We have continued to see success with our newest products as Eclipse ended the year with 170 clients more than doubling its client base. We have leveraged algorithmics capabilities and developed a scenario as a service, a pandemic specific analytical tool which is infection rate, susceptibility and death rates into the investment scenarios based on movements in equity, fixed income, FX and commodity markets.
In SS and C Health, we successfully launched our flu pilot program with the support of our internal call centers. This program provides outreach to SS and C Health clients in order to enhance the rates of flu vaccinations. We developed a similar COVAX program focused on ensuring the successful completion of the COVID vaccine series for members receiving the vaccination from SS and C Health Partner Pharmacies. While 2020 was a tumultuous year on a global basis, SS and C performed with distinction. We were able to outperform estimates, collect our receivables, delight our customers and generate more revenue than any year in our history.
Like many in the financial services industry, we earned revenue on float. In 2020, this revenue was down $20,000,000 or over 75 percent. We overcame all difficulties and posted $4,300,000 $4.30 of adjusted earnings per share, 12.6 47% above the $2.92 in 2018 and 122.8 percent above the $1.93 in 2017. Good numbers we think. I'll now turn the call over to Rahul to discuss the quarter in more detail.
Thanks, Bill. As you noted, we had a strong quarter with a broad based lift in revenue from Q3 across many of our business lines. DST, SS and C Health, alternatives, Intralinks, regulatory and algorithmics all posted improved performance in Q4. Our alternatives business grew 5.5% in Q4 and 5.7% for the year. Clients remain optimistic about their growth outlook, which is reflected in our data, including the capital movement and other indices we published.
Bill mentioned the rapid adoption of ezClipse in his earlier comments and in Q4 we launched the AsE app powered by Eclipse and made it available in iOS and Android app stores in November. User adoption and design collaboration for the app's next page have been strong. Intralinks has seen substantial growth since the recovery of the M and A market in the back half of twenty twenty. We remain very focused on driving technological differentiation in the virtual data room space in the context of a strengthening M
and A
environment. Despite the challenges of 2020, we ended the year with accomplishments to be proud of and set up our business for strength ahead. During the year, we made several executive appointments, including Dan DelMastro, Head of SS and C Health Karen Geiger and Steve Leavitt, Co Heads of SS and C Advent Kevin Rafferty, General Manager of SS and C Retirement Solutions Nick Wright, Head of Global Investor and Distribution Solutions Chris Matback, Head of Tax Services for SS and C Global and hired and promoted numerous other senior executives. These executives are working with our customers and prospects driving change and defining new products and services to fuel future growth. We continue to invest in our sales and marketing organizations and are seeing success gathering leads and interacting with prospects using digital and virtual platforms.
Under the direction of Eamonn Grieves, our Global Head of Sales, we launched a comprehensive solutions program that brings product and service owners together across SS and C to develop integrated and targeted offerings. These solutions are geared to our clients' specific needs and focused on their asset classes, structures, regulatory and end customer requirements and other business objectives. We have seen early success with clients selecting multiple products and services and anticipate that this new effort will drive further collaboration within SS and C and distinguish our offerings in the in the marketplace. Now I will mention some key deals for Q4. A 1,000,000,000 hedge fund launch chose our hosted Geneva solution along with Geneva World Investor and e Investor.
A large U. K. Wealth manager chose to transform their operations using our global investor and distribution solutions and Advent software. An existing retirement customer bought AWD, our workflow management tool. A Colorado based alternative investment manager chose a full suite of SS and C offerings, including Global Fund Services, loan servicing with PrecisionLM, our Edge Trading platform and Intralinks.
An existing fund services client extended their relationship to include risk, investor services and regulatory solutions, including our new Blue Sky reporting offering. A large SSNC Health client adopted our digital platform portfolio with a mobile app that enhances the member payer interaction for 10,000 plus members. I will now turn it over to Patrick to run through the financials.
Thank you. Results for the Q4 were GAAP revenues of $1,203,400,000 GAAP net income of 197,100,000 dollars and diluted EPS of $0.74 On an adjusted basis, revenues were 1,206,100,000 dollars including the impact of the adoption of the revenue standard 606 and acquired deferred revenue adjustments for acquisitions. Adjusted revenue was down 0.5%, adjusted operating income decreased 2.4% and adjusted diluted EPS was $1.13 a 4.6% increase over Q4 2019. Adjusted revenue decreased $6,100,000 or 0.5 percent over Q4 'nineteen. Our acquisitions contributed $27,400,000 Foreign exchange had a favorable impact of $6,000,000 or 0.5 percent in the quarter.
Adjusted organic revenue decline on a constant currency basis was 2% driven by weakness in the Advent, Institutional Software Products and DST Financial Services. These were offset by strength in fund administration, Interlinx and the Eze Business. And we had strong sequential growth in the DST Financial Services and Healthcare Businesses over the 3rd quarter. Adjusted operating income for the 4th quarter was $458,800,000 a decline of $12,200,000 or 2.4 percent from the Q4 of 2019. Foreign exchange had a negative impact of $3,500,000 on expenses in the quarter.
Adjusted operating margins were 38.8% compared to 38 0.0% in 2019. The expenses were driven by higher employee compensation and benefits, higher sales commissions and professional services and these expenses were partially offset by lower travel and contractor expenses. Adjusted EBITDA, defined in Note 3 of our earnings release, was $475,800,000 or 39.4 percent of adjusted revenue. Net interest expense for the 4th quarter was $53,300,000 and includes $3,400,000 of non cash amortized financing costs in OID. The average rate in the quarter for our amended credit facility and our senior notes was 2.99% compared to 4.53% in the Q4 of 2019 and resulted in an interest expense decrease of $47,200,000 or 47%.
We recorded a GAAP tax provision of $37,700,000 or 16.1 percent of pre tax income. Adjusted net income as defined in Note 4 of our earnings release was $302,600,000 and adjusted diluted EPS was 1 $0.13 The effective tax rate used for adjusted net income was 26%. Diluted shares increased to 268,100,000 from $266,700,000 in Q3. The impact of the increase in the average share price and option exercises was partially offset by share repurchases in the quarter. On our balance sheet and cash flow, as of December 31, we had approximately $209,300,000 in cash and cash equivalents and approximately $6,500,000,000 of gross debt for a net debt position of approximately $6,300,000,000 Operating cash flow for the 12 months ended December 2020 was $1,184,700,000 down $143,600,000 compared to the same period in 20 19.
The decrease was impacted by a one time upfront $250,000,000 payment that we received in 2019. For the full year, net debt payments made net debt payments of $738,200,000 Treasury stock buyback of $227,800,000 for purchases of 3 point 7,000,000 shares at an average price of $60.99 We declared and paid 136 $100,000 in common stock dividend as compared to $107,600,000 last year, an increase of 26.4%. Paid interest for the period was $236,200,000 compared to $353,000,000 last year due to lower debt levels and lower average interest rate. For the full year, our average interest rate was 3.35% compared to 4.78% in 2019. For the year, we paid income taxes of $277,400,000 compared to 222 point $7,000,000 in 2019.
We saw improvements in our accounts receivable DSO as of December 2020 at 48.4 days and that compares to 50.4 days as of September 2020 49.7 days of December 2019. Capital expenditures and capitalized software were 100 and $6,400,000 or 2.3 percent of adjusted revenue. Spending was predominantly for capitalized software and IT infrastructure and also some facility leasehold improvements. Our LTM consolidated EBITDA that we use for covenant compliance was $1,856,300,000 as of December 2020. Based on net debt of approximately $6,300,000,000 our total leverage ratio was 3.39 times and our secured leverage ratio was 2.31 times as of December 31.
On our outlook for 2021, first I'll cover some of the assumptions in our outlook. We currently expect markets to be volatile, large scale outsourcing deals and license deals to continue to be at moderate levels, but with improvements in the back half of twenty twenty one. Our fund services business will continue to perform. As we focus on client service, our retention rates will continue to be in the range of our most recent results. We've used foreign currency exchange at current levels.
We expect the impact on DST Health Unit pre acquisition client permutations to impact revenue by approximately $25,000,000 for the full year 2021. Adjusted organic growth for the year will be in the range between 0% and 4% positive. Adjusted organic growth for Q1 in the range of negative 2.3 percent to positive 1.1%. Interest rates on our term facility will be approximately 1 month LIBOR plus the spread which is currently 175 bps. We will continue to manage expenses during this period by controlling variable expenses and staff hiring.
On capital expenditures, we'll continue to invest in our business and spend approximately 2.8% of revenue on capital expenditures and capitalized software. We expect our adjusted tax rate to continue to be 26%. For the Q1 of 2021, we expect revenue in the range of 1,000,000,001 $58,000,000,000 to $1,198,000,000 Adjusted earnings per share to be in the range of $1.05 to 1 $0.11 For the full year of 2021, we expect revenue to be in the range of 4,685,000,000 dollars to $4,875,000,000 and adjusted earnings per share to be in the range of 4.3 $6 to $4.64 For the full year, we expect cash from operating activities to be in the range of $1,240,000,000 to 1,320,000,000 dollars And now I'll turn it over to Bill for final comments.
Excuse me, I think Mr. Bill got disconnected, but he's reconnecting now.
Okay. Thank you.
Mr. Bill Stone is reconnected.
Sorry about that. Thanks, Patrick. We continue to operate in the global pandemic. 99% of our global workforce is still remote and business travel and in person sales meetings are essentially non existent. Over the past 11 months, we have learned how to operate under these circumstances, utilizing video conferencing, web based marketing and promoting the power of our business model and reliability of our people and technology.
As you can tell from this call, we are optimistic and we believe our performance during this pandemic will pay dividends well into the future. We will now open it up for questions.
Our first question comes from the line of David Tagout from Evercore ICE. Your line is open.
Thank you. Good afternoon. Could you comment on Q4 2020 total organic revenue growth, quantify please? And then if you could break down organic revenue growth for the Q4 by fund administration, Intralinks and DSP.
For the 4th quarter, total adjusted organic growth was down 2%. The alternatives fund administration business was up 5.5%. And DST, we can provide you kind of a breakout between the two groups. The Financial Services group was down 1.1% and the Healthcare group was up 3.1%. I think that combined to be down 0.3% for the full year.
And Intralinks was up 3.8%.
Got it. Thanks for that. And just as my follow-up, could you comment on your acquisition pipeline and appetite to acquire in the year ahead based on the quality of the pipeline valuations that you see?
Well, we constantly look acquisitions and we're disciplined about it. Obviously, we deployed $8,300,000,000 in 2018 and that bought DST as an Intralinks. We spent I think about $138,000,000 in 2020, which was less than we would have expected. But we looked at lots of things and obviously in the public domain that we looked at linked administration down in Australia. So we're disciplined about it.
And we're quite aware that all the questions that we get on the conference calls and from our shareholders are organic revenue growth oriented. So we want to make sure that we focus on our organic revenue growth. And as Rahul had detailed in his remarks, we've made lots of changes. All of our businesses are getting better, all of them. Because if they don't get better, we get different executives.
And that's how we operate. So we're very optimistic about where we're going about generating tons of cash, paying down a bunch of debt, looking at great acquisitions and earning more money for our shareholders and then deciding how we're going to allocate our capital, whether that's going to be on acquisitions, which is generally our first choice. But we also like to pay down debt and we also like to evaluate buying back our shares. So I don't think our business plan or our strategy has changed. I believe that what we're doing is question becomes question becomes is, is that strategic for us?
Will it drive our organic revenue growth? And what is it going to do over the long term? So those are the criteria that we have. And I think we will probably buy some things in 2021. But usual, we'll be disciplined about it and we are going into 2021 with some optimism.
Our next question comes from the line of Andrew Schmidt from Citi. Your line is open.
Hey, guys. Thanks for taking my questions here. I wanted to touch on the sales cycle briefly. I know you mentioned in your revenue assumptions you expect customer appetite and buying behavior to improve throughout the year. But wondering what you're seeing more recently as we heading into 2021.
Are you seeing customer behavior and buying patterns improve? Obviously, you're still in a largely remote environment. But just curious what you're seeing from a sales cycle perspective, especially as it pertains to large deals?
Well, I'll give that a quick shot and then Rahul can comment. But we have a pretty full pipeline. We have large deals. We have what we believe are a number of large deals that we hope to close this quarter. We had a very reasonable January, and I believe that we will continue to execute and we're seeing some strength across our different businesses.
I think our indicators that we have in Intralinks are all as strong as they've ever been. I think we have a larger pipeline in January than we've ever had. And fund services, the hedge fund industry has proven to be quite resilient. And I think it will continue to be as more and more private assets become the most attractive place to put money, whether that's private equity or private credit. Our real estate, I think that SSNC C is well positioned to do well there.
And I think that the PST business is getting stronger. Our retirements business grew very nicely in Q4, and we expect it to grow very nicely throughout 2021. We have some challenges in our healthcare business, but Danny DelMastro and his team are doing a good job and they are very focused. And so with that, let Rahul take a crack.
So I think the thing that I would add is, as time has passed in this pandemic, we have gotten more comfortable and our customers as prospects have gotten more comfortable transacting over digital and virtual. And we always had an element of that, but obviously we've had to rely on it a lot more. So we've seen our yield for virtual events and other things that we do to gather pipeline go up pretty substantially. And we've also seen contract signings and things like that, which were certainly slow at the start of this process tick back up. So we feel pretty good about the current state.
It's better than it was 3 months ago and we think it's going to keep getting better throughout the course of the year.
That's great. Good to hear about the improvement, especially on the DST side. Maybe to tap on to that, when we think about the FY 2021 organic growth outlook, the 0 to 4, what are the 3 what are the primary things that drive sort of the bottom and the top end? And then within that, what are the assumptions for DST as the year progresses? Any color there would be helpful.
Again, right, when you're selling $20,000,000 to $50,000,000 deals for a year or $10,000,000 to $25,000,000 deals for the year, multi year deals. If we win them, we will be at that 4%. And if we don't win them, we will be closer to that 0%. But we're confident that we are going to win a lot more than we lose. We're going to continue to perform.
The feedback from our clients has been tremendous based on the work that our entire staff has put in and the attention to detail that we have delivered. In places like Advent and others that do net promoter scores, as it's ever been, customer satisfaction as we track is very high and our retention rates stick at 96% or so. And so I think that we have a lot of optimism that we can perform. We got to win. You got to throw passes, somebody got to catch them and they got to go across goal line, right?
I mean, that's the nature of the beast. And I don't know if Rajoy would have anything else to add to that.
Bob, just I guess on the second part of that on DSD in particular. So to talk about the pieces of DST separately, the DST Financial Services business, which is really everything except health, we're expecting to see low single digits type growth. That's kind of what's in. So at the midpoint, maybe something like 3.5% or something like that. And the health business as Bill mentioned, we do have some challenges and we're still dealing with some COVID impacts and we expect that to be flat to slightly down for the year.
Our next question comes from the line of Alex Kramm from UBS. Your line is open.
Hey, good evening, everyone. Can you talk about the cost structure and the margin a little bit? If I look at the guidance correctly here, it looks like continued margin expansion. So any more details there, but more importantly, it's just operating leverage or is it still a lot of efficiency gains that you're getting? You've been doing a lot of that.
So just wondering, where you're still finding opportunities to, I guess, cut if that's what's happening?
Well, I think Alex, we would say that we manage. We cut cut where we have to and but we have a large workforce with almost 25,000 people and there's opportunities everywhere, right? And we have to get more efficient and if you can get 5% efficiency then on 25,000 people, that's 1200 people, I think, right? So we need to drive revenue in order to be able to continue to grow our workforce and continue to increase our margins. And so that's what everyone at SS and C is focused on and we manage it.
We manage it every week. So we pick places that we want to put our resources in. I think we spent $600,000,000 between R and D and capitalized software and $140,000,000 or so in acquisitions we did. So we're investing back in our business And we think that there is tremendous opportunity for us and we think we have some very large competitors that just aren't going to be able to keep up. And when you think the longer 2021 goes in 2022, we are going to continue to execute on a much higher level than our competitors.
Okay, great. And then secondly, quick one. I think the buybacks were pretty soft in the 4th quarter. Is that just because you were looking at deals and maybe also your cash balance is fairly low, I think. So just had to step back or where did that come from?
And what's your expectations for 2021? I mean, you accelerated nicely in 2020. So that's still pretty focused on repurchases all else equal?
Well, again, we try to allocate our capital as best we can. And obviously, we think our stock is certainly not overvalued. So we look at that somewhat fondly, but it's not our first choice. And even as we buy and if we buy more than we did in 2020, it would not surprise me. But I don't believe that we will probably spend more than we pay down debt.
So obviously, if we do acquisitions and interest rates stay where they are, we'll probably use a lot of debt on acquisitions. But we generate a ton of cash. We generate a ton of cash in January. We will generate a ton of cash throughout the year. And hopefully, we will use it wisely for the investments of our shareholders.
Makes sense. Thank you.
Our next question comes from the line of Brad Zelnick from Credit Suisse. Your line is open.
Great. Thank you
so much for taking my questions. My first is for Bill. Bill, I'm wondering if you have any perspective on the higher trading volumes and volatility related to retail flows in the equity markets and how, if at all in any way, they've impacted parts of your business, maybe the health of fund admin clients or anything else worth noting. And Bill, I know you've been around long enough to see just about everything. Curious if you have any perspective on this force in the market and if in any way it's an opportunity for SS and C?
Well, me and Moses have been around for quite a while, Brad, as you well know. So as I look back on my 400 years in the business, these things happen, right? They get to be bubbles. And when you start taking technology and spreading it around the world and then allow people to collaborate. As always, it's difficult for the regulators to be able to manage all of the various schemes, so to speak, that people can deploy to drive up stocks or drive down stocks.
And so I think the regulators will catch up and I think that this will be another thing that isn't much different than year 2000 and how many eyeballs are looking at your screens. And so I think that the drive up on some of these very well known stocks, I think is probably a little bit above, maybe more than a little bit. But I don't know about where we would step in and have it as an advantage for us other than our regulatory services business that can help our clients see insights into that and then our algorithmics business where we have an awful lot of qualms that are constantly looking at this stuff. So we can give our clients insights into what's happening and I think that can be very valuable.
Thank you, Bill. It makes perfect sense to me. I appreciate the thoughtful answer. Maybe for Raul. Raul, in your prepared remarks, you talked about a comprehensive solutions program under Amon Graves combining products and services.
Just curious what profited this now? What's the opportunity really? And with total respect, it sounds obvious. So why wasn't this something you were already doing?
So about a year ago, I'd say in the Q4 2019, we put Ayman in charge of global sales and his mandate was really to help us collaborate more effectively and more than collaborate integrate, right, so that if you go see a customer and a customer is a bank or an insurance company or a hedge fund manager, we're bringing together different parts of the organization and offering that comprehensive solution. And the more we can do of that, the more strategic we become for them, the more likely it is to buy bigger, right? So just remember that we, as Bill pointed out, we bought DST as an Intralinks in 2018 and we're trying to sell things that work together, right? So it takes some time to integrate them. It takes some time to get the user interfaces and the functionality that they want.
And we feel like we're in a good place with that product offering. We're putting the right focus behind the sales and marketing of that was the right move. So I think we're formalizing things we've done all along, but we're off to a good start.
Makes sense. Thank you, guys.
Our next question comes from the line of Ashish Sabadra from Deutsche Bank. Your line is open.
Thanks for taking my question. Rahul, I just wanted to go to a comment that you made on the DST. If I heard you right, the DST Financial could potentially grow 3.5% this year in fiscal year 2021 at the midpoint. Just want to confirm if I heard that right. And then maybe just a question on that one is, obviously, that's pretty strong compared to the DST Financial growth profile historically.
What's really driving that strength? Is that the new there were a couple of large deals that you won last year. Are those is the implementation really driving it? And then if you can any provide any incremental color within DST Financials, where are you seeing pockets of strength or pockets of strong demand? Any color will be helpful.
Thanks.
Sure. So, yes, we have at the midpoint approximately 3.5% or so organic growth. The retirement business where we've talked about a number of large deals and done some press releases on them, it's clearly one of the bright spots. We're also seeing good strength in our UK based wealth and insurance services business and really across all the DST. We've been working hard for since 2018 really focused on the sales efforts there, focused on the product development efforts there, focused on digital and web portals and different ways in which our end customers can interact with their clients and that's what they deem most valuable.
We're starting to see some signs that the work we've done is paying off and we're pretty bullish on what might happen with that business, not just in 2021, but beyond.
That's great. Very helpful color. And maybe just a quick question on pricing in the alternatives fund admin side. There was a pricing increase back in end of 2018 sorry, end of 2019, early 2020. Are there opportunities for more annual price increases going forward?
Any thoughts on 'twenty one?
So we're doing and I think we said this last year, we really tried to set this up as a price conversation that was going to happen once a year, right? And it's been reasonable increases that I think our customers, while nobody welcomes them, they understand where we're coming from. We're working our way through that process right now and it's going pretty well and we do expect it to have a positive impact on alternatives, but really across our business.
That's very helpful. Thanks and great and good quarter. Thank you.
Our next question comes from the line of Mayank Tanwant from Needham. Your line is open.
Thank you. Good evening. Bill, just wanted to get a sense from you or maybe Rahul can chime in too. How should we think about the growth within the installed base, I. E.
Land and expand versus contribution from new logos as you get back to some level of normalcy in terms of organic trends across your portfolio of solutions?
Mayank, that's a very good question. And it really is kind of at the core of what we're doing. We bought DST and closed in April of 2018. In 2020, DST clients represented 75 of our top 100 clients. And they're all the largest investment organizations in the world and there are tremendous opportunity, right?
There's a lot of work to do at DST and we've done a lot of work and we've doubled EBITDA. I know it doesn't matter because it doesn't matter because our organic revenue growth didn't go up, but our earnings went way up, our cash went way up, cash flow went way up and it gave us tremendous opportunity to drill into all those great big clients and start showing them all of our opportunities. Algorithmics is a treasure trove of expertise with a worldwide business. So we have opportunities to go into these large organizations. And I think we just did a $1,000,000 deal with 1 of our clients on our new Blue Sky portal.
And that makes it so easy for our clients to be able to comply with all the regulations in all 50 states. And it's a pain in the neck. And the more things that we can take away from our clients that are a pain to them, the larger our land and expand process goes. And that's why we put Eamon in charge. I think several others of our top sales executives are also now drilling into all of our different opportunities that our client base are 18,000 clients.
But you can't go into a place as large as DST and start just swinging at a sledgehammer, right? You got to go in there, you got to understand and you got to be willing to accept the slings and arrows of Wall Street for a while, but there's no way we'd be at $4,700,000,000 in revenue without those 3 acquisitions. And guys like Mike Slideholme and Kevin Rafferty and John Szilai and Danny DelMastro and Tore Dorgati and a whole bunch of other people at DST have done a great job. And I think that those people understand that this doesn't seem like to be on the gas pedal. And this break stuff is not in our DNA.
But they had a lot of brakes, lots of brakes. And so we had to break those brakes and then hit on the gas pedal. But remember, it's $2,000,000,000 in revenue, dollars 2,000,000,000 Now that it starts growing, that's going to really put some wind in our sails and allow us if we execute and I believe we are executing, it's going to get better and better and better. And that's why you see the changes we've made, the bundling of our products and the improved outlook that we have because of all the work we've done.
When a
stonecutter swings that ax at a piece of granite, it doesn't crack the first time. It might crack the 100th time. But something tells me those 99 swings he made before she made before it cracked had an impact on it cracking. And that's the same thing we've done. We know it's granite.
We know we've got to swing. We know we've got to stay focused. We know we've got to push. That's not easy for everybody. But that's what we do.
That's how we manage. That's how we generate cash flow. That's how we generate earnings. And it used to be earnings and cash flow were really important. Now, kind of important, but they're not as important as organic revenue growth, but we did the things we think were necessary in order to set the platform to get organic revenue.
Great. That's very helpful And if I can just follow-up briefly, has the pandemic and the effect of that flushed out some of fragmented portions of your markets? In other words, are you now even stronger in some of the segments where you might have had more competition from some of the startups and smaller players that are not as well funded?
Well, I think actually, I think we're going to do better against the larger ones, the biggest ones. I think the use of third parties in India has not been very effective for an awful lot of very large places and we use our own people, almost 100%. And it's taken us a year, 2 years, 2.5 years, we're hopeful to comment on this too. But we had, I think, 1600, 1800 contractors from SENTEL that work for DST that we've now completely rebadged. They now all work for us.
And we have less and less outsiders inside SS and C and we operate better when we're in charge of people's races, people's bonuses, people's promotions, people's careers. And that's been a really big help for our business. And Sunil over in India has done a great job for us and I think we're going to continue to execute and I think we're going to continue to surprise positively. I don't know, Rahul, what do you think?
Well, I would just coming back to what you said about customer satisfaction and net promoter scores, we've seen really high levels of accolades from our customers throughout the both large and small customers. And we do think that this has been a disruptive time for many in the marketplace. So relatively placed, we're getting stronger on an absolute basis, but also relative to others. I think we're really well positioned going forward.
Great. Thank you so much.
Our next question comes from the line of Jackson Ader from JPMorgan. Your line is open.
Great. Thanks for taking my questions, guys. Bill, the first one for you on main reasons you win and lose. You're talking about being at the
high end or low end of the guidance range, just depends on whether you actually win some of these deals or not. And I'm curious, the reasons that you win and the reasons that you lose, have they changed
over the last couple of years? Just curious on your thoughts.
Well, I think for a number of the businesses that we inherited with DSC, they hadn't had a win in a number of years, right? So changing that entire attitude, you've got to believe you can win if you're going to win, right? Your prospects are going to know immediately if you're not confident. So knocking that insecurity out of people, that's not easy. It's not comfortable for people, but that's who we are.
Let's get at it. And so we've built software and whether that's a fraud, waste and abuse app that we did for SS and C Health or whether that's the improvements that we've made to the transfer agency business, that's a large business for us or what we've done in the retirement business. So, first, you have to have a superior product. Then you have to have a very trained workforce, right, so that they can implement it. And you have to have a knowledgeable marketing team that can market it and you have to have a great sales force.
So as I've said many times, right, we meet as sales team every week. Some of these places we bought didn't meet except every month. So there's a big difference in the culture and in the drive. And again, you have to recognize that we did $1,184,000,000 in cash flow in 2020. In 2017, we did about 400,000,000 dollars So we've tripled our cash flow.
And again, that's a very positive thing. It gives us lots of resources to training and education and more technology. We've hired some great people that have done some great work for us, Anthony Kiappa, John Malone, Nick Wright, all kinds of people who've done just great jobs for us. And I think that that's going to continue because they like winning. They get paid more when they win, right?
So I think that's been the major dive. The major reasons why we win is it's more organized. Hayman is doing a great job getting it more organized than it was and we're competitive. And we're not going to just sit back and not go after our competitors' clients directly. And they don't like it, but that's fine.
That's the nature of competition.
Great. Yes, I appreciate the thoughts. What about the Link asset? What did you find really attractive about it? And what are some
of the
main reasons that you kind of withdrew there?
Well, I mean, it's a I think it's a good business. We really like Australia as a market. We have done very well in Canada and we feel like we can replicate that in Australia and we've got a nice business in Australia and we want to have a bigger outsourcing business in Australia and Link would have fit that bill, but there's a lot of work to do on Link. And I believe they've started their process, but we have done a lot of work on DST. We have lots of positive momentum as you hear on this call.
And we didn't really want to have another situation where I got to tell you guys, it's another 2 or 3 year change. And so we decided that that really didn't fit with what we wanted to do. And so we went through. It's still a good company. I think they'll do fine, but it wasn't something that we wanted to tackle right now.
Our next question comes from the line of Peter Heckmann from D. A. Davidson.
Just one maintenance question. I didn't hear you mention the pending Capita acquisition. Is that deal still pending or has it closed? It's
in forever pending.
It's still pending. I think
it's good
But it's not dead, at least theoretically. You're still pursuing the close.
Yes. We had one large client at Capita that was not going to fit in with that acquisition and they had to find alternative. But we believe that has been rectified and we would expect it to close in the next 60, 90 days. And but we have expected that a couple of times in the past. So we want to make sure.
It's not that big of an acquisition anyway.
Right, right. Now that's right. Okay. And then just in terms of when we're looking out over the next couple of years, could you identify any pending regulations, kind of like a CECL, whether it's in the U. S.
Or globally that you think can serve as demand drivers for spend or upgrade activity, anything out there that we should be monitoring?
Well, I mean, obviously, you have a new administration in the United States and it's going to be much more active in financial services and going to view financial services as a money pot for taxes. And so there's going to be a lot of regulation and no different than Farm and other things that came out in the 2012, 2014 timeframe. And we would expect that it's going to be, I'm guessing it will be pretty similar from what it was 2,008 to 2016 and there will be opportunities to help our clients meet those new regulations and those new tax requirements in as cost effective way as possible.
Got it. Okay. If I could just sneak in one more. There was a joint venture announced by a number of financial services companies, State Street, PIMCO, Man Group, and it looked like they were going to be focusing on business process outsourcing for the fund industry. Is that something that's on your radar?
And do you think that would be something that would be potentially competing with any operations of SS and C or perhaps DST?
Well, hey, those are large, sophisticated, powerful companies with a lot of great people. And my guess is, is there's probably a little bit of politics in every one of those places. So when they all get together, it might be like the United Nations. So we'll have to see what happens with that. We're well aware, but we're also executing on our plan.
And hopefully, we'll see them in our rearview mirror.
Fair enough. Fair enough. I appreciate it, Bill. Thanks.
Our next question comes from the line of Michael Young from Truist Securities. Your line is open.
Hey, thanks for the
question. I wanted to just kind of ask maybe high level coming from 20 20, which was a heavily impacted pandemic year to some hopes of reopening this year. Could you just maybe give some color on the conversations with clients and how they've trended? And could there be sort of a backlog of activity as people kind of refocus on operating core businesses in 2021? Just any color
on that would be helpful.
Well, I think, as you well know, right, when you have a crisis such as this, the rapidity of change probably goes up tenfold. So companies that would have never believed they could operate from a remote now operate from remote. And I think that it's going to change lots of things. So how we all execute on our strategies and how we deploy our greatest asset obviously is our people and keeping them safe is paramount. There's going to be a lot of things that are going to be important that we focus on And I think, obviously, you guys are a recent merger of 2 large banking organizations.
And my guess is that there's a lot of change going on at Truist. And you have a major acquisition during a pandemic. So there's added impetus to streamline your operations, make them as efficient as possible, make sure you have redundancy. Cybersecurity is a very big deal. And I think that we need to be cognizant of what is out there and we need to be prudent.
When we know we need to act quickly, but the precipitous seems to me to be a poor strategy.
Okay. And my second question, just wanted
to follow-up on a few of your comments. I think you've kind of highlighted how the market's more eager and revenue growth versus good stable cash flow businesses. Is there any desire with either your next M and A deal or just kind of how you're managing internally to try to ramp up the revenue growth piece of the business as opposed to just cash flow?
We're trying. I would tell you that our focus is probably we're not going to forget about cash flow and we're not going to forget about earnings, but our focus is on growing revenue. And anybody that has any conversations with me knows exactly what I'm talking about or any conversations with Patrick or any conversation with Raul or any conversation with Eamon or Justine or anyone else in the company. Everybody knows it's revenue. Now you can't pigeonhole everything.
You got to make sure it's everybody admires Jeff Bezos and he's apparently did it on revenue growth And it's admirable, but not everybody has an Amazon business. So we need to be prudent. We're not going to go buy up 100,000, 200,000 square feet of office space in New York, in London, in Paris, Frankfurt and other places, because we think that would be a poor use of of our cash. Not that we don't have strong cash and not that we probably couldn't afford it, we probably could. But we're not Google.
We don't have more money than most nations. We're going to be prudent, we're going to think and then and we're going to make sure our people are safe and they're not coming back into the offices until we can make sure that that environment is safe for them and we're ready. So I think that's how we're trying to operate in way we're very focused on revenue growth. It's a little more difficult getting a large scale licenses when you don't get in person meetings. So but we're working at it.
We're winning some deals and we're winning like I said, the services business has been strong. Intralinks has got a very, very full pipeline and Ken Visconti and Bob Petracci were doing a great job there and Petracchi are doing a great job there. And I think that opportunities are greater than they've ever been. But those are opportunities. Still got to catch the ball still going to get over the gold mine.
Okay. Thank you.
Our next question comes from the line of Chris Donat from Piper Sandler. Your line is open.
Good afternoon. Thanks for taking my question. Bill, I wanted to ask one question about the redemption indicator that we see for GlobeOp and that January was the lowest number on record since 2,008. Do you think that's mostly market forces or is there anything changing in the competitive landscape that's keeping redemptions from leaving SSNC?
I mean, I think that we have really a blue chip roster of funds. But that being said, it's probably a heavy, heavy dose of what's happening in the market. I mean, if you look at the amount of assets going into private equity and real estate and private credit and hedge funds, I think you see that people are starving for returns, starving for income and they're not finding it in corporate bonds or government bonds for sure. So I think that people redeem either when they have a life event like buying a house or retiring or something or that they have an alternate place to put their money. And if they don't have an alternate place to put their money, they tend to stand pat.
And I think the hedge fund industry in particular and the other ones, the real estate industry as well as investment industry as well as the private equity industry has learned to communicate with their investors. And that communication is paramount. And again, that's something that SS and C is very well positioned and is able to help our customers communicate with their customers, with their investors. And I think that's another reason why the redemption indicators remain historically low.
Okay. Thanks for that. And then Patrick, one question about guidance and well for the Q4 you commented that there was less travel and less usage of contractors in the Q4. Are those two things that you would expect to stay low through the remainder of 2021 or do you expect travel and contractor usage to increase kind of over the course of the year as things get to some level of new normal?
Yes. The contractor reduction is due to the fact that we moved the India contractors to in house employees. So that will be permanent for 2021. And on travel, I think basically we've assumed that travel expenses won't be a heck of a lot different in Q1 and most of Q2 and then gradually start increasing in the 3rd Q4, but not be back pre pandemic levels. That's kind of the assumption we've made.
Our next question comes from the line of James Faucette from Morgan Stanley. Your line is open.
Hey, thanks. Just a couple of quick questions for me to follow-up on previous questions and answers. First on DST, I think you made a comment around some incremental work or improvement on DST that you're working on. Just wondering if you can touch on that, first of all.
Well, again, I'll take 30 seconds and then give it to Rahul. But we have made a lot of changes. Mike Sligholm has made a lot of changes. Nick Wright took over at the end of June last year and he's done a great job for us. He's based in London.
And Kevin Rafferty came in and he's running our retirement solutions business and he's doing it with John Geely and they're both doing a great job for us. And we have a focus on that business. So we've made a number of changes there. We talked about Danny DelMastro and Tory Gargati running our healthcare business and they brought it up quite an increased level of focus and intensity and I believe that that will pay off. Manny took over, oh, I think maybe September or maybe it might have been August last year.
And so we made a lot of changes and the sales force is now reporting up through AIMON as a global and Mike has taken Rob's tone and some other top sales executives that we have and slotted them into the DST business, Janine Kilgallen, MVP, a bunch of others that are really top flight people and know how we operate, how we prepare and how we show our wares to our various prospects. Would you have anything else, Raul?
Bill, the only thing I would add is, in addition to the sales focus and just overall more attention to the speed at which we execute and making sure that there's tangible things that we're trying to do and we're all marching in with some just some pace to it. We're also really focused on product development and innovation. So a lot of our hires even below the senior executives that you that we've mentioned have been in folks that are bringing in new technologies, whether that's digital, which a lot of our clients are looking for or things we can do with artificial intelligence and machine learning. We've made an acquisition at Vedado. There's others.
So we're giving that sales force more tools to be able to differentiate themselves from our competitors and that's helping.
Got it. Got it. And then I appreciate that. And then Bill, you started off talking about acquisitions and discipline and look, clearly you've built and established incredibly strong reputation of being able to find the right things at the right time and under the right circumstances. What kind of moves your guardrails, if you will, of discipline around?
And I guess I'm thinking about the current environment and maybe more generally, how you think this ultimate how the current environment ultimately plays out? And what do you at SS and T have to do to be prepared to take advantage of when things do change and start to adjust?
James, again, you got to do the work, right? I mean, you have to have people find businesses that we can ultimately buy. We have looked at making a number of different investments to get to know businesses better and then see if we can help them grow and then ultimately acquire them. We have to stay close to the private equity industry. We have to stay close to large scale financial institutions that want to get rid of divisions or want to joint venture with us in ways that they can really improve their margin profile.
So there's a number of those kinds of things that I think are the path to very accretive acquisitions that drive revenue growth. But it's work, right? I mean, it's looking at a lot of deals. It's having discipline about it. It's not turning this into the focus isn't on our business.
The focus is on what we could do to buy additional businesses. We have a lot of businesses. We have 18,000 clients. We have tremendous upsell and cross sell opportunities, right? We have tremendous development teams, thousands of developers, right?
We need to be able to build product, deliver product, market product, sell product, raise prices, right? We need to create this entire environment where we're the best, right? So when we went into fund administration in 2,002, we didn't have a dollar in AUA. Now we have $2,000,000,000,000 It's the same thing, you've got to execute. And then you can bring in places like Eisner Fast, where we get people like Rahul Kanwar, Renee Mooney and Michael Cole, Chris Madpack and a bunch of others that add to the quality and capability and breadth and depth and you keep marching through.
And now that we're the largest as a fund administrator, both in hedge and private equity and we're moving up fast in real estate and Pakesh Malde has done a great job. And we just got a lot of great people and there was also a lot of work to do with deploying $8,300,000,000 in 2018.
Our next question comes from the line of Sanindeir Tend from Jefferies. Your line is open.
Thanks for taking the question guys. Just following up on the comment about the focus around revenues and growth. Can you talk a little bit about maybe how pricing fits in into that strategy in terms of how you think about it on an annual basis? And then if there's any impact that we should be thinking about from a COVID perspective this year in the sense that maybe there's clients that have asked you to hold off on pricing increases? Any color you can provide there would be helpful.
Rahul, you want that one?
Yes. So, thus far in the annual pricing conversations that we've had, it really hasn't been that different than it was last year. Now this was a pretty new process for us. Last year was the first time. But the conversations have gone well.
And there are, as I mentioned earlier, we are going to be reasonable. And to the extent that we have a customer that has some constraints, obviously, we're going to respect that and try to make it work to the satisfaction of both SS and C and that customer, but they've been going pretty well.
Got it. And then just a quick, I guess, modeling question. Just can you remind us of the expected impact on revenues in 2021 for the DST clients that were terminated pre acquisition?
It's $25,000,000 for the full year.
No further questions at this time. I will now turn back the call over to Mr. Bill Stone.
Thank you. Again, thanks everybody for your thoughtful questions. And again, we're going to execute and I look forward to talking to you in late April or early May. Thanks.
Thank you again for participating. This concludes today's conference call. You may now disconnect.