Good afternoon, everyone. Why don't we go ahead and get started? My name is Jeff Schmitt. I cover wealth tech stocks here at William Blair. I'd like to introduce SS&C Technologies. They're a leading provider of enterprise software and outsourcing solutions for the financial services industry. It was actually our top pick for the year. We have with us today Brian Schell. He's the CFO to discuss the business. First, I do want to point you to our website for a list of research disclosures and any potential conflicts of interest. With that, I will open it up to turn it over to Brian.
Thank you. We appreciate the invite. It's a great conference, a great opportunity to meet with all of you and have a lot of really good dialogue on SS&C. I've got a slide presentation we'll run through here. I'll try to not necessarily hit every single bullet point on every slide. Obviously, I'll go through the obligatory safe harbor statement. If some of you are newer to the story, I'll still cover some high-level points, but still try to get some of those who are existing shareholders and have followed the story for a while try to tease out some of the finer points about what we do with respect to what we provide and our software for financial services and healthcare industries. We think it's mission-critical.
We think that's why we've weathered much of the storm that a lot of folks have had to go through. I'd say probably one of the best slides, one of my favorite slides in the deck, is this kind of our placemat slide. If there's one slide that I had to talk to about SS&C, this would be it. It really covers our investment thesis, what we do, some of the key metrics, and the industries that we serve. As we try to summarize, why do we exist, what do we have, is what we want to do, and why we have what we have is we think there's value in the depth and breadth of our offerings to financial services clients and to the healthcare industry.
When you look across the gambit of everything of what we do, there is transaction processing, there is investment accounting, there is trading, there is supporting of operations, there is investor services, there is compliance work, there is the analytics that we provide. I talked about the asset coverage, the industry coverage we have. We have asset management, we have hedge funds, we have private banking. Anybody who manages or touches assets, we are likely providing a software solution or software-enabled service to help them do that more effectively and more accurately. Focusing on automation and data are all the things that we think are really important. A couple of the key metrics, been in business for over 38-plus years, founder led, still our CEO and chairman of the board, about a $20 billion market cap right now, 27,000 employees, enterprise value of $26 billion, and over 22,000 clients.
A very diverse set of clients over 35 different countries and closer to $6 billion in revenues in all likelihood in 2025. A couple of other I think are pretty interesting metrics that I am still amazed by is it's not on the slide, but over $4 billion of AUA that we help provide services for, over 45 million accounts on our transfer agency platform, and over 500 million healthcare claims processed on our SS&C Technologies platform. That kind of gives you a broad overview of SS&C and kind of what we do. Just to dig into a little bit deeper, a different look, we've tried to simplify what we look like and what is SS&C by breaking out into these different six business units.
SS&C has been built on the back of a lot of acquisitions over its history, been a lot of organic growth, but also that organic growth on top of a lot of acquisitions. Over the last couple of years, we've tried to simplify our investor story to understand what do we do and what do we look like. The easiest way to think about that is 75% of our revenue is generated by three of the largest business units. The largest one is the GlobeOp business, which people generally think of as synonymous with SS&C, is servicing the alternative assets space, hedge funds, private markets, retail alts, those types of assets that are different than, say, the second largest business, which is GIDS, which is more about a transfer agency type of service and related services. That's about another 25% of the business.
The third leg of that 75% is our wealth and investment technology, affectionately referred to as WIT, which again is selling those software licenses to multiple, call it segments within the industry with focus on wealth, alternatives, asset management, the insurance market. Lots of really strong offerings and industry-leading products. One of the, I think, the key benefits or that we have or key advantages that SS&C has is that we own the software that we use to service our clients. If there is an edit, if there is a change, if there are enhancements we need to make, there is no supply chain issue. We have it, we control it, and we get that implemented for others. The rest of the business, the remaining 25%, think about it. Obviously, there is 5% with healthcare that I talked about. The other 20% are more really two verticals.
One is the intelligent automation business and analytics that kind of can go across a broad set of industries, primarily financial services. The other is many know about Intralinks, which are primarily associated with the supporting transactions. Again, product spotlight, a couple of things, and you may have heard of many of these products with respect to the different groups that I just mentioned. Black Diamond, that services the wealth market. That's been probably maybe the number one, I would say, RA software right now. We're seeing that continue to grow. Probably the fastest growing software solution that we do have in probably our entire portfolio that's of size. DemoniRx is the pharmacy platform, claims adjudication platform that we JVed with. Have a couple of partners, Elevance and Humana, that's processing the claims. I mentioned about Intralinks, and its Deal Center is the primary product there.
Blue Prism, which is the robotic process automation that was in that intelligent automation piece of the business that I talked about. The other, obviously, two large products that are not on the screen here is Geneva, which is what is used primarily to service a lot of the alternative assets space. And Eze, which many of you probably know with the order management system, is primarily associated with. We have been able to integrate those into many of our product offerings. Some recent big wins, kind of my hair up on the screen. A lot of these wins in 2023 and 2024 has led to the strong growth that we have already seen in 2025 starting off the year. I will not read through all the names, but these have been important as we continue to build a foundation going forward.
I don't have 2025 updated, but probably one of the marquee wins out there is doing some work in Australia with the superannuation funds. The largest there as far as revenue contribution to SS&C has been Insignia. To briefly touch on the financials, again, we just popped in a slide of the first quarter just to remind people of the first quarter highlights. A little over 5% organic growth rate. We had a, excuse me, a growth in our EBITDA of a little over 6%. We had a margin expansion over the prior year of about 30 basis points. Overall targeting as far as the guidance go about 50 basis points for the full year. We're making progress along the way. You can see the earnings growth, EPS growth of a little over 8%.
We had a really strong cash flow conversion this quarter and grew the cash flow from operations by over 51%. Primarily some enhancements in working capital more broadly. Again, being familiar with the SS&C business, we do have a fairly healthy margin business. This is EBITDA margin. We are operating at, been operating right around 40%. We were doing that up until 2022. 2022 reflects a dip from the Blue Prism acquisition, which was about $300 million in revenue with essentially no EBITDA at the time that we bought it. We have completely turned that around from an earnings contribution perspective. You can see us gradually increasing productivity, leveraging our scale over the last several years, building that up closer to that 40% level with this past year ending at 39.3%.
We have generally targeted about a 50 basis point improvement year over year, which allows for continued productivity enhancements as well as an opportunity to reinvest in the business to make sure that we are growing revenues in the longer term, but still providing cash to our shareholders. Revenue retention has been relatively strong at 97%. You can see there has been a little bit of a variation with a few basis points here and there over any of the quarters, but generally around 97%. Again, that is given the nature of the recurring revenue nature of the business, the stickiness of the services that we sell because they are more critical to their overall operations. It is not something that is easily changed. Like I said, this makes it a little bit easier to forecast some of the revenues that we have.
Again, it shows to its strength of SS&C and its overall business model. Again, just a quick overview of how we've seen EPS grow over time. The current, the $5.85 that you see on the slide here for 2025 is analyst consensus. Overall, it's been roughly a 5% growth rate going back to 2020. You see a little bit of the dip in 2022 and 2023. On the balance sheet, we had a lot of floating rate debt. When SOFR spiked, short-term rates spiked, that took a big dent out of some of the EPS. You see that's recovering back with more top-line growth and a stabilization of rates and a reduction of some of that debt along the way as well.
If we look at one of the things that we do like to talk about and we like to raise, and this is what we think drives future revenues and future earnings, is we still think it's important to continue to reinvest in the SS&C platform. We like to highlight the R&D spend that we have with the % of revenue, % of the kind of the more "software-related revenue" with the licensing maintenance fees. It's a number that continues to increase every year. We want to make sure we're ensuring the growth longer term of our business. I mean, it's easy to take money to the bottom line and not spend it, but not reinvest. We think it's really important, again, to drive that longer-term growth rate. We think that this is something that it's important for us.
If you see maybe any others that you're comparing us to, when you look at the other software organizations, take a look at this line item and make sure that they're keeping up. Again, we think it's important to continue to reinvest, taking that client feedback and putting it back into the product and the services that we have. In the shorter term, some of the guidance that we've laid out for the quarter is for the full year, we're looking at about 4.5% organic revenue growth rate. You can see the revenue range there of roughly $6.2 billion. I'm just rounding there. We tried to lay out some of the key metrics for the investor community to try and get a sense of what we see, what we see happening, what we have visibility to.
We think it's important to lay out our expectations and hold us accountable for what we think is going to go on as we look into our own operations and try to perform against that. One of the things that we've continued to work on is driving down our tax rate. I think you've noticed that in recent periods and continue to overall manage the cash flow and continue to raise that cash flow conversion. Spending a little bit of time on our three-year organic growth rate target, we put a number, a range out there, which is admittedly a little bit wider of 4%-8% as far as a targeted range of revenue growth. How do we get there and what are the component parts? Right?
We continue to look at what's the growth of the, I call it the share of wallet of our clients and continuing to provide them more and more services, I think has been a nice big part of that growth. We look at the new products, not just enhancements that we have, but also brand new products that we think can provide additional services. We look at the cross-sell and upsell to existing clients. One of the things we're trying to do there to improve those results is continue to enhance an enterprise, call it sales team that has knowledge of the entire suite of products that we have versus a siloed approach of a product by product. This is something I think we're making more traction on.
We're supporting that with stronger CRM data across the entire enterprise to make sure we understand who the key decision makers are and the relationship managers, particularly within the larger institutions who they may not know themselves within their own four walls who may be buying SS&C services within their own organization. Helping make that introduction and make that consistent is not necessarily rocket science, but it is gritty work. We're doing it. I think we're making some nice strides there. We think pricing can become an increasingly important part of our overall growth story. Traditionally, it's been 1%-1.5%. We're looking to make that that potentially could increase over time as we look to be more strategic in looking at those overall rate changes. I've mentioned Insignia with Australia and the superannuation funds.
We do think international can continue to be a big part of our growth strategy more broadly, organically. The last part of that is a little bit harder to move, but has been client retention. Right? We've seen that number consistently around 97%. You move that by another 100 basis points, that obviously just enhances your growth rate right on top of it. Those are things we're looking to do, looking at our client, our customer service, and how can we enhance that efficiently kind of across the board and then implement that where we see the successes. The last thing on this bullet on the left-hand side of the chart, spending a little more time on this page because I want to make sure we kind of cover some of the key growth initiatives, are the liftouts.
Essentially, as Alice was saying, rebadging employees and providing services to large financial institutions because we think we can do it at a lower cost, more efficiently, and on our own services and really leverage the SS&C scale and network that we have. This is actually what Insignia would call a liftout where we're essentially taking on 1,400 of their employees and providing those services to them. We believe, and hopefully the outcome there is from a service model, is that it's enhanced, it's higher quality, more accuracy, and more efficient so that along the way, it adds to our bottom line, but also adds to their bottom line because we're doing it more efficiently than what they were able to do it.
As far as the M&A and this approach is a little bit around the capital allocation approach, but just to touch on it, is the reason that M&A has been important to us is that we do think that while we like the adjacency of the businesses that we may acquire, that over time we think that can continue to actually boost and enhance the overall organic growth rate. If we can't over time consistently add 1-2 percentage points of revenue growth from M&A inorganically and then turn even more of that, then grow from that base into even further organic revenue, that's a real win. That's what we look for in the transactions. We are looking for those types of transactions that we can leverage our existing products, our existing cost base, the existing geographies.
We're looking to make sure that that happens in a way that's additive to our revenue growth rate as well as adding to our overall EPS accretion. The most important thing in M&A for us has been making sure we have the appropriate price discipline. Right? I know that's a tall order for M&A, to have something that's revenue growth accretive. It makes money, but we're not going to pay a really, really high multiple that doesn't make sense for our shareholders. Maintaining that price discipline has been really important. We want to make sure the M&A adds value to our shareholders. I want to touch a little bit on capital allocation.
This tends to be one of the larger and probably one of the most important things that we talk about, and to make sure that your management team is doing what it needs to be doing is as we think about M&A, absent the M&A, excuse me, for capital allocation, absent the M&A, share repurchase has been a big priority for us. We recently announced a new share repurchase authorization. We actually announced it a quarter earlier than we normally do. We actually upsized it by 50%. And reading between the lines or what caused that, one is in the absence of the M&A that we think can be accretive to our shareholders, we think it's the best utilization of that capital as share repurchase, particularly where it's priced today. We essentially had exhausted our previous authorization earlier than anticipated.
We continued to increase the amount of cash flow that we do have. So we needed to implement a new program as well as just given our growth and our size, we actually decided to increase the level of the authorization as well from $1 billion to $1.5 billion. So we think that was a pretty positive sign. Absent that, we will also on the edges pay down debt. Incremental cost of the debt right now is roughly 6.3%-6.4% depending on where SOFR is trading. And so that still is accretive to the bottom line. It still helps create additional debt capacity if we want to go out and pursue M&A opportunities as of scale. And this allows us to be able to do that without getting in the way of being able to execute on that transaction. So around the edges, we will do that.
We've been able to reduce the leverage ratio to roughly 2.7 times now. We are pretty close to investment-grade territory. Not necessarily our goal to be investment-grade. We like the financial flexibility and where we are and to be able to lever up to pursue a transaction that we think can be, again, add value to our overall, to our shareholders. The last thing I'll say here is that we will continue to look at the dividend, look at the payout, and add to that modestly on an annual basis. It is not a huge focus of return of capital. One of the items, and this kind of ties it all together with respect to some of the M&A that we've done, these next couple of slides. These are just kind of representative of some of the larger transactions that we've executed.
I mentioned that SS&C was, a lot of it was built on M&A over the last 10, 15 years. You can see some of the more sizable transactions here, 2018 being a very significant year where a lot of transactions were closed and a lot of leverage was added that we and helped generate a lot of the revenues that we see today. You can see how this is really kind of placed across the board with some of the key businesses that we have today with respect to GlobeOp, Intralinks, Advent Software, which forms the basis of our wealth and investment technology software business. Obviously, DST had multiple portions of that business with healthcare within our existing GIDS business. Obviously, you're aware of Intralinks and then Eze is also part of our wealth and investment technology business more broadly.
Blue Prism was a foundation of our intelligent automation and analytics group. Finally, with Bateya, which is called Class Action Litigation Services as far as claims and recovering claims for people who own those securities, that's been a real nice win and we've been very pleased with that transaction. Here's just how we approach M&A and the debt capital markets. When we've looked at it, you can see that we've levered up for each of those kind of sampling of transactions anywhere between four and five times. We've made the commitment to de-lever to the debt capital markets and the rating agencies with levering down, focusing capital allocation to get it to a, I call it a more manageable level, an acceptable level. This is the financial flexibility that we like to have.
We think this, again, can add value to shareholders versus necessarily buying something with equity. We like the idea of using debt. I was recently at a debt capital markets conference and they would like to see more debt. They are anxious to, anxious and in a positive way, would like to see some more acquisition activity, obviously assuming it makes sense so they can actually want to invest in more paper, I'll be honest. They were a little bit selfish in their wants there, not to blame them. This is a slide that kind of indicates our approach to capital allocation and leveraging that market. That concludes the slides that I had prepared for you today. We are about five minutes early. I do not know if you want to try and do questions or we just save that for later.
Yeah, if anyone has questions, I mean, we have five minutes here, so feel free to jump in.
I have a question. Okay. Your organic growth, I mean, you guided to for the second quarter, I think 2.5%, which certainly felt very conservative. And now that we're much of the way through there, obviously there's the paramours of economic uncertainty, but where is that kind of shaping up? Is that looking to be conservative?
Yeah, so for I assume everybody could hear the question, but basically asking about our 2Q forecast for guidance for organic revenue growth.
We knew going into the year when I look back at where we were at the end of last year when we set out the full year guidance and looked at how we think the revenue growth rate was going to fall, we knew 2Q was going to be a lower growth rate relative to the other quarter, certainly the first quarter and the second half. We're not officially or formally changing guidance on the roughly 2.5%. I would say that there's probably less uncertainty around market dynamics or people have gotten used to the volatility around whether it be the market changes, administrative changes, the potential tariff battles. We've not seen any slowdown in the dialogue with people's commitments to wanting to transact with us. That negative, which we did not see at the time, has not surfaced.
That's the good news, the absence of that negative. We'll see if at the end of the day, if it proves to be conservative. I only have one month so far in my head. I'll have a second month here soon as far as closing out the quarter. Right now we hope it proves to be conservative, but we'll see. There's nothing negative that has surfaced that makes us change that guidance right now.
For the year, is Insignia in that organic? $35 million-$70 million of revenue for—can you hear me? Is this—yeah. Insignia, I think you're projecting $35 million-$70 million of revenue.
If you sort of back into your numbers and you look at, you're basically projecting 5% organic in the second half, but at least a point of that is from Insignia, if not a little bit more. You're kind of guiding a little softly, or at least at the very bottom of your range.
Yeah. The Insignia is the 35-70. 35 was a reference to just the, was that called the second half results, so only half year. The 70 would be the annualization number of that. That is in our guidance. That explains some of the strength and confidence in the second half of the year, some of the growth rates.
The other remaining portions of why do we feel confident about the overall growth rate for the year is, again, just looking at pipeline, where they line up from the other transactions. I mentioned Bateya, and that's just kind of more math than anything else, but it becomes organic in its growth in the fourth quarter, so the second half of the year. It is set up to be a stronger fourth quarter, say, than the prior year as we look at the pipeline of cases and looking at the history of settlement and when that occurs. The courts like to kind of clean off their docket in the fourth quarter. We typically will see a stronger fourth quarter as the strongest quarter of any of them. It tends to be a little bit lumpy. We try to forecast that and try to bake that in.
We have really good visibility over a two to three year perspective, but sometimes on a quarterly basis, it's a little bit more challenging because some of that rev rec is dependent on the court's decision to basically for summary payment. Those are things that we're looking at, I think that gives us confidence in some of the growth rate numbers.
Okay. Thank you. The breakout will be in jennayey in 10 minutes. Thank you, Brian.
This presentation has now finished. Please check back shortly for the archive.