Great. Why don't we get started? Next up, we're thrilled to have Bill Stone, the CEO of SS&C. Part of our goal here today is to try to keep this as iterative as possible, so we'll start with a couple of questions. It's always great to get your perspective on a lot of things, but part of this year, I just need to read a kind of standard disclaimer, and then we'll get right into it. But as a research analyst, I'm required to provide certain disclosures relating to the nature of my own relationship and that of UBS with any company which I express a view at this meeting today. These disclosures are available at www.ubs.com/disclosures. Alternatively, please reach out, and I can provide you with any after this meeting. So that may be the most value I add as part of this conversation.
I thought it was very good.
Success today, but we'll see the way it goes. Bill, we've been fortunate to have you at this conference a long time. It's the fourth time we've done it and we start the same way with you in particular. You founded SS&C with $86,000, I think, in revenue the first year. You've been through a lot of cycles. You've seen a lot of different inflections, so what I wanted to do is maybe, for the benefit of the audience, maybe highlight key milestones, particularly given, and part of the spirit of the question is, it feels like we're at an inflection point in terms of generative AI, and you've always been ahead of the curve in terms of shifts, so maybe talk about some of the dynamics that led to where SS&C is today and the way you position the company, and you're clearly seeing it.
And I mean, we'll get new organic growth a little bit, but I think the context on kind of what you've built and how you've positioned it for today is just really important to the thesis overall.
Well, sure. And I appreciate everybody spending a little time with us this morning. I'm kind of the grand old man now, and so I used to be one of the youngest, and I'm not. So you kind of get used to that. But you get to see a lot of things when you've been running the same company for about 40 years. And so now it's all AI, right? But going back to 1986, it's been any number of technological changes that changed how we all operate. In 1981, IBM came out with the IBM PC. In 1986, when I started SS&C, we were about up to maybe a 386. And then you're going to have 486, and you're going to have a Pentium chip. And pretty soon, you're going to have Novell Networks and PC Networks, and everyone's going to talk about client-server.
And the first question they'd always get you is, "Is this true client-server?" Of course, I'd always tell them, "No, it's false client-server." So what the hell does either one of those two things mean? I wasn't really quite sure. But then you move forward, and the BlackBerry is really hot, right? And then Apple comes out with the iPhone, and now it's pretty much ubiquitous. And so the whole thing, and even those technologies themselves, as much as we use them, I used to have a car phone that weighed a pound and a half. So you always had to be careful that you have one hand on the wheel because the other hand was heavily carrying your almost portable phone. But those things didn't work as well until all of the infrastructure around the modems going up from 2400 to 9600 and stuff like this.
Now that's all pretty much point to point. If you watch Musk, he's going to change what's happening with telecom. He's floating enough satellites to be able to do your home phone and your cell phone and everything else. It's going to be disruptive. Any of you that are on a plane that ever get to use Starlink, it's instantaneous. So it's like going up and being in your living room and switching between NFL games. It's not much time between Channel 7 and Channel 17 or whatever the hell, right? All those things are changing, and AI is going to be another one that changes a lot of things, but all things change and all things remain the same. I don't think your life is going to change that much.
I don't think what you do, I don't think wanting to get your child into college, wanting to get your child out of college, wanting to see if they would be willing to at least be on a five-year plan instead of a seven or something like that, right? So all those things, I think, are going to be how you run your life, how you live your life, how you go about deciding what's important to you. And I think that will remain central to what's going on.
I agree, and part of what we've been struggling with, and I think what the market's clearly starting to focus on, and your stock as an example, is you're going to have GenAI winners and GenAI losers, and probably not adding much value in that statement, but one of the things we focused on with you is a lot of the IP you've created, particularly on the accounting side and the relative complexity of that, and quite frankly, how you've always been a big advocate of the service associated with the software and where that differentiation sits, and there's been some newcomers to this sector over the last couple of years that haven't necessarily kind of scaled the way they would have thought, and I think part of the where things didn't maybe come as intended was they didn't quite have the service associated with the software.
Again, I think where you've got that unique IP really sits in the accounting, and the account sits there higher. So maybe talk about, because again, I think to your point, the method of delivery may change, right? But the regulation gets more onerous, the volatility, and your ability to really add more value, right? Because part of our core thesis too is as your client's AUA becomes more complex through private, so on and so forth, you become more embedded just because of the complexity of that. So maybe talk to that a little bit. And you can see that borne out in the financials, whether it's retention, the organic growth, which we'll get into a little bit. But I think it's a key part to the story that doesn't necessarily get fully recognized by the market.
Yeah. I look at it that SS&C has kind of proved that it can make money, make more money through all kinds of different cycles. So it's very sticky and very focused on what it does. And what it does changes somewhat locally, and then regionally, and then nationally, and then internationally. So it's all changing. And so whether you're talking about the Office of the Superintendent of Financial Institutions in Ottawa, or you're talking about the SEC, or you're talking about the Financial Conduct Authority in the U.K., or I mean, 52 other regulators that constantly publish things that we all have to do. And if you don't do them, you can't be in their markets. And they're not the same, right?
So that gives us an awful lot of change that allows us to charge our clients if they want us to make it kosher for them to be in those jurisdictions, and then you add AML and KYC and all kinds of other things, and then you bring in risk, and everybody wants to control their risk, and it used to be risk was, is it interest rate risk, or is it maybe contingency risk about does this place have enough capital that can make it through a downturn, or is it going to go belly up, or what are you going to do, and now it's cyber risk, and in the businesses that we're in, we have a lot of IP, right, and protecting your IP is extremely difficult, right, so you have to do it constantly.
And I was telling Kevin earlier that we've had the head of the FBI, the head of the CIA, and all these people come in and tell us how to protect ourselves and all this kind of stuff. And all they ever say is, "Look internally." There's not some bandit that's going to come in at the middle of the night and sneak into your data processing room and steal your IP. It's much more likely it's going to be one of your own people, an analyst, a programmer, a manager, a supervisor, an executive, who knows? But that's what you have to protect against. But you also still have to move forward. So we want you to move forward, but you can't see any of the stuff we've done already. And it seems like they're not going to move forward very fast, right?
So it's a balancing act all the time. And you can never spend enough, right? So people are, "Are you doing this?" And, "Yeah, we do all that, of course." It's, "What don't we do that we should do?" That is the question. And so there's a lot of stuff like that that happens in 2025. And now the bad guys have AI too, right? Not just the good guys, the bad guys. And the bad guys are going to use it to break your defenses and to break into things that they shouldn't. And so you got to protect yourself for that. And again, technology changes so rapidly, but us humans, we don't change so rapidly. We inhabit, right?
And I try to teach our people, at least in businesses, is, "Let's get into some good habits." And if we give people a time or a date, let's hit our times and our dates. And as it gets increasingly complex, hitting those times and dates becomes very, very important. I was with a bunch of our clients last night. And one of our biggest clients said to another big client, he points to me and says, "He defines customer service." And I smiled at him. I said, "I pick up the phone." He goes, "Everyone at SS&C picks up the phone because the CEO picks up the phone." So that's a good habit. Sometimes you don't want to pick up the phone.
It's like when you're teenagers, I don't know, late on a Friday or Saturday, and you get a call. You don't really want to take that call if you don't have to. It's just one of the burdens of being a parent. So it's, again, it's getting into good habits and then trying to teach them good habits and then trying to set that up as the standard.
Makes a lot of sense. And one of the things we've been focused on is, and part of our thesis on the stock has been, there's been a structural shift in the organic growth, right? At the investor day, you talked about a range of 4-8%. And if you dimensionalize that, you've been very consistently in the 5-6% range the last couple four, six quarters. And that's a pretty meaningful step up from kind of what was a 1-2% range. And part of that was clearly cyclical. Part of it's clearly structural, right? And there's no coincidence. One of the things we focused on is you've been very deliberate around R&D, sales, and marketing, as well as leaning into higher growth areas that's helped boost that structural growth.
So, maybe talk to that dynamic a little bit and tell us one of the real successes has been on the good side where there's structurally higher growth there. I think most of the folks in the audience know that's 25% of the revenue, right? You've had a structural shift in that business. There's been some real benefit from a pricing perspective, although still relatively modest relative to the value you deliver. And then retention too. I know there's a lot here, but I think one of the key things too is your AUA, right? Because one of the debates has been in volatility, do your clients' AUA get impacted? It's been up and to the right very consistently over time. Maybe talk to that dynamic a little bit because I think it's a key part to the story.
Yeah. I mean, one of the things that you've seen is that the global macro vertical in fund administration has been very popular. Places like Point72 and Millennium and ExodusPoint and Citadel and a bunch of other ones have grown exponentially compared to the industry, and all those are our clients. Almost everyone that is that big and that sophisticated needs to have big and sophisticated matching up, right? Because they're in Luxembourg, and they're in Ireland, and they're in Canada, and they're in Singapore and Hong Kong, and even more so now in Australia and India, and then obviously across the United States, so there's a lot of regulators. There's a lot of money. There's a lot of transactions. There's a lot of sophistication. There's a lot of requirements.
And there are all these laid-back portfolio managers that you just pick up the phone and try to hold it out here as you try to figure out exactly what you know you did something wrong, but you're just not sure. And sometimes people call me up and they start kind of expressing their displeasure quickly. And I'm going, "You tell me what company you are, and you tell me which of our products you use. I might be able to help you." And I'm more than willing. But we have to start off with some fundamentals, right? Like, "Who are you? And what are we," I know you're complaining. I caught that. But what are we complaining about? And so there's a lot of things where, again, it's customer service. It's getting on the phone and let them have their 60 seconds or 90 seconds.
Are you going to catch your breath? Okay. Now we can maybe make a little progress, right? Because you burned off a little bit of the steam, but that's the nature of people in pretty high-pressure businesses, and I mean, you all understand that if you have great performance, you're a winner. If you have poor performance, you're a loser. I didn't make up the rules, but I think most people would agree that's a pretty accurate statement, I think, and it's also over time, right, so some people are, they're just getting started, and they're starting to raise capital, and they want to get bigger, and then they run into a wall because they don't have enough support mechanisms to be able to support them, and that's what we've been trying to do, is the JPMorgan first-class business in a first-class way and do that all the time, right?
So that it doesn't mean we're perfect by any stretch of the imagination. But if we do something wrong, we admit it, right? And then we go fix it. And a lot of people like to hide. And that's bad practice, particularly with smart people. They figure that out pretty quickly.
No question. Maybe we can disaggregate the income statement a little bit, and I may just, if there's any questions in the audience, otherwise we can keep going, but does anyone have any specific questions? Okay. We'll keep going. Maybe talk a little bit because obviously artificial intelligence has been very topical and will continue to be. Maybe talk about some of the internal efficiencies you're seeing. Because one of the things that we've been really impressed with is the continued margin expansion as you've scaled your clients, and you want a lot of big work where the implementation, my sense, probably isn't as profitable as some of the work as it goes live.
So talk about, and maybe the spirit of it is from a Blue Prism perspective, some of the efficiencies you've seen from the time of the acquisition, not only from an internal perspective, but also externally across your client base.
Yeah. So we sent a press release out close to a year ago about Insignia, which is a very big superannuation firm in Australia. And we listed out 1,400 people, right? And it looks like it's going to be like $100 million in revenue to us as a client. And those are needle movers, right? And I mean, hey, we love million-dollar clients, and we love $500,000 clients, and we love $2 million clients, but they're not quite the same needle mover as $100 million, right? So the first $100 million that we do, maybe we earn 20%. But we have a path to get to 40%, right? And we're going to put in Blue Prism and have a lot of AI agents. We have over 3,000 digital workers that we've deployed at SS&C since we've owned Blue Prism.
We think that saved us about $200 million in run rate savings. People said, "Wow." I said, "Yeah, but remember, we're investing a lot of money across our business. We invest some of it in getting these $100 million a year clients that start off at 20%. That doesn't really help our margin percentage, right? It's $100 million. We know we can take that 20%-40%. Maybe we take it higher. Just how efficient can we get and how fast?" Then we line up other ones that we're going to bring in. We brought another one in London called Wesleyan. We took a lift out from Humana. We have all these great big clients.
In our view, the big financial institutions, whether they be banks, asset managers, insurance companies, they get big, and then they get multiple layers. Oh, so the third assistant vice president has three assistants. Oh yeah, that's what you really need, right? Best if you didn't have the third assistant vice president, and you didn't have any assistants. It was very hard for those companies that are big presence in different cities around the world. Now we're going to let all these people go. That's not very popular. They all want to be popular. I mean, we'd like to be popular too, but we're not that interested in being popular. We're not a retail company. We almost service institutional almost completely. For us, we're behind the scenes. We don't need to be front and center. We're not that interested.
We'd like to have higher EBITDA and higher cash flow. I think the first nine months of 2025, our cash flow was like $1.01 billion and up 22% from 2024. We're a high cash-generating company. We have 97% retention rates. Through pluses and minuses, we're constantly growing. We've grown from, like you said, $86,000 in 1986 to we should do $6.2-$6.3 billion in 2025. I don't know exactly what that compound annual growth rate is, but I think it's pretty good. If you go back when we bought Advent, which we bought in 2015, we were doing $1 billion in revenue. We did $1 billion in 2015, and now in 2025, we're going to do $6.2-$6.3 billion. You look at steps that we make, and we're aggressive, and we're ambitious, and we like to win.
The grand old man of the place really likes to win because he'd rather have many years to win it, right? You got to make hay when the sun's shining. The sun might not shine that much longer. Not that I've given up anytime soon. To me, that's the essence of my job, is to motivate our team and make sure they understand that winning is more fun than losing. If you think losing is more fun than winning, we don't want you. You could be a great person, but don't work here. It's trying to get that instilled in all 29,000 people we have now. Do we need 29,000? We'll see how good this AI is or not.
But your point on that, Bill, I think is an important point. I want to talk about the cash flow. But in terms of the number of people, right, you've been able to hold it relatively flat as you're growing. And I think a lot of that is that efficiency you're seeing on the Blue Prism side. And that's one of the subtle undercurrents we keep focused on, is you're not having to hire as many to service this growth. And again, you're investing in AI. There's capacity that you're building. There's investment in some of these larger contracts, and you're still delivering on margin. So the undercurrent is there's a higher level of efficiency that just you continue to deliver.
That's right, and be able to do it without disruption. That's another key, right? You got to be able to do it without disruption and be able to, these are high-demand clients, right? They're the crème de la crème of different parts of the financial services empire, and same with healthcare. People say, "Well, when are you going to get healthcare?" Look, we got Humana. And it's a big change for these healthcare companies, and they're more regulated than we are in financial services, whether it's HIPAA or state regulation or Medicaid, Medicare, CMS. I think there's something called F6 coming next year. There's just all this stuff that's different but the same, and I've always said about we do claims management for pharmacies and medical claims. And I always said, "Look, a prescription and a trade ticket, look about the same, right? Number of shares, number of pills.
Rx number, CUSIP number. Symbol, symbol. Trader, pharmacist, or whatever, doctor," so there's a few pieces of information, but millions of them, and then you got to process them all. You got to collate them. You got to slice it up and deliver it back, and that's what we do as a business.
Let me just skim the audience one more time. Otherwise, we'll keep going. Because the next topic I want to talk about is, we alluded to this earlier, but the free cash flow will probably be somewhere around 1.4-1.5 for the full year, right? And the yield is somewhere around 7%. But I think, again, one of the real undercurrents is the shift in capital allocation, right? I mean, you had the foresight to do DST, Intralinks, and Advent back in 2018. And over that period, had to delever. But the reallocation of the capital has really shifted much more to equity holders as opposed to debt holders. And it's been a real benefit, I think, to SS&C overall. So maybe talk to that dynamic a little bit. Because I think more recently, it's been 75% buyback dividend and 25% deleveraging.
That's inverted from where it was, I think, from 2019 to 2023. Real important undercurrent to the value proposition you folks are delivering.
Well, like you said, we should probably do $1.5 billion in free cash flow, I think, our operating cash flow. And so that gives us a lot of flexibility as to what to do. And at $1.5 billion, we have about 250 million shares outstanding. So that's about $6 a share. So we can buy our stock back, and we save $6 a share, right? And then we also pay $1.08 dividend. So we're really getting $7.08 for every share we buy back. And our stock's trading at $85-$86 right now. And so that's 8.5%-9% return on our buybacks. We can also pay down debt, which our debt's probably 6.5%, maybe. And the interest on the debt is tax-deductible, right? So it's not quite as attractive as buying back our shares.
But the debt holders like us to prepay some of the debt. And so we do it. Because we want to keep our debt holders. We want to keep our equity holders in good stead with us. And then we also pay a dividend. Because if you don't pay a dividend, there's a lot of pools of money that won't invest in you because you don't pay a dividend. So we want to keep them happy too. And then the primacy of what we do with our cash flow is generally acquisitions. So we really think Calastone is a very great acquisition with some tremendous technology and a lot of great people. And so we're excited about what also gives us a lot more geographic coverage than we already have. Sometimes it's geographic coverage in the same places like Singapore and Hong Kong and Australia.
But at the same time, we've got a great business brewing in all of those places. So having more ballast, right? You have size. We bought Blue Prism because I wanted people. And we got, I don't know, 1,440, I think, when we bought Blue Prism. How long was it going to take me to hire 1,440 people? Forever. Forever. I never got there, right? So you got to do some of these things, the jumpstart that you're going to get into: robotic process automation, artificial intelligence, machine learning, natural language processing, ad nauseam, right? But if you don't have enough people that can collaborate and get better and then get better and then get better, right? And then you're pushing. When can we deliver this? And then hitting dates. So I think that's kind of been the history of SS&C, is take risk.
Try to be wise about the risk you take, but take risk. And if you want returns, you got to take risk. Look, if all you ever do is buy treasuries, treasury bills, my guess is that your return's going to be like a treasury bill. It tells you you're a pretty good portfolio manager when it comes to that. But if you're going to step out a little bit, then you got to do research. You got to understand what you're doing. What's your thesis? Why is this going to work? And being able to answer those things. And somebody like us, we've been doing it for 20, 30 years, went public in 1996. That's a long time ago, right? So it's understanding that we understand public markets. We understand the requirements. We understand what shareholders want.
And we understand what's the wise risk, and we at least what we think and what's going on with doing that. I'm not going 11 times leveraged. I'm not doing it. I've been six. I've been seven. I don't like that particularly either. But we bought really good assets, and they threw off enough cash flow that we paid it down fast. And so but interest rates went up, and fintech became very, very popular. So prices went up. So now we have a collection of assets that are worth way more on an EBITDA basis than what you're paying us as a collective. But to me, we're going to throw off $1.5 billion. We're going to do $2 billion close to $2.5 billion of consolidated EBITDA. We're going to do $6.2-$6.3 billion in revenue.
I'm nonplussed by people telling me, "Oh, you ought to grow another 50 basis points." I say, "Yeah, I ought to do a lot of things." But I think it's trying to be focused on delivering great returns, giving people great jobs, taking care of your customers. Those are the three pillars of kind of what you're trying to do as a public company CEO.
I think, Bill, to your point of Calastone, in addition to the geographical diversification, it gave you great technology, right? Because it gave you kind of a foothold, if you would, from a blockchain perspective, where there's probably some potential for you to the extent it's needed, reallocate that across the enterprise. And that's been another consistent theme you folks have embodied over time.
Yeah. I mean, we've been delivering these agentic AI agents, like we did one for radiology for the National Health Service. And I think we've saved them 40% of their hours in radiology. And we're doing the same thing for credit agreements. So we're doing all those electronically, taking out all the important things, putting it into the right buckets, and be able to deliver information back. And now we're doing the same thing. We're a big provider of municipal bond structuring. And now we can read the municipal bond documents, pull out all the relevant information for the structuring process, and instantly put it into our models. And that makes a big difference for our clients.
And again, there's been a lot of consolidation, which in our mind is really endorsed your strategy, whether it's Adenza being put into Nasdaq, SimCorp being put into Deutsche Börse, some of your other publicly traded peers have done some consolidation over the last year or so as well. So the markets have been endorsing kind of what you folks have been doing, which has been reassuring for sure.
Yeah. And people obviously, when people imitate what you've done, right? So a lot of people have followed SS&C and done a lot of acquisitions and fund administration and other fintech things. And some people kind of follow Ferrari too, for instance. But it's okay to be Ferrari.
Exactly. I think we'll end it there, Bill. We're up on time. Terrific.
Thanks a lot, Kevin.
You.