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How you been?
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All right. I think we're live. All right. We will go ahead and get started. Thanks everybody for joining us this afternoon. I think it's rainy outside right now, so you're all stuck inside with us, but I think you'll hear a good story here over the next half an hour. I'm Patrick O'Shaughnessy, the capital markets technology Analyst here at Raymond James. Up next we have SS&C Technologies. On their behalf we have Chairman and CEO, Bill Stone, Founder, Chairman, and CEO. Bill is gonna go through a handful of slides, and then we'll do a little Q&A after that. Bill, welcome.
Thanks. Thanks a lot, Patrick. Thanks, everybody. Appreciate you coming out late on whatever today is. I think it's Tuesday, but appreciate it. You know, I think, you know, other than, you know, software companies now not having any terminal value, which as you guys might imagine, I think is probably mostly bullshit, but, you know, we will go through why and then hopefully be able to explain that, you know, from a standpoint of SS&C... See if I can get this right. Maybe not. Hit enter. There's a safe harbor site, so I'm not sure you guys have seen a thousand of these. Ours is about the same.
We, you know, we're a leading provider, and why we say that is that we have 23,000 clients in 100 offices, in 40 countries, and we have about 200 products and services. You know, we bought Blue Prism in like March of 2022, so about four years ago and we got deep into RPA and machine learning and natural language processing and so forth and so on. You know, we deployed more digital workers in SS&C than Blue Prism had ever deployed in their history and faster than they'd ever deployed. We deployed about 4,000 in about two years, and it's really saved us a lot of money.
We think, I believe over the last couple years, three years, we've added about $1 billion in revenue and not any headcount. We think that, you know, as we go forward, you know, we think we have a big moat. You know, I mean, everyone thinks that AI is gonna eat everyone's lunch and, you know, I don't think so. I mean, I think, you know, this has taken me 40 years to put this together and like I said, we do a lot of things for a lot of people.
One of our clients is Millennium, and, you know, they might do 5 million or 10 million trades in a day, and you gotta get them all in there, and you gotta get them processed, and you gotta get it ready to trade the next day because there's 5 million or 10 million more coming tomorrow. We do those kinds of things for big, sophisticated places. Big clients of ours are like Capital Group or JPMorgan or Fidelity, T. Rowe, you know, Raymond James. Again, it's being able to handle sophisticated portfolios with high- IQ people, high- IQ clients and low patience. You know, we do that. We do lots of things throughout this. We do derivatives, we do mortgage-backed securities, we do, you know, every kind of fixed income and every kind of option.
You know, that's what we do. We try to do hard stuff because we think it's harder to replicate that. You know, we have, you know, six different business units that we're kinda chopped up into. Each of the ones on the left do about $1.5 billion-$1.6 billion in revenue. We have three other on the right, the intelligent automation and analytics. We have things such as Blue Prism and Algorithmics. We own a company that does structures municipal bonds called DBC. We do one that does timeshare wares for like Marriott and Hilton called TimeShareWare, very innovative name. We have Intralinks, which is I think the largest M&A virtual data room.
We have thousands of customers in Intralinks and in SS&C Health, which gets more questions than maybe it ought to. We have 5% of our revenue is there, but we really like the opportunity in health. We think it's one of the largest industries that really needs accounting and systems, and that's what we do. Now we're a big pharmacy benefits manager claims payer. We're not a PBM, but we're a claims payer and we built a product called Domani Rx, and we think we have a great opportunity.
We run at 31% margins in that business, we're not like we're hemorrhaging or anything, and we think that if we can do to the healthcare industry what we did to the fund administration industry, we have an opportunity to build a multi-billion dollar business. That's what we think. You know, AI, as you've all heard over the last six weeks, is the death knell for all software companies, now we're a services company. We don't really do software. I don't really know. You know, everybody can pivot, right? But we really do things that are very difficult, and we do it at scale and, you know, there's things that we've helped like St.
St. James's Place in London that, you know, their RIA and the big RIA here in the States might have 100 people or 200 or 300. St. James's Place has 5,000. They're doing lots of trades for a lot of different, a lot of different families in the U.K. and in Australia and Scotland and so forth and so on. We also, you know, really think that, you know, agentic AI and the other large language models are gonna change a lot of what we do. You know, I tell people all the time that the only real technology that's changed all of our lives has been this one, right? Everybody hates to lose their cell phone.
You know, I'm too old, but we used to hate to lose our wallet, but now we hate to lose our cell phone. I think that's probably what's gonna happen with things like AI. You know, all of us use the Internet. We use it all the time, but it really. Did it change your life? Did it really change your life? I doubt it. You know, is AI gonna change your life? Maybe. You know, it's not nearly a done deal, you know. That's the thing, you have to see how it plays out.
Most of these things, depending on, you know, they're all spending tens of billions of dollars to build out infrastructure and build out data centers and, you know, pretty soon it'll take too much energy, or it'll take too much of this or take too much of that, and all of us will have Broadcom knocking on our door asking another $300 million, right? It's like, "Well, I only paid you $100 million last year." "But we want $300 million." That's when we'll have to go see some antitrust lawyers or something. You know, we do acquisitions.
We do acquisitions when our clients want something, and we can't build it fast enough for 'em, so we'll go get it, and we'll integrate it into our workflows and make sure that it's what they want, you know, because we're really a customer-centric business. When you have 23,000 of 'em and you wanna keep 'em, you better be willing to talk to 'em. You better be willing to answer their questions. You better be willing to meet their needs. That's what we've done pretty well. You know, we bought DST Systems in 2018. They had 14,400 people and 1,600 contractors. For about the next four years, I was in the desert breaking rocks, you know. Changing that company and changing that culture, you know, we finally are making progress.
Our Global Investor and Distribution Solutions, GIDS, is $1.6 billion, $1.7 billion, and it was negative growth. Last year it was up 6%, 7%. This year it's gonna be up more. We won a piece of business in Australia called Insignia that pays us about $100 million a year. You know, very demanding, but we're doing a great job for 'em, and that's what changes the entire kind of outlook. You know, we have something called Black Diamond. As I said, it has about 4,000 clients. It has over $4 trillion in assets on it. We bought the wealth business from Morningstar and added 600 clients into Black Diamond last year, and it continues to grow at double digits.
We have integrated it with our trust system. Now, you know, we're teaching the money managers, the wealth managers, that, look, your best customers are gonna get old like me. You know, you might get rich, but, you know, I'm gonna give my money away, and I'm probably gonna give it to my kids or my grandkids, and I bet they go into trusts. You know? If you can't do trust accounting, then you're gonna lose your best customers. These people that manage wealth, they don't wanna lose their best customers. They won't. They'll come use, buy our stuff. That's what we constantly... We just did Calastone. We spent over $1 billion. They have 5,000 funds on their network.
They're big in tokenization, and they're also big in ETFs and mutual funds, all areas where we're a big player, and now we're bigger. I just think that, you know, we do things like Battea, which does class action processing. You know, we can find people money all the time, and they're always happy because we just send them checks. You know, we take a little fee for ourselves, but it's very, very minor compared to, like, Broadcom. We, you know, we really think AI is a way more of a tailwind to us than a headwind. Are there risks? Well, of course there's risks. There's risks all the time.
You know, you build up a business over 40 years, and you have clients that you've had for 35, 40 years, and they know they can count on you know, and that, that we're gonna accurately do what we say we're gonna do, and we're gonna protect them. Just like with AI, we're not putting AI in our products without guardrails. We put it in a box that cannot get out, you know, and that allows it secure. You want secure AI, you know, and if you don't think it can hurt you know, I think you're mistaken. I was in Abu Dhabi a few weeks ago, and, you know, they had a Formula 1 race, and everyone's talking about it, and I says, "You know those Formula 1 cars, man, they're really fast, huh?
You know, they don't just have a gas pedal in those cars. They got a brake. You know, if you start using AI and you don't have a brake, you're gonna find out that, ooh, that flying into one of those walls hurts." I think that's something that people, you know, get all excited and then go, "Oh, baby, this thing could hurt us as much as it could help us." I think that's something that people have to pay attention to. You know, they go, "Well, you know, you're just an old auditor." I said, "Well, mostly I'm a salesman. I did pass the CPA exam once. It was a long time ago, and you had to use a pencil." But I think this is what we do as a company.
You know, I think we embrace what we do. We like to win. We're unapologetic. We're capitalists. You know, I hope Cuomo does great in New York City, I'm still a capitalist, you know. I think that the things that we're doing across all of our AI and all of our automation-first stuff, I think is really important for our company, and it gives us an opportunity to really excel more so than our competitors. In that we've invested a lot more money. We've spent $500 million in cash on R&D, plus I think we've spent $11 billion or $12 billion in acquisitions over the last few years.
We're, you know, we're investing in our business constantly and we recognize that the world changes and changes pretty fast, and you have to be pretty nimble and if you're not, you get run over, you know. That's the nature. As I tell people all the time, you know, starting a fintech company is not that difficult. Building SS&C might be a little more difficult, but any of you have an idea, and you have a programmer, you can build an app, you know, get somebody to buy it, and if they really like it, there'll be a reference, and you can sell another one, and you could sell another one and sell another one and now we have 2,000 people that are selling all the time.
You know, again, the, the business that we bought, we bought GlobeOp in 2012, I think. You know, they were a public company trading on the London Stock Exchange, and they were gonna go private with TPG and one other private equity firm, we thought, "Wow, they're stealing it." One great thing about U.K. takeover rules is that you can put in a superior bid, and they have to take it. We did that in one GlobeOp. We did that in one FMC. We did that in one another one down in Australia. You know, when we won Insignia in Australia, we took 1,400 people from them. Now we have 3,000 people in Australia.
It's a great market. We think that we have opportunities throughout that to do more and more, and we think that that's a real opportunity to really. You know, like I said, we have $400 billion-$500 billion in superannuation assets that are on our systems. It's a $4 trillion market, so we have a really great opportunity there. I think, you know, it's stuff that again, we're solving people's problems, you know, and they trust us, and they ought to. You know, we're not perfect by any stretch. When we screw something up, we tell you. We don't duck, you know, and we fix it, you know. If we don't fix it, we might as well duck, you know.
It's something that we take very serious, and we take our customers very serious. You know, we make a lot of money. That's what we're supposed to do. I think our adjusted revenue, obviously in Q4 2025 was $1.654 billion. It was up 8%. You know, we generated operating cash flow of $1.744 billion. We have about 250 million shares outstanding. That's about $7 a share. You know, our earnings turn into cash, you know, and we think that's important. As people at SS&C know, "Bill, you're like a fanatic on cash." I says, "Yeah, them accountants, they lie." You know, you gotta look out for those accruals, you know, and they sometimes don't turn into cash. We have a high-margin business model.
We do run at 39%-40% margins, and we have opportunities to grow those. We think AI will help us. You know, we have thousands of people that do reconciliations, and we think we might be able to cut that down by a minimum of 50%, maybe as high as 90%. We have to see if it really works. You know, everyone says it does. Of course, you know, I would suggest that proof's in the pudding. You know, we have run this way for a long time. I think we'll continue to run this way. Why not, kinda? We have added assets under administration in our hedge fund business by $637 billion in the last two years. I think $637 billion by itself would be a top 10 fund administrator.
You know, we're the biggest. We're getting bigger and stronger, and we have the best funds, and we do the best work and that's why it keeps growing. You know, we spend money. You know, we spent $729 million and, you know, the guy that runs our CTO, he likes to spend money. He finds all kinds of neat little gadgets with lights that shine up and all that kind of stuff, but it runs pretty good most of the time too. We, you know, we have a fund administration business, which uses our Geneva platform, and we also license our Geneva platform, and 41 other fund administrators run Geneva. Like big ones like State Street and Bank of New York, BNP Paribas, and a bunch of others.
We are pretty focused on our shareholders. One reason is I'm the largest shareholder, so we really focus on some of our shareholders particularly. We think it's important to take care of our shareholders. Shareholders, employees, communities, suppliers, those are the people that really matter. We have focused on them for a long time. We repurchased over 1 billion shares in 2025. We think that's about what we'll do in 2026, maybe a little bit more. We pay down debt, and we look for acquisitions. We like good acquisitions a lot. We were a General Atlantic partner company for eight years and a Carlyle company for nine years.
We know all their tricks. We can kind of, you know, deploy money like private equity guys. You know, our earnings per share in 2025 were $6.14, and we're gonna expect to do $6.86 in 2026, and we'll make more than that in 2027. Guidance, which is always fun, you know. We think we'll do 4%-8% organic revenue growth, and we'll add a couple more points in acquisitions and continue to grow and continue to throw off tons of cash. That's pretty much who we are and what we do. We have our tax rates about 21%-22%. We hope to make that lower if we can, but we don't run the business to save taxes. Thank you. Enough already.
Well, thank you. Have a seat. I think one of the things you said was really interesting that you guys have grown a lot in the last three years, and yet you've not really added any headcount, and a lot of that's because of AI-related productivity that you've seen. How has that translated in margins? How has it translated to your ability to invest in technology and other things?
Yeah. Well, I think primarily it's allowed us to maintain our margins at, you know, 38%, 39%, 40% margins. At the same time, we put 2 million hours into building DomaniRx. We spent another 500,000 hours building Genesis. We've, you know, invested heavily in our Eclipse platform and other platforms that we have and that's what that kind of cash flow does for you.
As you looked at the different parts of your business, where do you expect growth to be led from in 2026? You mentioned the presentation GIDS. You expect that to maybe accelerate a little bit further in 2026. What are some of the other areas of strength that you're seeing right now?
Well, you know, I mentioned Insignia, which is GIDS' biggest platform now, but it also has won a number of other superannuation funds in Australia and won a number of pension mandates in Europe, particularly in the U.K. SS&C's hedge fund business is really strong. The hedge fund industry is strong. We run a couple of indexes. One is how many redemptions are coming into hedge funds, and they're at the lowest they've been in five years. Another one is what are the returns? That's been pretty strong too, risk-adjusted returns in the hedge fund industry. That's given us, I think last quarter, we grew 8%-9% in the hedge fund business.
Intralinks saw its growth slow down in the last couple of years as M&A activity slowed down. Are you guys seeing any green shoots there that give you more optimism for 2026?
We do. I mean, you know, they're optimistic, you know. I'm optimistic with them, except not quite as optimistic as them, you know, 'cause you have to be able to see what happens in the M&A, right? You know, wars don't usually help M&A. We would like us to get out of wars if we could and have people do more M&A. You know, it was also viewed that this administration that, you know, maybe the Hart-Scott-Rodino and the other impediments to really getting deals done quickly would alleviate a little bit, and I haven't really seen much of that. It's still pretty tough game.
Overall, how would you evaluate the health of your clients as it translates to budgets to buy your services and your content and your software? You talked about, I think, healthcare, or sorry, hedge funds are generally pretty healthy. Like, you look at the share prices of some of the private asset owners and there's maybe some concerns there. How are you generally evaluating the health of your clients as it translates to their budgets?
You know, I run a worldwide sales call every two weeks. Takes me a couple hours. We have never had more opportunities. You know, our pipelines are pretty full. We have lots of opportunity. People are trying to get, you know, their tech stack in order. You know, as you know, you know, most of Wall Street runs on 50-year-old technology, that's needs to get upgraded at some point. You know, you know they're gonna have to upgrade it when all the COBOL programmers die. You know, they're well on their way, but I don't think they're quite there yet. That there's a lot of pent-up demand for improved systems.
You know, my view on this healthcare stuff is that, you know, a lot of these great big healthcare companies run five, six, seven systems. Duplicative expenses all over the place, but it's so much revenue in healthcare, they kinda just gloss on by. You won't always be able to gloss on by. You're gonna have to get more efficient. You're gonna have to do things better and we'll be a natural person right there.
You had a slide where you kinda showed how AI is being implemented within your own products and services right now in each of the different six components. Any examples of areas that you're able to monetize AI as you're selling that to clients right now?
We've had some successes. We've been able to... You know, we are now reading the radiology in the National Health Service in the U.K. We're reading all the X-rays and all the MRIs, and we've saved them thousands of hours of the radiologist's time. That's been very positive. We also have a couple of banks, one that's using them to proof checks as they come through their thing, and so that's taken out a lot of expense. You know, and another one's doing all the credit checking and, you know, AML and KYC stuff for another bank. We're, you know, and, you know, we call ourselves customer zero because we're such a big services user. We have probably 10,000 people that do accounting and reporting and hedge funds and private equity funds.
We can test these new agents in our business before we roll it out to the public, you know. We're getting tremendous feedback. The pipelines are growing. We're getting. It's, you know, a question of you gotta monetize it, I realize.
You know, it's, you gotta let some of this stuff gel, right? Before you get in such a big hurry that, you know, you wanna go get that golden goose and get all the eggs out right now. I've always found when you try to do that, you end up with a dead goose, you know. You wanna take it you know, kinda take it easy when everyone else is running around like a chicken with their head cut off.
In the slide where you talked about the 4%-8% revenue growth algorithm, there's multiple components, cross-sells, up-sells, AI, I'm sure is part of that, and then pricing is part of that. How are you guys thinking about pricing this year as compared to recent past?
I think we've done a pretty good job of, you know, getting some lift in our pricing because of the stickiness of our software and the capabilities and training our relationship managers on how to get more. I think we will probably get an maybe an extra 50 - 100 basis points. Last year, I think we got close to 200 basis points on pricing, maybe we'll get, you know, 250, 300 this year.
As you guys are able to use AI to take out cost internally and clients are...
I'm usually deaf to that question. I mean, you're gonna come after us. Why don't you go after Broadcom? You know, why don't you go after Microsoft? Why don't you go after Google? I don't know. We're charging you 5, 6 basis points. You're charging, you know, 1.5 and 20. I don't think it's my 5 or 6 basis points that's really crippling you know. We need to be strong about that, you know. It doesn't do us any good to, you know. Any of you that run businesses understand that pricing is about the most important thing you do. You do the same amount of work, you get paid more. You do the same amount of work, you get paid less.
I like the first one of those two, you know. You gotta deliver a great service, so you gotta be there and you gotta be on top of it. People don't, they don't wanna, you know, wanna fight about it anyway, you know. You gotta give them a reason why they're with you and why they should continue to be with you, and you gotta work at it.
Maybe last from me, this AI-driven market sell-off and all things software, you said terminal value has questions now in people's mind. Does that create more attractive valuations for you guys as your balance sheet leverage is quite low at this point? You have a lot of cash flow. Is there maybe a greater opportunity for you on the M&A front given some of this market dislocation?
Maybe. You know, it's, you know, it's finding the right opportunities and then making sure that you don't get giddy and you don't have an investment banker really helping you decide what you should do. You know, you need to have analysis on your own, and you need to make sure that, you know, whatever that judgment comes down is that it's gonna hang, right? That you're not, "Oh, man, I just spent $3 billion and I got a pig in a poke," you know. You just have to do your own diligence. You have to do the work, you know. If you don't do the work, you're just impersonating doing the work.
Then you know, you all of a sudden you get all surprised and, "Well, no kidding." You know, we're pretty disciplined. We're not as disciplined as I wish we were, but, you know, I think what Curt Cignetti, I'm from Indiana, so I'm celebrating still. He said that, you know, we have a lot of discipline, we have a lot of teamwork, and $300 million. I owe money that really helped this football team, I think.
All right. Well, I think, on that note, we will wrap it up. There will be a breakout session downstairs. Thanks everybody for coming, and thank you very much, Bill.
My pleasure.