SS&C Technologies Holdings, Inc. (SSNC) Q3 2016 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen, and welcome to the SS&C Technologies Third Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference is being recorded. I would like to introduce your host for today's conference, Ms. Justine Stone, Head of Investor Relations. Ma'am, please go ahead. Justine Stone - SS&C Technologies Holdings, Inc.: Hi, everyone. Welcome and thank you for joining us for our Q3 2016 earnings call. I'm Justine Stone, Investor Relations for SS&C Technologies. With me today on the call is Bill Stone, Chairman and Chief Executive Officer; Norm Boulanger, President and Chief Operating Officer; Rahul Kanwar, Senior Vice President and Managing Director of Alternative Assets; and Patrick Pedonti, our Chief Financial Officer. Before we get started, we need to review the Safe Harbor statement. Please note that various remarks we make today about the 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 factor section of our most recent Annual Report on Form 10-K, 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, October 27, 2016. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. During today's call, we'll 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 at www.ssctech.com. I will now turn the call over to Bill. William C. Stone - SS&C Technologies Holdings, Inc.: Thanks, Justine. We reported record adjusted revenues of $391.9 million and adjusted diluted earnings per share of $0.42. We have reached over $600 million in last 12 months consolidated EBITDA and have paid $528 million in debt since acquiring Advent last July. This brings our leverage ratio to 4.1 times. SS&C, as you know, is a high cash flow business with over $237 million in cash flow from operations in the first nine months of this year. We nearly doubled our cash flow from the same period in 2015. This gives us the ability to pay down debt quickly while maintaining our methodically-opportunistic acquisition philosophy. Wells Fargo Global Fund Services and Salentica are two examples we recently announced, and Salentica, we recently closed. Last month, we had our annual client conference, SS&C Deliver, in San Diego. We had 1,200 attendees and we had over 150 educational sessions, labs and hands-on training. We featured new capability across our entire platform, including enhanced reporting and business intelligence, intelligence risk and financial planning. We also unveiled a new powerful enterprise trading system where we integrated Moxy with our MarketTrader execution management capability. Feedback from the conference and our new offerings has been quite positive. We had tremendous growth over the past few years. We've increased our assets under administration to become the second largest administrator in the world. And we've enriched our technology stack through acquisition such as Advent, Varden and Primatics, and added expertise at our senior management level to support our growing business. Our Alternative Assets business in particular has seen impressive growth and it now has even more opportunities. As of last week, we have reorganized this business under Rahul Kanwar to create a more cohesive business structure and to accommodate the increasing size and complexity of our clients' demand. We welcome the opportunity to embrace the best of what acquisitions, technology and management has done to our business. I will let Rahul explain what he is doing later in this call. Earlier this month, we announced our plan to acquire Wells Fargo Global Fund Services business. This reinforces SS&C at the forefront of the fund administration business and as a natural consolidator. Wells Fargo, as many of you may know, runs our Geneva platform. We also expect this to close in the first quarter of December. I'll turn it over to Norm now for an operational review. Normand A. Boulanger - SS&C Technologies Holdings, Inc.: Thanks, Bill. As Bill mentioned earlier, acquisitions are a key ingredient to our growth story, and our ability to successfully enhance capabilities and integrating acquired companies into our business follows our core competency. We have seen several examples of this with the Advent Software and Primatics Financial acquisitions. Black Diamond, our registered investment advisor platform, now has enhanced reporting and business intelligence capabilities with two new partnerships for an integrated experience across financial planning and risk. Our vision is to join both technology experience and day-to-day service experience into a powerful, unmatched combination. Already an industry-leading solution, Black Diamond has over 900 advisory clients across multiple awards. Earlier this week, we announced our acquisition of Salentica, a leading CRM solution for the wealth management industry. This acquisition will add deep expertise in CRM and will enrich Black Diamond's front-office capabilities. Salentica's software will also integrate with Axys, APX and our Global Wealth Platform. We've also integrated order management system, Moxy, with SS&C's execution management software, MarketTrader, in our FIX network. The newly-combined offer ensures that managers can achieve automation and efficiency, reducing risk during the trade lifecycle and gaining speed to market. Lastly, we're seeing a pickup in sales and pipeline for the integrated risk and finance solutions that Primatics offers due to the final guidelines FASB issued in June for current expected loss performance. The new rule requires financial institutions to overhaul their current financial instrument reserving process. The EVOLV platform is the only solution that integrate risk and finance capabilities to manage new accounting standards. I'd like to review some of the key deals from Q3. Specialized fixed income can take an existing Fortune client on a 25 year term license agreement purchased perpetual license after the term was up. Singapore-based financial service organization made additional investments in our HiPortfolio product with the purchase of multiple modules. A high volume municipal bond issuer chose our Global Debt Manager solution for its innovative design and superior functionality. A Texas-based insurance company selected Precision LM to streamline its loan servicing operations. A national private lending firms selected SS&C for a combination of fund services and also purchased Precision LM licenses for its commercial lending client. A longtime client has moved to a long-term solution and upgraded to our credit processing and settlement solution, TradeThru, to support their growing commodity and trading business. A $5.5 billion asset manager chose Advent OnDemand hosting and data management services from Moxy, APX and Advent Outsourcing Services. A $147 billion asset manager and existing client upgraded from Axys to APX with SS&C Recon, which will eliminate workflow errors. A large premium trading bank bought annual license for Primatics EVOLV solution along with business support services. And lastly, a government-sponsored financial enterprise bought annual license for EVOLV loan processing platform. And I'll turn it over to Rahul to discuss the Alternatives business. Rahul Kanwar - SS&C Technologies, Inc.: Thanks, Norm. Revenue for SS&C's Alternatives business unit grew 43.8% for the third quarter of 2016 compared to the same quarter in 2015. The requirements of our customers and prospects are constantly evolving. And as Bill mentioned earlier, we have reorganized the business unit to better serve them. Mike Sleightholme and Ken Fullerton will serve as co-heads of our global hedge and liquid alternatives business. Joe Patellaro will head our global private equity and will assume responsibility for our worldwide private equity fund offerings. Strategic Solutions and shared Services is a new umbrella of offering managed by Stephanie Miller. This will include our regulatory solutions business, middle office and investor services solutions. And finally, we have decided to combine our institutional and insurance outsourcing business, SS&C Direct, with Alternatives under Stan Szczepanik. In light of the increasing convergence among asset owners and the types of asset classes they invest in, this change will allow us to bring even more resources to the very important insurance market. We are confident in the ability of these field executives and are primed for future growth. We continue to progress in our transition and integration plan for the Citi Alternative Investor Services business acquired earlier this year. The teams are working well together. We have completed several important milestones in the synergies process and are building a pipeline for these groups. Client retention and satisfaction continued to be strong. Bill also mentioned our acquisition of Wells Fargo Global Fund Services business, which will fall into our newly-created Global Hedge and Liquid Alternatives segment. Wells Fargo administers $42 billion in alternative assets, covering a wide range of complex strategies, providing comprehensive administration, middle office operations and cash management services to alternative investment managers. This acquisition enhances our presence in Asia-Pacific with clients and offices in Singapore and Hong Kong, as well as London, New York and Minneapolis. We are excited to welcome 250 employees across the globe to SS&C and look forward to closing soon. I will now review key deals for Q3. A $12 billion AUA legacy Citi Fund Services client chose to convert funds to SS&C GlobeOp from a competitor. A state-sponsored New York financial entity chose SS&C's fund administration and loan processing services for functions that were previously done in-house. A new long-short equity hedge fund launched from a former SS&C GlobeOp client chose SS&C for their fund administration. A private equity firm with over $40 billion in assets chose SS&C for fund administration. e-Investor, our investor transaction processing solution, was the key element for the win. An existing private equity client with over $12 billion in assets expanded their relationship in private equity administration. And a private equity start-up spun out of the Harvard endowment chose SS&C for private equity administration. Our TNR private equity platform was the key element of the sale. I will now turn it over to Patrick to walk you through the financials. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Thanks, Rahul. The reported results for Q3 2016 has GAAP revenue of $383.3 million, GAAP net income of $38.7 million, and diluted EPS of $0.19. Adjusted revenue was $391.9 million excluding the adjustment for acquired deferred revenues for the Advent, Varden, and Primatics acquisitions. We had a strong quarter. Adjusted revenue was up 25.8%. Adjusted operating income increased 20.1%, and adjusted diluted EPS was $0.42, or a 23.5% increase over 2015. Adjusted revenue increased $80.4 million, or 25.8% in the quarter. The acquisitions of Varden, Primatics and the Citi Fund Administration business contributed $68.4 million. Foreign exchange had a negative impact of $1.8 million, or 0.6% in the quarter, mostly due to weakness in the British pound. Organic growth on a constant currency basis was 4.6% in the quarter. Adjusted operating income was $150.5 million, an increase of $25.2 million or 20.1% from third quarter 2015. Operating margins decreased to 38.4% of revenue from 40.2% in Q3 2015. The operating margins were impacted by the Citi Fund Administration business, which had operating margins of 24.3% in the quarter. This was an improvement from 18.8% in Q2 2016. Advent implemented cost synergies as of September were $43.4 million on an annual run rate basis. Recently, we completed a cost reduction of a sublease of one of our floors in the San Francisco location, and this will generate about $2.6 million of annual cost reductions. Adjusted consolidated EBITDA was $156.7 million or 40% of revenue, an increase of 19.7% over 2015. Net interest expense was $31.6 million and includes $2.7 million of non-cash amortized financing costs and OID. And the average interest rate in the quarter was 4.4%. We recorded a GAAP tax provision of 19% in the quarter, and we expect the GAAP effective tax rate for the full year to be between 20% and 22%. And we continue to project the tax rate for adjusted earnings to be between 27% and 29% for the full year 2016. Adjusted net income was $87.5 million, and adjusted EPS was $0.42. The adjusted net income excludes $51.5 million of amortization of intangible assets, $12.5 million of stock-based compensation, $5.6 million of acquisition purchase accounting adjustment, including the deferred revenue adjustment; $2.7 million of non-cash debt issuance costs; $300,000 of unusual and non-recurring items, and $1 million of capital based taxes, and for the adjusted net income we'll use an effective rate of 28%. Moving on to the balance sheet and cash flow; as of September 30, we had $101.8 million of cash and $2,551 million of gross debt, for a net debt position of $2,449.7 million. Operating cash flow for the nine months was $237 million, a $116.4 million or 96.6% increase over 2015. Cash flow for the nine months was driven by improved cash earnings and lower tax payment. For the nine months ended September, we paid down $268.6 million of debt. That brings the total since we acquired Advent in July 2015 to $528.6 million. We used $25 million for capital expenditures and capitalized software, mostly for IT, the drilldown of the Citi Fund Administration business infrastructure and facilities expansion. We paid $106.4 million of interest compared to $31.4 million in 2015. And so far in the nine months we paid $14.6 million of cash taxes. Our accounts receivable DSO as of September 2016 was 54.5 days, an improvement of 1.6 days from June 2016. The Citi Fund Administration receivables continued to adversely impact DSO, but we expect them to improve over the next several quarters. In addition, we acquired Citi Fund Administration on March 11, and we paid a total net amount of $309.8 million for that acquisition. LTM EBITDA used for our covenant compliance was $600 million as of September 2016, and includes $14.7 million of acquired EBITDA and cost savings related to the acquisition. And based on the net debt, our total leverage ratios were approximately 4.1 times as of September. On outlook for Q4, and this outlook excludes the Wells acquisition, which we do expect Wells acquisition to close in the fourth quarter, but we don't have firm details at this point. So our expectation for the fourth quarter is adjusted revenue in the range of $394 million to $403 million. Adjusted net income of $89.4 million to $92.4 million, and diluted shares in the range of $207.8 to $208.2 million. For the full year 2016, we expect cash from operating activities to be in the range of $380 million to $390 million, and capital expenditures in the range of 2.5% to 2.8% of adjusted revenues. Let me now turn it over to Bill for final comments. William C. Stone - SS&C Technologies Holdings, Inc.: Thanks, Patrick. I thank all of you for joining our call. We think we have a lot of opportunities ahead. Wells Fargo's Global Fund Services will give us more scale and expertise. The new organization in Alternatives under Rahul will enable us to build and promote complex bespoke solutions. Dave Welling, will integrate Salentica's CRM platform across our advisory business, and give us a world-class CRM solution. It's really exciting to work with 7,500 such talented employees across the globe, and as Rahul said, we're excited about adding the 250 from Wells Fargo. We look forward to closing out 2016 on a strong note. And we'll now open it up for questions.

Our first question comes from the line of Dan Perlin with RBC Capital Markets. Your line is open. Please go ahead.

Thanks. Good evening guys. I had a question just about the reorganization quickly. If the plan there, or I should say that, was the plan a function of the change in end market demand and environment, or a function of the mix that's shifting inside your business given the assets that you've acquired over the past say, couple of quarters? Rahul Kanwar - SS&C Technologies, Inc.: I think, it's primarily the latter, it's primarily that we have acquired a lot of capability over the last several years. And what we're trying to do is bring that capabilities together to be able to go after these market segments in kind of the most effective way possible.

Okay. And then, I think, Bill in the past you guys have mentioned, Geneva has something like 400 some odd clients, and only about 15% or something like that are not currently – or are currently fund administrative clients. I'm wondering, of that other 85% of the pool, what does that look like, and what's the opportunity there, and is there any update in terms of conversions? William C. Stone - SS&C Technologies Holdings, Inc.: Well, I think, that the Geneva business continues to be strong and we've been able to – when you look at fund administration from a fund administrator basis, there is about 300 fund administrators, and my guess is that Geneva is in about probably 40 of them, ranging from JPMorgan to smaller fund administrators. Rob Roley has been running that business for the last six months. He's done a great job, he's got a big pipeline, and we think that, that will continue to be a strong area for the business.

Okay. And then just lastly, I think last time we talked, you mentioned kind of a deal pipeline not just with acquisitions, but actual signings of deals, of 10 deals that could be $5 million annualized in revenue each. Where do we spend on that pipeline, are we any closer to getting some down the road? And then the other part of the question is, you had also mentioned that there were two to three institutional clients, I think, that you were expecting to have fully implemented, and now it's going to be a big driver to be fourth quarter organic growth (24:07). Thanks, guys. Rahul Kanwar - SS&C Technologies, Inc.: We still have a big pipeline of large deals. We are, knock on wood, getting closer to closing a number of them. And certainly we have weekly, if not daily, conversations about when we're going to get ink on paper. I think as far as where we go from there, I think the business will remain strong. I think we have lots of opportunities, and I think that our business has performed, and I think will continue to perform.

Thank you. And our next question comes from the line of Ashish Sabadra with Deutsche Bank. Your line is open. Please go ahead.

Hi. Thanks. Just a quick question on the organic growth, what are the organic growth expectation for 4Q? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: In the range that we provided, it's between 3.6% and 5.7%.

Okay. That's helpful. And just quickly on the $68.4 million of acquisition revenues in quarter, how much of it is Citi, and expectations for how Citi has been trending, and expectations for Citi revenues for the full year? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Citi revenue in Q3, I think it was $53.4 million. And we expect that to trend down for the fourth quarter, probably in a range of somewhere around $50 million plus or minus.

That's helpful. And then just a quick question around the guidance for the full year, I think the organic growth guidance for the full year was in the range of 3% to 4.5%. Just wanted to confirm that because you've confirmed the revenue range, I believe you're comfortable with that organic growth guidance as well, of that 3% to 4.5%? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: I think, the full year guidance, now we've had little bit stronger results from Citi, and we got a little bit of revenue from Salentica. So it's about 2.3% or 3% right now full year.

Okay. That's helpful. And maybe one final question around the drivers for organic growth improvement in the fourth quarter. I'm just wondering if you can talk about, like what were the drivers for organic growth improvement in this quarter as well just in terms of the core business versus contribution from Advent and stuff like that, if you can help us parse what have been the drivers for organic growth. Thanks. Normand A. Boulanger - SS&C Technologies Holdings, Inc.: Okay. I'll take that. This is Norm. I would say, the best way to look at it is, for Q3 the two, three, the three primary drivers of growth were the institutional asset management segment, our fund services team, and Advent.

Thank you. Our next question comes from the line of Peter Heckmann with Avondale. Your line is open. Please go ahead.

Good afternoon everyone. Patrick, could you help us size the two recent acquisitions, I think you said Salentica has closed, Wells potentially, I believe Bill said you believe you can close in December. But could you help us size those, and if possible talk about what type of margins we might see from them early on? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Salentica is about somewhere, it's a pretty small acquisition, somewhere around $3.5 million a year. The Wells acquisition, I think we said that they've got $42 billion in assets, and the average key is probably around 8 bps or so. So I think that's around $35 million, somewhere around that, a year. But we didn't provide Wells' guidance at this point, and we will once it closes.

Okay. That's good. And then as regards to the deal with Russell, which you pressed really and talked about on the last call press release recently, when do we expect that to ramp up to its full run rate, would that be about mid-2017? Rahul Kanwar - SS&C Technologies, Inc.: I think that, we will certainly expect to see a substantial portion by mid-2017, but the overall ramp up plan is about 18 months.

18-months. Okay. And then just lastly, are you seeing any hesitation on the part of your customers in terms of spending plans as they try and navigate a more difficult environment, fee pressure, the fiduciary rule, potential consolidation in the industry? Do you feel, or do you see decision cycles lengthening more on the software side, or are you seeing deals continue to close as expected? William C. Stone - SS&C Technologies Holdings, Inc.: I think, in general, Pete, that in the financial institutions the major banks are really, in certain sectors, very anxious to improve their operating environment and be able either to take technology in are outsourced to providers like us. And I think, the Russell win is kind of a wakeup call to a lot of long only places that are looking to reduce their footprint as far as their cost base. Once you get these things in large-scale in these big places, the overhead from the data centers and all the cost of the bureaucracy become pretty burdensome on these individual businesses. And so we've seen a number of big companies come see us about what we're offering to Russell, and whether or not we could offer the same thing to them.

Great. I'll go back in the queue.

Thank you. And our next question comes from the line of Brian Essex with Morgan Stanley. Your line is open. Please go ahead. Brian L. Essex - Morgan Stanley & Co. LLC: Hi, good afternoon, and thank you for taking the question. I was wondering if you could start by maybe touching on Varden, Primatics and Citi and how margin progression is progressing there. How long do you think before you get those kind of in line with corporate averages, and particularly with Citi, what kind of steps you're taking there, and what that trajectory might look like with that one? William C. Stone - SS&C Technologies Holdings, Inc.: Well, I'll let Rahul comment in a second, but as Patrick mentioned in his remarks that in a second quarter of 2016, Citi was 18.8% margins, and we acquired them in March of 2016. So we probably picked up 600 basis points, 700 basis points in the first quarter that we own them, second quarter of 2016 that would be. And then in the third quarter of 2016, I think, we reported that the margins were 24.3%, which is another 450 basis points or 550 basis points above what we did in Q2. So that's a pretty fast ramp, and we have a transaction services agreement that will run for a year, and when that year is up, that will be a pretty nice kick into our margin expansion. I don't know what you'll say, Rahul. Rahul Kanwar - SS&C Technologies, Inc.: No. I think, that's right. Also just to add, the big areas for us have been focus on the technology cost, and vendors, and renegotiating some of those contracts. And also how many contractors we use, and how efficiently we can do that. And that's worked pretty well, and we expect it to continue working for the next several quarters. Brian L. Essex - Morgan Stanley & Co. LLC: Got it. And then maybe we could follow with Salentica, I thought that was a pretty interesting transaction. It's pretty small, like just above 30 employees I think it said. But I guess, how do you measure a transaction like that in terms of value it adds to the platform, and how much IP comes with it given the small number of employees, and I guess, what do you anticipate that it will be able to incrementally add to the platform going forward? Normand A. Boulanger - SS&C Technologies Holdings, Inc.: I'll take that one, Bill. Let me start with that. Couple of ways to look at that, the number one value, I think, start with number one, there are two primary values of the acquisition one is expertise in CRM. These guys are expert in CRM systems, and integrating their platform, Microsoft Dynamics and Salesforce are the two largest players in that space. Brian L. Essex - Morgan Stanley & Co. LLC: All right. Normand A. Boulanger - SS&C Technologies Holdings, Inc.: That product is already integrated with our APX and Axyx system as a partner. We're going to be able to add that to our Black Diamond new product, as well as our Global Wealth platform. So when you start thinking about the Black Diamond solution, it's really the holistic approach of fully integrated things like CRM, trade order management, rebalance and account and portfolio management, client reporting, (34:03) relationships. So this is part of the strategy of making sure we can service that entire spectrum of activities. And we like the fact that we can own what we think is an important part of that equation, which is the CRM site. They have IP. They've got a hosted version of that, that they've started building, and we're going to continue, they've been making nice progress in terms of converting people from a service model to an outsourced model. We'll continue to invest in that, and we think it's got great potential. William C. Stone - SS&C Technologies Holdings, Inc.: We also, I think, we have a 1,000 prospects for them literally right out of the box. So we think we have opportunities in which to drive Salentica into our client base. Obviously, you have to start with a few, and you have to get some momentum and use them as a reference so that they get to see the power that the combined solution does. But that's a great opportunity to push Salentica through a large swap of our client base. Brian L. Essex - Morgan Stanley & Co. LLC: Yeah. I mean, that was one of the ways, I was thinking about it. And I guess, how do you scale that given the tie to head count? Maybe, how long you guys get the penetration and a robust rate into that installed base? William C. Stone - SS&C Technologies Holdings, Inc.: Well, Brian, we have almost 7,700, 7,800 when we have Wells Fargo. We have plenty of resources. We have plenty of bandwidth. And I think as Dave Welling starts to roll that through his client base, there will be all kinds of ways to have our resources support that. And it's something that gives us a lot of flexibility and a lot of power. Brian L. Essex - Morgan Stanley & Co. LLC: Okay. Great. Well, thank you very much. I'll step back in the queue.

Thank you. And our next question comes from the line of Sterling Auty with JPMorgan. Your line is open. Please go ahead.

Yeah. Thanks. Hi guys. So looking at the nice acceleration in organic revenue growth into the fourth quarter, how would you characterize that improvement in terms of just the mix now that you've annualized Advent versus maybe just generally some improvement that you're seeing in, in either broader execution, or maybe even some improvement in the health of your end markets? William C. Stone - SS&C Technologies Holdings, Inc.: Well, I think, Sterling, I think that Q2 was a real tough comp for 2016 over 2015. Q3 was a little bit easier, and we did have some of the acquisitions go organic. And we're focusing on the business, and the more we focus, the better that business gets. And as far as the end markets, we're seeing some surprising strength in various of our products. I think we just sold the largest MarginMan in history, about a $2 million deal over five years. We've just sold some really nice Precision LM business. We have a lot of capability across our product portfolio. And I think it's really that, if we continue to execute, I think, our business can continue to perform.

That makes sense. And maybe just on the Citi business, you're seeing overperformance relative to what you kind of guided to when you first bought it. How much of that is related to kind of the positive customer retention comments that you had earlier in the call versus other factors? Rahul Kanwar - SS&C Technologies, Inc.: I think it's both. I think we've had an opportunity to get to know those customers and show them the combined offering, in some cases we've been able to either retain them when they were looking to leave, or up sell them on several of our other products and services. And also we're doing a little bit better with synergies than we had originally thought. And we think that process is going to keep going pretty well.

Great. Thank you.

Thank you. And our next question comes from the line of Hugh Miller with Macquarie. Your line is open. Please go ahead. Hugh M. Miller - Macquarie Capital (USA), Inc.: Hi. Thanks for taking my questions. Just I guess, a quick follow up or two on the Wells transaction. Definitely I appreciate some of the insight you gave. If you could just give us a feel of kind of what their business may be, the EBITDA margins that they were kind of running at, and if you have an expectation as to the time horizon which is realistic to kind of get them up to your standard? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Yeah. I think, in general, the Wells business was running in the 10% to 15% EBITDA range. What we would be shooting is 40% to 45%. And my guess is you're looking again at probably an 18 to 24 months transition. It depends how quickly we can scale parts of their technology infrastructure. And then also, they have a pretty nice sales pipeline themselves. And so, if we can help them bring some of that to fruition, I think, it can – perhaps it could be at the low end of that 18% to 24%. Hugh M. Miller - Macquarie Capital (USA), Inc.: Okay, great. That's definitely helpful. And I guess as you think about kind of some of the headwinds within the hedge funds space and the macro environment there, but also some of the strength that you're seeing in terms of the recently acquired franchises that you're seeing some synergies and kind of tailwinds to selling efforts. When we think about organic growth in 2017, can you just give us a rough sense as you think about you moving into next year, how that might compare to the organic growth in 2016? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. Hugh, I think a key determinant on how fast we'll grow in 2017, will be how many acquisitions we do between now and say the fourth quarter of 2017. Management matters. If you're going to do a bunch of acquisitions, you're not going to get 5% to 10% organic growth, but you're going to get way more than 5% to 10% acquisition growth. The pipeline on acquisitions is pretty high. And the opportunities that are being presented to us is pretty broad and pretty deep. And so we are getting to be very selective on what it is that we what, and I would tell you that most of these assets are trying to price in a pretty high manner. But I think we have some momentum going into 2017 across our product portfolio, and I think that we have an opportunity to outperform 2016 as far as organic revenue growth is concerned. Hugh M. Miller - Macquarie Capital (USA), Inc.: Okay. And maybe as a quick follow up to that. I mean as you consider – I definitely appreciate the insight about pricing and you're kind of maintaining some discipline – are you getting a little bit more excited about kind of consolidating-type transactions or would you anticipate they'll be probably be more on the strategic front in enhancing the platform? William C. Stone - SS&C Technologies Holdings, Inc.: You know what, when your goal is to be the world's dominant platform, you're looking across the gamut at both acquisitions that really rely on our platform and the expertise that we've built around that platform, and our ability to run that platform to its highest degree of efficiency. You know at the same time, you bump into new types of customers that want new types of services. And you have to be prepared to deliver those services. Then certainly, we're spending in excess of $150 million a year on R&D ourselves plus the acquisitions we do. So we build a lot of software and we buy a lot of software. But we think software is the underpinning of all of what we do. And that's what allows our accountants and our operations personnel to have the best tools to be able to process more transactions per person than our competitors, to be able to do more assets under administration per person than our competitors, and allows us to improve our offering to our customers more quickly, more efficiently than any of our competitors. So, to us, it's a holistic thing. It's technology. There is a lot of Geneva customers that would like to run like we run. So we are a natural consolidator there. And then we are always coming out with new products, new service. And I think that's something that allows us to be a leader in each of the segments we are in. Hugh M. Miller - Macquarie Capital (USA), Inc.: That's helpful. Thank you. And last from me, I guess, maybe if you could just provide us a little bit of an update on kind of the Black Diamond offering. Just in terms of the both the growth opportunities and kind of the competitive landscape, and if anything has changed there. William C. Stone - SS&C Technologies Holdings, Inc.: Again on Black Diamond, I think we're growing in excess I think 25% a year. I think we have over 900 RAs on the platform. You know, I think that business is doing very well. We're pretty optimistic about it, and we would like to put more resources behind it to see if we could grow it faster. The primary competitors, Orion, Tamarac and Addepar haven't changed. And then also the major custodians such as Schwab and Pershing tend to be – Fidelity – tend to be the same ones as well. So, we're working a lot with our partners and we're building out the product itself. Salentica, this quarter – last quarter, we announced two new partnerships. So we're excited about that business and we think that that's one of the areas in financial services across the United States that has some organic growth itself. Hugh M. Miller - Macquarie Capital (USA), Inc.: Got it. Thank you so much.

Thank you. And our next question comes from the line of Rayna Kumar with Evercore ISI. Your line is open. Please go ahead.

Good evening. Could we get your AUA number for the quarter and your expectation for AUA growth for the next 12 months? Rahul Kanwar - SS&C Technologies, Inc.: Yeah, the AUA number for the quarter is $1.093 trillion. We do not guide forward AUA.

Okay. But just overall thoughts, when that number.. Rahul Kanwar - SS&C Technologies, Inc.: As Bill mentioned, we've got lots of opportunity both within our client base. We continue to see really strong performance particularly in private equity and real estate. And the pipeline is strong. And on the backs of some of the recent wins, we think we're getting interest from similar organizations. So, we're pretty optimistic.

Great. That's helpful. You discussed your progress with post-trade matching in the U.S.? Normand A. Boulanger - SS&C Technologies Holdings, Inc.: Yeah. William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. Go ahead, Norm. Normand A. Boulanger - SS&C Technologies Holdings, Inc.: Yeah. So, we're working very closely with the different partners in that space as well as the SEC. It's still little bit slower than we like in terms of the delay on the bank side to be able to change some of their systems to allow processing. But we're still optimistic that we can win some business over the course of Q4 and start to see more improvement going into next year. But it's going to take a little bit. All the partners have to come together to make sure we can communicate the settlement process across each of the systems. And it's the large banks – (46:28) side of the banks that's the delay at the moment.

Got it. What was the revenue growth in the Alternatives business in third quarter, and could you just discuss client retention? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Yeah. This is Patrick. So client retention, we measure it on an LTM basis for the last 12 months. So, on an LTM basis for the last 12 months, it was 95.7%. And that's a little bit of an – I'm sorry, 95.9% – and it's a slight improvement from LTM as of June, which was 95.7%. Did you have another question? I'm sorry if I missed it.

Yeah. And what was the organic growth rate, revenue growth rate for the Alternatives business in third quarter? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: It was about 1.8%.

Okay. Thank you.

Thank you. And our next question comes from the line of Chris Donat with Sandler O'Neill. Your line is open. Please go ahead. Christopher Roy Donat - Sandler O'Neill & Partners LP: Thanks. Good afternoon. Thanks for taking my question. Wanted to ask Bill about something you'd said at a conference a couple months ago about how after the acquisition of Primatics, you had about 55 clients on it, but you thought you could get it up to 550. Just trying to size the opportunity there. Is this something that, based on the math that was available, it looks like Primatics clients are doing about $1 million in annual revenue. Can it scale up at that level or do you think you're going to move sort of down market and get into some smaller clients if you can't scale into the hundreds? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. I think, obviously, that their clients now are places like JPMorgan and PNC and Fannie-Mae. So you know what there's not 550 of those, right? So, obviously, we're going to down market through two to three tiers of various banking organizations. But there's probably multi-billion-dollar banks, there is probably about 500 of them, I'll bet. So I think that we have opportunities to probably sell $500 million in assets all the way up. And obviously, a lot of banks are consolidating. When you consolidate, you acquire a bunch of loans. And there's an awful lot of requirements coming out of the Fed and the SEC about reporting on those loans. And the EVOLV platform is a pretty robust capable platform that we think will get a lot of traction. And I think that we have lots of opportunity in that space. Christopher Roy Donat - Sandler O'Neill & Partners LP: Got it. Thanks very much.

Thank you. And our next question comes from the line of John DiFucci with Jefferies. Your line is open. Please go ahead.

Hi, guys. This is AJ Ljubich on for John. I was just looking at cash flow in the quarter and I think it came in a little bit late versus expectations. I think deferred revenue is down a bit sequentially. Would you point to that as the reason for maybe a little bit of cash flow lightness or was there anything sort of one time in the quarter? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: We don't guide cash flow by quarter. We guide it for the full-year. So I think we'll see – probably the DSO was a little bit higher than we expected would probably the disappointment in the quarter. But I think we'll make that up in the fourth quarter and we'll hit the overall guidance for the full year that we just provided.

Okay. Thanks. And then one sort of more strategic question. I think the Salentica acquisition is very interesting. It's sort of technological acquisition, as an adjacency to the RA wealth management market. As you look out into other potential acquisitions, are there other adjacencies that you'd like to enter within sort of that wealth management space? William C. Stone - SS&C Technologies Holdings, Inc.: Well I think there's a lot of opportunity in the wealth management space because, like I said, it's one of the few areas where you have organic growth in the industry as a whole. So as you look at what Black Diamond offers and then also what Salentica offers, some of the things that people are going to want are more sophisticated plans, investment plans that are easy to read and easy to understand. As you start going the mass affluent market, right, everybody is not a CFA and a CPA. A lot of people are doctors or lawyers or business people, teachers. So that the financial information is going to have to be able to be presented in a way that is quite understanding. We also think that our learning process with our Zoologic process and Nervanix can be an addition into this space as well as people want to get increasingly conversant with how people are investing their money and what risks they are taking, and what expectations they should have on a reasonable basis, right. Most of us with our retirement funds aren't trying to go to Vegas and put it on red. I think it's much more of trying to understand how you maintain your principal balances and get as much income as you can off those principal balances. So, I think there's a lot of things across that in the wealth management sector. We've been putting a very big push on tax across all of our businesses. And we think that's another area that will be quite attractive to the mass affluent.

Great. Thank you.

Thank you. And our next question comes from the line of Chris Shutler with William Blair. Your line is open. Please go ahead. Christopher Charles Shutler - William Blair & Co. LLC: Hey, guys, good afternoon. Just wanted to touch on organic growth for a second here. So, it looks like the – I think last quarter, Patrick, you provided a full-year guidance of 3% to 3.5% organic. And today, I think you said 2.3% to 3% despite the fact that Q3 was relatively in the middle of the previously-provided range. So, what happened to make Q4 a little bit lower? Obviously, FX isn't helping you guys, but on the Alternatives side I guess particularly with what's happening in that business, I would think that markets would be helping? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: I think, in summary, we are getting hurt by FX especially the British pound. I think it was down to 8% from Q2 to Q3. In addition, I think, the guidance we provided for Q4 is – the midpoint of that guidance is exactly the same guidance we provided at the end of Q2 except we upped it a little for Salentica. But what we're seeing is we're seeing a little bit of a shift in some of the components that are contributing to the growth from Q2. And we got a lot of products and lot of it kind of shift around. But I think in summary, from where we were at the end of Q2, we're getting better performance out of the Citi, better revenue performance out of the Citi Fund Administration business, especially in retaining clients longer than we expected originally when we acquired them, and the growth in the core fund administration business is a little bit slower than what we expected. Christopher Charles Shutler - William Blair & Co. LLC: Okay. Is that – and the hedge fund administration business is obviously a tough environment. But is it pricing, is it fewer startups? I mean, what would you attribute it to? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah, I think the overarching thing is, is that even though the redemption indicators are within the range, you're seeing a little bit higher redemptions coming in to our client base. So, at the beginning of October, you might have had in 2015 that there is going to be, over the next 90 days, there is going to be $5 billion worth of redemption. This year, it could have ticked up to $6.5 billion or $7 billion, right. So that's a couple-of-billion dollars. And we're selling a lot of business, and there's also capital inflows, but it would be better if that $5 billion went to $3 billion. So you're going to have some headwind in the asset growth of the current client base. And then I think startups, while they are down a little bit, they were never a large source of revenue to us, particularly at the startup. We hope for them to grow over time, but they are not a big source of revenue in the first several quarters of them going live. So I think there is a little bit of headwind. We have a number of opportunities that we can accelerate in Q4. We got to execute, right. We got a number of projects that has to get done. If they get done, we're going to be able to pick-up some more revenue. We have a number of these great big deals that if you sign them now, we will get revenue in December. You don't sign until December, you're not getting revenue until January at the earliest. So, a lot of it has to do with execution. We passed out a lot of new pins out to our sales force, we expect them to use them. Christopher Charles Shutler - William Blair & Co. LLC: All right. Thanks. Just one last one. Bill, on the topic of acquisitions, I mean looking out to 2017, are you seeing the most opportunities now in fund administration or is it more other areas? Is it – are there some larger deals or is it mostly tuck-in? Just trying to get a feel? William C. Stone - SS&C Technologies Holdings, Inc.: All right. It's across the gamut and there's a lot of them. It ranges from stuff in the $1 billion cost to stuff in the $20 million cost. So, it's across the gamut. I wouldn't say we're seeing – maybe there is one or two that are at $1.5 billion. But we're not seeing anything in the $2 billion, $3 billion, $4 billion right now. Obviously, you saw the Misys IPO they got pulled. So there is still a number of things that are not being massively embraced by the investing public. But there is a lot of stuff where prices have firmed, people have fought their way through financial crisis, they are in pretty good shape, and they want to take money off the table. So SS&C is in a pretty nice spot to be able to acquire some really nice assets. Christopher Charles Shutler - William Blair & Co. LLC: All right. Thank you.

Thank you. And our next question comes from the line of Patrick O'Shaughnessy with Raymond James. Your line is open. Please go ahead. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Hey, good afternoon. So first question, lot of the chatter right now seems to be around asset manager consolidation, and we saw that with Janus and we're hearing others asset managers talk about that. Does that post potential threat to your software business or do you think even if one of your clients consolidates, you probably also working with the other firm that it might join with? William C. Stone - SS&C Technologies Holdings, Inc.: You know, Patrick I didn't know you changed your name from O'Shaughnessy, but even if you did we'll still answer those questions. I think that the Janus Henderson creates some opportunity for us, because as they combine, they start looking at what they do and how they do it. And then they see what we do with Russell and they might give us a shot at being their middle and back office provider. So, in general, when these long-only shops get together, I think it creates more opportunity for us than it creates consolidation of current clients that would not pay us as much because we only have one license instead of two. That's possible as well. But so far, knock on wood, it looks like more opportunity than it looks like headwind. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Got it. And we can't all be blessed with an easily pronounced last name like Stone. So, I'll work on that. William C. Stone - SS&C Technologies Holdings, Inc.: I appreciate that. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: One quick follow up question. So, the reorg on the fund administration side. What's the real goal that – is that to improve your sales capability? Is it to improve your service? Improve your technology development? What do you hope to achieve from that? William C. Stone - SS&C Technologies Holdings, Inc.: I think that when we acquired Eisnerfast in March of 2005, is when Rahul came into our business. He's done a great job organizing and running that business. We've now also gone from $50 million, $60 million in revenue to $600 million, $700 million in revenue. And so, now, it's much about how you're organized. We've got a lot of new talent that complements the talent we have. We have a lot of great talent that's here. Stephanie Miller was running JPMorgan's Fund Services business. You know, that's a big business, more than a $1 trillion in assets. We get Mike Sleightholme and Joe Patellaro that are running big businesses for Citi. They have some skills and abilities that can really help Rahul. And I think that along with his current crop of talented people that he just needed to be better organized in order to take advantage and have more people executing on big decisions then everything kind of flowing through him. And so I think that's what we've done. And we expect faster decision-making, more responsibility in our people. And that should play through both the sales organization, the delivery organization, the new product, new service creation organization, so development and experts that are building specifications on that development. So things like tax, things like really slick insights into performance and performance attribution, more things when it comes to regulatory as the government keeps coming out with more and more, and integration with things like EVOLV at Primatics and Varden. So there is a lot of things that are going on that you need to have some – more traditional organized business where he has individual units within his Alternatives business, plus he has a Controller that helps him run the business, then he has a Development Manager that helps him run the business. I just think it's a much stronger organization and that's why we did it. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Great. Thank you very much.

Thank you. And I'm showing no further questions at this time. And I would like to turn the conference back over to Mr. Bill stone for any closing remarks. William C. Stone - SS&C Technologies Holdings, Inc.: Again, thanks so much. We look forward to talking to you after the New Year. And everyone enjoy the holiday season and this last two weeks of this American election, which has been quite entertaining. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.