SS&C Technologies Holdings, Inc. (SSNC) Q1 2018 Earnings Report, Transcript and Summary

Good afternoon. My name is Sara, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Q1 2018 SS&C Technologies Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Thank you. I will now turn the conference over to Ms. Justine Stone. Please go ahead. Justine Stone - SS&C Technologies Holdings, Inc.: Hi, everyone. Welcome and thank you for joining us for our Q1 2018 earnings call. I'm Justine Stone, Investor Relations for SS&C Technologies. With me today is Bill Stone, Chairman and Chief Executive Officer; Norm Boulanger, President and Chief Operating Officer; Rahul Kanwar, our Executive Vice President; 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 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 our Risk Factors 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, May 1, 2018. While the company may elect to update these forward-looking statements, it specifically disclaims any obligation to do so. During today's call we will be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com. I'll now turn the call over to Bill. William C. Stone - SS&C Technologies Holdings, Inc.: Thanks, Justine. And thanks, everyone for being on our first quarter call. We did $435 million in adjusted revenue for the quarter and earned $0.53 in diluted – adjusted diluted earnings per share and had a consolidated EBITDA margin of over 41%. Completing the DST Systems acquisition was a great accomplishment for us in the first quarter. We announced this acquisition on January 11, and we closed on April 16. We secured the funding. We studied their businesses. We planned the roadmap to manage the business and we have now begun to execute. Mike Sleightholme who came to us in March of 16 with the Citi fund administration acquisition is now in charge of the DST business. We have a lot of confidence in Mike's ability to grow their business, to improve their operations and obviously to capitalize on the synergies that we have spoken about. Mike has a talented team working with him and he has the entire organization behind him. I'd also like to welcome Joe Frank to SS&C. He is our new Chief Legal Officer and he's going to run M&A for us. Joe joins us from Shearman & Sterling where he headed the Securities Litigation and Enforcement Practice. Joe has a lot of experience and we're glad to have him. Now, I'll turn it over to Norm. Normand A. Boulanger - SS&C Technologies Holdings, Inc.: Thanks, Bill. We had great results across the board for Q1 2018 while having a strong focus on DST planning, which you'll hear more about from Rahul. We are enthusiastic about the markets we are in, especially the wealth management market which continues to grow and our opportunities to replace in-house solutions. To review some of the key deals for Q1, a Canadian bank – and we have a longstanding client relationship – expanded their scope of service with our Pacer product. An existing client bought SS&C's Vision FI reporting tool to replace an inefficient internal system. A U.S. based insurance company chose SS&C's CAMRA for their portfolio management system, reducing their overall operational costs. A $5 billion investment manager chose our Global Wealth Platform solution because of its single platform front to back capabilities. A $40 billion family office chose a suite of SS&C Advent solutions with our portfolio construction and rebalancing solution, Advent Genesis being the key differentiator. A $19 billion asset manager chose a suite of SS&C Advent solutions, including APX, on-demand and Moxy after a competitor failed in implementation. A $1.5 billion advisory firm chose Black Diamond solution; the win was due to overall functionality, Salesforce integration and Charles Schwab integration. A $30 billion bank selected SS&C Primatics EVOLV product as their CECL solution. And last, a $380 billion bank continues to engage SS&C Primatics for its U.S. GAAP compliance, which is the entire bank portfolio. The partnership continues and has grown over the past nine years. And now I'll turn it over to Rahul to discuss the alternatives business. Rahul Kanwar - SS&C Technologies Holdings, Inc.: Thanks, Norm. SS&C GlobeOp saw a 6.9% increase in revenue for the quarter ended March 31, 2018 compared to the same quarter in 2017. Our competitive advantages have led to winning bigger, more complex mandates and we see strong demand in the marketplace. We continue to invest in our application development and technology infrastructure provide for enhanced functionality and throughput. As Bill mentioned, Mike Sleightholme will manage the DST business. We've been busy in the months leading up to close and the weeks since on several initiatives. We have visited many DST locations worldwide, conducted town halls with the staff and seen several large customers. We're also introducing DST sales and customer-facing executives to SS&C's suite of products and services. These include our middle office and back office offerings, investment accounting systems, regulatory and analytics capability, web portals and mobility, front office infrastructure, and several other areas. Similarly, we have begun to incorporate DST regulated funds and transfer agency services and client proposals and are working on establishing a pipeline of cross-sell opportunities. Early feedback on the service capability of the broader organization has been positive. The expense synergies plan remains on target. We've identified several early opportunities and are focused on enhancing the customer experience while realizing our financial objectives. Now I will mention some key deals for Q1 2018. A $20 billion plus hedge fund chose to convert in-house operations to SS&C after a careful review of the marketplace. A $5 billion event driven fund and current Geneva client chose SS&C for fund services, including regulatory and tax preparations. A $7.5 billion hedge fund chose to outsource fund administration due to our middle office capabilities and our ability to meet their customized reporting and technology needs. A large financial institution chose our outsourcing services to provide accounting, analytics and reporting to their private capital clients. A publicly traded infrastructure, real estate and private equity fund with over $20 billion in assets chose to outsource their fund administration with our Real Assets Group. I will now turn it over to Patrick to run through the financials. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Thank you, Rahul. Results for the first quarter were GAAP revenue of $421.9 million and EPS of $0.24. Adjusted revenue was $434.6 million, excluding the adjustments for implementing the new revenue recognition standard and for the acquired deferred revenue related to the Advent acquisition. We had a strong quarter. Adjusted revenue was up 6.1%, adjusted operating income increased 10.6% and adjusted diluted EPS was $0.53 or a 20.5% increase over 2017. Adjusted revenue increased $25 million in the first quarter of 2017. The acquisitions of Modestspark and CommonWealth contributed $1.8 million in the quarter. Foreign Exchange had a favorable impact of $3.3 million or 0.8% in the quarter, mostly due to the strength of the British pound, the euro and the organic – and the Canadian dollar. Organic growth on a constant currency basis was 5.3% in the quarter. Adjusted operating income for the quarter was $171.9 million, an increase of $16.4 million or 10.6% from the first quarter of 2017. Adjusted operating margins increased to 39.6% from 38% in Q1 2017. Foreign Exchange had a negative impact of $4.6 million on expenses in the quarter. Margin improvement was mostly driven by improved gross margins and lower operating expenses as a percentage of revenue. Consolidated – adjusted consolidated EBITDA was $178.7 or 41.1% of adjusted revenue, an increase of 10.5% over Q1 2017. Net interest expense for the first quarter was $25.4 million and includes $2.6 million of non-cash amortized financing costs and OID. The average interest rate in the quarter for the term loan facility in our (10:00) notes was 4.5% compared to 3.8% in the first quarter of 2017. As we have seen, the LIBOR increase which Fed (10:11) increases over the past 12 months. We recorded a GAAP tax provision of $10.7 million or 17.2% of pre-tax income. Adjusted net income was $114.8 million and adjusted EPS was $0.53. The adjusted net income excludes $54.6 million of amortization of intangible assets, $4.7 million of stock-based comp, $2.6 million of non-cash debt issuance costs, $11.9 million adjustment related to the adoption of ASC 606 revenue standard and $5.4 million of other items including $0.2 million of FX impact and $5.2 million of other items, primarily acquisition-related costs. Diluted shares increased 3.8% over Q1 2017 mostly due to the increase in the average stock price in the quarter and the effective tax rate used for adjusted net income of 23%. On the balance sheet and cash flow, we recorded a contract asset related to the future license value of term licensed contracts. We also netted those contracts that were related to deferred revenue which resulted – the net amount resulted in lower deferred revenue, but gross deferred revenue in at the end of the quarter was $22.4 million, an increase of $20.2 million over December 2017. As of March 31, we had $74.1 million in cash and cash equivalents and a little over $2 billion of gross debt or a net debt position of $1.956 million. Operating cash flow for the three months ended March 18 was $69.9 million, a $12.1 million or 20.8% increase compared to the same period in 2017. Operating cash flows in 2008 were driven by improved earnings and lower tax payments offset by increases in accounts receivable and a reduction in accrued expenses as a result of our annual bonus being paid in the first quarter. Highlights for the quarter. We paid $61.3 million of total debt in the quarter. We paid $31.8 million of interest compared to $40.7 million in Q1 of 2017 due to lower debt levels. We paid $1.7 million in cash taxes compared to $10.4 million in Q1 2017. Our accounts receivable DSO was 54.9 days compared to 50 days as of December 2017 and 54.4 days in March 2017. And we used $11.1 million for capital expenditures and capitalized software mostly for facilities expansion in IT as well as leasehold improvements. Our LTM EBITDA was $714.7 million as of March 2018; includes $2.1 million of acquired EBITDA and cost savings related to our acquisition. And based on a net debt of approximately $2 billion, our total leverage was 2.7 times. On outlook for Q2, we currently expect the second quarter in the year 2018 and we have assumed that the closing of the DST acquisition took place on April 16 and we've included two-and-a-half months of results for DST in the second quarter. The gross debt balance at the closing is $7.4 billion, and based on current LIBOR rates, the current interest expense will be approximately 4.5%. The equity offering in April, we raised $1.4 billion and issued – 30.3 million shares were issued in that equity offering. Our current expectation for the second quarter of 2018 is adjusted revenue in the range of $895 million to $915 million, adjusted net income of $131.6 million to $140.8 million, and diluted share is in the range of $249.4 million to $248.6 million. For the full year, our current expectation is adjusted revenue in the range of $3.404 billion to $3.344 billion and adjusted net income of $546.7 million to $575.3 million and diluted shares of $243.5 million to $243 million and we expect the tax rate to be approximately 25% with the combination of DST. We will update cash flow after Q2 after we complete the purchase accounting for DST. One item, GAAP revenues in the second quarter as a result of the revenue recognition of ASC 606 will be $9.5 million lower than adjusted and $40 million lower for the full year due to the new revenue standard. Now I'll turn it back over to Bill for final comments. William C. Stone - SS&C Technologies Holdings, Inc.: We have a lot of opportunity ahead of us and we look forward to capitalizing on these opportunities and we look forward to talking to you after the second quarter. And now we'll open it up for questions.

Your first question comes from the line of Alex Kramm from UBS. Please go ahead.

Hey. Good evening, everyone. I guess I just want to start with I think where Patrick laid off – left off with some of the numbers you gave for where the debt is now, et cetera. Can you actually give us an update on what your cash balance is now too unless you mentioned this already, because you obviously issued equity and debt. And then more importantly though, what is your plan with all that money that you raised? Obviously, you looked at Fidessa and that didn't pan out. So, what is out there and how much firepower do you think and what are you looking at? William C. Stone - SS&C Technologies Holdings, Inc.: I think, Alex, we raised a little extra cash and we have – I think Patrick can comment on this, but I think we have about $750 million to $800 million in cash on our balance sheet. Is that about right, Patrick? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: That's right, Bill. William C. Stone - SS&C Technologies Holdings, Inc.: And so, there's a number of properties that are in the marketplace or coming to the marketplace that we have some reasonable interest in. And those would range from probably a cost of $1 billion to $3 billion. I think with the cash on hand – and obviously, we still have some dry powder in our debt facilities – that we'd be able to accomplish those without too much strain on us. Obviously, we are moving as quickly as we can at DSP to integrate that and get as much capability out of that as we can. But we have a talented management team. As I mentioned, Joe Frank just joined us couple of months ago and he has a list of acquisition opportunities, but we're disciplined about it. We were disciplined about Fidessa. We think that's a good platform, we think that's a good product, we think that's a good company, but the price was nosebleed level. So, that's not generally what SS&C does.

Fair enough. And then secondly, I think you gave a quick update or ran through your confidence level on synergies. Maybe you can just lay this out a little bit more for us. One, I think you upsized the synergies when you did the secondary. So maybe a little bit more color of where those incremental dollars have come from? And then maybe just tell us what do you expect to realize by the end of the year, by the end of year two; sounds like there's a little bit of an update here and as you had a little bit more of a chance to get to know these guys. Rahul Kanwar - SS&C Technologies Holdings, Inc.: This is Rahul. I think it's still early for us. We're pretty confident on the synergies opportunity and that's why we took it up to a $175 million. The broad areas remain operational and technology-driven efficiencies as well as things like corporate costs and use of third-party vendors and things like that. I don't know that we have currently started to stratify it by how much in 2018, 2019 versus 2020. But we're certainly feeling pretty good about the opportunity and look, it's been two weeks since we closed, right. So while we've identified some things, we're certainly looking forward to doing more work in the upcoming weeks and months. William C. Stone - SS&C Technologies Holdings, Inc.: And we also say that we've been really pleased with the talent level at DST and then the commitment of the people. And we think that Mike Sleightholme has fit in very well and is a very accomplished executive. And I think we have lots of opportunity. And as Rahul said earlier, I've probably seen 20 DST clients, 25 DST clients and the rest of our senior team has met a number of them as well. And as always, SS&C is in a hurry.

Sounds good. I'll jump back in the queue. Thank you.

Your next question comes from the line from Rayna Kumar from Evercore ISI. Please go ahead.

Hi, this is Anthony Cyganovich on behalf of Rayna Kumar. I was hoping you could just give us some updated thoughts on whether you plan to retain DST's healthcare business or potentially spin that out or sell it? And following some recent healthcare industry consolidation, I would like to hear your thoughts on DST's ability to maintain some of their largest healthcare clients? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. Sure. I mean I think that at the present we like that business, we like the management team and we like the foothold we have in healthcare. You know, obviously SS&C is formed in Connecticut right outside of Hartford. There is a couple of large healthcare clients – healthcare insurance companies here like Aetna and Cigna and a number of others. So we have a cadre of expertise inside SS&C. And similar to fund administration, which we got into in 2002 and we were told how hard it was, now it's 15, 16 years later and now we're the largest in the world. We're not particularly intimidated yet. That doesn't mean that we don't have a healthy regard and humility about what we have to do, but we're technologists and we have a lot of confidence in our ability to build easy-to-use interfaces, to have secure mobility and perhaps to bring a fresh set of energy into the healthcare space.

Okay. Got it. And just as a point of clarification, in your revenue guidance for full year does your adjusted revenue include or exclude out of pocket reimbursements from DST? William C. Stone - SS&C Technologies Holdings, Inc.: They include.

Include. Okay. Thank you.

Your next question comes from the line of Chris Shutler from William Blair. Please go ahead. Chris Charles Shutler - William Blair & Co. LLC: Hey, guys. Good afternoon. I'm going to be the guy to ask you about organic growth. So, what are your organic growth expectations for Q2 and the full year? Have they changed? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. The full year is pretty much the same as our previous guidance. It's in the range of 5% – 3.7% to 5.5% and in the quarter of Q2, it was approximately 2.5% to 5%. Chris Charles Shutler - William Blair & Co. LLC: 2.5% to 5% in the second quarter? William C. Stone - SS&C Technologies Holdings, Inc.: That's right. Chris Charles Shutler - William Blair & Co. LLC: Okay. And any kind of breakout you can give on fund admin versus the rest of the business? William C. Stone - SS&C Technologies Holdings, Inc.: For... Chris Charles Shutler - William Blair & Co. LLC: Both in Q1 – both in Q1 and the guidance, sorry. William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. In Q1, fund administration organic growth what 6.4% – and we don't provide that in the guidance. Chris Charles Shutler - William Blair & Co. LLC: Okay. Just one more quick one on the guidance, the DST revenue. I just want to make sure that I'm calculating this correctly. So fair to assume that the DST at the midpoint is about $1.6 billion. Is that fair for the revenue? William C. Stone - SS&C Technologies Holdings, Inc.: For the full year or the... Chris Charles Shutler - William Blair & Co. LLC: Correct. William C. Stone - SS&C Technologies Holdings, Inc.: Like partial year. At the midpoint, it's approximately $1.6 billion, yes. Chris Charles Shutler - William Blair & Co. LLC: Yeah. Okay. Thank you. I'll hop back in the queue. William C. Stone - SS&C Technologies Holdings, Inc.: Yeah.

Your next question comes from the line of Chris Donat from Sandler O'Neill. Please go ahead. Christopher Roy Donat - Sandler O'Neill & Partners LP: Hi. Good afternoon. Thanks for taking my question. Bill, wanted to know if – with your experience in the market in the last few months, if your sense of where your ceiling on debt-to-EBITDA, if that's moved at all. Just curious if that's changed or if it's the same as it was before you started down the capital-raising road? William C. Stone - SS&C Technologies Holdings, Inc.: Well, obviously, LIBOR has moved up relatively markedly, but at the same time if you've been around just as long as I have, interest rates are still remarkably low. So there's – it all depends on what asset you're going to get and then making sure that we can really make a lot of money for our shareholders. And we want to pay back our debt holders as quickly as we can and we want to be – for a, I guess about a five-times levered company, at least on a secured basis, we are still pretty conservatively managed; we track cash every week, DST now tracks cash every week. And it's something that we focus on and it's something that I think that – depending on what the asset is and – as you well know, we like Fidessa. We met with them several times and – but in the end, we're disciplined. And we're not going to be railroaded. We're not going to believe that you don't have to pay the debt back. We're going to focus on the fee structures on our various structures. And we work for our shareholders and we have that focus and I think that while Fidessa was a very good asset and I continue to believe that, it's not exactly in our wheelhouse – pretty close, but not exactly. And I think that – we got DST at a price at about half. Christopher Roy Donat - Sandler O'Neill & Partners LP: Okay. And then just one for Norm. You mentioned a couple Primatics wins in CECL. There's been some chatter in the banking industry that the CECL accounting standard might be delayed or changed or somehow altered. Just are you seeing any slowdown or any change in how business goes or still pretty optimistic with the opportunity for Primatics in the CECL products? William C. Stone - SS&C Technologies Holdings, Inc.: I think we're still optimistic, right. We don't have a crystal ball, but people have – people just like us have to assume it's going in, right. So they have to take steps now in anticipation of that. And it's not the first time a regulation got delayed; but likely, it will continue. Christopher Roy Donat - Sandler O'Neill & Partners LP: Okay. Got it. Thank you.

Your next question comes from the line of Pete Heckmann from D.A. Davidson. Please go ahead. Peter J. Heckmann - D. A. Davidson & Co.: Hey, good afternoon. Missed a little bit of the beginning of the call, but now that the DST deal is closed, have you thought – if anybody can give us some more color on the potential revenue synergies and where there may be some focus areas where you think you might be able to get organic growth headed more towards the mid-single digits? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah, I think Pete that the biggest opportunity for us really is to work with the functional experts of which there are lots of them at DST and the technologists, but – mostly to improve the user interface and get mobility and more data access and start showing, which we've been doing, some of the technology that we have and then as we can delight their customers, we think there are large opportunities to move our middle office services, outsource more of the middle offices and the back offices of these large long-only players and bring them out to see what we've done at Russell and others. And I think that those kinds of things are going to inject a lot of oxygen into the process that they have today. And I think that so far we've already gotten a number of mandates to begin a large scale refocus and we – to change entire operating processes and procedures at some of the largest long-only firms. Peter J. Heckmann - D. A. Davidson & Co.: Okay, that's helpful. And just as a quick follow-up – and this may be just anecdotal, but in the fund administration business, are you seeing any change in practices from the prime brokers around either pricing, the bundling of their services that's changing from the last, let's say six months? William C. Stone - SS&C Technologies Holdings, Inc.: I wouldn't say, dramatically. The few prime brokers that still have fund administration businesses are obviously eager to try to bundle some of that and that's been a competitive item for us for several years; it's not particularly different now. Peter J. Heckmann - D. A. Davidson & Co.: Okay. I appreciate the update. Thanks.

Your next question comes from the line of Brian Essex from Morgan Stanley. Please go ahead. Brian Essex - Morgan Stanley & Co. LLC: Hi. Good afternoon and thank you for taking the question. And Bill, just a quick question; I noticed in your prepared remarks, you landed a $20 billion asset PE in real asset group. Any color behind that win in terms of the drivers that got that over the goal line? And just I guess from a higher level on the PE side of the pipeline, are you seeing any changes there in terms of what you may be able to bring onto the platform? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. So that particular opportunity is a fairly long-term customer on a more limited basis and they launched a large fund and because of the strength of the relationship and in particular the added focus that we had on the Real Assets area with the hiring of Bhagesh Malde and the talented executives that he's brought into that team. So that all played a role. I can say the biggest change in our private equity and Real Assets business is that the mandates that we're competing for are bigger, right. So we've got larger deals and generally we're doing more for them. So, bigger ticket items – sometimes with slightly longer sales cycles, but generally positive. Brian Essex - Morgan Stanley & Co. LLC: Got it. And then any – I know it's only been a couple of weeks, but what level of focus do you have on the DST sales force in their pipeline I guess to ensure that that pipeline doesn't get disrupted during this process. And any initial thoughts as you've maybe dug in and taken a look at their sales process and sales motion and anything that strikes you as either things you can change or the approach that you're taking to make sure that that pipeline momentum is maintained through the process? William C. Stone - SS&C Technologies Holdings, Inc.: Well, Brian, I think the biggest thing is that we're a pretty sales-oriented organization and... Brian Essex - Morgan Stanley & Co. LLC: Yep. William C. Stone - SS&C Technologies Holdings, Inc.: And I think maybe more so than DST was. And I think sales force at DST kind of expects a 100-day process between when they get a win and when the paper gets signed. We'd like that to be about 30 days. So, that's kind of a big change to go from 100 days to 30 days. Brian Essex - Morgan Stanley & Co. LLC: Right. William C. Stone - SS&C Technologies Holdings, Inc.: I will tell you that we would like the 30 days to go to 15 days, right. So I think that's maybe the biggest change; and then also that senior level executives throughout SS&C are available to the entire sales force. I think that's been a positive development for DST already. Brian Essex - Morgan Stanley & Co. LLC: Got it. And then maybe a follow-up; any initial thoughts on pricing power? I know that you've talked about having pricing power on SS&C side and that you're careful how you exercise that. What about on the DST side as you kind of dig into that business and look at the portfolio, particularly on deals that may be coming up for renewal or thoughts on how pricing is structured on that side of the fence? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. I don't necessarily know about pricing power. What I would say is, is that – now, there is a lot of things that DST does for their client base that we would view as outside of the contract, right. So, there might be some opportunities to go show them that when India comes out with another regulation that perhaps they are not regulating us, they are regulating that (00:35:27), right, and then explaining to them that we can't put a bunch of people on this thing and build it up for you for free. And so, there will be some of those discussions, but it has to be valuable. People have to understand that putting really good people on this, doing a great job, they're delivering on time and we have to pay them and pay them more. So we have to have a relationship with people that's open and honest and we have to be valuable to those clients. And I think we're laying lots of great groundwork that they're seeing that we put our money where our mouth is too. Brian Essex - Morgan Stanley & Co. LLC: Very helpful. Thank you.

Your next question comes from the line of Sterling Auty from JPMorgan. Please go ahead.

Yeah, thanks. Hi, guys. So now that you've had a little bit of a chance to look underneath the hood, look at the sales organization, the go-to market motion, what are your thoughts around what the integration of the two companies look like and maybe some synergies that you will get out of the go-to market motion specifically? William C. Stone - SS&C Technologies Holdings, Inc.: So, I think, Sterling, as Rahul said, it's only been two weeks since we closed. I spoke at their Advantage Conference a couple of months ago. We have a big conference in Vegas in September, our Deliver Conference and I think we will have all kinds of integrated product and integrated materials as to what we can do to – you know, let's say somebody has a middle office with 140 people in it, maybe we can show them how they could have a middle office with 40 people in it. And those kinds of productivity gains are pretty attractive in businesses that while still great businesses are not quite as lucrative as they were before.

All right. Fair enough. And then one housekeeping question – I missed if it was said, but what was the total assets under administration at the end of the quarter? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: $1.58 trillion.

Okay. Thank you.

Your next question comes from the line of Alex Kramm from UBS. Please go ahead.

Oh, hello, again. Just a couple of follow-ups. One, just, Patrick, I think on the debt – on the interest rate, you said 4.5%. Can you just flush it out a little bit more? I think you're paying LIBOR plus 2.50%, I think LIBOR is at 2.36%, so are you assuming 2%? Or what are assuming for the quarter or full year just so we kind of know what's in your guidance from a rate perspective? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Well, we're using one month LIBOR, and one month LIBOR is around 2%. So we're locking in for a month. And the spread is 2.5%, so that's where we get to 4.5%...

Okay. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: ...the current interest rate. We've assumed that in our plan. Obviously we could see some rate increases through the year from the Fed, but right now we've assumed 4.5%.

Great. Fair enough. And then just I guess coming back to my first question on the cash that you have raised. And obviously, Bill, you laid out kind of like your appetite for further acquisitions, but obviously last year we saw that there may be a time when it's hard to find deals. So given that the cashiers are sitting around, any other plans if you can't find anything in the next 3, 6, 12 months when you get impatient, like what would be your kind of ideal way to deploy that cash? Would you start de-levering again or would you consider like maybe a special dividend? How are you thinking about the cash, absence of any deals? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. I think that it would probably be a combination of deleveraging and then maybe buying back some shares. The dilution, when your stock price goes up is a little onerous and we'd just as well buy back, whatever that is. And with the $750 million, $800 million – and we generate a lot of cash, right. It's not like that that's the only cash we have. I think we'll probably expect to generate – I know we'll give you some guidance at the end of the next quarter, but last year I think the company, just SS&C generated $450 million or so in cash. And my guess is, is DST is going to generate several hundreds of millions in cash and we're going to generate probably at least $500 million. So I think you'd talk about $800 million, $900 million in cash as a company. So we should have some firepower and we hopefully will find some acquisitions and be able to move more quickly, because the financing will be easier because of the cash we have on our balance sheet.

Right. But there's no – and maybe I didn't ask this right – but there's no timeline where you say, like, hey I'll give it so and so many months; after that I got to be prudent and return the cash or anything like that? William C. Stone - SS&C Technologies Holdings, Inc.: Well, I mean I think that that's the analysis of course, but we're not going to set an artificial timeline on that when something like Fidessa could come up or something else and we could be right in the middle of it and then have to talk to you about why we didn't do what we said we were going to do on September 13th. And we don't want to be obtuse, but at the same time we want to have some flexibility. And no one is more interested in returns for our shareholders than I am. And after me, I would say the people on this call from SS&C are extremely interested in returns to shareholders. So, we're focused on it.

All right. Very good. Thanks again. Good night.

Your next question comes from the line of Surinder Thind from Jefferies. Please go ahead.

Good afternoon. Just a quick question on kind of the outlook for the full year versus maybe the organic growth rate in 2Q, where it seemed like it was maybe a little bit lower than the full year. Can you provide any color on that? Is that kind of an idea where maybe clients are taking a little bit of a pause as you guys are in the early stages of – with the DST deal, or how should we think about that; maybe any near-term impacts? William C. Stone - SS&C Technologies Holdings, Inc.: You're talking about Q2 versus the...

The full year guide. William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. Well, Q2 only – Q2 only includes two-and-a-half months for DST, right?

Okay. So the difference is simply timing then at this point? William C. Stone - SS&C Technologies Holdings, Inc.: Yeah. We closed DST on April 16th. So we're assuming two-and-a-half months of results for Q2, not full three months. That's the main difference.

Understood. But I guess in terms of the conversations that you are having with clients, is there any kind of impact or pause or is it just kind of full systems go at this point? William C. Stone - SS&C Technologies Holdings, Inc.: I think it's pretty much full systems go. I mean, obviously these are large scale sophisticated clients that – just like Jefferies doesn't just snap their fingers and start a big project. You have to go through your IT organization, your functional people, the Chief Operating Officer, you got to get through procurement, you probably have a CFO that wants to bless it and then obviously there's the legal department. So, it's not something that just happens overnight, but we're gaining momentum. And I think the key to this being really, really successful is that we build on that momentum, right; that we delight some of these initial contracts that we have and show them the difference between how we attack some of the problems and how the problems were attacked in the past. And it's a combination of the expertise we have with the DST organization and the expertise we have in the SS&C organization. And quickly, we are turning it into one organization.

Understood. And then maybe following up on a question about Fidessa and the commentary around that maybe being on the edge of your wheelhouse, how should we think about the comfort level of how far you're willing to extend I guess the reach and stuff while you are digesting the deal at this point? And maybe does that introduce, the further out you go away from your core, additional risk at this point or it sounds like you're dealing with some fairly sizable deals in the pipeline at this point? William C. Stone - SS&C Technologies Holdings, Inc.: Well, again we've been at this for a long time and we've navigated through, I think – I think DST was our 50th acquisition. And I'm not saying, we have a perfect track record, but we have a good track record and we went public October – I mean, March 31st of 2010 at $7.50 and I think we closed at $50. And I know that that's not Facebook or Google, but we do accounting. I think we reconcile and I think that the businesses we are in are very solid businesses and I don't think accounting is going away; double entry bookkeeping has been around for about six hundred or seven hundred years. We think it will see us out.

Fair enough. That's it for me. Thank you.

Your next question comes from the line of Patrick O'Shaughnessy from Raymond James. Please go ahead. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Hey. Patrick, question for you if I could. Curious if you are able to give us the implied DST revenue growth expectation within your guidance? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: No, I don't – I mean, you can – I mean – I think we've said that we've got about $1.6 billion in here for 8.5 months at the midpoint. And I mean I think that DST's revenue is public for last year, but you have to be careful because they had a lot of onetime items; I think over $100 million of onetime items, cancellation charges in last year. So, I think – I think it's a slight improvement over last year if you take out their onetime items. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Yeah. William C. Stone - SS&C Technologies Holdings, Inc.: And it's also – you have IFDS and BFDS acquisitions in the, I think in the first or second quarter of last year too. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: First quarter, yeah. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Got it. Thanks for that. And then just curious if you can shed some insight on your revenue reclassification moving away from recurring to non-recurring and the annual run rate basis. Is it just, kind of post-DST, those are a little bit less relevant metrics going forward? William C. Stone - SS&C Technologies Holdings, Inc.: Well, I think that that's – we sit there and go through this with Pricewaterhouse to try to decide what makes the most sense, what gives the best clarity to our financial statements and this is what we picked. So I think that that's really the crux of it. Patrick J. O'Shaughnessy - Raymond James & Associates, Inc.: Okay. Fair enough. Thank you.

Your next question comes from the line of Chris Donat from Sandler O'Neill. Please go ahead. Christopher Roy Donat - Sandler O'Neill & Partners LP: Hi. Just want to ask one follow-up related to DST, because there was a report a couple weeks ago that Legg Mason is moving a piece of business away from DST. It looks like it was small related to money market funds, but I'm just curious if you have any expectations for attrition related to DST, just sort of the opposite side of Patrick's question there? William C. Stone - SS&C Technologies Holdings, Inc.: I mean I don't think that we have any giant concerns at all about attrition. Obviously, we're trying to get as close to the client as we can as quickly as we can. And I think that right now, today, we have some confidence. That can change of course, but yeah I don't think that the Legg Mason piece of business is very substantial. Christopher Roy Donat - Sandler O'Neill & Partners LP: Okay. Thank you.

Your next question comes from the line of Chris Shutler from William Blair. Please go ahead. Chris Charles Shutler - William Blair & Co. LLC: Hey, guys. Just going back to the – I think to Patrick's question on DST and what's implied, I just want to make sure I understand. So, if I annualize the $1.6 billion, it looks to – I'm guessing that because of the IFDS and BFS, that it's better to look at either Q3 or Q4 of last year as the better kind of run rate revenue for DST or the better comparison. If I do that, it looks like it's somewhere between kind of negative 5% annualized growth that you're looking for and positive 1%. Any more color on where in that range – like, what the better period to look at is because there was a decent difference between Q3 and Q4? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: I think – I mean Q1 didn't have the acquisition, so that's across (50:01). And in Q2 they had about $90 million of cancellation charges, okay, last year. So that's – if you take out the $90 million, they're running at about $560 million or so. And they ran about $560 million in Q3 and I think they have some special – some other revenue recognition items in Q4. So I think those mid-months are pretty representative of where they were running. Chris Charles Shutler - William Blair & Co. LLC: Okay, that's helpful. Thanks Patrick. Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: That's $550 million to $560 a quarter. Chris Charles Shutler - William Blair & Co. LLC: $550 million to $560 million? Patrick J. Pedonti - SS&C Technologies Holdings, Inc.: Yeah. Chris Charles Shutler - William Blair & Co. LLC: Okay. Thank you.

And I'm currently showing no other questions at this time. I'll turn the call back over to Mr. Bill Stone for closing comments. William C. Stone - SS&C Technologies Holdings, Inc.: Thanks, everybody. We look forward to seeing you in July or early August. Thanks.

This concludes today's conference call. Thank you for your participation. You may now disconnect.