SS&C Technologies Holdings Inc (SSNC) 2010 Q4 法說會逐字稿

Good afternoon. My name is Huey and I will be your conference operator today. At this time I'd like to welcome everyone to the SS&C Technologies 2010 fourth quarter and 2010 earnings conference call. At this time all participants are in a listen only mode.

Later we'll conduct a question and answer session.(Operator Instructions)

Please note that this conference is being recorded and will be made available on SS&C's website at www.ssctech.com. I'd now like to turn the conference over to Mr. William C. Stone, Chairman and Chief Executive Officer. Mr. Stone, you may begin your conference.

Thanks, Huey and welcome and thank everybody for joining us on our Q4 and 2010 earnings call. I'm Bill Stone, and I'm the Chairman and CEO of SS&C and I have Normand Boulanger, our President and Chief Operating Officer, and Patrick Pedonti our CFO with me today.

You know, before we get started we have to review the Safe Harbor statement which various remarks we make on this conference call, we'll talk about our future expectation plans and prospects, and they constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation and Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements.

As a result of various important factors these are included in SS&C's filings with Securities and Exchange Commission in particular, the company's annual report on form 10-K for the year ended December 31, 2009.

I'll start with a brief overview of our quarter and I'll turn it over to Norm who'll go into some more of the details on sales and operations and then I will give it to Patrick for finance and then close, and then take your questions.

Now, we're very pleased report that 2010 was another strong year for SS&C, and it was capped by another record revenue quarter in Q4. Our revenue grew 21% or $15 million over the same period a year ago. During 2010 we saw the beginnings of a renewed interest in the spending on front, middle and back office solutions and financial services companies are again competing and technology is one of their main weapons.

SS&C enjoyed a 21.4% increase in revenue in 2010 and software enabled services revenue was up 32.2% in fourth quarter to a historical high of $56.1 million.Revenue from software enabled services was 65.2% of fourth quarter revenue. Our annual run rate basis recurring revenue which we defined as maintenance and software enabled services was $74.7 million for Q4 or an annual run rate of $298.9 million. This represents a 24.5% increase from $60 million and $240 million annually in the same period of 2009, and it's an increase of 3.6% from Q3 of 2010's $72.1 million and $288.6 million run rate.

We believe this is a good indicator of visibility and these are GAAP recognize revenue numbers. You know, once again in 2010 we delivered record revenues for SS&C (and while we're) -- while sustaining our 40% operating margins.

We also added 200 top flight employees around the world. You know, we've also maintained our focus on evolving market needs. You know we spent the year working on some very exciting technological developments which we will be launching throughout 2011. Including a number of web portals and mobile delivery platforms. We are well placed to be one of the first to the market with these applications.

Also in 2010 we continued to approach our capabilities through targeted -- we continued to add to our capabilities through targeted acquisitions such as Geller Investment Partnerships or GIPs, services we also added the thinklink platform of TD Ameritrade and we also added TimeShareWare. Each of these acquisitions will add to our strategic initiatives and real estate trading and private equity administration.

Now I will turn it over to a Norm for highlights.

Thanks, Bill. We closed out 2010 with a solid quarter. Four primary factors drove growth both in 2010 and Q4.

First, we added new customers across all businesses and geographies despite uncertain market conditions. Second, we had success upselling existing customers, new functionality in technology operate such as Bank Loans, Impairments Manager, CAMRA Sequel platform upgrades and others. Third, we focused on cross-selling our solutions across market verticals. (Some) logic on the line training, derivatives account and evaluation, reconciliation, performance measurement and attribution and others.

Fourth, as Bill mentioned we intricated a number of acquisitions in 2010. Geller, GIPS acquisition expanded our footprint in private equity fund administration services, and the next (chronological) by private equity software on a licensed basis. A newly formed financial markets group evolved in 2010 and is built out of our acquisitions of trade ware, micro design services, thinklink and our trade order management solution, Antares.

These acquisitions create a comprehensive solution of order and execution management, fixed network and settlement capabilities, providing services to broker dealers, asset managers, and hedge funds. In Q4, we acquired TimeShareWare. They offer technology solutions for shared ownership resorts. We folded our SKYLINE Property Management business into TimeShareWare because we believe there were synergies and expertise, service and technology that will benefit both teams, while increasing these overall real estate footprints.

Some notable wins in Q4 include, a large global bank's corporate trust and agency service division, signed a deal (to deploy) SS&C's money market manager to support their role on some issuing and paying agent for short-term investments. A large US based national financial service organization selected SS&C to serve as it's $14 billion loan portfolio with SS&C's origination and services solution, LMS Loan Suite.

A large US independent broker-dealer purchased our reconciliation software to augment its reconciliation and synthetic trade creation process on our enterprise level. They're expecting the process between three and four million transactions per day utilizing our software.

A major Canadian bank added SS&C's MarginMan to support their margin trade in precious metals and foreign exchange and a global provider of outsourced asset management and investment process and operations solutions selected SS&C's EVARE for it's private bank and trust business unit. Our services will include the enrichment and transformation of the client's held away assets to provide a holistic view of client assets.

Solmar Hotels and Resorts, selected SS&C's TimeShareWare professional, to manage all sales, market and lead management, property management and online rental operations.

We are pleased with our momentum and opportunities going into 2011. Some of the trends we are seeing include, continued demand for alternative fund administration business, more large scale insurance companies are issuing RFPs for potential software as a service or full business process outsourcing to replace Legacy systems, increase sales opportunities for our mortgage loan solutions from insurance companies and mortgage loan servicers.We're seeing increased sales opportunities for our corporate trust solutions for major US banks, and our global wealth platform design for managed account program has seen an increase interest from a number of large investment advisors.

We see opportunities further to drive sales of products released in 2010, including our recent release of TNR Solution version 10.0, our private equity technology platform. Major enhancements include new configuration tools, advanced account and functionality, and sophisticated investor relations notifications.We also see opportunities internationally and are investing in our team, in order to better capitalize on it.

I will now turn it over to Pat to talk about the financials.

Thanks, Norm. Results for the fourth quarter 2010 are GAAP revenues of $86.1 million and reported GAAP net income for the period was $9.2 million and diluted EPS was $0.12. Adjusted revenues exclude one-time acquisition related first accounting adjustments was $86.1 million, an increase of $15 million or 21% from Q4 2009. Excluding acquisition revenue and a positive impact of foreign currency, organic revenue increased 8.7% in the quarter.

Acquisitions including TheNextRound, TradeWare, Geller GIPS business, thinklink, and TimeShareWare businesses contributed $8.3 million in the quarter and foreign exchange positively impacted us by $549,000 as foreign currency strengthened, compared to the prior period. The business had strong growth in fund services business provided to hedge funds, (fund to) funds and private equity funds, LMS license sales, institutional asset managers and SMC products sold to asset managers.

Adjusted operating income for the fourth quarter was $34.1 million an increase of $5.1 million or 18% from the fourth quarter of 2009. Operating margins fell to 39.6% from 40.8% in Q4 '09 as recent acquisitions impacted the margins. We expect operating margins at these acquisitions to improve over the course of 2011.

Adjusted consolidated EBITDA defined in note three of our financial statements was $35.5 million or 41.2% of adjusted revenue in the quarter. This is an improvement of $5.2 million compared to Q4 2009 or 17%. Net interest expense for the fourth quarter was $6.6 million and includes $496,000 of non-cash amortized financing cost. Interest expense is down $2.5 million from Q4 '09 as we pay down $108 million of debt since December 31, 2009.

We recorded a tax provision in the quarter of $5.1 million or 36% of pre tax income.The GAAP effective tax rate including some one-time items was 27% for the full year. Adjusted net income defined in note four was $18.2 million and adjusted diluted EPS was $0.24 for the quarter.

The adjusted net income excludes $9 million of amortization of intangible assets, $4.1 million of stock-based compensation, $230,000 of capital base taxes, and $65,000 of unusual and nonrecurring gains, mostly foreign currency and acquisition related items.

For the year, adjusted revenue is $329 million an increase of $58.1 million or 21.5% over 2009. Excluding acquisitions and the impact of foreign exchange, organic revenue grew 6.5% for the full year. Adjusted operating income was $129.2 million, 39.3% of revenues and an increase of $22.7 million compared to '09. And adjusted net income increased $19 million or 41% from $46.6 million in '09 and 65.6 in 2010, and adjusted diluted EPS for the full year was $0.90.

On our balance sheet and cash flows, we ended the year with $84.8 million in cash and about $290 million in debt for a net debt position of $206 million. We generated $75.6 million in operating cash flow for the full year, a $15.7 million or 26% improvement over 2009.

For the year, we completed the acquisition of GIPs, thinklink, TimeShareWare for a total of $45.8 million.We used $5.3 million for capital expenditures which should represent 1.6% of revenue.

We paid down about $109 million of debt including the sub note redemption we completed in the second quarter of 2010. We paid $18.3 million in taxes compared to $23.5 in '09.$5.1 million of this reduction is included in cash flow from financing and not cash from operations as it is a tax benefit as a result of the stock option exercises during the year.

Our accounts receivable DSO was at an all time low of 48 days as of December 2010, an improvement from 58 days -- 53 days as of December '09. In financing activities we generated $9.6 million in cash related to option exercises net of acquisitions.

Our LTM EBITDA used for our covenant compliance includes acquisition as if owned for the full period was $141.3 million. For the year, our EBITDA growth and lower debt position has reduced our leverage from approximately $3.2 on December '09 to $1.8 as of December 31, 2010.

On our outlook for 2010, first couple items, we've completed a secondary and closed on it on February 9, 2011. We issued 2 million primary shares at the offering and we granted the underwriters a right to purchase additional 1.9 million primary shares within 30 days. Those shares will be outstanding as of the closing date. The net proceeds from the offering are approximately $33.5 million plus approximately $18.6 million if the over allotment is exercised by the underwriters.

On February 15, we announced the redemption of 66.6 million of the eleven and three quarters sub debt. We expect this redemption to take place on March 17. The redemption will be at $1029.37 per 1000 principal, plus accrued interest up to March 16, 2009. We will take a charge for the premium and the redemption in the first quarter.

In addition, an interest hedge of $100 million of our term debt expired December, 2010. The interest on $100 million will reduce from approximately 6.5% per year to LIBOR + 200 basis points. Our current expectation for first quarter '11 is revenue in the range of $87 million to $88.5 million. Adjusted net income of $18.6 million to $19.2 million and outstanding diluted shares of $78.6 million to $78.8 million. Our current expectation for the full year is revenue in the range of $362 million to $369 million and adjusted net income in a range of $81.8 million to $84.8 million.

Outstanding diluted shares will be approximately $80.2 million to $80.6 million after affecting the secondary offering for a full quarter. We then expect shares to increase about 300,000 to 500,000 per quarter starting in the third quarter. For full year 2011, we expect cash from operating activities to be in the range of $82 million to $86 million and capital expenses to be in the range of 1.9% to 2.1% of total revenues.

And I will turn it over to Bill for final comments.

Thanks, Patrick. Looking forward towards 2011 and beyond, we feel very optimistic.For the full year 2011, we are guiding to revenue as Patrick said to $362 to $369 and we continue to be encouraged by the technology recovery and we are constantly getting leads in from our financial services customers and new greenfield opportunities.

You know, we're also seeing clients become increasingly comfortable using software enabled services both AFP, AFP + and BPO services, and we're excited about that opportunity. We think we're well positioned to understand the technical aspects of this software enabled services model but we also have deep consulting knowledge and strong expertise across financial services verticals.

Finally, you know this is the 25th anniversary of the founding of SS&C, and since we started our business in 1986, a lot has changed around the world, but our commitment to providing the best service and the best technology has not changed.

And now we'd like to open it up to any questions.

Thank you sir. (Operator Instructions) Our first questioner in que is Adam Frisch with Morgan Stanley. Your line is now open.

Hi it's Glenn Fodor for Adam Frisch. Another nice quarter, guys. And nice guidance you put out there, but just wondering if you can give a little more texture on what's built into it use the assumptions underlying it, want to know how kind of much confidence we can have in it. And then think about what potential drivers or things that can go right that could drive upside aside from, say acquisitions?

I think that the biggest driver to our business is this annual run rate basis right so you are going into 2011 with $298.9 million of annual run rate basis based on Q4. Given that our business grows every month, if you took just a third month of Q4 it's probably a little higher than $298.9 million. And that would mean that we get zero license and zero professional services. Given that the last several years we've averaged about $20 million, $25 million in each one of those, I'd be pretty surprised if we would go below the $20 million mark so you could probably add $40 million in licenses and professional services so you know, you get a little above $300 million, you get $40 million for licenses and services before we even start the year and you're already in excess of $340 million.

So we really only have to go find $20 million or so to hit our numbers. So I mean I think that we are very confident in these numbers and we also think that going from $328 million to $365 million, $366 million at the midpoint, is still a reasonable challenge and I think that maintaining our margins in driving our free cash flow and watching our capital expenditures are really the things that are SS&C's hallmarks and we believe that we will be able to carry through in 2011.

Great. And thanks for the color on the cross selling and up selling success you are having. Can you -- when you think about the 8.7% organic revenue growth in the quarter, can you kind of give us a sense of the balance between how much came from new sales, how much came from cross selling and up selling to existing customers? Is it possible to dice it that way?

Well, you can't. It is not particularly precise but I would tell you that this quarter I think two thirds of it was probably new sales.

Is that -- how does that compare to prior quarters? I believe you may have -- ?

It jumps around, it jumps around depending on how big, you know, we could have an upgrade to our sequel platform that could account for 10% or 15% by itself. So, but I think the important thing to understand is there's a consistent opportunity to upsell, cross sell, and sell new accounts. Another question is each quarter, how's it going to fall.

And I would also say to just give you a little color on that is in general it's somewhere in the one third, two thirds. And so it is either going to be one third new in two thirds up sell or it is going to be two thirds upsell or two thirds new and one third upsell or somewhere 50/50. Now, generally the guidance we give it somewhere around 50/50 but the range is probably 67/33 to 50/50.

That's helpful, thank you very much.

Thank you sir, our next question in our que is Sterling Auty with JP Morgan. Please go ahead.

Thanks, hello, guys. So, following on that, and maybe this answered but I just missed it but as you look at the guidance for 2011, how do you think about the component that comes from organic growth versus the benefit from acquisitions?

We've kind of given guidance generally that would be about 5% to 10% organic growth. And if you look at the guidance we gave from the high to the low, it would be somewhere around 6% to 8% organic.

Okay. And then in following on in a different area when you look at the different customer categories the asset managers, the alternative managers, treasury, et cetera, as you came into the end of the year, which parts of your customer base were showing particular strength and as you look at 2011, where are the areas that you think might see the more improvement?

I think some of the things that Norm talked about in the call earlier is, is that we are seeing a lot of acceptance by large US banks for our money market platforms and we are seeing a lot of interest in our global wealth platform for high net worth and near high net worth individuals so that's been very attractive. And then lastly, you know alternatives continues to continues to chug along and that again is, is we are having a lot of -- and awful lot of interest in the capabilities that we bring to the table both from a technological standpoint but also from an infrastructure standpoint. And I think that's also something that will continue to go along for us.

Alright, great, thank you, guys.

Thank you sir, our next questioner in que is Tim Fox with Deutsche Bank. Your questions please.

Thank you, good afternoon. Wondering if you could comment on the pace of renewals how they came in pricing wise in the fourth quarter and then in looking at 2011, any big renewals coming up, any expectations for pricing increases or is it more of the normal on your -- on the maintenance side of the business?

We've had very good retention rates for 2010. Pretty much in our historical range of low to mid 90%. Concerning price increase on the maintenance, the price increases are generally tied to CPI so they've been pretty low recently. You know, where we might be averaging -- their generally CPI plus a couple points, so generally we are averaging 5% to 7% you know now we're averaging 2% to 3%, increases on the maintenance contract. And as far as big contracts renewing, I mean, frankly most of our clients are renewing every single year, on our maintenance side. And pretty much our long-term software and service clients are now on annual renewable contracts so things don't really change year-to-year as far as big clients renewing in one year.

Okay, great. And then, you mentioned, I think Bill mentioned investments internationally if you could maybe help quantify how much incremental investment you may be looking internationally? Where, specifically from a geographic or vertical perspective, just a little more color on your expectations on the international side? Thank you.

Yes, I think that we are going to invest probably in the low millions in Europe and probably $1 million, $2 million in Asia. We do think that will be paid for by new business. And in general knock on wood so far that's what's happened. We have moved a senior executive to London in Dave Reid and Dave has been there now for about two weeks I think. And we've also moved another senior guy to Australia, Phill Bannis, and Phil has been there for about six months now. We are seeing some increased activity out of Australia and Southern Asia and we believe that will continue. We are particularly excited about our global wealth platform there and then also our margin trading platform, MarginMan. There's a lot more interest in margin trading in Asia then in the US or Europe. So, we think those things are positive, we think there's a big opportunity and we think we can take advantage of it with an investment that is you know very close to as creative as we make it.

Thank you.

Thank you sir. Our next questioner is John Tasdemir with Needham & Company. Your line is now open.

Thank you very much. Less of a quarterly question for you Bill, but, so a huge spending rebound in the second half of 2010 and as you look out into 2011, what I'd like to get a sense of is as you've invested throughout the downturn and maybe the next tier of competitors haven't and perhaps they've missed a product cycle or two, where in your business do think that next tier of competitors is most susceptible? As you think about front, middle and back office services?

John, I think the biggest thing that's really happened in the last even 20 years has been a real acceptance now of software enabled services or SES model. More and more companies and financial services are finding it increasingly difficult you know, to have it two tier employee structure. The front office, the investment bankers, the portfolio managers, the traders, the research guys, and then the investment accountants and securities operations and data processing types. You know, it is really becoming an increasingly difficult thing to manage. It is increasingly difficult thing to maintain the same employee benefits across such a wide range of annual compensation.

So we think that more and more they are going to try to increasingly get out of the back-office processing game. So that's giving us a tremendous opportunity to leverage the Internet using secure protocols and you know Internet tunnels to be able to really deliver a very, very high quality, very rich functionality delivery mechanism to portfolio managers, research analysts, traders, and chief investment officers, general partners of a variety of different investment and financial services companies. And I think that's by far our biggest opportunity. People want out of the HR game, people want to get away from all these mandates that are being driven by various state governments and federal governments around the world. You know, having employees is an expensive proposition and the way they get rid of them is to outsource it to places like us.

That's really helpful. Thank you.

Thank you sir. Our next question in our que is Laura Letterman with William Blair. You're questions please.

Yes, thank you guys. Congratulations on a nice quarter. Can you talk a little bit about the acquisition pipeline related to that pricing (inaudible) and then I follow up with a question.

We still see a very attractive pipeline of acquisitions out there and you know as Patrick mentioned earlier, we spent $45.8 million in 2010 and I think we've spent $51.3 million in '09. You know, my guess is, is we'll spend something like that. You know, we are bigger, we'd like to spend more, but we are very disciplined. So if we can't find the kinds of acquisitions we want at the types of prices we want, then we are in general going to pass. That doesn't mean we won't pay up for something that we think is very valuable to us that we are going to be able to drive, but I don't think there's any, I don't think that there's any glaring hole in our platform, there's nothing that we covet, Laura, so that we don't get into a situation where we have to have it, and then we become a little irrational.

Right. When you talk about the two thirds of the business that's software and software laden services can you talk about how much of that is set software versus kind of BPL services wrapped around some of the software? Is there any qualitative or quantitative discussion around that?

I think it is about half and half. You know but our BPO services as you well know they are not lift outs, it is not a -- it's not any commoditized it's very high margin it's very, very sticky and we are excited about it. So, it's about half and half.

That's very helpful. You also talk about a two-part question here, ratability business in Q4 and also kind of your pipeline if you look at it standing here today, how it looks versus like a year ago. I don't mean acquisition, I mean pipeline for sales to whether it's upsell to existing customers or sales to new customers?

And Laura, what is ratability in Q4? I guess I don't understand.

Sorry. Is it back end loaded more than normal or is it sort of the normal rateability of new business and upgrade business coming throughout the quarter?

I would say it was similar. We got that one large LMS sale towards the end of the quarter so that probably skewed it a little. But, you know that probably happens two out of eight quarters, 25% of the time. I don't think that's anything out of the ordinary. I would say that our order book is the strongest it is been for a number of years. I think we have a pretty strong sales force, we've got some people doing an excellent job for us. Rahul Kanwar is running our fund services business, we have Alex Marasco up running our asset management business, spending a lot of time up in Toronto doing a great job. Dave Reid's going over to London and really has been driving that business you know already and so I think we have a lot of people in place that are really pushing the envelope. And I think that's our real opportunity is to execute better, get more out of each individual sales person which means gets more out of each individual sales call and sales opportunity.

Thanks so much.

Thank you ma'am. (Operator Instructions) Our next questioner in queue is Terry Tillman with Raymond James. Your questions please.

Hello, guys this is actual Eric (inaudible) stepping in for Terry. Nice job on the quarter. I appreciate all the color as far as guidance is concerned, but just want to see if you guys can give us a little bit of color for 2011 as far as the EBITDA?

We think EBITDA will be probably around a midpoint of where we generally guided 40% to 42%. It'll fluctuate quarter to quarter. Q1 and Q2 if you look at us historically are a little bit heavier in payroll tax related benefit costs and you know we also generally have our employee raises in the first half of the year. So, it tends to be lower in the first half and then higher in the second half of the year.

Okay. Great. Thank you. And then specifically as far as TimeShareWare revenue, where do you guys see that in guiding for 2011 considering it's a license revenue model and its variability there, what do you -- just give us a little color around that for 2011?

We think that the TimeShareWare business is probably somewhere around $8 million to $10 million.

Okay. Great. And then one last question as far as your hedge fund administration business. Where do you guys see that growing for the next year and potentially where do you guys see some sort of upside coming from? Thank you.

Our hedge fund administration business has been really strong and our total return product has been particularly strong over the last year, year and a half. So, we're really excited about its opportunities and how much business that we are gathering from its capabilities. So we are going to continue to get a lot of funds from onshore and we're also doing increasingly well in Europe and we're starting to see a number of funds in Asia. So, we're excited about its, its growth opportunities and it will be across a wide range of global macro credit funds, risk [ARRB], convertible ARRB, long/short private equity, stuff with a lot of FAS 157 and other illiquid instrument kind of charges and a lot of complexity is something where we tend to perform extremely well.

And then the hedge fund business, the alternative asset business is generally throughout the year been running about the mid teens organic growth rate. In Q4 it was about 17%.

Great, thank you.

Thank you. Our next questioner in que is Ross MacMillan with Jefferies. Please go ahead.

Thanks a lot. I just wanted to clarify did you say Patrick that EBITDA margins for the year would be 40% to 42% range?

Yes, round at the midpoint of 40% to 42%.

So, that would be up year over year, right?

It would be pretty similar to 2010.

Okay. And I recall that when you entered 2010 and you had some acquisitions that maybe were very slightly at the margin depressing to margins, is that still part and parcel of what's flowing into '11 or are there some other factors whether organic investment or other that's sustaining the margin at that level?

There's a couple things one, you're right on the acquisitions. They've been -- the acquisitions we completed in late '09 and then 2010 if you look at them combined are running in the mid 20% EBITDA margins. We think those will improve in '11, and the other thing too we're doing is I think software as a service business is going pretty fast. And we're putting costs in place like a quarter ahead to support that growth to make sure that we are servicing the clients. So that's hurting us probably a little bit also.

That's helpful. Maybe just one other maybe for Bill, can you just update us on Gears and where we are with the Gear strategy? Thanks.

I think Gears is a platform where we are taking one of our accounting engines and then wrapping it into a full-blown capability from trading all the way through to client reporting and regulatory reporting, tax reporting. So, you know, that is our primary platform for demonstration in our institutional and asset management businesses. And that's primarily targeted at institutional asset managers and pension funds and insurance companies. Where as high net worth individuals where you have more thousands of portfolios what would be targeted with our Global Wealth Platform. So we are rolling out Gears across the world that we think we have some opportunities. It's gotten good reception. I think that what we'd like to do is, is to turn it into an upgrade cycle. But that we're probably a quarter or two quarters away from having some additional capability in that platform in order to be able to make it an upgrade cycle.

That's helpful. But that would be offered as a fully self re-enabled service, so you're able to offer that platform on the kind of BPO or outsource mode?

Either way, actually, or license (inaudible).

Okay, great. And then just any comments on the competitive environment you obviously had some nice wins in insurance, I'm just curious about the core institutional asset manager business. Any comments on competition or in fact, anything changing that's notable from a competitive standpoint?

I don't think so. I think that in general we continue to compete against the usual suspects and on the license side it is primarily the Sim Corp's the Advent's, the SunGuard's and then on the FAS side of the ledger it tends to be you know more of the large institutions, the State Street's and Bank of New York's, particularly in fund administration. And then the independents which would be Citco and Globe and I think the newest entrant in there and I think I talked about it in the last quarter was company called HedgeServe, I bet they're in the marketplace now. But, in general, we like our competitive position. We like our business model. We think our business model drives high cash flow, low CapEx, you know high customer satisfaction, high employee satisfaction and we think those four competitive advantages are something that are innate in SS&C and I think that that's going to really carry us over the next three to five years.

Great. And very last one for me, I'm just curious I got on a little late, you may have commented on this, but there's a lot of commentary around private market valuations continuing to go higher as the public market goes higher. Has that really been the key barrier to you doing more M&A, has it really been kind of agreed on terms?

You know, I generally say this every quarter, but the reason I say it every quarter is it's the truth and that is that we look at 10, 15, 20 deals a quarter. We buy two, three, four companies a year. So, you know we're really not in the, we have to do this mode. If we can't find the right acquisitions, then management takes all of its attention and puts it towards growing our organic revenue growth. Now that we're a public company, the key drivers for us are free cash flow, organic revenue growth and earnings per share. As a private company it was always consolidated adjustment EBITDA with as if owned accounting. Which I learned about, but I didn't know much about that before we went private. We are in general a very GAAP oriented earnings per share kind of company. And so, of course we put out adjusted numbers because of our amortization of intangibles and some other things that the analysts like to see. But in general we block and tackle and we try to grow every quarter and you know we try to give stretch estimates and then we try to hit them. So, I mean I think that's been our track record and I think that's what we're going to do going forward.

Fair enough, thanks a lot.

Thank you sir and at this time I'm showing no additional questioners in the que, I'd like to turn the program back over to Mr. Stone for any closing remarks.

Again, thanks a whole lot, this is our as I said this is our 25th anniversary and we look forward to talking to you next quarter.

Thank you sir. Well, ladies and gentlemen this does conclude today's program. Thank you for your participation and have a wonderful day. Attendees, you may now disconnect.