SS&C Technologies Holdings Inc (SSNC) 2021 Q1 法說會逐字稿

Good day, and thank you for standing by, and welcome to the SS&C Technologies First Quarter 2021 Earnings Call. (Operator Instructions) Please note that today's call is being recorded. (Operator Instructions)

I would now like to turn the conference over to Ms. Justine Stone. Thank you. Please go ahead.

Hi, everyone. Welcome, and thank you for joining us for our Q1 2021 earnings call. I'm Justine Stone, Investor Relations for SS&C. With me today is Bill Stone, Chairman and Chief Executive Officer; Rahul Kanwar, President and Chief Operating Officer; 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, April 26, 2021. 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 will now turn the call over to Bill.

Thanks, everyone, for joining. Our results for the first quarter were $1.235 billion of adjusted revenue, up 4.9%, and $1.18 in adjusted earnings per share, up 14.6%. Our adjusted consolidated EBITDA was $491.9 million for the quarter, and our adjusted consolidated EBITDA margin was 39.8%. Our first quarter adjusted organic revenue was up 2.9%. We strengthened our alternatives business, Intralinks, and our software businesses contributed to this growth, surpassing our own expectations. DST came in at 0.1% growth for both financial services and health care.

Operating cash flow was $185.7 million for the 3 months ended March 31, 2021, up 25.7%. We bought back 2.7 million shares of common stock in Q1 2021 at an average price of $67.15 per share for $181.4 million. Our secured net leverage ratio now stands at 2.29x, and our total net leverage ratio is at 3.35x. We continue our focus on organic revenue growth, and we are beginning to see some positive trends. We are growing our sales force and building new revenue-generating products and services. We continue to make product improvements and new technologies across our business.

In SS&C Health, our digital capabilities continue to grow in partnership with our customers and expert user experience design team. The pilot of the SS&C digital experience platform will launch in early Q2 2021, with the platform expanding to over 2 million members by early Q4 2021. This represents an exciting opportunity for our customers to unify their digital solutions and provide a single member experience, aligning to member and market expectations. We continue to integrate Vidado across our various business lines and have won new mandates using this technology.

ESG investing is becoming increasingly more important to our investors and our clients. While we are working to expand and improve our own disclosures and policies, we are also building solutions to help our clients address their ESG needs. Our learning institute has developed an introduction to ESG online course to be released in Q2 2021. This course will introduce users to environmental, social and governance factors used by investors and lenders for making investment decisions. The course will equip learners with basic fluency in core ESG concepts, explore risk and outline ongoing debates in the field.

We completed the Capita Life and Pension Services Ireland acquisition in the first quarter, adding 380 employees. This acquisition makes SS&C the largest technology and service provider in international life and pensions market in Ireland and provides us with an excellent opportunity to expand in Ireland across Europe. We also are continuing our efforts to acquire Mainstream Group. Their Board unanimously recommended our proposal. Mainstream is a provider of investment administration, middle office funded accounting, superannuation administration, share registry and unit registry, services to leading fund managers and superannuation loans, family offices and dealer groups.

Earlier this month, we announced a reduction in force of 2.2% of our global employee base. These decisions are always difficult, and we have delayed our plan since the first quarter of 2020. And we have and we'll continue to treat everyone fairly, provide severance and transition assistance. The markets we serve and our customers demand innovation and overall productivity increases. These pressures often dictate cost containment efforts. Our ability to continue to give pay raises, bonuses and other career development opportunities require us to manage our cost carefully and fairly.

I'll now turn the call over to Rahul to discuss the quarter in more detail.

Thanks, Bill. We had a strong quarter with a broad-based lift in revenue, both year-over-year and sequentially. Intralinks had robust growth as the M&A market is off to a good start and economic stimulus continues. Increased carve-outs and restructuring and overall economic activity driving acquisitions contributed to our deal and opportunity count, and win rates remain high.

In our alternatives business, the number of qualified prospects has returned to pre-COVID levels, and there's increased fundraising momentum across strategies. Our existing clients are growing organically through new fund launches and performance, and we continue to win new clients at healthy levels. We ended the quarter with over $2 trillion in assets under administration for the first time, a significant milestone.

Our software business performed well. Outsourced technology trends across wealth, asset management and alternatives remain strong. Customers increasingly demand the ability to select and configure their operating model, including both software applications and outsourced services. Our capabilities are proving to be a valuable differentiator. As one indicator, over 90% of SS&C Advent's Q1 new sales included hosting or other operational services. Managed service offerings for our Geneva and Eze applications continue to get traction in the marketplace.

Now I will mention some key deals for Q1. A top alternatives fund administrator, an existing Geneva client, extended their Geneva license to [40x bonds]. A new hedge fund launch chose a suite of SS&C products, including SOMS, EMS, GlobeOp fund services, Advent outsource services and FIX link. A large Canadian asset manager expanded Vision and Pacer licensing to support its business plan. This client chose SS&C's real assets fund services, investor services and financial statement preparation for their real estate funds. A newly launched retail brokerage and wealth management business in Southeast Asia chose GWP for its end-to-end capabilities. One of Asia's leading investment firms chose SS&C GlobeOp fund services for bank loan servicing. A Swiss-based asset manager chose SS&C's fund services and regulatory solutions for valuation capabilities around complex derivatives. An existing mutual fund customer chose SS&C's digital investor experience. A large multinational asset manager and existing transfer agency client expanded their relationship with us to include their Luxembourg business.

I will now turn it over to Patrick to run through the financials.

Thanks. Results for the first quarter of 2021 were GAAP revenues of $1,233.4 million, GAAP net income of $174.9 million and diluted EPS of $0.65. Adjusted revenues were $1,235.4 million, including the impact of the adoption of the revenue standard 606 and for the acquired deferred revenue adjustment for acquisitions. Adjusted revenue was up 4.9%. Adjusted operating income increased 7.1%. And adjusted EPS was $1.18, a 14.6% increase over Q1 2020. Adjusted revenue increased $57.4 million. Our acquisitions contributed $18.6 million in the quarter. Foreign exchange had a favorable impact of $16.1 million or 1.4%. Adjusted organic revenue increased on a constant currency basis by 2.9% driven by strength in the alternatives fund administration, Advent and Intralinks products. These were offset by weakness in the institutional asset management, health care and the Eze products.

Adjusted operating income for the first quarter was $475.8 million, an increase of $31.6 million or 7.1% from the first quarter of 2020. Foreign exchange had a negative impact of $13.2 million on expenses in the quarter. Adjusted operating margins increased from 37.7% in the first quarter of 2020 to 38.5% in the first quarter of 2021 driven by cost controls. Expenses increased 3.5% on a constant currency basis. Acquisitions added $6.3 million, and foreign currency increased costs by $13.2 million.

Adjusted consolidated EBITDA was $491.9 million or 38 -- 39.8% of adjusted revenue, an increase of $28.4 million from Q1 2020. Net interest expense for the first quarter was $51.4 million and includes $3.3 million of noncash amortized financing costs and OID. Average interest rate in the quarter for the amended credit agreement, including our senior notes, was 3.01% compared to 4.18% in the first quarter of 2020 and resulted in an interest expense decrease of $26 million or 33% in the quarter. We recorded a GAAP tax provision in the quarter of $60.8 million or 25.8% of pretax income.

Adjusted net income, as defined in Note 4 of the earnings release, was $316.5 million and adjusted diluted EPS was $1.18. And the effective tax rate used for adjusted net income was 26%. Diluted shares remain unchanged in Q4 at 268.1 million. The impact of an increase in the average share price and option exercises was offset by the share repurchases.

On cash flow and our balance sheet, as of March 31, we had approximately $253.7 million of cash and cash equivalents and approximately $6.6 billion of gross debt for a net debt position of approximately $6.3 billion. Operating cash flow for the 3 months ended March was $185.7 million, a $38 million or 25.7% increase compared to the same period in 2020. For the 3 months ended March 31, we purchased treasury stock buybacks of $181.4 million for purchases of 2.7 million shares at an average price of $67.15 per share compared to no treasury buybacks in the first quarter of 2020. Program to date, treasury stock buybacks totaled $469.5 million for purchases of 7.8 million shares at an average price of $60.38, with $280.5 million remaining on the current program, which was initially $750 million that the Board approved.

Net debt borrowings in the quarter were $70.6 million compared to net borrowings of $150.1 million in 2020. We declared and issued and paid a dividend of $41.2 million as compared to $31.9 million last year, an increase of 29%. We paid interest in the quarter of $76.6 million compared to $102.5 million last year. In the quarter, we paid $42.5 million in income taxes compared to $17.7 million in 2020. Our accounts receivable DSO was 48.9 days as of March 31 compared to 48.4 as of December 2020 and 52.4 days as of March 2020. Capital expenditures and capitalized software totaled $31.4 million or 2.5% of adjusted revenue. Spending was predominantly for capitalized software and IT infrastructure. Our LTM EBITDA that we use for covenant compliance was $1,886.4 million as of March 2021. It includes $4 million of acquired EBITDA and cost savings related to our acquisitions. The baseline net debt was approximately $6.3 billion. Our total leverage ratio was 3.35x. And our secured ratio was 2.29x.

So outlook for the remainder of the year, the following assumptions are included in the outlook for 2021. We'll continue focusing on client service, and our retention rates will continue to be in the range of most recent results. We will assume foreign currency exchange will be at current levels for the remainder of the year. We expect the impact on DST health unit pre-acquisition client terminations to impact revenue by approximately $17 million for the remainder of the year.

Adjusted organic growth for the year will be in the range of 1.7% to 4.7%. Adjusted organic growth for Q2 will be in the range of 2.4% to 5.9%. Interest rate on our term loan facility will approximately be 1-month LIBOR plus the current spread, which is 175 bps. We will continue to manage expenses during this period and control variable expenses and staff hiring. And we'll continue to invest in our business long term with capital expenditures of about 2.8% of revenue. And we expect the tax rate to be approximately 26% for the full year.

For the second quarter of 2021, we expect revenue in the range of $1.190 billion to $1.230 billion, adjusted net income in the range of $294 million to $310 million and diluted shares to be in the range of $267.8 million to $268.3 million. For the full year of 2021, we expect revenue in the range of $4.825 billion to $4.965 billion, adjusted net income in the range of $1.213 billion to $1.279 billion and diluted shares in the range of 267.4 million to 268.9 million. And for the full year, we expect cash from operating activities to be in the range of $1.280 billion to $1.340 billion.

And I'll turn it over to Bill for final comments.

Thanks, Patrick. With almost $500 million in adjusted consolidated EBITDA for the quarter, exceeding $2 trillion in assets under administration on our alternatives business, adjusted revenue growth of almost 3% and reducing our security and total leverage ratios to 2.29 and 3.35x, we have built a powerful franchise. The franchise continued to add talent and opportunities as we embark on a new post-COVID world.

I will now open for questions.

(Operator Instructions) And our first question comes from Dan Perlin with RBC.

And a great start to the year. So Bill, I just wanted to drill down a little bit. It sounds like maybe client budgets are starting to come back in the growth mode. You called out alternatives maybe being back to pre-COVID levels and new fundraising at Intralinks. So I'm just wondering, as you're having those conversations today with clients, where do we stand in terms of the real demand environment? What's the current pipeline look like for you guys? I mean, obviously, we see your guidance, which seems pretty reasonable. But I'm just also wondering kind of the tonal difference that you're having with clients today versus maybe a quarter or 2 ago?

Well, Dan, I think what you're seeing across the world is that the world is opening up and, knock on wood, that we can continue to do that. The different governments, whether it's the EU or United States or all of North America and Asia pumped money into the economies, and that's giving investment managers confidence as their fund flows start to fill their coffers, and that makes them either launch new funds, get into new investment types or new strategies. And that reflects in the increased demand we're seeing. And also, we've increased the size of our sales force, and we'll continue to train, and that is proving to be pretty effective. And so we're cautiously optimistic. No one can really predict what the pandemic is going to do next. Hopefully, we're going to see it off into the sunset, but we don't have a perfect crystal ball on that. But I would say that's the primary drivers of our demand increase.

Yes. No, that's good. On the -- the follow-up is on this new kind of division that you guys launched, this Intelligent Automation Solutions, where it sounds like you're trying to help clients with their digital transformations. That -- I guess I'm wondering, that sounds like not so much a deviation from your historical, like, product-forward business, but it does sound like it might be broader in and around consulting and maybe some other IT kind of functions. So I'm wondering 2 things. One, do you think that that's opening up the funnel for new opportunities that you guys are going to be able to bring in? And then secondly, is there a product road map that needs to go along with that in order to be successful there?

Well, we're pretty excited about adding Gautam and his experience and expertise and then being able to make our bundles increasingly more user-friendly and more powerful. So we're excited about our opportunities. We think we have lots of exciting technology, and we think that we're increasingly becoming more adept at binding our different products together, which gives our clients more comfort as they grow and expand and want to have fewer suppliers and rely heavily on that. Rahul, do you agree with that comment?

Well, I would. And I would just add to the second part of the question that there already is a fair amount of IP within SS&C that relates to intelligent automation, whether it's our AWD product or various initiatives we have across the company on natural language processing and artificial intelligence. And Gautam and his team are charged with pulling those together, as Bill said, to make sure that they are knitted together in the right way for a particular use case or a particular application in a given industry as well as build new product. But we have a pretty good foundation.

And our next question comes from Surinder Thind with Jefferies.

Congratulations on the quarter. My first question is regarding the guidance. Can you break down the outlook for organic growth amongst the various segments for the full year, meaning as Intralinks, DST and SS&C Corp.?

Yes. I think, in general, we expect our alternatives business to grow in the 4% to 7% range. We expect Intralinks to be a little bit better than that, and our software businesses in the 1% to 2%. And we're striving hard to make -- to keep DST in positive, so 0 to 1. And we think we have the pipelines and capabilities to get those numbers. And that's what we're striving for. Eze does a lot better when there's more volatility in the market. And obviously, recently volatility's picked up, which will help the Eze business. Rahul, do you have other points you'd like to make?

Bill, I think you covered it. And I would just say, and we saw this in Q1, we are seeing pretty good lift across our business, right? So it is pretty broad-based. So we're pretty optimistic about what happens in Q2 to Q4.

That's helpful. And then as a quick follow-up, can you maybe -- is there any color that you can provide on the Schwab transaction, and they're switching away from DST to BNY Mellon for the transfer agency business? And then what kind of an impact that might have on you guys?

Yes. We don't expect that to have much of an impact on our overall business. The revenue side of that was not particularly large. And sometimes some of these -- some of the big custodians are under tremendous pressure. And so we are holding our own and bringing out new technology and moving a lot faster. And we're not going to always win. That's Schwab's acquisition, and they're going to bring in new technologies that were used by the acquisition candidate that they acquired. And so I mean this is going to happen occasionally. And Schwab's still a great customer of ours, and we have a lot of respect for them, and we're not going anywhere. We'll be there, and we're pretty optimistic about what we're building and how we're delivering it.

And our next question comes from Alex Kramm with UBS.

Can you maybe just talk about pricing in the quarter, maybe across the board, but then also on the hedge fund administration side? You've been talking about this for a couple of years now that you're trying to get a little bit more. So anything you can share on the quarter would be helpful.

Rahul, do you want to take that?

Sure. Alex, I think as we've said previously, the -- we've developed a pretty good process now where, once a year, we go back to these customers and we talk to them about the contracts, particularly ones that are coming up on renewal and to see generally a modest increase that's in line with what happens to our cost. So we're in that process and I've been in that process for 3 or 4 months now. And there really hasn't been much to report other than, hey, nobody is happy to get approached about a price increase, but we've had good, constructive dialogue. There really has not been any fallout out of that process. And we think that our mission, which was to be able to have that conversation and deliver a lot of value to go with that, we're doing that. So it's gone well. Like I said, it's pretty modest overall. And -- but we expect to be able to keep doing it on an annual basis over the long term.

Okay. Fair enough. And then maybe just turning back to the quarter, I think you mentioned DST, but can you break out maybe some of the other businesses, like the alternative business growth for the quarter, but then also Intralinks as I don't think you mentioned it? Is there anything you can share in terms of how the growth came together for the quarter? Sorry, if I missed it.

Yes, the alternatives -- this is Patrick. The alternatives business grew 6.7% in the quarter. Intralinks was up 10%. And as Bill mentioned, the Eze business had lower volumes and was down 3% for the quarter. And the DST business, combined health and financial services, was essentially flat on an adjusted basis.

And our next question comes from Andrew Schmidt with Citi.

So a question on DST, I think you mentioned last quarter financial services for the year on an organic basis expected to be low single, health care maybe flat to down. Any update to the growth structure of DST this year? And then any commentary on how the pipeline is specifically shaping up for DST versus the other parts of the business would be helpful.

Well, again, we've done lots of changes in DST, and we're pretty focused on it. We have some really good pipeline business in there. And I think that it's the execution part of it, right? You have to win, and then you have to convert. So we won a number of large mandates in the third and fourth quarter last year in our retirement services business. And that revenue is -- will build throughout 2021, and that will give us a reasonably significant lift of DST. And then we win some more. That's the challenge of this. But we do think we're bringing out some really exciting new digital technologies and capabilities. And I think ultimately, you have to have superior products and superior services. And when you have that, then the ability to train your sales force and win the deals, I think, is -- becomes increasingly positive. And is that your take at it, Rahul?

It is, Bill. And the DST Financial business, we're thinking, as planned for the year: low single digits, probably 2.5% or so organic growth; and the health business 1.3%. So the average of those 2 things is kind of a little over 2%. That's what's in our plan right now.

Got it. That's super helpful. And yes, I appreciate the technology commentary. That's great to hear. I guess just as a follow-up, just switching gears to the institutional asset management market. Obviously, we saw the announcement of a large asset manager switching to front-to-back investment servicing platform. Are you seeing more demand or more conversation amongst the larger traditional asset managers just to overhaul their tech infrastructure? Obviously, we've been talking about this for a number of years, but it does seem like some things are starting to break loose. I'm just curious on your commentary there on that market.

Well, we are bringing on a number of new products and services and focused in that area. The large-scale asset managers, it's a multiyear process for them. And the new technologies, right, the RPA, the AI, the ML, the natural language processing, those things are being increasingly sophisticated and increasingly powerful. These asset managers are looking at what they have today and then how do they transition to new technologies and be able to streamline their operations and infrastructure costs. So we think increasingly that will get adopted. And it's proven to kind of be a difficult thing to -- without your infrastructure and bring new. At the same time, it created an also long review and analysis. Now I think that's going to come to change. And we're planning on being at the forefront.

Makes sense. Let's hope we're getting to that stage. Appreciate the comments.

And our next question comes from Rayna Kumar with Evercore ISI.

Can you give us your thoughts on the current outlook for a large license deal? So now that vaccine is becoming more prevalent in the U.S., are you -- do you think you're going to start to give more face-to-face meetings to close up some of these larger deals that you spoke about in the fourth quarter earnings call?

Well, as Rahul spoke earlier, Rayna, that the thing you're seeing now is increasingly infrastructure bundles with large licenses. So that the technology aspects of maintaining current code, right, so releases have to go in, and it has to be handled and it has to be done in a very professional way, and that's our expertise. Often, it's not these large-cap managers that are very expert in using applications but not necessarily as expert in maintaining them, upgrading them, planning for those things. And so we think that bundling capability is giving us a little more running room. And we think that the large license sales, I think, are not going to be as robust as they were 10 years ago because there's more options for people. And I think they will adopt some of those options that make their entire infrastructure easier to manage. Do you agree with that, Rahul?

I do. And we've seen -- as Bill just mentioned, we've seen that strength in our Advent business, and we're starting to see more of those conversations in our institutional and investment management business.

That's extremely helpful. And just on the DST business, a clarification question, did you say DST for the full year could be up 0 to 1% organically or up 2%? And what gives you confidence that DST will continue to improve in 2021 versus what we saw in 2020?

Yes. I think I said it's 0 to 1% but, Rahul, correct me. And I think we're shooting that combined around 2%. And we have opportunities, I mean tremendous opportunities. Opportunities only translate into financial statements when contracts get signed, right? So we are executing on large-scale deals. Hopefully, over the next couple of quarters, it will come to fruition, and we'll be able to share with you. But we're cautiously optimistic that big things are going to happen for us. We've been working hard to make sure that happens and, at the same time, continuing to drive earnings, drive cash flow and increase shareholder value. That's our job. Rahul, do you have any more on that?

Well, I don't. We are -- we're also -- we've got reasonably good visibility at least in the current quarter and hold that out. So that's also part of where the confidence comes from.

And our next question comes from James Faucette with Morgan Stanley.

I wanted to touch on quickly acquisitions during the course of the quarter. Rahul kind of mentioned that you might be looking a little bit more tweaking your M&A strategy a little bit. And it seems like the Mainstream may fit the criteria you outlined then. Should we expect acquisitions similar to this going forward in terms of price you're willing to pay, growth rates, et cetera?

Well, I think the answer to that is yes. James, if you can tell us about what's the high end of this, it right to see -- but there's not a lot of money chasing things. And we have a lot of confidence in our development teams and our sales organization. And we believe we can build most anything. So the question becomes is where do you allocate your capital. And we want to allocate it -- you know what, we'll give our shareholders the best risk-adjusted return. So maybe these things that are selling at 20x revenue, maybe they are going to be moonshots. But you've been at this long enough, 20x revenue, man, that's a big number. And so you got to do your due diligence, you got to know how you're going to make that pay off.

And so I would say, yes, of course, we have to raise our prices in the market to get good assets because good assets are selling for a higher price. But we're still disciplined. Like I said, we've did almost $500 million in adjusted consolidated EBITDA. And that gives us a lot of flexibility. And as Patrick said, we're expecting somewhere around $1.3 billion in free cash flow. So we can use that to do lots of things. And we plan on doing lots of things. And so we think there's a good question and there's no specific answer other than, certainly, if you're going to be in the M&A game, you're going to pay more now than you did 5, 10 years ago.

Yes. For sure. And I think the tweaks certainly makes sense. I wish I could tell you, though, Bill, how high or how long it goes on. But I guess associated with that, it seems like there's been some recent focus on Australia, given Link Group and Mainstream. Is that a coincidence? Or is there something attractive about the Australian market that you're looking to gain exposure to? I'm just trying to get a little bit of insight into if there's anything specific there that we should be paying attention to in that region of the world.

Well, I think Australia has a strong economy, and they have a -- their superannuation fund concepts and distribution to their populous is what they call it the wall of money, I think. And when you have that and you have an upwards 30 million people that are certainly top decile of the world's wealth as far as full populations go, I think it's an attractive market, right? And they have English [convenience], common law practices, primarily contractual processes similar to the U.K. and the U.S. and Canada, and so that makes it pretty attractive and it makes what we do pretty transparent to them. And I think that's why we see the Australian -- plus they were for sale. So it's something that we try to take advantage of no matter where it is in the world.

Our next question comes from Chris Donat with Piper Sandler.

It's Chris Donat. In terms of your second quarter guidance, just wondering about the -- it looks like about a 2% decrease from the first quarter in terms of adjusted revenue. How should we think about that? Is that sort of coming off a strong quarter from Intralinks? Or was other revenue pulled forward in other sources? Just help us understand what's the quarter-on-quarter change in revenue.

Rahul, you want to take that?

Sure. I think the biggest thing there is we do have some seasonality in our business, in a couple of the areas. For example, in our alternatives business, we do a lot of year-end financial statements and tax work. In our transfer agency and Innovest businesses, we do some regulatory filings and reporting to investors that occur around the year-end process. And so there's pockets like that where there's just more work that gets concentrated in Q1 than Q2, and that's primarily the difference.

Okay. Got it. That makes sense. And then you already touched on this a little bit, but I just want to make sure I'm understanding what's going on. With the new Intelligent Automation Solutions Group, is that separate from Singularity? Or is there some overlap? Or where are we with Singularity? And there's a lot of themes here with machine learning and robotic process automation. It seemed like they overlap between the 2.

Well, I think they do, right? I mean Singularity is an investment analytics and accounting and reporting solution. And then our Intelligent Automation, the workflow product, AWD, would be integrated with that in order to be able to use all of Singularity's capabilities and be able to put in a very sophisticated workflow process. So it is all related, and -- but it's the bundling of those things, I think, that gives us that power [in the market].

Our next question comes from Jackson Ader with JPMorgan.

Great. First one is on win rates. And I was just curious if in either the Eze business or Fund Administration, whether you were seeing any kind of different win rates for maybe new fund launches versus your win rates with existing funds that are just putting out for an RFP.

I think our historical win rates and our current win rates are pretty similar. We might have a little momentum now. But we are a pretty powerful force in this, right? We had $74 billion in our funds business. And we have consistently been a big force in new fund launches that we're in. And I think that will continue. Do you have any more color, Rahul?

Well, I agree. I think it is pretty consistent with the past. And we are -- as our business gets stronger and we continue to build products and services, it is strengthening. And that part of the market, the new fund launch market, has always been really attractive to us. And many of our long-term clients and big clients started out in that process, and that continues to be a place where we have a good number of wins.

Okay. And then my follow-up is on -- just 2 quick ones on the Mainstream acquisition. First, is -- is there anything structural about that business that would kind of keep it from being able to get to that SS&C operating margin kind of target level? And then also, if memory serves, Advent, when we acquired them had, I don't know, teens or maybe 20% of the business came from the international market. So I was curious if there's any kind of either retailer or RIA potential cross-sell with Advent moving into a new market?

Well, we don't think there's anything structural at Mainstream. And we think it's a good business. We think we can add a lot of heft in sales, marketing and then, obviously, we're going to save some on overhead costs. So we should be able to drive margins up. And as far as Advent is concerned, I think, we do well internationally. Black Diamond, we acquired with Advent, and that's a big RIA. I think we're up to [1,700] or so RIA in Black Diamond, and that continues to be a nice growth area for us. And we like that space, of course. Everybody likes that space. So finding tuck-in acquisitions is -- it's expensive. And you got to be cognizant of that expense and then also what's the time to market if we decided to build, and we have to make sure that we're wise about which of those we do.

And there are no further questions at this time. I'll turn the conference back over to Bill Stone for final remarks.

Well, again, we appreciate all of you, and hopefully, we're off to the races on here, right, Kentucky Derby is coming up in a week or 2. And I look forward to talking to you again in the second quarter. Thanks.