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spk00: Thank you for standing by. My name is Bailey and I will be your conference operator today. At this time, I would like to welcome everyone to the SS&C Technologies Q2 2023 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. If you would like to ask a question during this time, press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star and the number one. I would now like to hand the call over to Head of Investor Relations, Justine Stone. You may begin.
spk04: Welcome and thank you for joining us for our Q2 2023 earnings call. I'm Justine Stone, Investor Relations for SS&C. With me today is Bill Stone, Chairman and Chief Executive Officer SS&C. Rahul Kanwar, President and Chief Operating Officer, and Patrick Pedanti, 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 Security Litigation Reform Act of 1995. Actual results may differ maturely from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the risk factor section of our most recent annual report on Form 10-K, which is on file at the SEC and can be accessed on our website. These forward-looking statements represent our expectations only as of today, July 27, 2023, while the company may elect to update these forward-looking statements It specifically disclaims any obligation to do so. During today's call, we'll be referring to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the investor relations section of our website at www.ssvtech.com. I will now turn the call over to Bill.
spk13: Thanks, Justine, and thanks, everyone, for joining. Results for the second quarter are $1.363 billion in adjusted revenue, up 2.5%, and our adjusted delivery for care were $1.08. An increase in interest expense, which was $118 million in Q2-23, compared to $68 million in Q2-22, and general expenses have put some pressure on our bottom line. Adjusted consolidated EBITDA was $502.4 million, and our EBITDA margin was 36.8%. up 140 basis points from Q2 22. Our second quarter adjusted organic revenue was up 2.5%, driven by strength in our alternatives business, particularly private markets, which was up over 20%, interlinks, and the retirement businesses. SFC generated cash from operating activities of 584.2 million. for the six months into June 30, up 137 million or 30.5% over the same period last year. We paid down $125 million in debt in Q2, bringing our consolidated net leverage ratio to 3.27 times and our net secured leverage ratio to 2.28 times consolidated EBITDA. In Q2, we bought back 2 million shares for 111,900,000 at an average price of $56.17 per share, and we will continue to target 50% of our cash flow to stock buybacks and 50% to debt paydown. Our M&A strategy remains disciplined, and we have yet to see movement on any large assets. We do think that there will be opportunity to do some tuck-in acquisitions in the near term. Expense management will be a priority for the remainder of the year. Our internal deployment of Blue Prism digital workers is well underway, and we are on track to achieve our full year targets. We currently have over 500 digital workers deployed across all business units. We believe this is one of the fastest deployments of digital workers in Blue Prism's history. Currently, the largest usage of Blue Prism is in are GIDS and fund administration businesses, but we see significant opportunity in retirement, health, regulatory, and tax reporting. Operational functions in production with digital workers include reconciliation break investigation and resolution, statement downloads, daily price file, investor contract notes, and statements and reporting. We expect the FTC savings to accelerate in the back half of the year as these live processes are embedded in the business and the full benefits are realized. I'll now turn it over to Rahul.
spk02: Thanks, Bill. Our business continues to strengthen as we prioritize innovation and new product rollout across the company. Intralink's rebounded with 9% growth in Q2. Average deal size is up. Price increases have been implemented. Deal services, which offers redaction and NDA services, has become Intralink's fastest growing product. In our investor portal business, we launched InView, a purpose-built portal designed for investors to aggregate all of their fund reports into a single view and make data-driven decisions. Initial client feedback has been positive. As Bill mentioned, private markets continue to accelerate with strong growth in Q2. Private credit, in particular, is a big opportunity for us, and our offering has made significant advancements as we go live on the SSMC private cloud environment. Go-check integration, loan platform integration, a robust data platform are all key functionalities to manage complex fund structures. Retirement, which grew 7% in Q2, has several multi-million dollar opportunities in the pipeline. We recently surpassed a billion dollars on our retirement income clearing and calculation platform and have grown the number of participants 42% since January. Sales remained strong in Q2 with headline wins in Fund Services, Advent, and GIDS. Some key attributes that our prospects cited were strong functionality, ability to purchase both software and services from a single vendor, and our commitment to innovation. Sales priorities remained disciplined execution, offering holistic and comprehensive solutions for customers, and paying close attention to their onboarding experience. As one example, We recently announced Blue Prism has partnered with the National Health Services Shared Business Services team to provide additional services to the NHS in England. Using Blue Prism's intelligent automation platform, NHS organizations can improve patient care, expedite patient processing, and transform standardized services, contact center communications, HR, finance, and other corporate functions. These new capabilities mirror the needs of our pharmacy and healthcare customers in SS&C Health and review the combination of our healthcare products and services, including Domani Rx, along with Blue Prism, to be a powerful solution. I will now turn it over to Patrick to run through the financials.
spk14: Thanks. Results for the second quarter were GAAP revenues of $1,362.6 million, GAAP net income of $130.7 million, and GAAP EPS of 51 cents. Adjusted revenues were $1,363.4 million. Adjusted revenues were up 2.5%. Adjusted operating income increased 6.7%. Adjusted diluted EPS was $1.8, a 1.8% decrease from Q2-22 due to the impact of higher interest rates on our debt. Adjusted organic revenue increase on a constant currency basis was 2.5%. Acquisitions contributed $5.8 million. Foreign exchange had an unfavorable impact of $3.4 million. We had strength across several product lines, including alternatives, GIDS transfer agency services, Blue Prism, and the Intralinks businesses. Adjusted operating margins expanded in Q2 2022. to 2023 as we managed expense growth. Adjusted operating income for the second quarter of 23 increased 30.5 million or 6.7% from the second quarter of 2022. Adjusted operating margins were 35.6% in the second quarter compared to 34.2% in the second quarter of 2022. Excluding acquisitions, expenses increased 0.6 percent on a constant currency basis. Acquisitions added 3.8 million of expenses, and foreign currency decreased costs by 6.2 million. Net interest expense in the second quarter was 118 million, an increase of 15.3 million, or 74 percent, from Q2 2022. Q2 2023 net interest expense includes 3.4 million of non-cash amortized financing costs, NOID. The average interest rate in the quarter was 6.59% compared to 3.45% in the second quarter of 2022. Adjusted net income, as defined in Note 4, was $274.6 million, and adjusted EPS was $1.08. An effective tax rate was 26%. Diluted shares decreased to $255 million from $257 million in Q1. Higher share repurchases during the first and second quarter led to the increase, decrease. On the balance sheet and cash flow, we ended the second quarter with $439.7 million of cash or cash equivalents and $7 billion of gross debt. SSNC's net debt which excludes cash and cash equivalents of $114.4 million held at Damani RX was $6.6 billion as of June 30th. Operating cash flow for the six months was $584.2 million, $136.7 million, or $30.5 million increase compared to the same period in 2022. And for the six months ended June 30th, we purchased Treasury stock for a total of 246.6 million or 4.3 million shares at an average price of $57.78. We declared and paid a dividend of 101 million common stock compared to 102 million last year. Net debt payments for the six months was 169.8 million. And for the six months, we paid 226.9 million of interest compared to $112.6 million in 2022. In the six months, we paid income taxes $159 million, comparable to $156.5 million in 2022. And our accounts receivable DSO was 53.1 days compared to 55.9 days as of June 2022. Capital expenditures and capitalized software total $121.4 million, or 4.5 percent of revenue on a year-to-date basis. Our LTM consolidated EBITDA, which we used for covenant compliance, was $2 billion, $31.6 million as of June 30th. Based on net debt of $6.6 billion, our total leverage ratio was 3.27 percent, and our secured leverage ratio was 2.28 percent. On outlook for the remainder of the year, I'll cover a few assumptions. First, we'll continue to focus on client services. Retention rates will continue to be in the range of our most recent results. We have assumed foreign currency exchange will be at current levels. Our outlook assumes software-licensed business will have lower growth in the second half of the year compared to previous expectations. Adjusted organic growth for the year will be between 2 percent and 4 percent. Adjusted organic growth for Q3 will be in the range of 1.5 to 4.5 percent. We have assumed interest rates will stay consistent with current rates for the remainder of the year. And we will manage expenses and personnel costs to improve our operating margins. And we'll continue to invest in our business long-term with capital expenditures in the range of 4% of revenues. And I would expect our gap tax rate to continue to be approximately 26%. So for the third quarter of 2023, we expect revenues in the range of $1,355,000,000 to $1,395,000,000. Adjusted net income in the range of $287,000,000 to $309,000,000. and diluted shares in the range of $254 million to $256 million. And for the full year, we expect revenues in the range of $5,469,000,000 to $5,575,000,000. Adjusted net income in the range of $1,160,000,000 to $1,225,000,000, and diluted shares in the range of $254,000,000 to $257,000. For the full year, we expect cash from operating activities to be in the range of $1,265,000,000 to $1,335,000,000. The DST ERISA 401 settlement, which we recently announced, is excluded from these cash flow estimates. If the court approves the settlement in 2023, we expect the impact on cash flow to be approximately $40 million net of taxes. And I'll turn it over to Bill for final comments.
spk13: Thanks, Patrick. And I want to congratulate you on your retirement. Patrick has been with SS&C since 1999. He has seen us through over 60 acquisitions, a go-private transaction, and our 2010 IPO. Thank you for your accomplishments and your dedication. I also want to welcome Brian Schnell to SS&C as our newly appointed CFO. Brian will join SSNC on August 7th from his position as CFO of Chicago Board Documents Exchange. Brian has an MBA from George Washington University and his undergraduate degree from the University of Notre Dame. Finally, SSNC has spent the past 37 years developing and acquiring a broad range of market-leading technology. We have added world-class services around these products. Multiple times we have aggressively and extensively defended our intellectual property against misappropriation. We have done it successfully multiple times. On occasion, our professional fees will pick up as we hire expensive legal talent. And now I will open it up for questions.
spk00: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Please limit yourself to one initial and one follow-up question. And we'll pause for just a moment to compile the Q&A roster. And your first question comes from Kevin McVey with Credit Suisse.
spk11: Thanks so much. And let me add my congratulations to Patrick as well. And welcome to Brian. Hey, it looks like you continue to see real nice momentum in the organic growth, came in at about 2.5%. And the guide for Q3 in the full year is 3%. If I do the math, I think that implies 5% for Q4. I just want to confirm that, number one. And then, you know, that's a really nice acceleration from the beginning of the year. Maybe if I'm right on that 5, could maybe just help bridge maybe from the 1 to the 5 or maybe the 2.5 that you just put up to the 5, maybe start there.
spk13: Well, I think that, you know, we did 2.5 in Q2 or 2.6 maybe. And I think in Q3, we're expecting somewhere between 1.5 and 4.5. And for Q4, I think, Patrick, what do we have for Q4 on organic revenue growth?
spk14: Yeah, Q4 at the midpoint in Q4, it's about 4.8%, so close to 5%. Yeah.
spk13: Does that answer your question, Kevin?
spk11: It does, Bill. And then just any sense of the professional fees on the IP, just any additional just thoughts around that? Because it seems like the delta on the EPS was interested, sounded like some medical, and then I think those professional services that you just alluded to, is that right?
spk13: That's right. Medical claims are obviously interest expenses by far the biggest thing to impact EPS. But on an operating basis, the medical claims and professional fees were more than expected in Q2. And you have no choice but to see these things through to the end. But if you don't protect your IP, then we're not protecting the shareholders' assets. And so we will continue to do that. And like I said, we've been successful a number of times.
spk10: Makes sense. Thanks so much.
spk00: Your next question comes from Dan Perlin with RBC Capital Markets.
spk09: Thanks. Bill, maybe you could just spend a moment talking about some of the prioritizations you've got for these investments that you mentioned in the release. You know, you sound pretty adamant that they're going to drive, you know, incremental revenue growth. Obviously, just talking about the organic growth.
spk13: Well, I think, Dan, what we've done is, you know, we've spent a lot of money building out a number of new systems and, you know, even in what has been a pretty tough financial market, even though it's gotten a little stronger the last quarter. But, you know, you can see on our AUA that that ticked up about $15 billion in Q2. That's a good harbinger of some of the things that we've done for our clients that separates us from our competitors. You know, and I think what what we've done with the technology in our services business is to make it that it's a compelling offering for our clients and our prospects. And we continue to take business from our competitors. It's still lumpy though, right? Particularly with the biggest funds. We have deals we think we would have closed months ago. that literally drag. And there's really, at least as far as we think, there's nothing we could do to make the biggest funds go faster. So that's one thing. And then on the technology, the Aloha product has been pretty strong. We've done pretty well with Singularity. We've got some real momentum in all the additional products that we've done with Black Diamond. We've combined Black Diamond with our trust accounting so that RIAs can continue to keep the assets that they've gathered when it goes generational and the generation puts it in trust for the kids. Oftentimes, they lose that business because they don't have trust accounting capabilities. So that's been pretty popular for us. And Geneva continues to... to dominate in the large scale hedge fund business. And I think we have a number of those private markets, as we said, was up over 20% in Q2. So there's any number of pockets of strength, it's just getting all the pockets to be at strength in the same quarter, right? So I think it is, it's just a constant. It's making sure we're, executing at a very high level and that, you know, we go for the wins. And that's where we're at. We're still a very profitable company. We generate tremendous amounts of cash. We're not going anywhere. We're still very competitive. And it's just a question of really getting the entire orchestra perfectly in tune.
spk05: Your next question comes from the line of Peter Heckman with DA Davidson. Please go ahead.
spk08: Okay. Glad to have us back online here. Bill, can you talk a little bit, you know, this trade settlement, shorting the trade settlement cycle to one day, P plus one, and then eventually to T plus zero. That's been talked about for a very long period of time. Do you view that as a catalyst at all for some of your clients to consider upgrading older systems?
spk13: You know, I think that if they have to, then they will. And if they can continue to band-aid it like a lot of them have done so far, I think they'll continue to do that. So, you know, for it to be a mad dash to get new technologies in, I don't foresee that. But there will be some that want to take advantage of the increased capability of the newer systems, the security, the speed, and then also the reconciliation parts of that stuff, and making sure that everything gets processed in a very timely fashion. So there'll be some disruption, but I don't think there'll be a tremendous amount of incremental revenue. I don't think there's a few hundred million or something like that, right? And, you know, to move the bar on SS&C, you've got to do, you know, 100 million or 200 million.
spk08: Right. Okay. Okay. And then, you know, interlinks up 9% is particularly impressive given that M&A continues to be down 25, 30% year over year. I know you mentioned one area. I didn't quite catch it, but can you talk about some of the areas outside of M&A where Interlinks is outperforming and allowing that business to continue to grow?
spk13: You want to take that, Rahul?
spk02: Sure. I think the biggest area outside of M&A is the alternatives area. So that's the InView portal that I mentioned in my comments. It's the LP communication, capital call distribution, statement distribution, those kinds of things. And, you know, as we continue to bring our businesses closer together and develop joint solutions, we're finding lots of opportunities to sell that web and LP communication system to our fund administration clients and going to market it sort of a joint package. And that's been attractive. So that's another area where that alternative business is growing even faster than the M&A business right now.
spk13: And I think we have like redaction services and other enhancements to the core offerings that have also been pretty attractive.
spk08: Okay, that's helpful. And then just last question, in terms of the way you report, you know, in this quarter you talked about a couple tough comps from software license fees. You know, on an annual basis, I don't believe you're still disclosing this as a separate light item, but, you know, software license fees, are we kind of talking around, Is that about the right level if we just isolate the perpetual licenses?
spk13: I don't really have that off the top of my head, Pete. I would guess that we sell, yeah, probably something 20, 25 million a quarter.
spk08: Okay. All right. I appreciate it. I will get back to you.
spk05: Your next question comes from the line of Andrew Schmidt of Citi. Please go ahead.
spk12: Hey, guys. Thanks for taking my questions, and let me extend my congratulations to Patrick and look forward to working with Brian when he comes aboard. I wanted to ask on the operating expense space. Obviously, it's been a volatile couple of years, and there's been more variability there than historically. Maybe just talk about just your visibility when it comes to the expense space in terms of just, you know, what to expect. On one hand, you maybe had a few things, labor costs for the past year. Now you have these legal fees, you know, picking up a little bit. On the other side of this, we also have blue prison benefits. Just wondering just how all this balances out in terms of your overall marketing structure and visibility going forward. Thanks a lot, guys.
spk13: Well, I think our, you know, if you look at our expenses on a currency basis excluding acquisitions in Q2, I think it was up 0.6%. So, you know, as an overall marker, you know, to keep your expense growth, you know, at less than 1% is, I think, pretty impressive. And as much as we've been deploying and getting some of the benefits of Blue Prism, It's a little bit like we're in spring training. For baseball, we're not going to get really in our stride maybe until the middle of summer. I think we have a lot of opportunities to further our cost management, our expense management with the deployment of digital workers. We think we can just give our workers, current human workers, better jobs with more interesting work and let the digital workers, you know, do the repetitive stuff that computers are great at. So we think we have a tremendous opportunity there. You know, occasionally, you know, you'll have a situation where, you know, you think your IP's been misappropriated and then you've got to go defend it. And that's not a cheap process, but it's a necessary process. And so that happens. And we had some, you know, some excess medical claims in the second quarter. And, you know, that's going to happen. You know, we have a big population and we want to make sure they have great, great health care. And so whatever that is, you know, we're happy to pay it.
spk12: Got it. Thank you for that. And to be clear, you're still, it looks like, correct me if I'm wrong, you're still expecting operating marginal in the back half. Is that correct?
spk13: We are.
spk12: Okay. Fantastic. And then maybe just, thanks, Patrick. Just lastly, it sounds like growth, you know, sort of expected some slowness in terms of licensed revenues. What's the expectation for just licensed revenue pulled through in the back half, just given that that can be more variable relative to kind of the other sources of revenue. Just curious to get your visibility around that. Thanks a lot, guys.
spk13: Well, you know, license revenues are, you know, kind of capital expenditures for our customers. And, you know, more and more, they're going for, you know, outsourced services, you know, longer-term contracts, and less less large-scale capital commitments. So, you know, I would suggest that, you know, the license business will continue to evolve, you know, more term licenses, probably perhaps longer terms, which might offset some of the move towards outsourcing, but, you know, because on longer-term licenses, you get 606 recognition There's a lot of moving parts and some of the stuff with the accounting and the reporting, gap and then adjusted gap and all that, it gets a little arcane. So for me, I watch cash. How much cash do we get coming in here? And cash doesn't lie. So I think that's kind of my focus and And how people interpret accounting rules is a difficult process. Got it.
spk12: Thank you, Bill.
spk05: Your next question comes from the line of James Fawcett with Morgan Stanley. Please go ahead.
spk01: Hi, it's Michael in Fountain for James. Thanks for taking our question. Bill, I think at a conference in late May, you were talking to buyback potential in the 700 million range, and then we have the buyback announcement for roughly a billion. Is there anything we should be reading into in terms of the higher quantum there, just in terms of your use of free cash flow?
spk13: I mean, I don't think so. I think if we find acquisitions that we want to buy that we can get, you know, at a a price where we feel like we can make some money, then I think we will go after acquisitions first. But after that, we're going to pretty much split it between stock buybacks and debt repayment. If interest rates alleviate, we'll probably allocate more to stock buybacks than we would to debt pay down. But we're not going to go 100% either way, and we view it as art more than we view it as science, and we're going to try to be wise.
spk01: Makes sense. Appreciate that. Maybe just a follow-up on the organic rev cadence throughout the rest of the year. Seems like you're gradually scaling on the organic revenue side with exit rates close to 5% and 4Q, but is there anything in the pipeline and or what you guys are planning on doing from a pricing perspective that gives you the visibility into that 5% number in 4Q?
spk13: It's a whole combination of things, right, including price increases, including, you know, getting the large-scale deals that are already in that have revenue, have that revenue flush through in Q4. And then it's selling new business. So I think it's a combination of things. And there's work to be done, of course. But it's still July. We've got a lot of time. And we have a lot of really talented people. And we expect results. And on balance, they deliver them.
spk06: Thanks, Bill.
spk05: Once again, ladies and gentlemen, if you have a question, it is star 1. Your next question comes from the line of Terry Tillman with Truist. Please go ahead.
spk10: Hey, guys. This is Joe Mirzon for Terry. I want to extend my congrats to Patrick and to Brian. It's always nice to see a fellow donor climbing the corporate ladder. I have a question about Blue Prism. I think at the end of last year, you'd expected about 100 digital workers. You're at 500 now. Do you still expect to get to 1,000 by the end of 2023?
spk13: I think the numbers we gave at the last conference call was between 1,350 and 2,700. And I think Rahul can correct me if I'm wrong, but we would expect to have close to 2,000 by the end of the year.
spk10: I think that's right. Thanks. And just as a follow-up, I think in the past you've noted about a $50,000 savings per role that's migrated to the prison. Is that still accurate, or are you seeing better or worse savings as you've implemented more of these workers?
spk13: I would say that that's still the kind of rough estimate of where we are. As we as we automate different processes, you know, there's more of a, it might be a little bit wider of a range of what we say by digital worker. But I think we would still say the average is, you know, somewhere around 50, plus or minus 10%. Great.
spk10: Thanks so much, guys.
spk05: Your next question comes from the line of Patrick O'Shaughnessy with Raymond James. Please go ahead.
spk07: Hey, good evening. Can you speak to which part of the company where your intellectual property litigation is targeted? And has the potential theft of your IP had any impact on that business at this point?
spk13: Yeah, it's primarily in our fund services business. And I would say that we think it has that impact on our on our business and, you know, so, you know, that's why we fight these things, Patrick, is that, you know, you don't want to compete against people that are competing against you with your technology. You know, that doesn't seem particularly fair.
spk07: Got it. Makes sense. And then what are you seeing up there in terms of deal multiples? Obviously, SimCorp sold recently at a pretty lofty multiple, as did Adenza. Are there pockets where multiples are starting to come in, or is it all still pretty frothy?
spk13: I don't quite understand either one of those deals, frankly. But obviously, those are smart people that do those things, and so they do. I just look at it that way. You know, we make a whole lot of money, you know, and if we keep our eye on the ball, you know, we're going to get some nice pitches and we're going to knock them out of the park, you know, and there's no reason to, you know, I understand, right? I mean, we want total shareholder value and, you know, we always want our stock to go up rather than go down. But we live in a 90-day world on that stuff. But technology and big-time customers and all that, You know, they don't really live on a 90-day world. You know, sometimes they wait six months before they sign a contract, and the contract doesn't change at all in those six months. So, you know, it's getting in the cadence of your customers and making sure that you have enough pipeline that when people delay, you've got other ones that you can accelerate. And so I think that's our real challenge is, you know, at $5.5 billion, if you want to grow 10%, We didn't have any attrition. We still have to sell $550 million. We have 4% attrition, but we have to sell $750 million. That's a lot of revenue. That's a lot bigger than most of the people that we get compared to.
spk07: Understood. Thank you.
spk05: Your next question comes from the line of Alex Cram with UBS. Please go ahead.
spk03: Yes, hey, good evening, everyone. Just wanted to come back to organic growth for a second here because I don't think that's been asked on the actually the guide down. I mean, you were at, I think the midpoint was 3% before. Sorry, yeah, 3% before. No, it's 4% before. Thank you. Three now. You talked about the software licenses, so that makes sense. But is that all or is there something else that you would highlight? Why the reduction? I mean, you did come in better in the second quarter here as well.
spk13: Well, I think it's... Go ahead, Patrick.
spk14: Yeah, I think it's all... I mean, when you compare the outlook we provided a quarter ago to this outlook, it's pretty much the software business. You know, Advent as an institutional asset management, and we're seeing improvements in some of the other outsourcing businesses. like alternatives, interlinks, and our health business from where we expect it to be. So it's mostly the software business. It's still growing in the back half of the year. It's still growing in the back half of the year, but not as much as we expected.
spk03: Okay. No, thanks for clarifying. And then maybe on a more positive note, the GITS business, I don't think it's kind of on this call at all, two pretty solid back-to-back quarters. I mean, solid in the context of the normal growth in that business, 3.5%, but seems stable. So just wondering if there's any incremental color, if that's a good growth rate for the time being, or if you're hopeful that, you know, it's not only stabilized, but we can actually accelerate from here.
spk13: Well, I think we've done a pretty good job of, you know, repositioning that entire business and And I think that we have some optimism about being able to close big deals. But in the agency business, they're very large, tens of millions annually. So it's a long sales process. And so it is fraught with delays. So while we have some optimism, I would say that that we're watching that very closely. Rahul, do you have more color?
spk02: Well, I think, you know, I agree with everything you said. I think the other thing that I would highlight is some of our largest opportunities in the company globally are in this business, right? So to Bill's point, their sales cycle are a little bit longer. We have to keep our eye on it at all times. But, you know, in terms of a medium-term outlook, if you kind of look out, even a couple of years, we do think that this business is capable of growing a lot faster than, you know, kind of low single digits that it is right now.
spk03: All right. Very good. Thanks guys.
spk05: There are no further questions at this time. I will turn the call to Bill Stone.
spk13: Thank you, Bailey. And again, thanks everybody for being on the call. I can assure you that we are, uh, pretty focused and we look forward to talking to you at the end of October. Patrick, thanks again. See you.
spk14: Thank you.
spk05: This concludes today's conference call. Thank you for joining. You may now disconnect your lines.
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