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SS&C Technologies Holdings Inc (NASDAQ:SSNC)
Q4 2020 Earnings Call
Feb 10, 2021, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the SS&C Technologies Fourth Quarter and Full Year Earnings Call. [Operator Instructions]

And without further ado I would like to welcome your host for today, Ms. Justine Stone. Ma'am, the floor is yours.

Justine Stone -- Investor Relations

Hi, everyone. Welcome, and thank you for joining us for our fourth quarter and full year 2020 earnings call. I'm Justine Stone, Investor Relations for SS&C Technologies. 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 the 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, February 10, 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.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Thanks, Justine, and thanks, everyone for joining. Our results for the fourth quarter were $1,206 million in adjusted revenue, it's down a 0.5% and a $1.13 in adjusted diluted earnings per share, which is up almost 5%. For the full year, we had $4.681 billion in adjusted revenue, up 0.3% and $4.30 in adjusted diluted earnings per share, up 12.3%. Our adjusted consolidated EBITDA was $475.8 million for the fourth quarter and our adjusted consolidated EBITDA margin was 39.4%.

Our Q4 adjusted organic revenue was down 2% and for the full year our 2020 organic revenue was down 0.5%. As expected, we had weakness in our large license software business in the fourth quarter, but our alternatives business, our Intralinks and our Eze business grew nicely and the DST business saw improvement from the previous quarter.

Operating cash flow was $1,184.7 million for the 12 months ended December 31, 2020, up 10% if you exclude a one-time $250 million upfront license payment paid in the second half of 2019. $1,184.7 million represents a 103% cash conversion rate on our adjusted net income of $1,146.8 million. We put cash to good use in 2020. We paid down $738 million of debt, bringing our secured net leverage ratio to 2.31 times and our total net leverage ratio to 3.39 times. We bought back 3.7 million shares of common stock at an average price of $60.99 for total consideration of $227 million.

This year we faced many challenges which were unprecedented in our 35-year history. SS&C adjusted quietly and with authority. We moved 99% of our workforce to remote, supporting clients with expertise and resources. We continued to meet our deliverables, engage with our prospects and we've built and deployed solutions. We have continued to see success with our newest products. As eclipsed into the year with 170 clients, while doubling its client base. We have leveraged Algorithmics capabilities and developed scenario as a service [Technical Issues] pandemic-specific analytical tools incorporate [Technical Issues] infection rate, susceptibility and death rates into the investment scenarios based on movements in equity, fixed income, FX and commodity markets.

In SS&C Health, we successfully launched our flu pilot program with the support of our internal call centers. This program provides outreach to SS&C Health clients in order to enhance the rates of flu vaccinations. We developed a similar COVAX Program focused on ensuring the successful completion of the COVID Vaccine series for members receiving the vaccination from SS&C Health partner pharmacies. While 2020 was a tumultuous year on a global basis, SS&C performed with distinction.

We were able to outperform estimates, collect our receivables, delight our customers and generate more revenue than any year in our history. Like many in the financial services industry, we earned revenue on float. In 2020 of this revenue was down $20 million or over 75%. We overcame all difficulties and posted $4.3 million -- $4.30 in adjusted earnings per share, 12.6% above the $3.83 per share in 2019, 47% above the $2.92 in 2018 and 122.8% above the $1.93 in 2017. Good numbers we think.

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

Rahul Kanwar -- President and Chief Operating Officer

Thanks, Bill. As you noted, we had a strong quarter with a broad-based lift in revenue from Q3 across many of our business lines. DST, SS&C Health, alternatives, Intralinks, regulatory and Algorithmics all posted improved performance in Q4. Our alternatives business grew 5.5% in Q4 and 5.7% for the year. Clients remain optimistic about their growth outlook, which is reflected in our data, including the capital movement and other indices we publish. Bill mentioned the rapid adoption of Eze Eclipse in his earlier comments and in Q4, we launched the Eze app powered by Eclipse and made it available in iOS and Android app stores in November. User adoption and design collaboration for the apps next phase have been strong.

Intralinks has seen substantial growth since the recovery of the M&A market in the back half of 2020. We remain very focused on driving technological differentiation in the virtual data room space in the context of the strengthening M&A environment. Despite the challenges of 2020, we ended the year with accomplishments to be proud of instead of our business for strength ahead. During the year, we made several executive appointments including Dan DelMastro, Head of SS&C Health, Karen Geiger and Steve Leivent, Co-Heads of SS&C Advent, Kevin Rafferty, General Manager of SS&C Retirement Solutions, Nick Wright, Head of Global Investor and Distribution Solutions, Chris Madpak, Head of Tax services for SS&C GlobeOp and hired and promoted numerous other senior executives. These executives are working with our customers and prospects driving change and defining new products and services to fuel future growth.

We continue to invest in our sales and marketing organizations and are seeing success gathering leads and interacting with prospects using digital and virtual platforms. Under the direction of the Eamonn Greaves, our Global Head of Sales, we launched a comprehensive solutions program that brings product and service owners together across SS&C to develop integrated and targeted offerings. These solutions are geared to our client-specific needs and focused on their asset classes, structures, regulatory and end customer requirements and other business objectives. We have seen early success with client selecting multiple products and services and anticipate that this new effort will drive further collaboration within SS&C and distinguish our offerings in the marketplace.

Now, I will mention some key deals for Q4. A $1 billion hedge fund launch chose our hosted Geneva solution along with Geneva World Investor and e-Investor. A large UK Wealth Manager chose to transform their operations using our Global Investor and Distribution Solutions and Advent software. An existing retirement customer bought AWD our workflow management tool. A Colorado-based alternative investment manager chose a full suite of SS&C offerings including GlobeOp Fund Services, loan servicing with Precision LM our Eze trading platform and Intralinks. An existing fund services client extended their relationship to include risk investor services and regulatory solution, including our new Blue Sky reporting offering. A large SS&C Health client adopted our digital platform portfolio with a mobile app that enhances the member payer interaction for 10,000-plus members.

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

Patrick J. Pedonti -- Senior Vice President and Chief Financial Officer

Thank you. Results for the fourth quarter were GAAP revenues of a $1.2034 billion, GAAP net income of $197.1 million and diluted EPS of $0.74. On an adjusted basis, revenues were $1.2061 billion, including the impact of the adoption of the revenue standard 606 and acquired deferred revenue adjustments for acquisitions. Adjusted revenue was down 0.5%, adjusted operating income decreased 2.4% and adjusted diluted EPS was $1.13, a 4.6% increase over Q4 2019. Adjusted revenue decreased $6.1 million or 0.5% over Q4 '19. Our acquisitions contributed $27.4 million. Foreign exchange had a favorable impact of $6 million or 0.5% in the quarter.

Adjusted organic revenue declined on a constant currency basis was 2% driven by weakness in the Advent, institutional, software products and DST financial services. These were offset by strength in fund administration, Intralinks and the Eze business and we had strong sequential growth in the DST financial services and healthcare businesses over the third quarter. Adjusted operating income for the fourth quarter was $458.8 million, a decline of $12.2 million or 2.4% from the fourth quarter 2019. Foreign exchange had a negative impact of $3.5 million on expenses in the quarter. Adjusted operating margins were 38.8% compared to 38% in 2019. The expenses were driven by higher employee compensation and benefits, higher sales commissions and professional services and these expenses were partially offset by lower travel and contractor expenses.

Adjusted EBITDA, defined in Note 3 of our earnings release, was $475.8 million with 39.4% of adjusted revenue. Net interest expense for the fourth quarter was $53.3 million and includes $3.4 million of non-cash amortized financing costs and OID. The average rate in the quarter for our amended credit facility and our senior notes was 2.99% compared to 4.53% in the fourth quarter of 2019 and resulted in an interest expense decrease of $47.2 million or 47%. We recorded a GAAP tax provision of $37.7 million or 16.1% of pre-tax income.

Adjusted net income as defined in Note 4 of our earnings release was $302.6 million and adjusted diluted EPS was $1.13. The effective tax rate used for adjusted net income was 26%. Diluted shares increased to $268.1 million from $266.7 million in Q3. The impact of the increase in the average share price and option exercises was partially offset by share repurchases in the quarter. Our balance sheet and cash flow as of December 31st, we had approximately $209.3 million in cash and cash equivalents and approximately $6.5 billion of gross debt for a net debt position of approximately $6.3 billion. Operating cash flow for the 12 months ended December 2020 was $1,184.7 million, down $143.6 million compared to the same period in 2019. The decrease was impacted by a one-time upfront $250 million license payment that we received in 2019.

For the full year, net debt payments -- made net debt payments of $738.2 million. Treasury stock buyback of $227.8 million for purchases of 3.7 million shares at an average price of $60.99. We declared and paid $136.1 million of common stock dividend as compared to $107.6 million last year, an increase of 26.4%. Paid interest for the period was $236.2 million compared to $353 million last year to the lower debt levels and lower average interest rate. For the full year, our average interest rate was 3.35% compared to 4.78% in 2019. For the year, we paid income taxes of $277.4 million compared to $222.7 million in 2019.

We saw improvements in our accounts receivable DSO as of December 2020 at 48.4 days and that compares to 50.4 days as of September 2020 and 49.7 days of December 2019. Capital expenditures and capitalized software were $106.4 million or 2.3% of adjusted revenue. Spending was predominantly for capitalized software and IT infrastructure, and also some facility leasehold improvements. Our LTM consolidated EBITDA that we use for covenant compliance was $1,856.3 million as of December 2020. Baseline net debt of approximately $6.3 billion, our total leverage ratio was 3.9 times and our secured leverage ratio was 2.31 times as of December 31st.

On our outlook for 2021, first I'll cover some of the assumptions in our outlook. We currently expect markets to be volatile. Large scale outsourcing deals and license deals to continued to be at moderate levels, but with improvements in the back half of 2021. Our fund services business will continue to perform. As we focused on client service, our retention rates will continue to be in the range of our most recent results. We've used foreign currency exchange at current levels. We expect the impact on DST Health unit pre-acquisition client terminations to impact revenue by approximately $25 million for the full year 2021.

Adjusted organic growth for the year will be in the range between zero and 4% positive. Adjusted organic growth for Q1 in the range of negative 2.3% to positive 1.1%. Interest rates on our term facility will be approximately one month LIBOR plus the spread, which is currently 175 bps. We will continue to manage expenses during this period by controlling variable expenses and staff hiring. On capital expenditures, we'll continue to invest in our business and spend approximately 2.8% of revenue on capital expenditures and capitalized software. We expect our adjusted tax rate to continue to be 26%.

For the first quarter of 2021, we expect revenue in the range of $1,158 million to $1,198 million. Adjusted earnings per share to be in the range of $1.05 to $1.11. For the full year of 2021, we expect revenue to be in the range of $4,685 million to $4,875 million and adjusted earnings per share to be in the range of $4.36 to $4.64. For the full year, we expect cash from operating activities to be in the range of $1,240 million to $1,320 million.

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

Operator

Excuse me. I think Mr. Bill got disconnected, but he is reconnecting now.

Patrick J. Pedonti -- Senior Vice President and Chief Financial Officer

Okay, thank you.

Operator

Excuse me, Mr. Bill Stone is reconnected.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Sorry about that. Thanks, Patrick.

Patrick J. Pedonti -- Senior Vice President and Chief Financial Officer

Thank you.

William C. Stone -- Chairman of the Board and Chief Executive Officer

We continue to operate in the global pandemic. 99% of our global workforce is still remote and business travel and in-person sales meetings are essentially non-existent. Over the past 11 months we have learned how to operate under these circumstances utilizing video conferencing website, web-based marketing and promoting the power of our business model and reliability of our people and technology. As you can tell from this call, we are optimistic and we believe our performance during this pandemic will pay dividends well into the future.

We will now open it up for questions.

Questions and Answers:

Operator

Thank you, presenters. [Operator Instructions] Our first question comes from the line of David Togut from Evercore ICE. Your line is open.

David Togut -- Evercore ISI -- Analyst

Thank you. Good afternoon. Could you comment on fourth quarter 2020 total organic revenue growth, quantify please, and then if you could break down organic revenue growth for the fourth quarter by fund administration, Intralinks and DST?

Patrick J. Pedonti -- Senior Vice President and Chief Financial Officer

For the fourth quarter, total adjusted organic growth was down 2%. The alternatives fund administration business was up 5.5%. And DST we can provide you kind of a breakout between the two groups. The financial services group was down 1.1% and the healthcare group was up 3.1%. I think that combined to be down 0.3% for the full year. And Intralinks was up 3.8%.

David Togut -- Evercore ISI -- Analyst

Got it. Thanks for that, and just as my follow up, could you comment on your acquisition pipeline and appetite to acquire in the year ahead based on the quality of the pipeline and valuations that you see?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, we constantly look at acquisitions and we're disciplined about it. Obviously, we deployed $8.3 billion in 2018 and that bought DST, Eze and Intralinks. We spent, I think, about $138 million in 2020, which was less than we would have expected, but we looked at lots of things and obviously in the public domain you know that we looked at linked administration done in Australia. So we're disciplined about it. And we're quite aware that all the questions that we get on the conference calls and from our shareholders are organic revenue growth per unit. So we want to make sure that we focus on our organic revenue growth.

And as Rahul had detailed in his remarks, we've made lots of changes. All of our businesses are getting better. All of them, because if they don't get better, we get different executives and that's how we operate. So we're very optimistic about where we're going about generating tons of cash, paying down a bunch of debt, looking at great acquisitions and earning more money for our shareholders and then deciding how we're going to allocate our capital, whether that's going to be on acquisitions, which is generally our first choice. But we also like to pay down debt and we also like to evaluate buying back our shares.

So I don't think our our business plan or our strategy has changed. I believe that what we're doing is executed and I think that's what we'll continue. So there is a lot of stuff for sale and you see stuff getting purchased all the time and the question becomes is, is that strategic for us, will it drive our organic revenue growth and what is it going to do over the long-term. So those are the criteria that we have. And I think we will probably buy some things in 2021, but as usual we'll be disciplined about it and we are going into 2021 with some optimism.

David Togut -- Evercore ISI -- Analyst

Understood. Thank you very much.

Operator

Our next question comes from the line of Andrew Schmidt from Citi. Your line is open.

Andrew Schmidt -- Citigroup -- Analyst

Hey, guys. Thanks for taking my questions here. I wanted to touch on the sales cycle briefly. I know you mentioned in your revenue assumptions, you expect customer appetite and buying behavior to improve throughout the year. But I'm wondering what you're seeing more recently as we head -- heading into 2021, are you seeing customer behavior and buying patterns improve? Obviously, you're still in a largely rote environment, but just curious what you're seeing from a sales cycle perspective especially as it pertains to large deals?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I'll give that a quick shot and then Rahul can comment, but we have a pretty full pipeline. We have large deals. We have what we believe are a number of large deals that we hope to close this quarter. We have a very reasonable January and I believe that we will continue to execute and we're seeing some strength across our different businesses. I think our indicators that we have in Intralinks are all as strong as they've ever been. I think we have a larger pipeline than we've ever had and fund services, the hedge fund industry has proven to be quite resilient and I think it will continue to be as more and more private assets becomes the most attractive place to put money, whether that's private equity or private credit. Our real estate, I think that SS&C is well positioned to do well there. And I think that DST business is getting stronger. Our retirements business grew very nicely in Q4 and we expect it to grow very nicely throughout 2021. We have some challenges in our healthcare business. But Danny DelMastro and his team are doing a good job and are very focused and so with that up Rahul take you correct.

Rahul Kanwar -- President and Chief Operating Officer

So I think the thing that I would add is as time has passed in this pandemic, we have gotten more comfortable and our customers' prospects have gotten more comfortable transacting over digital and virtual and we always had an element of that, but obviously we've had to rely on it a lot more. So we've seen our yield for virtual events and other things that we do together. Pipeline go up pretty substantially. And we've also seen contract signings and things like that, which were certainly slow at the start of this process, kick back up. So we feel pretty good about the current state. It's better than it was three months ago and we think it's going to keep getting better throughout the course of the year.

Andrew Schmidt -- Citigroup -- Analyst

That's great. Good to hear about the improvement, especially in the DST side. Maybe to tab on to that, when you think about the FY '21 organic growth outlook 0% to 4%, what are the three -- what are the primary things that drive sort of the bottom and the top end? And then within that, what are the assumptions for DST as the year progresses any color there would be helpful?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Again, right. The -- when you're selling $20 million to $50 million deals for a year or $10 million to $25 million deals for the year, multi-year deals, if we win them, we will be at that 4% and if we don't win them, we will be closer to that 0%, but we're confident that we are going to win a lot more than we lose. We're going to continue to perform. The feedback from our clients has been tremendous based on the work that our entire staff has put in and the attention to detail that we have delivered. And in places like Advent and others that do net promoter scores it's higher that's ever been. Customer satisfaction as we track is very high. And our retention rates stick at 96% or so. And so I think that we have a lot of optimism that we can perform. No, we're going to win. They going to sort of passes, they're going to catch him and they're going to go across goal line. I mean that's the nature of the beast and the amount. Rahul you would have anything else to add to that.

Rahul Kanwar -- President and Chief Operating Officer

Just I guess on the second part of that on DST in particular, so to talked about the pieces of DST separately, the DST financial services business, which is really everything except health, we're expecting to see low single-digits type growth that's kind of what's been so at the midpoint, maybe something like 3.5% or something like that. And the health business as Bill mentioned, we do have some challenges and we're still dealing with some COVID impacts and we expect that to be flat to slightly down for the year.

Andrew Schmidt -- Citigroup -- Analyst

Got it. That's good context. Very helpful, guys, Appreciate it. Thanks.

Operator

Our next question comes from the line of Alex Kramm from UBS. Your line is open.

Alex Kramm -- UBS -- Analyst

Yeah. Hey, good evening, everyone. Can you talk about the cost structure and the margin a little bit? If I look at the guidance correctly here, it looks like continued margin expansion. So any more details there. But more importantly, it's just operating leverage or is it still a lot of efficiency gains that you're getting. You've been doing a lot of that. So just wondering we are still finding opportunities too to, I guess, cut if that's what's happening.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I think, Alex, we would say that we manage. We cut where we have to. And but -- we have a large workforce with almost 25,000 people. And there is opportunities everywhere right and we have to get more efficient and if you can get 5% efficiency, then on 25,000 people that's 1,200 people I think right. So we need to drive revenue in order to be able to continue to grow our workforce and continue to increase our margins and so that's what everyone at SS&C is focused on and we manage it. We manage it every week. So we picked places that we want to put our resources in. I think we spent $600 million between R&D and capitalized software and $140 million or so in acquisitions we did. So we're investing back in our business. And we think that there is tremendous opportunity for us and we think we have some very large competitors that just aren't going to be able to keep up and we think the longer 2021 goals. In 2022, we are going to continue to execute on a much higher levels than our competitors.

Alex Kramm -- UBS -- Analyst

Okay, great. And then secondly quick one. I think the buybacks were pretty soft in the fourth quarter, is that just because you were looking at deals? And maybe also your cash balance is fairly low I think. So just had to step back or where did they come from and what's your expectations for 2021? I mean you accelerated nicely in 2020, so that's still pretty focused on repurchases all else equal?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, again, we try to allocate our capital as best as we can. And obviously, we think our stock is certainly not overvalued. So we look at that somewhat fondly, but it's not our first choice. And even as we buy and if we buy more than we did in 2020, it would not surprise me, but I don't believe that we will probably spend more than we pay down debt. So obviously, if we do acquisitions, same interest rates stay where they are. We will probably use a lot of debt on acquisitions, but we generate a ton of cash. We generate a ton of cash in January. We will generate ton of cash throughout the year. And hopefully we will use it wisely with the best interests of our shareholders.

Alex Kramm -- UBS -- Analyst

Makes sense. Thank you.

Operator

Our next question comes from the line of Brad Zelnick from Credit Suisse. Your line is open.

Brad Zelnick -- Credit Suisse -- Analyst

Great. Thank you so much for taking my questions. My first is for Bill. Bill, I'm wondering if you have any perspective on the higher trading volumes and volatility related to retail flows in the equity markets. And how, if at all in any way, they have impacted parts of your business, maybe the health of fund admin clients or anything else worth noting, and Bill, I know you've been around long enough to see just about everything, curious if you have any perspective on this force in the market, and if in any way it's an opportunity for SS&C.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I mean, most of those have been around for quite a while, Brad, as you well know. So as I look back on my 400 years in the business, these things happen, right. They get to be bubbles and when you start taking technology and spreading it around the world and then allow people to collaborate, as always, it's difficult for the regulator to be able to manage all of the various schemes so to speak that people can deploy to drive up stocks or drive down stocks. And so I think the regulators will catch up and I think that this will be another thing that isn't much different than year 2000 and how many eyeballs are looking at your screens and so I think that the drive up on some of these very well known stocks I think is very well known stocks, I think is probably a little bit above, maybe more than little bit, but I don't know about where we would step in and how it is an advantage for us other than our regulatory services business that can help our clients see insights into that and then our Algorithmics business where we have an awful lot of quants that are constantly looking at this stuff. So we can give our client insights into what's happening and I think that can be very valuable.

Brad Zelnick -- Credit Suisse -- Analyst

Thank you, Bill. Makes perfect sense to me. I appreciate the thoughtful answer. Maybe for Rahul. Rahul, in your prepared remarks, you talked about a comprehensive solutions program under Eamonn Greaves, combining products and services. Just curious what prompted this now? What's the opportunity really? And with total respect, it sounds obvious, so why wasn't there something you're already doing?

Rahul Kanwar -- President and Chief Operating Officer

So, about a year ago let's say in the fourth quarter 2019, we put Eamonn in-charge of Global Sales and his mandate was really to help us collaborate more effectively, and more than collaborate integrate, right, so that, if you go see a customer and a customer is a bank or an insurance company or a hedge fund manager, we're bring in together different parts of the organization and offering that comprehensive solution. And the more we can do of that, the more strategic we become for them, the more likely it is to buy bigger, right. So just remember that we, as Bill pointed out, we bought DST as an Intralinks in 2018 and we're trying to sell things that work together, right. So it takes some time to integrate them. It takes some time to get the user interfaces and the functionality that they want. And we feel like we're in a good place with that product offering. We're putting the right focus behind the sales and marketing of that was the right. So I think we're formalizing things we've done all along, but we're off to a good start.

Brad Zelnick -- Credit Suisse -- Analyst

Makes sense. Thank you, guys.

Operator

Our next question comes from the line of Ashish Sabadra from Deutsche Bank. Your line is open.

Ashish Sabadra -- Deutsche Bank -- Analyst

Thanks for taking my question. Rahul, I just wanted to go back to a comment that you made on the DST. If I heard you right, the DST financial could potentially grow 3.5% this year in fiscal '21 at the midpoint, just want to confirm if I heard that right. And then maybe just a question on that one is, obviously, that's pretty strong compared to the DST financial growth profile historically, what's really driving that strength? Is that the new -- there were couple of large deals that you won last year, are those -- is the implementation really driving it? And then if you can maybe provide any incremental color within DST financial, where are you seeing pockets of strength or pockets of strong demand, any color will be helpful. Thanks.

Rahul Kanwar -- President and Chief Operating Officer

Sure. So, yeah, we have at the midpoint approximately 3.5% or so organic growth. The retirement business where we've talked about a number of large deals in terms of press releases on them, it's clearly one of the bright spots. We're also seeing good strength in our U.K.-based wealth and insurance services business, and really across all of DST, we've been working hard for since 2018 really, focused on the sales efforts there, focused on the product development efforts there, focused on digital and web portals and different ways in which our end customers can interact with their clients, and that's what they being most valuable. We're starting to see some signs that the work we've done is paying off and we're pretty bullish on what might happen with that business, not just in 2021 but beyond.

Ashish Sabadra -- Deutsche Bank -- Analyst

That's great, very helpful color. And maybe just a quick question on pricing in the alternatives fund admin side, there was a pricing increase back in end of 2018, sorry, end of 2019, early 2020. Are there opportunities for more annual price increases going forward? Any thoughts on '21. Thanks.

Rahul Kanwar -- President and Chief Operating Officer

So we're doing -- and I think we said this last year, we really tried to set this up as a price conversation that was going to happen once a year, right. And it's been reasonable increases that I think our customers, while nobody welcomes them. They understand where we're coming from. We're working our way through that process right now and it's going pretty well and we do expect it to have positive impact on alternatives, but really across our business.

Ashish Sabadra -- Deutsche Bank -- Analyst

That's very helpful, thanks, and great and good quarter. Thank you.

Operator

Our next question comes from the line of Mayank Tandon from Needham. Your line is open.

Mayank Tandon -- Needham & Company -- Analyst

Thank you. Good evening. Bill, just wanted to get a sense from you or maybe Rahul can chime in too. How should we think about the growth within the installed base by i.e. land and expand versus contribution from new logos as you get back at some level of normalcy in terms of organic trends across your portfolio of solutions?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Mayank, that's a very good question, and it really is kind of at the core of what we're doing. We bought DST and closed in April of 2018. In 2020, DST clients represented 75 of our top 100 clients, and they're all the largest investment organizations in the world and there are tremendous opportunities, right. But there is a lot of work to do at DST, and we've done a lot of work and we've doubled the EBITDA. I know it doesn't matter because our organic revenue growth didn't go up, but our earnings went way up, our cash went way up, cash flow went way up and it gave us tremendous opportunity to drill into all those very big clients to start showing them all of our opportunities.

Algorithmics is that -- for trials of expertise with a worldwide business. So we have opportunities to go into these large organizations and I think we just did a $1 million deal with one of our clients on our new Blue Sky Portal and that makes it so easy for our clients to be able to comply with all the regulations in all 50 states and it's a pain in the neck. And the more things that we can take away from our clients that are paying to them, the larger our land and expand process goes and that's why we put Eamonn in charge. I think several others of our top sales executives are also now drilling into all of our different opportunities that our client base are 80,000 clients.

But you can't go into a place as large as DST and start to slinging a flow chain, right. You got to go in there and got to understand and you got to be willing to accept the slings and arrows of Wall Street for a while, but there is no way we'd be $2.7 billion of revenue without those three acquisitions. And guys like Mike Sleightholme and Kevin Rafferty and John Geli and Danny DelMastro and Torrey Delgatti and whole bunch of other people at DST have done a great job. And I think that those people understand that SS&C likes to be on the gas stove and this break stuff is not in our DNA. But they had a lot of breaks, lots of breaks, and so we had to break those breaks and then get on the gas level. But remember it's $2 billion revenue, $2 billion. Now that is start growing. That's going to really put some wind in our sales and allow us if we execute, and I believe we are executing. It's going to get better and better and better.

And that's why you see the changes we've made, the bundling of our products, and the improved outlook that we have because of all the work we've done. When a stone cutter swings that axe on a piece of granite, it doesn't crack the first time. It might crack at the 100th time. But someone tells me those 99 swings he made -- before she made before it cracked had an impact on your cracking and that's the same thing we've done. We know it's granite, we know we've got to swing, we know we got to stay focused, we know we got to push, that's not easy for everybody, but that's what we do. That's how we manage. That's how we generate cash flow. That's how we generate earnings. And it used to be earnings and cash flow were really important. Now they're kind of important, but they're not as important as organic revenue growth, but we did the things we think were necessary in order to set the platform to get organic revenues.

Mayank Tandon -- Needham & Company -- Analyst

Great. That's very helpful perspective. Thank you for that. And if I can just follow-up briefly, has the pandemic and the effect of that flushed out some of the competition in the fragmented portions of your markets? In other words, are you now even stronger in some of the segments where you might have had more competition from some of the start-ups and smaller players are not as well funded?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I think actually, Mayak, I think we're going to do better against the larger ones, the biggest ones. I think the use of third-parties in India has not been very effective or an awful lot of very large places and we use our own teeth, almost 100% and it's taken us a year or two years, two and a half years for us to comment on the too, but we had I think, 1,600, 1,800 contractors from Syntel that work for DST that we've now completely rebadged. They now work for us, right, and we have less and less outsiders inside SS&C. And we operate better when we are in charge of people's raises, people's bonuses, people's promotions, people's careers and that's been a really big help for our business. And Sunil over in India has done a great job for us and I think we're going to continue to execute and I think we're going to continue to surprise positively. And Rahul, what do you think?

Rahul Kanwar -- President and Chief Operating Officer

Well, I would just -- coming back to what you said about customer satisfaction and net promoter scores, we've have seen really high levels of accolades from our customers throughout the both large and small customers. And we do think that this has been a disruptive time for many in the marketplace to relatively place. We're getting stronger on an absolute basis, but also relative to others, I think we're really well positioned going forward.

Mayank Tandon -- Needham & Company -- Analyst

Great. Thank you so much.

Operator

Our next question comes from the line of Jackson Ader from J.P. Morgan. Your line is open.

Jackson Ader -- J.P. Morgan -- Analyst

Great. Thanks for taking my questions, guys. Bill, the first one for you on main reasons you win and lose in talking about being at the high end or low end of the guidance range just depends on whether you actually win some of these deals or not. And I'm curious, the reasons that you win and the reasons that you lose have they changed over the last couple of years? Just curious on your thoughts.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I think for a number of the businesses that we inherited with DST, they hadn't had a win in a number of years, right. So changing that entire attitude you've got to believe you can win if you're going to win, right. Your prospects are null immediately if you're not confident. So knocking that insecurity out of people is not easy. It's not comfortable for people, but that's who we are. Let's get at it. As we built software and whether that's a fraud, waste and abused app that we've build for SS&C Health or whether that's the improvements that we've made to the transfer agency business that's a large business for us or what we've done in the retirement business.

So first, you have to have a superior product and then you have to have a very trained workforce right, so that they can implement it. And you have to have a knowledgeable marketing team that can market it. And you have to have a great sales force. So as I've said many times, right, we meet our sales team every week. Some of these prices we bought didn't meet accept every month. So there is a big difference in the culture and in the drive. And again, you have to recognize that we did $1.184 billion in cash flow in 2020. In 2017, we did about $400 million. So we've tripled our cash flow.

And again, that's a very positive thing. It gives us lots of resources to invest in training and education and more technology and we've hired some great people that have done some great work for us. Anthony Caiafa, John Bellone, Nick White, all kinds of people who've done just great jobs for us and I think that that's going to continue because they like winning. They get paid more when they win, right. So I think that's been the major drive, the major reasons why we win is it's more organized. Eamonn's doing a great job getting it more organized than it was and we're competitive. And we're not going to just sit back and not go after our competitors' clients directly, and they didn't going to like it. But that's fine, that's the nature of competition.

Jackson Ader -- J.P. Morgan -- Analyst

Great. And, yeah, I appreciate the thoughts. What about the link asset? What did you find really attractive about it? And what are some of the main reasons that you kind of withdrew there?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I mean it's a -- I think it's a good business. We really like Australia as a market. We have done very well in Canada and we feel like we can replicate that in Australia, and we've got a nice business in Australia and we want to have a bigger outsourcing business in Australia and link would have set that bill, but there's a lot of work to do on link. And I believe that they've started their process, but we have done a lot of work on DST. We have lots of positive momentum as you hear on this call and we didn't really want to have another situation where I got to tell you guys because it's another two or three year change. And so we decided that really didn't fit with what we wanted to do and so we withdrew. It's still a good company. I think they'll do fine, but it wasn't something that we wanted to tackle right now.

Jackson Ader -- J.P. Morgan -- Analyst

Okay, great. That makes sense. Thank you.

Operator

Our next question comes from the line of Peter Heckmann from D.A. Davidson. Your line is open.

Peter Heckmann -- D.A. Davidson -- Analyst

Thank you, and good afternoon, everyone. Just one maintenance question. I didn't hear you mention the pending Capita acquisition, is that deal still pending or has it closed?

William C. Stone -- Chairman of the Board and Chief Executive Officer

It seems forever...

Rahul Kanwar -- President and Chief Operating Officer

It is still pending.

William C. Stone -- Chairman of the Board and Chief Executive Officer

I think it's...

Peter Heckmann -- D.A. Davidson -- Analyst

But it's not dead, at least theoretically. You're still pursuing the close.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Yeah. We had one large client at Capita that was not going to fit in with that acquisition, and they had to find alternatives, but we believe that has been rectified and we would expect it to close in the next 60, 90 days and -- but we have expected that a couple of times in the past. So we want to make sure. It's not that big of an acquisition anyway.

Peter Heckmann -- D.A. Davidson -- Analyst

Right, right. That's right, OK. And then just in terms of when we're looking out over the next couple of years, could you identify any pending regulations kind of like a CECL, whether it's in the U.S. or globally that you think can serve as demand drivers for spend or upgrade activity anything out there that we should be monitoring?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I mean, obviously, you have a new administration in the United States and it's going to be much more active in financial services and going to view financial services as a money pot for taxes. And so there's is going to be a lot of regulation and no different than Form PF and other things that came out in the 2012, 2014 timeframe and we would expect that it's going to be -- I'm guessing, it will be pretty similar from what it was 2008 to 2016. And there will be opportunities to help our clients meet those new regulations and those new tax requirements in cost effective way as possible.

Peter Heckmann -- D.A. Davidson -- Analyst

Got it, got it. Okay. And if I could just sneak in one more. There was a joint venture announced by a number of financial services companies TIBCO, Man Group. It looked like they're going to be focusing on business process outsourcing for the fund industry. Is that something that's on your radar and do you think that will be something distinct would be potentially competing with any operations of SS&C or perhaps DST?

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, hey, those are large sophisticated powerful companies with a lot of great people and I guess is there is probably a little bit of politics in everyone else places. So when they all get together might be like the United Nations. So we'll have to see what happens with that. We're well aware, but we're also executing on our plan. And now, hopefully, we'll see them in our real premier.

Peter Heckmann -- D.A. Davidson -- Analyst

Fair enough, fair enough. I appreciate it, Bill. Thanks.

Operator

[Operator Instructions] Our next question comes from the line of Michael Young from Truist Securities. Your line is open.

Michael Young -- Truist Securities -- Analyst

Hey, thanks for the question. Wanted to just kind of ask maybe high level coming from 2020 which was heavily impacted pandemic year to some hopes of reopening this year. Could you just maybe give some color on the conversations with clients and how they have trended? And could there be sort of a backlog of activity as people kind of refocus on operating core businesses in 2021, just any color on that would be helpful.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, I think as you well know, right, when you have a crisis such as this, the rapidity of change probably goes up tenfold. So companies that would have never believed they could operate from a remote, now operate from remote. And I think that it's going to change a bunch of things. So how we all execute on our strategy use and how we deploy our greatest asset obviously is our people and keeping them safe is paramount. There's going to be a lot of things that are going to be important that we focus on and I think obviously you guys are recent merger of two large banking organizations and my guess is that there's a lot of change going on it and you have no major acquisition during a pandemic. So there is added impetus to streamline your operations make much efficient as possible, make sure you have redundancy. Cyber security is a very big deal. And I think that we need to be cognizant of what is out there. And we need to be prudent. When we know we need to act quickly, but the precipitous seems to me to be poor strategy.

Michael Young -- Truist Securities -- Analyst

Okay. And my second question, I just wanted to follow up on a few of your comments. I think you've kind of highlighted how the markets more eager and revenue growth versus good stable cash flow businesses. Is there any desire with either your next M&A deal or just kind of how you're managing internally to try to ramp up the revenue growth piece of the business as opposed to just cash flow?

William C. Stone -- Chairman of the Board and Chief Executive Officer

We're trying. I would tell you that our focus is probably -- we're not going to forget about cash flow. We're not going to forget about earnings, but our focus is on revenue. And anybody who has any conversations with me knows exactly what I am talking about or any conversations with Patrick or any conversation with Raul or any conversation with Emmon or Justine or anyone else in the company. Everybody knows, it's revenue. You can pitching whole everything. You got to make sure it -- everybody admirers Jeff Bezos and he is apparently depend on revenue growth and it's admirable, but not everybody has an Amazon business. So we need to be prudent.

We're not going to go by up 100,000, 200,000 square feet of office space in New York, in London, in Paris and Frankfurt and other places because we think that would be a poor use of our cash. Not that we don't have strong cash and not so we probably couldn't afford it. We probably could. But we're not Google. We don't have more money than most nations. But we're going to be prudent. We're going to think. And we're going to make sure our people are safe and they're not coming back into the offices until we can make sure that environment is safe for them and we're ready.

So, I think that's how we're trying to operate. We're very focused on revenue growth. It's a little more difficult getting a large scale licenses when you don't get in-person meetings. So -- but we're working at it. We win some deals and we're win, like I said, the funds and services business has been strong, Intralinks has got a very, very full pipeline and Ken Bisconti and Bob Petrocchi are doing a great job there and Petrocchi are doing a great job there, and I think that there are opportunities are greater than they've ever been. But those are opportunities to kind of catch the ball, to go to go over goal line.

Michael Young -- Truist Securities -- Analyst

Thank you.

Operator

Our next question comes from the line of Chris Donat from Piper Sandler. Your line is open.

Christopher Donat -- Piper Sandler & Co. -- Analyst

Good afternoon. Thanks for taking my question. Bill, wanted to ask one question about the Redemption Indicator that we see for GlobeOp and that January was the lowest number on record since 2008. Do you think that's mostly market forces or is there anything changing in the competitive landscape that's keeping redemption from leaving SS&C?

William C. Stone -- Chairman of the Board and Chief Executive Officer

I mean, I think that we have a really blue chip roster of of funds. But that being said, it's probably a heavy, heavy dose of what's happening in the market. I mean if you look at the amount of assets going into private equity and real estate and private credit and hedge funds, I think you see that people are starving for return, starving for income and they're not finding the corporate bonds or government bonds for sure. So I think that people redeem either when they have a life of that like buying a house or retiring or something or they have an alternate place to put their money. And if they don't have an alternate place to put their money, they tend to stay intact. And I think the hedge fund industry in particular and the other ones, the real estate industry as well as investment industry as well as the private equity industry, has learned to communicate with their investors and that communication is paramount. And again, that's something that SS&C is very well positioned to be able to help our customers communicate with their customers, with their investors and I think that's another reason why the Redemption Indicator should be historically low.

Christopher Donat -- Piper Sandler & Co. -- Analyst

Okay. Thanks for that. And then, Patrick, one question about guidance and -- well, for the fourth quarter, you commented that there was less travel and less usage of contractors in the fourth quarter, are those two things that you would expect to stay low through the remainder of 2021 or do you expect travel and contractor usage to increase kind of over the course of the year as things get to some level of new normal?

Patrick J. Pedonti -- Senior Vice President and Chief Financial Officer

The contractor reduction is through the fact that we moved contractors to in-house employees. So that will be permanent for 2021. And on travel, I think basically we've assumed that travel expenses won't be a heck of a lot different than Q1 and most of Q2, and then gradually start increasing in the third and fourth quarter, but not be back to pre-pandemic level. So that's kind of the assumption we've made.

Christopher Donat -- Piper Sandler & Co. -- Analyst

Got it. Thanks very much, Patrick.

Operator

Our next question comes from the line of James Faucette from Morgan Stanley. Your line is open.

James Faucette -- Morgan Stanley -- Analyst

Hey, thanks. Just a couple of quick questions from me to follow-up on previous questions and answers. First on DST, I think you made a comment around some incremental work or improvements on DST that you're working on. Just wondering if you can touch on that first of all.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Well, again, I'll take 30 seconds and then give it to Rahul, but we have made a lot of changes. Mike Sleightholme made a lot of changes. Nick Wright took over in at end of June last year and he's done a great job for us. He's based in London. And Kevin Rafferty came in and he is running our retirement solutions business and he's doing it with John Geli and they're both doing a great job for us. And we have a focus on that business. So we've made a number of changes there and we talked about Danny DelMastro and Torrey Delgatti running on our healthcare business and they bought a quite a bit increased level of focus and intensity, and I believe that will pay off. And he took over, I think, maybe September or maybe would might have been August last year. And so we made a lot of changes and the sales force is now reporting up through Eamonn as a global and Mike have taken Rob Stone and some other top sales executives that we have and slotted them into the DST business. Johninko Gallon, Peter, bunch of others that are -- they are really top-flight people and know how we operate, how we prepare and how we show our wears to our various prospects. Would you have anything else, Rahul?

Rahul Kanwar -- President and Chief Operating Officer

The only thing I would add is in addition to the sales focus and just overall more attention to the speed at which we execute and making sure that there is tangible things that we're trying to do and we're all marching with some -- just some pace to it. We're also really focused on product development and innovation. So a lot of our hires even below the senior executives that you've -- that we've mentioned have been in folks that are bringing in new technologies, whether that's digital, which a lot of our clients are looking for or things we can do with artificial intelligence and machine learning. We've made an acquisition at Vidado, there is others. So we're giving that sales force more tools to be able to differentiate themselves from our competitors and that's helping.

James Faucette -- Morgan Stanley -- Analyst

Got it, got it. And then -- I appreciate that. And then Bill, you started off talking about acquisitions and discipline and look, clearly, you've built-in and established incredibly strong reputation of being able to find the right things at the right time and under the right circumstances. What kind of moves your guardrails, if you will, of discipline around, and I guess I'm thinking about the current environment and maybe more generally, how you think this ultimate -- how the current environment ultimately plays out and what do you at SS&C have to do to be prepared to take advantage of when things do change and start to adjust?

William C. Stone -- Chairman of the Board and Chief Executive Officer

James, you -- and again it got to do the the work, right. I mean you have to have people find businesses that we can ultimately buy. We have looked at making a number of different investments to get to know businesses better and then see if we can help them grow and then ultimately acquire them. We have to stay close to the private equity industry. We have to stay close to large scale financial institutions that want to get rid of divisions or want to do joint venture with us in ways that they can really improve their margin profile. So there is a number of those kinds of things that I think are the path to very accretive acquisitions that drive revenue growth. But it's work, right. I mean it's looking at a lot of deals, it's have an disciplined about it. It's not turning this into -- the focus isn't on our business, the focus is on what we could do to buy additional businesses.

We have a lot of businesses. We have 18,000 clients. We have tremendous up-sell and cross-sell opportunities, right. We have tremendous development teams, thousands of developers, right. We need to be able to build product, deliver product, market product, sell product, raise prices, right. We need to create this entire environment where we're the best, right. So when we went into fund administration in 2002, we didn't have a dollar in AuA. Now we have $2 trillion. It's the same thing we've got to execute. And then you can bring in places like at Eisnerfast, where we get people like Rahul Kanwar, Ravi Modi and Michael, Chris Madpak and a bunch of others that add to the quality and capability and breadth and the depth and you keep marching through, and now that we're the largest as the fund administrator, both in hedge and private equity and we're moving up fast in real estate and Brijesh Modi has done a great job. And we just got a lot of great people and there is awful lot of work to do with deploying $8.3 billion in 2018.

James Faucette -- Morgan Stanley -- Analyst

Thanks a lot, Bill. Thank you very much.

Operator

Our next question comes from the line of Surinder Thind from Jefferies. Your line is open.

Surinder Thind -- Jefferies -- Analyst

Thanks for taking the question guys. Just following up on the comment about the focus around revenues and growth. Can you talk a little bit about maybe how pricing fits in into that strategy in terms of how you think about it on an annual basis? And then if there is any impact that we should be thinking about from a COVID perspective this year in the sense that maybe there is clients that have asked you to hold off on pricing increases and any color you can provide there would be helpful.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Rahul, you want that one?

Rahul Kanwar -- President and Chief Operating Officer

Yeah. So thus far in the annual pricing conversations that we've had, it really hasn't been that different than it was last year. Now, this was a pretty new process for us. Last year was the first time. But the conversations have gone well. And there are, as I mentioned earlier, we are going to be reasonable and to the extent that we have a customer that has some constraints, obviously we're going to respect that and and try to make it work to the satisfaction of both SS&C and that customer, but they've been going pretty well.

Surinder Thind -- Jefferies -- Analyst

Got it. And then just a quick, I guess, modeling question. Just can you remind us of the expected impact on revenues in 2021 for the DST clients that were terminated pre-acquisition?

Patrick J. Pedonti -- Senior Vice President and Chief Financial Officer

It's $25 million for the full year.

Surinder Thind -- Jefferies -- Analyst

Okay. Thank you. Thanks, guys.

Operator

No further questions at this time. I will now turn back the call over to Mr. Bill Stone.

William C. Stone -- Chairman of the Board and Chief Executive Officer

Thank you. Again, thanks everybody for your thoughtful questions. And again, we're going to execute and I look forward to talking to you in late April or early May. Thanks.

Duration: 76 minutes

Call participants:

Justine Stone -- Investor Relations

William C. Stone -- Chairman of the Board and Chief Executive Officer

Rahul Kanwar -- President and Chief Operating Officer

Patrick J. Pedonti -- Senior Vice President and Chief Financial Officer

David Togut -- Evercore ISI -- Analyst

Andrew Schmidt -- Citigroup -- Analyst

Alex Kramm -- UBS -- Analyst

Brad Zelnick -- Credit Suisse -- Analyst

Ashish Sabadra -- Deutsche Bank -- Analyst

Mayank Tandon -- Needham & Company -- Analyst

Jackson Ader -- J.P. Morgan -- Analyst

Peter Heckmann -- D.A. Davidson -- Analyst

Michael Young -- Truist Securities -- Analyst

Christopher Donat -- Piper Sandler & Co. -- Analyst

James Faucette -- Morgan Stanley -- Analyst

Surinder Thind -- Jefferies -- Analyst

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