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SS&C Technologies Holdings (SSNC -0.30%)
Q4 2021 Earnings Call
Feb 10, 2022, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good afternoon. Thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the SS&C Technologies fourth quarter and full year '21 earnings conference call.

[Operator instructions] It's now my pleasure to turn today's call over to Justine Stone, head of investor relations. Please go ahead, ma'am.

Justine Stone -- Head of Investor Relations

Hi, everyone. Welcome, and thank you for joining us for our fourth quarter and full year 2021 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.

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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, included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com. In the third quarter of 2021, we entered into a joint venture named DomaniRx LLC, which we are the majority interest holder and primary beneficiary.

All earnings figures discussed today including operating income, EBITDA, net income and EPS are attributable to SS&C based on the ownership interest retained by SS&C. I will now call the turn over to Bill.

Bill Stone -- Chairman and Chief Executive Officer

Thanks, Justine, and thanks, everyone, for joining. Our results for the fourth quarter were $1.296 billion in adjusted revenue, up 7.5% and $1.28 in adjusted diluted earnings per share, up 13.3%. For the year, adjusted revenue was $5,058.9 million, up 8.1% and adjusted diluted EPS was $5.02, up 16.7%. Adjusted consolidated EBITDA was $522.9 million for the quarter, and our EBITDA margin was 40.3%.

Our fourth quarter adjusted organic revenue was up 6.9%, ahead of our expectations. Our alternatives at Intralinks businesses continue to drive our top-line growth, growing at 12.9% and 23%, respectively. As I mentioned in our earnings press release, the pandemic and its impact on labor force and put pressure on our costs. Much of our R&D efforts are diverted toward automation and efficiency in our services business, and these productivity gains should counteract the pressure from higher labor costs.

At the same time, the great resignation is drawing attention at the highest levels of fund companies, causing many to consider third-party administrators. This creates opportunity. We continue to see shifts across the industry. Firms with in-house operations cannot hire talent fast enough and our competitors are not able to replace talent or meet the needs of scaling their businesses.

We see this phenomenon worldwide, and we expect it to be a catalyst for outsourcing services, as well as clients being willing to invest in technology. 2021 was a record-breaking year for M&A, propelling our Intralinks business to new heights, while our execution generated market share gains. Global M&A volumes topped $5 trillion for the first time ever, comfortably eclipsing the previous record of $4.55 trillion. Based on publicly announced deals, we gained 5% market share in the M&A market.

Our current forecast based on a survey of over 300 deal makers found a majority expect a level of M&A activity to increase in 2022. SS&C generated net cash from operating activities of $1.429 billion for the 12 months ended December 31, 2021, up 20.6% and or $244 million from 2020. We paid down $519.9 million in debt in 2021, and our leverage ratio stand at 1.72 secured and 2.69 total. Our shareholder-friendly capital allocation strategy remains a top priority.

In 2021, we bought back 6.8 million shares at an average price of $71.74 per share for a total of $487.9 million. We were restricted from buying back stock in Q4 '21 due to material nonpublic information related to the Blue Prism acquisition. In November, the board approved a 25% increase in our quarterly dividend payout, now at $0.20 per share. We are still limited to what we can say regarding the Blue Prism acquisition.

We have made good progress with regulatory approvals and expect to close in Q1 or Q2. For more background on this acquisition and information on our strategic rationale, please refer to our scheme document. 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. Sales execution, market strength and collaboration across our business units have been key drivers to this year's performance. Our business performed extremely well, and we made great progress on new technology which will set us up for further success. We continue to focus on innovation.

At Algorithmics, our clients' front office operations can now achieve nanosecond response times for pre-trade deal checks. Algorithmics integration with Singularity has led to new wins and increased pipeline. Corus, our automated workflow solution has released a new workforce optimization tool focused on in-office remote and hybrid management to improve productivity and provide insights. Newly created SS&C Trust suite combining Black Diamond and InnoTrust under a single contract and commercial model was sold to the first client.

On the healthcare front, DomaniRx has been making great strides in building our cloud native, API-driven, claims adjudication platform. Now I will mention some key deals for Q4. A a top health insurance company chose Singularity outsourcing services for their investment accounting operations. A $8 billion in AUM hedge fund chose a suite of GlobeOp's Middle and back office services, citing our ownership of technology as a key component to the win.

A premier financial services firm chose our mutual fund sub-accounting and all serve solution to efficiently scale and grow their new business. A $4.5 billion AUM asset manager based in Kuwait chose a suite of Advent Geneva products. A $7.5 billion AUM trust company chose a suite of Advent cloud delivery products due to our overall solution for equity and fixed income. A New York-based hedge fund with a firmwide objective to move to the cloud, upgraded their trading operations to Eze Eclipse.

The pension and investment arm of one of the Canadian provinces chose to upgrade to our newest investment accounting solution, Aloha. A large Malaysian insurer also chose Aloha and our Vision reporting solution. I will now turn it over to Patrick to run through the financials.

Patrick Pedonti -- Chief Financial Officer

Thank you. Results for the fourth quarter of 2021 were GAAP revenues of $1,294.2 million, GAAP net income of $250.9 million and diluted EPS of $0.94. Adjusted revenues were $1,296.2 million, including the impact of the adoption of the revenue ASC 606 and for acquired deferred revenue adjustments for acquisitions. Adjusted revenue was up 7.5%.

Adjusted operating income increased 10.6% and adjusted EPS was $1.28, a 13.3% increase over Q4 2020. Revenue showed strong growth with strength across several product lines, including the alternative asset business, Advent, ALPS, brokerage and the Interlink businesses. Adjusted revenue increased $90.1 million or 7.5% over Q4 2020. Our acquisitions contributed $10.5 million in the quarter.

Foreign exchange had a favorable impact of $0.8 million or 0.1% in the quarter. Adjusted organic revenue increased on a constant-currency basis was 6.9% in the quarter. Adjusted operating income for the fourth quarter was $507.5 million, an increase of $48.7 million or 10.6% in the fourth quarter of 2020. Adjusted operating margins increased from 38% in the fourth quarter of 2020 to 39.2% in the fourth quarter of 2021, driven by revenue growth and cost controls.

Expenses increased 4.2% on a constant-currency basis. Acquisitions added $8.6 million expenses and foreign currency increased cost by $0.7 million. Adjusted consolidated EBITDA defined in Note 3 of our earnings release was $522.9 million or 40.3% of adjusted revenue and increased $47.1 million or 9.9% from Q4 2020. Net interest expense for the quarter was $49 million and includes $3.2 million of noncash amortized financing costs and OID.

The average interest rate in the quarter for our credit facility including our senior notes was 3.09%, compared to 2.99% in the fourth quarter of 2020. A reduction in the debt balance resulted in interest expense decrease of $4.1 million or 8%. Adjusted net income defined in Note 4 of our earnings release was $341.3 million and adjusted EPS was $1.23, and the effective tax rate used for adjusted net income was 26%. Diluted shares increased to 267 million from 266.5 million in Q3 as a result of an increase in the average share price and option exercises.

On our balance sheet and cash flow, we ended the fourth quarter with $564 million of cash and cash equivalents and $6 billion of gross debt. SS&C's net debt as defined in our credit agreement, which excludes cash and cash equivalents of $139.5 million held by DomaniRx LLC was $5.6 billion as of the end of the year. Operating cash flow for the 12 months was $1,429 million, a $244 million or 20.6% increase compared to 2020. And for the 12 months ended December 31, for the full year, we allocated proportionately to our free cash flow to both stock buybacks and debt payments.

Treasury stock buybacks were $487.9 million for purchases of 6.8 million shares at an average price of $71.74 per share, and that compares to $227.7 million of treasury buybacks in 2020. In July 2021, the board authorized a new stock repurchase program for up to $1 billion in stock buybacks. We have approximately $837 million remaining on that authorization. Net debt payments were $519.9 million, compared to $738.2 million in 2020.

We declared and paid $174 million of common stock dividends as compared to $136.1 million last year, an increase of 27.8%. For the full year, we paid income taxes of $310.4 million, compared to $244.4 million in 2020. Our accounts receivable DSO was down to 49.5 days, compared to 50.8 days as of September 21 and 48.4 days as of December 2020. Capital expenditures and capitalized software was $136.6 million, which is about 2.7% of adjusted revenue, compared to $106.4 million in 2020.

Spending was predominantly for capitalized software and IT infrastructure. Option exercises proceeds for the year were $197.7 million for 5 million shares, compared to $189.7 million for 6.3 million shares last year. Our consolidated EBITDA, which are used for our covenant compliance was $2.066 billion and includes $1.3 million of acquired EBITDA and cost savings related to our acquisition. And based on net debt of $5.6 million, our total leverage ratio was 2.69 times and our secured ratio was 1.72 times.

On our outlook for the year, I'll first cover some high-level assumptions. As we're focusing on client services, we expect retention rates to continue to be in the range of most recent results. Pending acquisitions are not included in our current 2022 guidance. We have assumed foreign currency exchange will be at the current levels.

As a result, adjusted organic growth for the year will be in the range of 2% to 6%. And adjusted organic growth for Q1 will be in the range of 1.9% to 5.1%. On interest rates, we have assumed for the near term, it will be a 30-day LIBOR plus the spread of 175 bps. In midyear and the latter part of the year, we've assumed the three- to six-month LIBOR plus the spread.

We expect staff costs to increase due to continued wage inflation. And we will manage our expenses during this period by controlling variable expenses to maintain our operating margins. And we'll continue to invest in our business with capital expenditures of approximately 2.8% of revenue. Our free cash flow will continue to allocate both to debt paydown and stock buybacks.

And we expect the adjusted tax rate to continue to be approximately 26%. So for the first quarter of 2022, we expect revenue to be in the range of $1.258 billion to $1.298 billion, adjusted net income in the range of $326 million to $343.5 million and diluted shares in the range of 268.3 million to 267.8 million. For the full year of 2022, we expect revenue in the range of $5.130 billion to $5.330 billion. adjusted net income in the range of $1.375 billion to $1.445 billion and diluted shares in the range of 269.5 million to 267.5 million.

And our operating cash flow, we expect the full year to be in the range of $1.440 billion to $1.510 billion. And I'll turn it over back to Bill for final comments.

Bill Stone -- Chairman and Chief Executive Officer

I'm proud to announce that we have completed our SS&C's private cloud SOC 1 and we are very close to our private -- our SOC 2 on our private cloud, which we expect to have within a week. These types of audits required an enormous amount of coordination and commitment. Not only have we delivered on our contractual commitments to customers, but our sales staff is busy showing prospects. We are one of the first companies with a SOC 1 and SOC 2 certified private cloud offering.

Stay tuned as we roll out products and services, which utilize this hyper secure, robust and lightning fast technology. I'll now open it up for questions.

Questions & Answers:


Operator

[Operator instructions] Your first question comes from the line of Mike Young with Truist Securities. Your line is open.

Mike Young -- Truist Securities -- Analyst

Sorry about that. I was having a bit of an issue with my new view button as well. Thanks for taking the question. Just maybe wanted to start with the commentary about the staff cost increases and trying to offset those with some other cost savings.

Just as we kind of look forward to next year with kind of a revenue guide in line with current expectations. Should we think of kind of the EBITDA margin is a normal, kind of slight expansion year over year? Or do you think there will be some pressure on that given kind of some of the dynamics with inflation.

Bill Stone -- Chairman and Chief Executive Officer

Well, I mean, we're not immune, right? We are in businesses that our employees are highly sought after, and they're a great team. And the raises and bonuses are going to be larger and more frequent. But we also are going to have lots of productivity gains. And we think that we will be able to expand our margins in the 50 to 75 basis points.

And if we get a little tailwind, maybe we'll do a little better.

Mike Young -- Truist Securities -- Analyst

OK. That's helpful. And maybe just as a follow-up, as we kind of think about maybe the business as a whole or specific business line. How much does kind of inflation play into contract pricing? And how much of a tailwind should we be expecting as a part of that next year?

Bill Stone -- Chairman and Chief Executive Officer

Well, our customers are like Truist and other sophisticated users of technology and financial accounting and investment accounting and reporting and tax accounting and reporting. So they're aware, they're aware that our costs increase and they want to keep the same staff as we have on our clients, and that's what really gets our people to work hand in glove with our clients. And so, people understand when costs go up, prices have to go up. And I think, that that is something that we are very cognizant of and we have focused on it for the last two or three years.

And I think, that nobody likes price increases, people certainly understand.

Operator

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

Surinder Thind -- Jefferies -- Analyst

Thank you. Bill, I'd like to start with a question about the revenue guidance for next year. It sounds like the adjusted organic growth is going to be in the 2% to 6% range for the full year. Can you put that in the context of Investor Day, where you talked about 4% to 7% longer term.

Is it near-term headwinds that you're seeing? Are clients thinking about delaying projects? How should we think about what we heard at the Investor Day a few months ago versus what the guide is currently.

Bill Stone -- Chairman and Chief Executive Officer

Well, again, Surinder, we're trying to maybe be a little conservative, but certainly be realistic and make sure -- it's pretty uncertain time right now with the speculation on interest rates. The regulatory environment is constantly changing. And when you see as much M&A activity, as you do today, a lot of times, our clients can merge, too. So we're to be realistic, and we've been able to surprise positively for a few quarters.

And I am hoping that that a bunch of business comes in. We have full pipelines. We've got great products coming out. So we have some optimism, but we also want to temper that with realism. 

Surinder Thind -- Jefferies -- Analyst

That's helpful. And then, as a follow-up to the earlier question about -- it sounds like you're still expecting to be able to expand margins by about 50 to maybe 75 basis points this year. Is there a bridge that you can provide us there in the sense that, obviously, there's wage inflation. And then, are you able to pass most of that or some of that cost on to clients? Or how should we think about that versus the productivity initiatives at this point? Just trying to get an idea for the balance of how to think about the push-pull on margins at this point.

Bill Stone -- Chairman and Chief Executive Officer

Well, I mean, again, we don't control inflation. And like everybody, we -- I think last year, hired 5,700 people, right? So that's a lot of people. And so, that's a lot of training and that's a lot of education, and that's a lot of administration. So our costs are going to go up.

And when it's inflationary, they're going to go up more. And we're going to compete, and we are going to compete hard. And we're going to deliver superior service to our clients in a period where we believe that a number of our competitors are going to deliver inferior service. And that's the opportunity, and that's one of the ways in which -- if our win rates go up and our prices firm, our margins are going to go up.

Rahul, you might have something to add.

Rahul Kanwar -- President and Chief Operating Officer

Bill, in addition to the productivity and the labor force dynamics that you covered, we still have some opportunities on things like enterprise contracts that are coming up for renewal and third-party software and discretionary spend. So in addition to, obviously, making sure that we've got highly motivated employees that are continuously innovating and making our processes better, we also keep looking at other areas in which to control costs and all of those things together ought to result in some margin improvement.

Surinder Thind -- Jefferies -- Analyst

That's helpful. Thank you.

Operator

Your next question comes from the line of Peter Heckmann with D.A. Company. Your line is open.

John Rodriguez -- D.A. Davidson -- Analyst

Thank you. Hi, this is John on for Pete. Just a quick one. Within fund administration, have you guys seen any change in the competitive dynamics over the last year?

Bill Stone -- Chairman and Chief Executive Officer

Well, I think, if you look at the league tables, you'll see that Apex is is buying everything in sight, and so they're getting larger. They've done a number of acquisitions. They've got a couple of them left on the limb to finish, I think. But acquisitions are challenging.

And my guess is, it's challenging for them. So other than what they have done, I don't think there's been that much of a difference in in our competitive landscape. Would you agree with that, Rahul?

Rahul Kanwar -- President and Chief Operating Officer

I would, Bill. I'd also say, if you look at our growth rates, our business is accelerating, right? So the other change in dynamic is that as we continue to build products and services and get more and more scale, our ability to compete and enhance that win rate because it just gets a little bit better every year, and that's what we saw this past year.

John Rodriguez -- D.A. Davidson -- Analyst

Got it. I know the acquisitions aren't included in the current 2022 guide, but just wondering, how should we look at the potential contribution of the OSHA's ETS and [Inaudible] deals?

Patrick Pedonti -- Chief Financial Officer

This is Patrick. I think, this is fairly small. It might be around $8 million of revenue. And shares might be around $20 million of revenue, but they're both not included, as we indicated.

John Rodriguez -- D.A. Davidson -- Analyst

Got it. Thank you so much.

Operator

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

Andrew Schmidt -- Citi -- Analyst

Hi, guys. Thanks for taking my questions. I like the slide you have in the investor deck, it's just organic growth type business, it highlights the good growth in the alternatives business in 2021. I was wondering if you could talk about the expectation within the organic growth guidance for alternatives for 2022? And particularly, how you think about potential if we do see market volatility continue, what impact it could have on that business.

Thanks.

Patrick Pedonti -- Chief Financial Officer

This is Patrick. I think, at the midpoint of our guidance, we expect the fund administration growth in the high single digits for 2022. So continued to be higher than historical.

Bill Stone -- Chairman and Chief Executive Officer

And while there's been volatility at different times, if you look at the chart of our capital markets or capital movements indicator that we publish every month, since 2011, I think, it's almost straight line north. So I think, that the talent in the alternatives business match to the breadth of investments and strategies that talented group of people have, I think, bodes well for the alternatives. We see nothing, but increased interest from very large-scale fund companies, from very large scale institutions, from very large-scale sovereign wealth funds and government. So I see, if anything, that in our guidance and stuff that our alternatives guidance might be the most conservative of all.

Andrew Schmidt -- Citi -- Analyst

Got it. That's pretty constructive. I appreciate that. And then, just in the fourth quarter and maybe into the first quarter, did Omicron have an impact on sales pipeline or deal closing? Just wondering if it might have temporarily slowed things down, which might imply some pent-up demand at some point in the first quarter, end of the second quarter. 

Bill Stone -- Chairman and Chief Executive Officer

Well, like everything, right, everything is Omicron related. There aren't any mobile desks anymore. They're also Omicron or some other COVID derivative, but I think that 6.9% organic growth off of a pretty good Q4 of '20 is pretty solid. And I think, Surinder said before, our four to seven that we talked about on analyst day, that's at the high end of the four to seven.

And then, we, again, are focused on organic revenue growth. And even the acquisitions that we've done are really -- we think are going to be very additive to our product offerings and the scope and capabilities that we're going to be able to offer across our entire product line.

Operator

Your next question comes from Jackson Ader with J.P. Morgan. Your line is open.

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

Great. Thanks for taking my questions, guys. The first one is on Blue Prism. It's kind of has a different financial profile and some of the other recent acquisitions that you've made.

So just curious, any initial thoughts on what the integration or strategy after closing might look like relative to some of the different acquisitions that you've made in the past?

Bill Stone -- Chairman and Chief Executive Officer

Yeah, Jackson, we're really not in any position to comment on Blue Prism and the London and U.K. takeover board frowns for us to say anything. So we think that that should close in late Q1 or Q2, and we'll be happy to set up a call with you at that time.

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

No big deal. I felt like I had to ask. And then, the follow-up question, with retention rates and AUA, both kind of ticking down, I'm curious how much would impact maybe those -- the lower retention rates had on assets versus maybe market factors.

Bill Stone -- Chairman and Chief Executive Officer

Yeah, I don't think -- we're going to get a little bit of fluctuation with our our AUA both with market market values and then also when certain clients launch new funds or even shut down funds, and I do think we had one sovereign wealth fund with a lot of assets, but very few services. So the amount of the drop could have been $30 billion, $40 billion, $50 billion. But I don't think we made very much money on it because they didn't take very many services, right? So we don't view that as much of a headwind. And I think, in the first quarter of '20, we were at $2.150 billion, and we're now at $2.17 billion, I think.

So I think, we have a very strong business, and it's getting stronger.

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

OK. All right. Thank you.

Operator

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

Chris Donat -- Piper Sandler -- Analyst

Good evening. Thanks for taking my question. Bill and Rahul, I just want to follow up on that last one about the AUA because looking at Slide 12, I was a little surprised that the reduction quarter on quarter in AUA. And Bill, you just made the comment about the sovereign wealth fund.

And I know you've got a higher mix of fixed income assets than probably equities focused people like me think about. But can you just help me understand the sequential decline? And again, I'm equity biased. So I think, about the S&P 500 being up like 10.5% in the fourth quarter. So I'm looking at the wrong fraction of the benchmark.

Bill Stone -- Chairman and Chief Executive Officer

Yeah. Again, like I said, we're going to have some fluctuation in this, but I would say that over time, we have really grown. Yeah, I think, the first quarter of 2020, we were at $1.750 trillion, and now we're up almost $500 billion in two years. And if you look at the lead tables in this, I think $500 billion, you get to be about fifth in the lead table, fifth or sixth.

And so, I think, that was -- I mean, Rahul?

Rahul Kanwar -- President and Chief Operating Officer

Yeah, that's right. So there's one -- sort of a one-off in there, which is like Bill just said, there's a nearly $50 billion AUA in a single customer that paid us less than $1 million a year, right? So that's the -- that, I think, is the biggest reason. The underlying other metrics on new funds, new business that we have won, performance-driven growth, things like that continue to be in line with historical averages.

Chris Donat -- Piper Sandler -- Analyst

OK. Thanks.

Bill Stone -- Chairman and Chief Executive Officer

OK. And we would comment a little bit that we have very strong pipelines, and we have a very strong sales force and they're executing. 

Chris Donat -- Piper Sandler -- Analyst

OK. Thanks for clarifying that one. And then, for Patrick, I would also appreciate seeing the organic growth by business broken out. Just thinking about the software businesses and DST financial, are the organic growth rates for 2021 probably the best way to think about growth rates for 2022?

Patrick Pedonti -- Chief Financial Officer

I think so. I think, the major changes we'll see in 2022 is we're expecting a decline in our healthcare business in 2022. And currently, we expect the growth rate of Intralinks to continue to be double digits, but not as high as 2021. And the vast majority of the other product lines will be pretty similar.

Chris Donat -- Piper Sandler -- Analyst

OK. Thanks very much, Patrick.

Operator

Your next question comes from the line of Kevin McVeigh with Credit Suisse. Your line is open.

Kevin McVeigh -- Credit Suisse -- Analyst

Great. Thanks so much. Well, I wonder if you could just talk into the revenue guidance for 2022. It looks like the range is 2% to 6%.

Last year, it looks like the range was about 200 basis points from the low to the high end. Any sense of the puts and takes on what we get you to the low end this year versus the high end and why you widened out the range a little bit?

Patrick Pedonti -- Chief Financial Officer

I think, the range in 2020 was somewhere around $180 million, and now it's $200 million. It will take us that much different from what I recall, in absolute dollars.

Kevin McVeigh -- Credit Suisse -- Analyst

OK. And maybe I may pick it up.

Patrick Pedonti -- Chief Financial Officer

That's what I recall, but I can get back to you, if you want.

Kevin McVeigh -- Credit Suisse -- Analyst

OK. Maybe I'll follow-up off-line. Can you just remind us of the seasonality? I know there's some year-end work, things like that. Does that fall into the first quarter in terms of the filings and things like that? Is there any way to think about what the impact is on the quarter on that? 

Bill Stone -- Chairman and Chief Executive Officer

So there's a little more tax and financial statement work in the first and second quarters than the third and fourth quarters. I think, that's the primary seasonality that we have. Is that right, Rahul?

Rahul Kanwar -- President and Chief Operating Officer

That's right, Bill. And the other one is just there tends to be a little bit more license in Q4.

Kevin McVeigh -- Credit Suisse -- Analyst

Great. Thank you.

Operator

Your next question comes from the line of Jason Faucette with Morgan Stanley. Your line is open.

Jonathan Lee -- Morgan Stanley -- Analyst

Hey, it's Jonathan on for Jason. I appreciate the color here. Can you provide an update on sort of the M&A environment from what you're seeing? Obviously, you're waiting on two deals to close, but are you seeing any other attractive targets in the market? And sort of what assets would you be looking for from a capability or a geographic perspective?

Bill Stone -- Chairman and Chief Executive Officer

Yeah. I think, there's a number of properties that are in the market or coming to the market that we will have some interest in. Fintech has kind of reset as far as price is concerned, if you look across the horizon. So a number of fintechs that we are trying to get public didn't get out.

And some of the ones that cut out early in the year have kind of come back to just moderate nosebleed levels instead of extreme. So that gives us a lot more stuff to take a look at. But at the same time, right, we're going to push hard to get that organic revenue growth up. And so, the acquisitions have to have a higher hurdle.

And we have a lot of people that want to do acquisitions within SS&C, but they recognize that if they don't have organic revenue growth, we don't have much capital for their acquisition plans. So it's trying to have a discipline in the process that everybody understands that we always want to back our best businesses.

Jonathan Lee -- Morgan Stanley -- Analyst

Thanks for the color, Bill. And I want to build on some of the questions that have already been asked around, sort of the pricing environment and wage inflation. How are you thinking about the magnitude and timing of price increases through the year and just given some of that wage inflation that you're seeing in the market?

Bill Stone -- Chairman and Chief Executive Officer

Yeah. I mean, Jonathan, that's a great question. And it is one that we've given a lot of thought to, and we're trying to figure out different ways in which to make SS&C a great place to work, make sure that we pay very well and that we are extremely competitive. And so, on that side, that is just what the labor market demands, and it's something that we're well aware of.

A lot of ways it's running the business. And when your costs go up, if you don't send your prices up, obviously, your margin is going to get hammered. So we're not that anxious to getting hammered. So we're focusing on those things and working hard with our clients to make sure that when they have issues that they need to have solved, that it's our number they call.

And as you see, we came out with a press release, I think, a week ago or so about our treasury management system. And we just did a seminar, I think, today, where we had 277 people lined up or signed up to come to our webinar on our new treasury management system. We have another product coming out in a very short order called GoCentral that we're really excited about. So we've got a lot of stuff happening, and you got to execute, you've got to win, you have to have satisfied clients and have to be upfront and brutally honest with everybody so that we can get on with doing the things that are necessary to have a business.

Jonathan Lee -- Morgan Stanley -- Analyst

Loud and clear. Thanks, Bill.

Operator

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

Alex Kramm -- UBS -- Analyst

Yeah, hello. Hello, everyone. Just on the healthcare comment from earlier was the decline. Hopefully, I got this right, but can you flesh it out a little bit more? I mean, very recently you've sounded super bullish on that business.

So just want to make sure I didn't miss anything there. And maybe related, I think, you're hoping to get some more partners into the Domani JV, so maybe any updates there would be great.

Bill Stone -- Chairman and Chief Executive Officer

Yeah. I mean, we remain very optimistic. We have a number of people that are trying to become partners and customers of we have knock on wood, have a lot of progress on the development side. And so, we're optimistic about that.

And hopefully, we will have some announcements on healthcare over the next quarter or two that are quite positive. Is that how you would look at it, Rahul?

Rahul Kanwar -- President and Chief Operating Officer

That's right, Bill. We are making really good progress on the new system that we're building and have lots of great support from our partners.

Alex Kramm -- UBS -- Analyst

And in regards to the decline, why is this business going to be down this year, remind me, please? 

Rahul Kanwar -- President and Chief Operating Officer

There's some attrition on the medical claim side. So Domani is very focused on pharmacy. And on the medical claims side, we have some attrition as something we've known about and we're going to need to overcome that this year. 

Alex Kramm -- UBS -- Analyst

Yeah. OK. Thanks. And then, just real quick in terms of capital allocation, I'm not sure if this came up already, but I know, obviously, you've got Blue Prism here soon.

But outside of that, given the cash flow that you're throwing off, you already delevered decently. Like so should we assume buybacks can continue at a pretty attractive pace? Or how should we be thinking about the remainder of the cash in absence of any deals?

Bill Stone -- Chairman and Chief Executive Officer

Yeah. Again, Alex, we're trying to be as wise as we can be. I would guess, given that the term market is still pretty strong, the high-yield market, not as, so I would imagine that we will be pretty active in buying back our shares, and we'll still pay down a good amount of debt. And obviously, we are not paying down our 2% debt, so we can just refinance it on Blue Prism at 3% or 3.5%.

So we have a hoard of cash that we'll use in closing these acquisitions. And then -- but we're still generally like as you saw, we generated almost $0.25 billion in cash above what we did in 2020. So at $1.429 billion, you have an awful lot of flexibility and an awful lot of optionality. 

Alex Kramm -- UBS -- Analyst

Very good. Thank you very much.

Operator

Your final question comes from the line of Patrick O'Shaughnessy with Raymond James. Your line is open.

Patrick O'Shaughnessy -- Raymond James -- Analyst

Hi, good evening. On the M&A front, do you think getting the regulatory approval for larger acquisitions is going to be incrementally more challenging going forward given the current stance of global regulators? Or would you anticipate largely steering clear from extended antitrust reviews?

Bill Stone -- Chairman and Chief Executive Officer

Well, I mean, again, Patrick, we're not anxious to have antitrust reviews, as you can imagine. At the same time, the more attractive an acquisition is, the more dogged we will be to close it. And hopefully, that's the way that we drive success in our M&A activities, but we're getting big, right? So we're not going to be able to hide.

Patrick O'Shaughnessy -- Raymond James -- Analyst

Got it. OK. And then, staying on the regulatory theme, do you guys have any preliminary thoughts on how the SEC's proposal to increase disclosure requirements on private fund managers might offer either opportunities or threats to SS&C?

Bill Stone -- Chairman and Chief Executive Officer

I think, it's primarily an opportunity to help our clients with additional regulation, and we're optimistic in our ability to do that.

Patrick O'Shaughnessy -- Raymond James -- Analyst

All right. Thank you.

Operator

There are no further questions at this time. I would now like to turn the call back over to Mr. Bill Stone for closing remarks. 

Bill Stone -- Chairman and Chief Executive Officer

Thanks, everybody. We look forward to talking to you at the end of Q1 and stay healthy and stay safe, and we'll talk to you in 90 days or so. Thank you.

Operator

Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may now disconnect.

Duration: 51 minutes

Call participants:

Justine Stone -- Head of Investor Relations

Bill Stone -- Chairman and Chief Executive Officer

Rahul Kanwar -- President and Chief Operating Officer

Patrick Pedonti -- Chief Financial Officer

Mike Young -- Truist Securities -- Analyst

Surinder Thind -- Jefferies -- Analyst

John Rodriguez -- D.A. Davidson -- Analyst

Andrew Schmidt -- Citi -- Analyst

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

Chris Donat -- Piper Sandler -- Analyst

Kevin McVeigh -- Credit Suisse -- Analyst

Jonathan Lee -- Morgan Stanley -- Analyst

Alex Kramm -- UBS -- Analyst

Patrick O'Shaughnessy -- Raymond James -- Analyst

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