But again, our strategy is very deliberate, to rebalance portfolio mix away from those centers towards markets where we’re much less represented and our competition is not as high. But also rebalanced our book of business as, if you track our performance over the last 3, 4 years, this is why the revenue is so stable. Sometimes when Asia doesn’t work, U.S. picks up slack. When U.S. is slowing down, we’re rebalancing towards Europe, and we will continue to do that going forward.
Faith Brunner: And if I could sneak one more in here. Just a lot of strength in multi-strategy to it, you guys are a beneficiary of capital flows. So wondering how you’re thinking about these fund types of clients and their overall willingness to get infrastructure up and running quickly?
Oleg Movchan: I’m so sorry, I did not get the first part of your question. Could you repeat that?
Faith Brunner: Just as you’re continuing to see strength in multi-strategy, asset managers, so and so, how are you thinking about lines and their willingness to kind of adopt broader solutions.
Oleg Movchan: I got it. So that’s an interesting one because the multi-strategy, multi-manager businesses, to some extent, actually represent a challenge for us because they have very custom blends of different things. And actually, to the extent that they’re competing for talent, oftentimes, it’s nearly impossible for them to impose specific system requirements and people that are coming in with people coming in with a team that has some kind of history with another system, some kind of a preconceived notion how they like their workflows to be organized. And so the platform has to be dynamic and flexible enough to absorb the team without necessarily imposing those technical workflow constraints. On the other hand, precisely because they captured such enormous economies of scale they have virtually unlimited technology budget, and therefore, their ability to run a lot of proprietary things to satisfy — to develop and run a lot of proprietary things to satisfy their firm-wide requirements is also much higher.
And so the cost pressures are, in some sense, a secondary there. From my perspective, it’s much more driven by what makes sense for the business. On the other hand, those firms have become big magnets for talent and therefore, they actually are pressing down on the number of launches naturally. SPMs who are looking to launch, they make a choice, whether they go into loan and they launch a fund or they go on a platform like one of those multi-manager platforms, and they just get a seat and get capital allocated and just begin trading. And so from that perspective, we have a pretty strong nucleus of clients like that. But in some sense, this is not a market where we see unlimited growth. What is interesting, though, when you see some recent announcements on the subject, more traditional fully integrated asset managers typically start competing with those and actually allocate capital internally.
And this is where we come in. This is we — our blend of multiple capabilities, middle, back, and front office actually matters because those guys care about costs and they care about scale, and they actually start coming in into those markets with much more palatable cost structure that makes more sense for investors.
Operator: We’ll move next to Alexei Gogolev at JPMorgan.
Elyse Kanner: This is Elyse Kanner on for Alexei Gogolev. So my question was talking about your average onboarding period kind of how you plan to reduce this to better compete with other players in the space.
Oleg Movchan: Yes, big area of focus for us. We think about that part is not just cost structure part or pulling revenue forward part, but also as a competitive advantage. Typically all onboarding framework and onboarding cycle is much shorter than that of our competitors in that space, specifically legacy providers that have on-prem installs. And so even if you mentioned capabilities, we typically win business precisely because our onboarding is much more reliable and much shorter than that of our competition. And in terms of leveraging that, there’s only one way to do it. You design the organization the right way and you build technology capabilities around that so that your team is much more effective and efficient. So that’s what drives the cost down. This would enhance the velocity of the process.
Elyse Kanner: And then real quick on EBITDA margin. So I know your guidance remained the same. I was wondering if 20% plus EBITDA margins are sustainable for the next 2 years and where you see the trajectory of margins going perhaps back to 40% from there?
Brad Herring: This is Brad. I’ll take that question. We’ve talked about expanding margins. It’s also why we mentioned — I mentioned the pass-through rates when we talk about incremental revenue as how much of that is flowing through EBITDA. So we’ve targeted a 45%, 55% pass-through rate. So what that translates into certainly is margin expansion. So we’ve targeted exiting this year around 20%, and we certainly see those numbers not only sustainable but also show the ability to expand those margins, both in the near term and in the long term. We’re not setting necessarily targets to say when we’ll get to 30%, 40% margins from an outlook perspective, but we certainly have the ability to take where we’ll exit this year and expand those further into 2024.
Operator: Our next question comes from Parker Lane at Stifel.
Parker Lane: Nice to see the reiterated guide and the improvement in NDR quarter-over-quarter. Brad, curious as we head into the fourth quarter here and into 2024, what are your expectations around the trend line of NDR? Do you think we get back to the levels we were at last year, you talked about quality of the pipeline improving and maybe some stabilization out there. Just curious where we should expect that to go.
Brad Herring: It’s a great question. We spend a lot of time looking at it. Just like you, I was very pleased to see that NDR trajectory turn in the quarter to start kind of flipping the other direction. We posted the 107 number when you exclude — we targeted that number getting back at least to a 110. I think reality is, it’s probably a number that stabilizes in the 110 to 115 rate over time. When it gets there is going to be an interesting question. I certainly I’m appreciative to see the trend going in the right direction. I think it’s probably going to hover around these levels for the next maybe a quarter or 2, but I do think that 110, 115 number is a sustainable target once we get past that.
