Linda Huber: Yes. So Owen, just to be absolutely clear, in planning for this year’s continuing revenue outlook, we have included what is going on with the Credit Suisse situation. We cannot tell what quarter that will occur, and there are ongoing business discussions. So stay tuned. We’ll see how it plays out, but we’ve been conservative, and we have included that in our guidance. So now regarding capital markets, things changed again yesterday. Chairman Powell was quite dovish in his comments. As of today, the June rate cut probability is north of 70% for 25 basis points of cutting in June. The Fed is looking at three rate cuts over the course of the remaining calendar year. The probability of the June cut went up 15 percentage points from where we were Tuesday.
So if you think about it, I think of Chairman Powell is metaphorically driving the family station wagon. And we keep asking, are we there yet, are we there yet for rate cuts? And he says, we’re not quite there yet. So we’re waiting. The trends are very positive. The Swiss National Bank cut interest rates by 25 bps this morning. The Bank of England held constant. And we saw some IPOs yesterday, the Astera IPO traded way up yesterday, which is a good sign. And Reddit priced at the high end of its range, which was $31 to $34 priced at $34. So seeing IPOs is a really good sign, and we are seeing better information on the timing of rate cuts. We now wait with a bit of a lag as to when that impacts our business. So again, there is a bit of a lag.
So that’s why Phil had talked about the third quarter, we’re not hugely optimistic about that, but the fourth quarter is certainly starting to look much better. So hope that’s helpful to you. And we keep asking the same question, are we there yet on the rate cuts, but we’re going to have to wait. Thanks.
Operator: Thanks. One moment for our next question. Our next question comes from Jeff Silber with BMO Capital Markets. Your line is open.
Jeff Silber: Thank you so much. I wanted to focus on your client count growth. User count growth was really strong, but we’re seeing client count growth slowing. Is there anything specifically going on there? Or is it just tough comps? Or any color would be great.
Helen Shan: Sure. This is Helen. So yes, I think a lot of our client count growth is driven by new business. So I think you’re seeing a bit of that take place right now as you’re seeing that come down. But I don’t think there’s anything in particular that we’re looking at. Typically, that’s driven by corporates and wealth. This quarter, we actually saw some good growth in partners, which is a little bit more on the fintech side. So I don’t — we’re not looking at the client count as something that — to be focused on necessarily.
Operator: Thank you. One moment for our next question. Our next question comes from Craig Huber with Huber Research Partners. Your line is open.
Craig Huber: Thank you. Linda, I want to go back to the question on the ramp for cost if we could in the back half of the year. It seems to me just looking at your guidance here, your revenue guidance, your operating profit guidance for the year that it’s gutted you up quite significantly your cost in the back half of the year by roughly $60 million over the six months versus the first-half of the year and stuff? And if I got that math right, why is that? I mean obviously, in recent years, your fourth quarter has ticked up the cost versus what you reported in the second quarter. But prior to the last two years, that was not necessarily the case. So I just want to hear a little bit more color on that, please. Do I have that right, you are expecting cost up significantly in the second-half versus the first-half, which does seem a little strange to me.
One more thing if I could add because you have had a pretty large restructuring charge in the second quarter, one of the larger ones you’ve had in recent years. That should help the cost of anything, obviously. So any thoughts, I’d appreciate. Thank you.
Linda Huber: Craig, you’re right. We will see a ramp in the back half of the year. Total expenses for the second quarter, $337 million, and we do expect that those will ramp. This is mostly driven by the technology cost. And Craig, what we’re seeing is we have to build in more cloud costs as gen AI takes off and as we get increased demand on that front. So most of this comes from the technology budget. Personnel costs will remain quite flat. As we had said, we have rightsized those, and we reduced our bonus accrual by about $7 million. So the bonus accruals went for the first quarter, it was $30 million with some adjustment going on, $20 million in the second quarter. You should probably pencil in the low 20s for the third and fourth quarter, given what we’re seeing now.
And keep in mind that our employees are paid sort of half on top line growth and half on margin. So the margin piece is about where we want it. The top line piece, we’re anticipating a little bit of slowness. So we’ve adjusted that down for the bonus calculation. On real estate, we’ve done quite well, bringing those costs down. And third-party data costs are about flat. So mostly it is about increases in the tech budget driven by increased amortization as that moves through and also the cloud expense as we look to fuel the gen AI efforts of the company and our clients. So hope that helps you there, Craig.
Operator: Thank you. One moment for our next question. Our next question comes from Russell Quelch with Redburn Atlantic. Your line is open.
