Operator: Thank you. And I show our next question comes from the line of Chris Allen from Citi. Please go ahead.
Chris Allen: Yeah, good morning everyone. I was wondering if you could help us think about the contract value from client wins at Adenza. Maybe any color just in terms of how much a new client — [you had six this quarter would] (ph) translate from a new contract perspective and we expand relationships with existing clients, we’re talking about a 10% increase, 15% increase? Any color that would be helpful.
Adena Friedman: Well, we don’t actually provide specific contract values per client or anything like that. If you don’t mind, I think we’ll take that one back and think about how we want to provide more transparency there. But I would say this, it’s always land and expand. And actually as we move up into Tier 2s and Tier 1s [on ASCs] (ph), it’s land and expand. So we might sign a client for, let’s say mid to high six figures or low seven figures to land. And then as we expand, we can go and we can double or triple, or even in some cases, you know, have five times the amount over time. And I do think we have some examples of that back when we first signed the deal and on our third quarter results, we gave some examples of how we’ve expanded contracts over time, but we’re not providing you specifics on, like, what the new contract values were for the new clients right now.
Chris Allen: That was it for me. Thanks.
Operator: Thank you.
Adena Friedman: Thank you.
Operator: One moment for our next question. And I show our next question comes from the line of Patrick Moley from Piper Sandler. Please go ahead.
Patrick Moley: Yeah, good morning. Thanks for taking my question. I just had one on the retention ratios for Adenza. It looked like, for the full year, they — on both the gross and net basis, came in a little bit lower than what you were expecting when you initially announced the deal, even after you include the impact of those bankruptcies. So just was hoping maybe you could provide some more color on what you think led to that underperformance there? And then any color on the retention ratios or what your targeted retention ratios would be going forward. Thanks.
Adena Friedman: Sure. Yeah. So I think we did see some declines in the growth and net retention in the latter part of the year. And I think really a lot of that did come from the bankruptcy that we mentioned and that really did start impacting us in the fourth quarter. And then, we had, I would just say the, what I would call the events of 2023 across the banking system did create some levels of challenge in a couple of very specific areas of retention, but it’s not, I would say there was nothing systemic about the concern. There was nothing that we saw that was that was more of a trend in any way whatsoever. It was more the encapsulation of a lot of the events that occurred during the year both in terms of looking at the retention as well as kind of some of the acquisitions that occurred. But again, these are very, very specific and nothing trend-wise. But I don’t know, Sarah, if you want to add anything to that.
Sarah Youngwood: Yeah, the retention on a gross basis was actually flat at 97% if you exclude that bankruptcy. So when we look at it in terms of like long-term trends, we feel that it’s very solid.
Adena Friedman: Yeah.
Patrick Moley: Okay, great. That’s it for me.
Adena Friedman: Okay, great. Thank you.
Patrick Moley: Thank you.
Operator: Thank you. And I show our next question comes from the line of Michael Cyprys from Morgan Stanley. Please go ahead.
Michael Cyprys: Hi, good morning. Thanks for taking the question. I just wanted to ask on capital allocation, how you’re thinking about allocating capital now that the Adenza deal has closed? How you’re thinking about the pace of debt pay down as well as buybacks? I thought I heard you mention that you paused on buybacks. Is that pause still in place and what would lead you to reinstate buybacks?
Sarah Youngwood: Hey, Mike. Nice speaking to you. This is Sarah. So what we have is the strategy that we have outlined is maintained. So we have a balanced view of how to deal with the capital allocation just to reiterate across the dividends, the share repurchase, and the deleveraging. You’ve seen the pause, as I mentioned, and that pause is going to be maintained in the first quarter. Very important for us to continue to deleverage, and — but that is a short-term tactical as part of a strategy that overall hasn’t changed. So we continue to be committed to the progressive dividend, and you’ve seen the progress there as well as over time it’s important to continue to offset dilution with share repurchase. And so that’s the context, and of course this is also a topic that we’ll come back to at Investor Day.
Adena Friedman: You know, one thing we’re pretty good at is that, that just leaving 2023, as Sarah mentioned, we’re at 4.3 times leverage. So that’s ahead of what we had anticipated at the closing of the deal. And so that’s actually kind of both the strength of the business, as well as some very specific tactical decisions we made to pay down the term loan as we’re kind of getting started to kind of launch into 2024 with a very solid plan on deleveraging. But also the focus though will be on that balanced approach over time.
Michael Cyprys: Great, thanks. And just to follow up on the expense outlook. I’m sorry?
Adena Friedman: Yeah, go ahead.
Michael Cyprys: Just on the expense outlook, I was just hoping you could elaborate on the 5% pro forma growth in expenses for this year in 2024. What would drive you towards the higher end versus the lower end of the range and any moving pieces you might be able to elaborate on? Thank you.
Adena Friedman: Sure, yeah. So I would say that, first of all, we’ve been really focused on making sure that we are being as efficient as possible across the business, just on a go — on a run rate basis. That we are also though continuing to make the investments in driving our products forward, our growth forward, but also automation, on bringing more automation into the company. And at the same time, beginning the synergy achievement on the Adenza deal. And the midpoint really reflects all of that. What would drive the expenses above that would be higher growth. So if we’re able to grow faster and we’re able to grow more, there might be some revenue related expenses that come in in terms of just being able to achieve that revenue.
But I think that it has also more to do with can we continue to actually accelerate some of our investments if we’re seeing higher revenue growth throughout the year. And that’s why we always give you a range of kind of the mid to long term outlook on our solutions business growth, revenue growth, and expense growth so that you can kind of understand how we calibrate it. But we do feel like it’s been a good combination at the midpoint of expense discipline, Adenza synergies, but also targeted investments in our business.
Operator: Thank you. And I show our next question comes from the line of Simon Clinch from Redburn Atlantic. Please go ahead. Mr. Clinch, your line is open if you’re on mute. Mr. Clinch, your line is open. Thank you. And I show our next question comes from the line of Andrew Bond from Rosenblatt Securities. Please go ahead.
