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Operator: Good afternoon, ladies and gentlemen, and welcome to the Deutsche Borse AG Analyst and Investor Conference Call regarding the preliminary Q4 and full year results of 2025. [Operator Instructions] Let me open the floor to Mr. Jan Strecker.
Jan Strecker: Welcome, ladies and gentlemen, and thank you for joining us today to review our financial results for the fourth quarter and the full year of 2025. Present on today's call are Stephan Leithner, our Chief Executive Officer; and Jens Schulte, our Chief Financial Officer. Stephan and Jens will take you through the presentation. And following their remarks, we will open the line for your questions. The presentation materials have been distributed via e-mail and are also available for download on our Investor Relations website. This call is being recorded, and a replay will be made available shortly after the conclusion of today's session. With that, let me now hand over to you, Stephan.
Stephan Leithner: Thank you, Jan, and welcome, everyone. In 2025, we achieved record-breaking top and bottom line financial results, successfully executing our strategy and delivering on our guidance. This demonstrates the strength and resilience of our diversified business model. Net revenues without treasury results increased by a strong 9%, reaching the targeted level of EUR 5.2 billion. Importantly, we showed significant and operating leverage with EBITDA without treasury result growing even faster at 14%. This performance was underpinned by our very disciplined cost management with operating cost growth held at just 3%, right in line with our expectations. These record results confirm that we are on the right path, successfully executing our strategy despite headwinds in some areas. Our strong performance and confidence in our strategy directly translate into significant shareholder returns. We are proposing a 5% dividend increase to EUR 4.20 per share and will shortly launch a EUR 500 million share buyback program on an accelerated basis. In total, this delivers a record distribution of EUR 1.3 billion to our shareholders in 2026, a total payout of around 63%. The positive momentum of the full year was also visible in the fourth quarter performance. Q4 net revenues grew 7%, driving a 10% increase in EBITDA without treasury results. This was primarily fueled by outstanding double-digit net revenue growth in 2 areas: first, in the SimCorp Software Solutions, which was up 18% on a constant currency basis, driven by client wins and the continued expansion of our SaaS offering. Our performance in the Americas in this context was a standout with 47% annual recurring revenue growth. This was driven by major client wins, including a Tier 1 U.S. asset manager, which will bring all asset classes onto our platform with a full front-to-back coverage. This is a powerful validation of our SimCorp One platform and our strategy in this key market. The acceleration of our SaaS transformation at SimCorp is also a core driver of this success. SaaS net revenue grew 50% in the fourth quarter, what a number. This is the secular growth we are focused on, and it confirms we will have over half our clients on our SaaS platform by 2026. This performance puts us clearly ahead of our key competitors as I can proudly report. Altogether, 2025 was a year of strong execution for SimCorp, and we have delivered excellent results. Our strategic path is clear, and we are delivering on it. The second area that performed exceptionally well in the fourth quarter was our Security Services business, which grew net revenue without treasury results by an outstanding 17%, again, what a number. we achieved new all-time highs across custody, settlement and collateral management, which drove this exceptional result. The record-breaking activity was fueled by a confluence of powerful market trends, including continued strong fixed income issuance, which increased the overall amount of debt outstanding, equally as a second driver, persistently high equity market valuations. And thirdly, a significant uptick in retail investor activity and flows into Europe. Finally, and furthermore, a heightened demand for safe and efficient collateralization propelled our collateral management outstandings up by 28% to a new record of EUR 932 billion, demonstrating the essential role our infrastructure plays in a dynamic market environment. The future growth of our Security Services division is driven by 3 core strategic drivers as we also outlined at our Capital Markets Day. First, we are focused on business scaling by expanding our client footprint with direct plug-and-play infrastructure access and innovation with our Collateral Management as a Service platform. Second, we are leading the European capital market transformation by leveraging our unique position as a top CSD and ICSD to consolidate the fragmented post-trade landscape and capture new capital flows into Europe. And finally, a third trend and the most transformative, we are pioneering asset class expansion by driving the digitization of finance, building on our D7 digital issuance platform to create the trusted market infrastructure for tokenized securities, digital cash and institutional crypto assets. Our strong performance, as you can see on the second chart, gives us the power to execute our strategy and make decisive moves to solidify our leadership position for the long term. The slide highlights 2 examples of this in action that we are tackling this year. First, an update on our acquisition of Allfunds, a truly transformational step for our Fund Services business in our Leading the Transformation strategy. The strategic, commercial and financial rationale for this move is exceptionally compelling. With Allfunds, we are not just acquiring a business, we are building a European investment fund champion. This isn't just about getting bigger, it's about getting better and creating a fully integrated end-to-end service offering for the entire fund industry across different markets. This combination is powerful because our businesses are highly complementary. We are bringing together Clearstream's strengths in Central Europe with Allfunds' leadership in Southern Europe. This positions us at the heart of pan-European ecosystems, significantly reducing market fragmentation and establishing a harmonized global reaching business that plays a pivotal role in facilitating the investment of retail savings into productive capital. This is a significant step forward for European capital markets and also addresses the goals of the savings and investment unions that are so often talked about. From a financial perspective, this transaction is designed to create substantial long-term value. We have identified significant synergy potential, expecting to deliver annual cost savings of EUR 60 million in operating costs and EUR 30 million in capital expenditure. Approximately half of the run rate synergies will be realized in the current strategy cycle by year-end 2028. The acquisition is valued at EUR 5.3 billion, structured at EUR 8.80 per share. Initially, we proposed a balanced mix of cash and shares. However, we have since refined this financing structure to increase the cash component. This strategic adjustment allows us to fully utilize our debt capacity. Due to our strong financial performance, our credit rating metrics at year-end 2025 were all very well within the established thresholds, leaving room to increase the cash component. Speaking to you today on the analyst call here, the result is a transaction that delivers high single-digit cash EPS accretion from year 1 based on the run rate synergies while preserving our strong credit rating and maximizing immediate value for you as our shareholders. I would like to emphasize, however, beyond the financials, the partnership nature of this transaction, which, from my perspective, will make it so transformative and a unique opportunity. The compelling concept was developed through close dialogue with the Allfunds management team. The transaction has the unanimous support of the Allfunds Board of Directors. We have also already received irrevocable undertakings from Allfunds' largest shareholders. We are now proceeding with the U.K. scheme of arrangement process and obtaining the necessary regulatory approvals. We are highly confident in securing antitrust clearance because our businesses really are complementary. Clearstream mainly drives post-trade fund processing infrastructure, while Allfunds is a fund distribution platform. We also have a distinct geographical and client focus across the funds value chain, as I already outlined earlier. We anticipate completing the transaction in the first half of 2027. In closing, this is a landmark transaction. It strengthens our capability, accelerates our strategy and reinforces our commitment to building the future of capital markets infrastructure. We are creating a world-class player that will better serve clients and drive the evolution of the global funds industry. You hear my passion. I think this is a very strong story. Now let me expand on the second situation, for which I know many of you have been persistently looking for clarification. I recall many of our meetings around this. We are now taking full ownership of our data analytics and index champion ISS STOXX. As we announced overnight, we have reached an agreement with GA to acquire the remaining 20% minority stake held by our partner. The move creates clarity around this topic and is the natural and planned culmination of our successful partnership, which began with our joint investment in Axioma back in 2019 and continued through the strategic merger that formed the integrated ISS STOXX business in 2023. This buyout is a reaffirmation of our strategic vision and gives GA the necessary liquidity. It solidifies our ambition for ISS STOXX to be a leading go-to provider of mission-critical data analytics and indices for the buy side. While we acknowledge the headwinds resulting from a changed attitude towards certain products, particularly in the U.S., we feel strongly confirmed by clients about the underlying business logic. We remain confident in a return to stronger growth in the medium term as outlined during our Capital Markets Day last December. We also view the transformation through AI as a key opportunity, not a threat. ISS STOXX is uniquely positioned for this transformation to its unique historic databases. Our clients have a strong need for highly reliable regulation-proof quality data with an algorithm alone cannot provide. Our strategy is to use AI as a powerful augmentation tool, combining our trusted data and human experience to enhance our offerings and maintain our market leadership. Taking full ownership reduces complexity, allowing us to accelerate the execution of our strategy for this highly attractive business. For example, we'll benefit from lower governance costs and closer integration with our global system and processes. It will also be easier for us to promote closer cooperation between our index and data businesses in areas such as financial derivatives and software solutions. Similarly, we can leverage ISS STOXX's data handling and processing capability globally as well as analytics competence over time in other parts of the group. The agreement with General Atlantic included a contractual path for their exit, and the valuation is based on the peer group multiple as we had agreed at the outset of the partnership in 2019 and 2023. We will finance this using available cash and debt. The transaction is expected to have a low single-digit accretive effect on our cash EPS, obviously, already this year. Finally, let me be very clear on a critical point. Integrity and independence of ISS research are paramount. We are fully committed to maintaining the established noninterference policies, ensuring that the research provided by ISS continues to be objective and trusted by the market. Both the Allfunds acquisition and the minority buyout of ISS STOXX are clear, logical steps in the further development of our group. Let me turn to the strategy for a second again. Our strategy, Leading the Transformation, provides a clear road map for the future. So let me come to the outlook for 2026 within the growth trajectory of our strategy on Page 3. This is best summarized in 4 key messages. First and foremost, we start from a position of strength. We are on track and fully committed to our 2026 financial targets. And you heard me say that a year ago when it came to 2025, and we deliver. Specifically for 2026, this is EUR 5.7 billion in net revenue and EUR 3.1 billion in EBITDA without our treasury results. But let me be clear, we see these ambitious goals, not as a final destination, but as an important interim milestone in our journey as we have outlined already in London in December. Delivering on this plan demonstrates our credibility and provides the foundation for our next phase of growth. The second point is our ambition extends well beyond 2026. We are committed to delivering sustained growth, targeting a high 8% organic net revenue growth through 2028. This isn't just a number. It's a plan powered by durable sector growth drivers and our leadership in technology. Our unique position allows us to lead key market transformations, unlocking new growth vectors that will propel us forward. As a third element of the strategy, we are evolving our operating model to efficiently deliver this growth. Through our OneGroup model, we are building a more scalable and efficient organization. This is not just about cost control, it's about cultivating a culture of excellence. And obviously, we are not compromising our organic investment volume, which runs at around EUR 600 million per year. By holding our operating cost growth to a disciplined 3% growth rate, we will ensure that the revenue growth translates directly into enhanced profitability and operating leverage. And therefore, finally, our financial ambition. The payout from this strategy is very attractive. We will deliver strong structural top line growth and significant scale benefits. This bottom line performance gives us a powerful combination of strong investment capacity for organic growth and strategic M&A while delivering attractive and growing shareholder returns. In light of the recent market developments regarding artificial intelligence, let me also again reaffirm our clear position on the topic. We view AI not as a threat, but as a powerful engine for our growth. A thorough assessment confirmed our portfolio robustness, showing that less than 5% of our revenues are only potentially affected as AI cannot replace the regulated system-critical infrastructure and processes we operate. At the same time, our plans for scaling and limiting cost growth benefit greatly from AI. With over 75% of our infrastructure now cloud-based, we are strategically positioned to capitalize on this opportunity by developing AI at scale on a rapid, cost-effective and secure manner. We're already leveraging AI to enhance internal efficiency and are rolling out product embedded AI to boost client productivity. As a component of our Leading the Transformation strategy, AI is generating tangible value. In short, we are delivering on our current plan, and we have a clear path to sustained and profitable growth throughout 2028. We are evolving our operating model to support it, and this will all translate into strong returns for you, our shareholders. With that, I'll hand it over to Jens for a closer look at the financial and the segment details.
Jens Schulte: Yes. Thank you very much, Stephan, and warm welcome, everyone, also from my side. So it's a pleasure to walk you through our financial results for 2025. As you've heard, the year was a record year for Deutsche Borse Group, and Slide #4 crystallizes the strong basis we have built. We delivered total net revenue of over EUR 6 billion and an EBITDA of more than EUR 3.5 billion. Without the treasury results, we achieved 9% top line growth and more importantly, 14% bottom line growth. The fact that our revenue growth is outpacing the growth of our operating costs demonstrates the increasing profitability we are generating across the group. It's a testament to the strength of our diversified portfolio, which allowed us to, a, deliver this performance despite cyclical headwinds in certain areas; and b, our disciplined approach to cost management with only 3% growth, fully in line with our guidance. This all translates into a strong cash EPS of EUR 11.65. Now let's zoom into the fourth quarter on Page #5, which was a strong finish to the year. We posted net revenue of EUR 1.6 billion and an EBITDA of almost EUR 900 million. This translates to a 7% top line growth without the treasury results, which corresponds to 9% on a constant currency basis and 10% bottom line growth, again showcasing that our profitability is growing faster than our revenue. The key takeaway for this quarter is the quality of our earnings. Our performance was driven by sustained double-digit secular growth in our Software Solutions and Security Service businesses. The structural momentum more than compensated for the weakness in areas such as equity derivatives, which were affected by modest market volatility. Our ability to balance performance across the portfolio is a core strength of our business model. On the cost side, total operating costs remained broadly stable as disciplined cost management and FX tailwinds offset inflation and targeted investments. Additionally, operating costs included exceptional effects from preparing for the potential IPO of ISS STOXX last year. Now that we have agreed to buy out the minorities, a lower double-digit million euro amount has become income state effective. Now let's take a closer look at our segments. First, let's start with Investment Management Solutions on Page #6. As we discussed at our Capital Markets Day, this segment is central to our buy-side strategy. In the fourth quarter, Software Solutions was clearly the growth engine, delivering 13% net revenue growth. As Stephan mentioned, we even achieved an impressive 18% net revenue growth on a constant currency basis. This reflects the increasing U.S. footprint. The growth resulted from our focused execution, including significant customer wins in North America and the continued success of our Software-as-a-Service transformation. It's encouraging to see that Axioma, our analytics offering, which is now part of the SimCorp One platform, has achieved the highest ARR growth since the acquisition in 2019. This achievement is a testament to the benefits of combining the 2 businesses as well as the revenue synergies we anticipated as part of the SimCorp acquisition. The strong performance offset the known challenges in the ESG and Index business, which continues to experience prolonged cycles due to the political uncertainty. Net revenue growth in ESG and Index was 4% at constant currency, which is not fully satisfactory, but within the expected growth range for this business, as discussed during the CMD. Our Index business benefited from robust licensing and achieved net revenue growth of 10%. The segment EBITDA is affected by the exceptional costs I just mentioned. After adjusting for these costs, EBITDA increased broadly in line with net revenue. The results in Trading & Clearing on Page #7 demonstrate our strength in secular growth areas and our leadership in European markets. The division achieved 3% growth without the treasury results, but the details are what tell the real story. We saw good performance where structural drivers are strongest. Commodities benefited from robust EU gas activity. Cash equities were fueled by ongoing inflows into Europe, and foreign exchange continued to expand its client base and geographic reach. Financial derivatives remained flat as expected, given the subdued volatility environment in equities. However, this was offset by our fixed income business. We made good progress on our fixed income road map, achieving a 7% year-over-year increase in net revenue without the treasury results. Our OTC Clearing and Repo businesses significantly propelled this growth with net revenue climbing by 14% and 44%, respectively. A key element of our strategy has been preparing for the EMEA 3.0 active account requirement, a major catalyst for growth in our OTC Clearing segment. Our strategic focus on converting our extensive client base into active participants yielded further results. We experienced a 31% increase in our outstanding notional, reaching EUR 44 trillion and capturing a 22% market share. This was accompanied by a surge in trading activity with our average daily IRS volumes growing by 97%. While we have successfully onboarded nearly 2,500 clients, our EU buy-side activation rate remains at 16%. This underscores a significant opportunity for future growth, and we anticipate gradually phasing in more active clients over the next 6 to 12 months. Our commodities business had another successful quarter with an 8% increase in net revenue. This growth was fueled by Europe's increased reliance on our global LNG supplies, which created price volatility and a heightened need for market participants to hedge against uncertainties in supply and demand. We also saw further momentum in the Clearing Services that our U.S. commodities business, Nodal, provides to Coinbase. Nodal Clear serves as the central counterparty for the Coinbase Derivatives Exchange, mitigating credit risk for market participants. Thanks to this partnership. The first ever 24/7 clearing for margin crypto futures are now available in the U.S. and plans are in place to integrate the stablecoin USDC as eligible collateral for futures trading. In cash equities, we benefited from strong demand for European equities and significant inflows into European ETFs. This reflects the broader investor rotation into European markets and growing interest in passive strategies. And finally, our foreign exchange business achieved net revenue growth across most product lines, supported by net new client wins and geographic expansion. Now turning to our post-trade businesses. We have Fund Services on Page 8. Net revenue without the treasury result increased by 3%. However, the underlying businesses of fund processing and fund distribution grew by a solid 7%. This growth is mainly fueled by structural trends, but was also influenced by some retrospective adjustments of volume-related costs. Generally, we are seeing new record levels of custody and settlement volumes as well as the continued increase in assets under distribution to more than EUR 760 billion. The performance is a direct result of our investments in our platform and our successful partnerships with global participants. These investments position us perfectly to capture the ongoing industry trend of outsourcing. We are seeing positive momentum across the board, supported by new client wins, portfolio growth and ongoing inflows into European assets. The other line item declined mainly due to exceptional effects in the fourth quarter of last year. And operating costs this quarter were influenced primarily by slightly higher investments and growth. However, the 2% growth in operating costs in Fund Services for the full year is in line with our expectations. It demonstrates our scaling momentum, which will be further fueled once the Allfunds acquisition is completed. Securities Services on Page #9 had an outstanding quarter, with net revenue without the treasury result growing by 17%. This performance highlights Clearstream's essential role in the European financial market infrastructure and its robust competitive position. Growth was broad-based and driven by record levels of assets under custody, strong settlement transactions and continued fixed income issuance. High equity market levels and increased retail participation also contributed to this growth. Our collateral management business reached an all-time high with outstanding balances increasing 28% to an average of EUR 932 billion. This robust growth nearly offset the impact of lower cash balances at year-end and U.S. dollar rate cuts on net interest income. As you can see on Page #10, our strong and consistent cash generation enables us to make investments such as Allfunds and the buyout of the ISS STOXX minorities while providing attractive and growing returns to our shareholders. Based on our performance in '25, we are proposing a dividend of EUR 4.20 per share. This represents a 5% year-over-year increase and a 38% payout ratio, which is at the upper end of our stated policy range. Furthermore, as we announced at our Capital Markets Day, we have refined our capital allocation policy to include regular annual buybacks. And I'm pleased to confirm that the previously announced EUR 500 million share buyback program will begin soon and is expected to last around 3 to 5 months. Our balanced approach of investing in organic and inorganic growth while increasing direct shareholder returns reflects our confidence in our future cash flow generation. On a side note, the 2 million shares we repurchased last year have been canceled and the shares outstanding now amount to 182.1 million. Finally, let me conclude with our outlook for fiscal year '26, which is outlined on Page 11 and reflects our confidence in the year ahead. We fully confirm the guidance we laid out as part of our Horizon '26 strategy, which has become an important interim step in our Leading the Transformation trajectory until '28. Our Leading the Transformation strategy presented at our Capital Markets Day in December sets a clear path for sustained growth through 2028 and beyond. The strategy is built on 4 key pillars: executing secular growth, driving market transformation, evolving our OneGroup operating model and refining our capital allocation. We are targeting an 8% compound annual growth rate in net revenue without the treasury result to reach EUR 6.5 billion by 2028. This will be driven by our leadership in secular trends, such as the growth of the buy side and our focus on key transformation themes like the evolution of European capital markets and the expansion of digital and alternative assets. A core component of the strategy is the evolution of our OneGroup operating model, which focuses on scalability and efficiency improvements, allowing for an increase in operating efficiency with the projected operating cost CAGR of only 3%. The resulting bottom line outperformance will support strong investment capacity and attractive shareholder returns. For '26, we expect to generate net revenue of EUR 5.7 billion and an EBITDA of EUR 3.1 billion in '26 without the treasury result. We are confident in our ability to achieve these targets due to our sustained business momentum, including recent client wins and continued momentum from secular growth trends. Furthermore, our strategic initiatives, particularly the deployment of AI will improve operational efficiency, supporting our EBITDA target while generating new revenue streams over time. Our targets also assume a normalization of market volatility and modest growth in equity derivatives. Additionally, we expect a treasury result of approximately EUR 0.7 billion, comprised of about EUR 0.5 billion in net interest income and EUR 0.2 billion in margin fees. The underlying assumptions for the NII are stable cash balances and euro interest rates as well as modestly declining U.S. interest rates. Regarding costs, we anticipate a moderate increase in overall operating expenses, consistent with our medium-term guidance of approximately 3%. This increase is not just passive cost inflation, it's disciplined investment in our key strategic initiatives that will fuel our future growth and drive operating leverage. We are fully on track to meet our medium-term goals and continue to lead the transformation of our industry. And that concludes our presentation. We look forward to your questions.
Operator: [Operator Instructions] And the first question comes from Benjamin Goy from Deutsche Bank.
Benjamin Goy: One question on Software Solutions, please. You mentioned another major client win in North America. Maybe you can give a bit more color on this client and more broadly, whether the business has reached a tipping point now in this market with major logos you can put on your RFPs and the integration of Axioma. How the dialogue has changed with U.S. clients over the last year or so?
Stephan Leithner: Benjamin, thanks for your question. We are indeed very excited. I don't know how to frame that well because I gave you this West Coast largest pension fund last year type guidance. I think give us a bit more time for the press release, and we will be able to give you absolute clarity. But to the second part of your question, I think we have reached a positive tipping point in the spirit of the type of RFP participation and invitations we receive. We see a continued very strong pipeline in the U.S. market. But let me emphasize that this is a much broader pipeline than we historically have seen because of the Axioma integration. And as a second leg that it is equally fueled, and we talk a bit less about it by European momentum. I mean the quality of the names in Europe, Axioma was one of them as we had announced it, that really have such a strong and broad front-to-back character is something that, in fairness, we had not expected in that quality of dialogues that we are seeing now.
Operator: And the next question comes from Arnaud Giblat from BNP Paribas.
Arnaud Giblat: It's Arnaud Giblat from BNP. My question is on ISS. So I was wondering how the price of the acquisition was determined for the minorities. You mentioned peer multiples earlier on the call, but it seems to me that it's a small premium. And I'm just wondering how the headwinds you acknowledge for this business affected that price because the peers seem to be growing a bit faster. And also, was the timing of the minority of this buyout predetermined as part of the terms of the acquisitions made in 2019 and 2023?
Stephan Leithner: No for the questions. As we have highlighted, there is a historic context in the basic agreements that we struck in 2019 and 2023. It is obviously, and that's why we put in the reference back to the peer group context. It's not arbitrary or negotiated in a narrow sense. There is an analytic basis on which we obviously will not provide more further details around, given that it's confidential between GA and us. But in summary, it's something that we feel very much is supported by the strength that we see in the business medium term, very confident and very excited. I think some of the valuation dynamics we see in the market is clearly a change from historic levels, but it doesn't change our belief in the fundamental quality of the business.
Arnaud Giblat: And on the decision to do that today rather than in the future, was that predetermined as well?
Stephan Leithner: No, there was a context. We have always said that around the dual track. And after 7 years, I alluded to that on a number of occasions. Certainly, there was already a long time horizon. So in that sense, yes, there were windows during which it became the possibility for GA to also have liquidity through the buyback. But again, that was not predetermined. That's why we did indeed look very seriously at the possibility of the dual track throughout the last year.
Operator: And we have the next question from Enrico Bolzoni from JPMorgan. Okay, so he doesn't want to ask a question. Then we have the next question from Hubert Lam from Bank of America.
Hubert Lam: Just one question on Allfunds. What gives you the confidence that you can pass the regulatory hurdles to get the Allfunds deal done, just given the possible antitrust situation around that?
Stephan Leithner: Thanks, Hubert, for the question. The complementarity is really the sense of confidence that we have. The second element I would really want to emphasize is that this is a highly competitive market environment. I mean the platform and the size and quality makes the combined business very much a leader in many dimensions, but we are very much aware that and why the universe of intermediaries that are active there, including a number of platforms that are run by different asset managers as well as distribution groups. So it's a very competitive market in addition to the complementarity. If you put the 2 things together, we have done a lot of analysis, as we have also highlighted together with Allfunds in the run-up to the announcements, and that gives us a high degree of confidence.
Operator: And the next question comes from Ian White from Autonomous Research.
Ian White: Very simple one from my side, please. Very specifically, with respect to ISS' historical databases, why is AI unable to replicate those data sets? What are the moats there, please?
Stephan Leithner: Good question, Ian. I think the substance of that moat is really driven around the enormous amounts of quality assurance that needs to happen, and that has been happening in the work that ISS has been doing over the many years. That is the anchor that really drives that distinctive sort of positioning of the data sets they have. I would add as a second element, the integration with a number of the qualitative data in recent years when it comes to sort of information that is supporting certain decisions and voting decisions, take again many of the ESG data and other, which is a pretty unique combination that ISS has there.
Ian White: So just to clarify, is it fair to characterize those data sets then as essentially enriched or augmented by things that you couldn't scrape for free from company disclosures or the Internet? Is that a fair summary?
Stephan Leithner: Yes, absolutely. But let me add to that. Quality assured means often error corrected. And I think that is what, in particular, for nothing worse than for models that learn of wrong and mistaken data, erroneous data. I think it's an area of shareholder voting where the topic of having a factually correct database is a critical part.
Operator: And we have the next question from Tom Mills from Jefferies.
Thomas Mills: I have one on Allfunds, please. Obviously, you've laid out what you expect to achieve from a cost synergy perspective. I'd certainly anticipate there should be some material revenue synergies that you should be able to exploit here as well. Can you maybe talk about what you see there and perhaps why you haven't set those out in detail?
Stephan Leithner: Thanks a lot, Tom. It's much appreciated. I think the cost synergies, as you say, is something, which even though Allfunds is a public listed company, we have had a lot of joint efforts. I think we thought very conservatively about the synergy topic, as you can take from the revenue side. I think we'll see that much better once we have full access in the combination.
Operator: And we have the next question from Michael Werner from UBS.
Michael Werner: One question from me, please. I believe at the Capital Markets Day, you indicated that you expected Trading & Clearing revenues to grow by about 11% year-on-year in 2026, which is a bit above, I think, myself and the sell-side consensus number out there. And I think maybe some of this is coming from the opportunity from active accounts. A, can you confirm that? And then B, I believe when you talked about active accounts, and I might very well be wrong here at the Capital Markets Day, you talked about a phase-in period kind of midyear around May of this year. And then earlier, you talked about this opportunity still coming through in the next 6 to 12 months. So, A, was there any change in any of the timings? And B, when do you expect all of these active accounts to be activated?
Stephan Leithner: Yes. Thanks very much, Mike, for the 2 questions. So on the Trading & Clearing revenue outlook for this year, I guess, comparing us to the consensus, there's been 2 major differences. One is maybe we estimate the EEX performance a little bit more strongly because we believe that the basic trajectory in that business is really, really super rock solid. And the second one is probably, as you indicate, slightly different assumptions on the uptick on the fixed income road map where we are confident to achieve it on a fee-based revenue basis and where there may be a little bit more caution on the market side. With respect to your active accounts question, basically, that has not changed. So active accounts, as you know, needs to be basically fulfilled until the middle of this year, so until June. So we do anticipate more significant activation rates by the mid of this year. But what we wanted to indicate on our tax today is also to say that, of course, this will not stop in the middle of the year, right? So this will be a phased ramp up and there may be some clients which start on a low basis just to test technicalities and figure out their flow routing and things like that. And then this should hopefully also expand further. That's essentially what we meant with our statement.
Operator: The next question comes from Grace Dargan from Barclays.
Grace Dargan: I just wanted to probe a little bit more around the synergies for ISS STOXX. Whether you have any target numbers, how you're thinking about that and whether there'd be any one-off costs to achieve that? And whether that's all captured in your existing revenue and cost guidance?
Jens Schulte: Yes. Thanks very much, Grace, for the question. So we have not -- there are not top-down figures on potential ISS STOXX synergies. And as Stephan alluded to, we see several ways in how to benefit from that, by the way, also in the other direction. So I mean, we mentioned that we can see lower governance costs and also the business being more closely integrated on the back office. Also the other way around. This business has, for example, a strong footprint in the Philippines. So it's a very good far-shoring location. And we anticipate as part of our OneGroup topic that we explained that also other parts of the group will basically make use of that. And that's now much easier in a 100% consolidation scenario. But to your question, we haven't quantified that yet, so that's work that we're going to do over the next weeks and months. And then these figures are not yet included in our guidance or anything, yes. So it's basically the guidance has been set based on the structure so far, and there should be additional benefits in there.
Operator: And we have one question from Ian White from Autonomous Research.
Ian White: If I can maybe just ask a couple of follow-ups, if that's okay. I think following slightly on from Mike's question, can you provide us maybe a little bit more detail about how you're thinking of monetization of the short-term interest rate contracts and also the renegotiation potentially of the revenue share within the OTC clearing business? I'm assuming nothing has happened or nothing has changed on either of those fronts so far, but maybe a bit more detail around that would be interesting. And secondly, if I can maybe ask on the Kraken partnership and specifically the xStocks initiative. Have you kind of effectively entered into competition for trading in, in U.S. stocks there with the recent developments? And what do you anticipate in terms of additional securities that will be offered under that partnership and the prospects for building some liquidity in those markets, please?
Jens Schulte: On the first part, Ian, happy to take that one. So on the various incentive programs that we have running within the fixed income road map, as you know, so that alludes to the -- I mean, to the STIR component of the FI ETD business, but also to the other components of our fixed income road map. We are actually reviewing those, as we said, within the first half of the year and then taking individual decisions. So far, I mean, with good market shares already achieved in most of the components, but we want to go further and we will figure out whether we further make use of these incentives or not. We haven't decided that yet. So it's going to come in through by the middle of the year. And on the second one, will you?
Stephan Leithner: Happy to take it on. So I think, again, this is in an early phase. The xStocks dynamics will, for us is more relevant when it comes to the European parts. And what we can really do around the partnership with Kraken of tokenizations that bring not only xStocks on the 360X platforms, but then more importantly, the reverse direction, some of the different asset categories we have as we move to tokenization and leverage the Kraken sort of infrastructure there.
Jens Schulte: I think we have one further question. Enrico redialed in and I think is ready to ask the question. Enrico?
Enrico Bolzoni: Can you hear me?
Jens Schulte: Yes, loud and clear.
Enrico Bolzoni: Sorry, I was kicked out and thus rejoined. So perhaps I might have missed the question from my colleague. I'm going to ask it again, just in case. So going back to your stat, can you provide a bit of color perhaps on the competitive landscape? I would be very curious to know if, for example, you can break down the growth that you printed between its components of perhaps a bit of pricing, how much was due to new clients win? And in general, do you expect that competitors in the U.S. will react to your success and perhaps we should see a bit of pricing pressure coming forward?
Jens Schulte: Enrico, this was the Software Solutions business, right, to make sure?
Enrico Bolzoni: Yes, that's right.
Stephan Leithner: I think again, we wouldn't have a detailed breakdown. But inherently, this is not a pricing type. I mean market works with a decent inflation protection type pricing structure. So it really is around market share wins. And secondly, to go back, it is very much about activation of clients, meaning in the SaaS period, you clearly reap the full benefits once the early transition is coming on stream. So therefore, it's a blend of the sign-up, the client upfront parts and then obviously even more important, the ARR components, which go live, the more sort of activation of components has happened. So that's the real driver from a market share context.
Jens Schulte: I mean maybe only to build on what Stephan said. In terms of competitive dynamics, always keep in mind that the majority of this market is still outside third-party providers such as us, right? I mean the majority of the market is still captive solutions within clients. And so it's less that we try to snap away clients from our competitors. It's actually basically turning captive solutions into our solution. So there's plenty of growth in the market still.
Enrico Bolzoni: That's very helpful. If I may add on this last point you made in light of the current debate on AI latest products that have been launched. Do you see any change so far in the client to perhaps...
Stephan Leithner: I think let me be pretty...
Enrico Bolzoni: Out of the change...
Stephan Leithner: Well, Enrico, thanks for the question very much because I truly want to make that point in a very strong and passionate way. I think the power of SimCorp One is really the character of the front-to-back data handling, the ultimate truth type quality of a platform. I think we really see this as something where given the size and magnitude that we talk about in numbers in investment volumes, I mean, this is not something you play around as a retailer or even as a wealth investor. This is something where the biggest institutions of the world are handling their data where the certainty of quality and processing is really critical. And that's the confidence. That's the one true power. That's the unique asset for SimCorp different from a number of other providers who come at this from the front end rather than the middle and back office. So that power is one where AI capabilities come on top. So that's why we also look at it as an opportunity. We have in place with the biggest and most demanding clients, the base platform. That's why we look at this as an upside opportunity as we obviously work with AI-based modules going forward.
Jan Strecker: Great. So there are no further questions in the pipeline. And therefore, we would like to conclude today's call. Thank you very much for your participation. If there's anything else, then please do feel free to reach out to us directly. Thank you.
Operator: The recording has been stopped.