Core Viewpoint - SS&C Technologies (SSNC) has experienced significant selling pressure, resulting in a 16% decline in stock price over the past four weeks, but analysts anticipate better earnings than previously expected, indicating a potential rebound for the stock [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to determine if SSNC is oversold, with a current RSI reading of 28.14, suggesting that the stock may soon reverse its downward trend [2][5]. - Stocks oscillate between overbought and oversold conditions, and the RSI helps identify potential price reversals, indicating that SSNC may present an entry opportunity for investors [3]. Group 2: Fundamental Indicators - Analysts have raised earnings estimates for SSNC by 2.7% over the last 30 days, reflecting a strong consensus among sell-side analysts, which typically correlates with price appreciation in the near term [7]. - SSNC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, further supporting the potential for a turnaround in the stock's performance [8].

Core Viewpoint - SS&C Technologies (SSNC) has faced significant selling pressure, resulting in a 15.3% decline in stock price over the past four weeks, but analysts anticipate improved earnings in the near future [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) for SSNC is currently at 26.86, indicating that the stock may be oversold and could be poised for a rebound as selling pressure exhausts [5]. - RSI is a momentum oscillator that helps identify whether a stock is overbought or oversold, with readings below 30 typically indicating an oversold condition [2][3]. Group 2: Fundamental Indicators - Analysts have raised their earnings estimates for SSNC by 2.7% over the last 30 days, suggesting a positive trend that often correlates with price appreciation [7]. - SSNC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, indicating strong potential for a turnaround [8].

We recently compiled a list of the 15 Best Strong Buy Tech Stocks to Invest In. SS&C Technologies Holdings, Inc. is placed sixth on our list. TheFly reported on February 6 that Needham lowered its price target on SSNC to $95 from $105 and maintained a Buy rating. The firm noted that the company exceeded expectations on both revenue and earnings, delivered record revenue and EBITDA. The firm also noted that the company continues to show healthy organic growth, expanding margins, and value-accretive acquisi ...

Core Insights - SS&C Technologies has undergone significant transformation, expanding its workforce from approximately 8,000–9,000 to the mid-20,000s following the acquisition of DST Systems, which has positively impacted financial results over recent quarters [1][2][3] Company Evolution - The company has evolved from a financial services software provider to a comprehensive platform that includes fund administration, transfer agency, wealth services, and enterprise software, with a notable shift occurring in 2018 when it completed three major acquisitions [2][3] Financial Strategy - M&A remains the top priority for capital allocation, focusing on acquisitions that enhance capabilities and allow cross-selling to around 23,000 customers, with share buybacks and debt reduction as secondary strategies when attractive deals are not available [4][8] - SS&C aims to achieve 40% operating margins by the end of 2026, targeting an annual margin improvement of approximately 50 basis points, leveraging liftout integrations and automation to enhance initially low-margin contracts over 18–24 months [6][9] Profitability and Cash Flow - The company emphasizes profitability and cash flow conversion, quickly targeting margin improvements post-acquisition, as demonstrated by the increase in margins from 19% to the "high 30s" within 18 months after acquiring DST, attributed to disciplined execution [7][9] AI Strategy - SS&C's AI strategy focuses on secure orchestration and automation rather than replacing core accounting functions, utilizing technologies like Blue Prism for productivity gains and developing an AI Gateway for controlled model execution [5][10][14] - The company views AI as a technological inflection point, aiming to enhance product quality, customer relationships, and financial outcomes while addressing data security and confidentiality concerns [10][12][14] Competitive Positioning - SS&C maintains stable headcount growth despite company expansion, leveraging automation technologies to improve efficiency, and positions itself as a partner for clients seeking modernization and stable career paths for employees [16][17] - The company emphasizes strong customer relationships and trust, aiming to solve multiple problems at scale compared to startups that may only address narrow issues [18] Growth Opportunities - SS&C is optimistic about Calastone, which automates flows into regulated funds and presents potential revenue synergies, and is exploring tokenization as a growing theme with several customers either implementing or planning to implement tokenized funds [19][20] - The company plans to continue prioritizing customer relationships, pursuing acquisitions to extend capabilities, and leveraging technological shifts to capture market share [21]

Company Background - SS&C is recognized for its complex evolution and significant acquisitions over time, which may not be fully appreciated by the market [2] - The company has made meaningful acquisitions, including notable transactions in 2018 and more recent ones like Calastone [2] Investor Perspective - The presentation at the financial conference highlights the positive outcomes for investors and the compelling narrative surrounding SS&C [1]

Summary of SS&C Technologies 2026 Conference Call Company Overview - **Company**: SS&C Technologies (NasdaqGS:SSNC) - **Industry**: Financial Services and Healthcare Technology - **Background**: Established in 1986, SS&C provides mission-critical infrastructure for financial services and healthcare, focusing on technology to differentiate its offerings [3][4] Key Points Business Evolution and Acquisitions - SS&C has transformed from a financial services software company to the world's largest fund administrator and transfer agent through strategic acquisitions, including DST Systems, Intralinks, and Eze in 2018 [5][6] - The company has integrated these acquisitions into its infrastructure, enhancing sales, marketing, and customer retention [6] Financial Performance - SS&C has reduced leverage from 7% to 2.7% since 2018, generating approximately $1.5 billion in free cash flow, resulting in an 8.5% free cash flow yield [7] - The company has prioritized capital allocation towards share buybacks (60%) and debt repayment (30%) [11] Growth and Margin Expansion - SS&C has achieved organic growth of around 5% over the past two years, with expectations to maintain this growth rate in 2026 [35] - The company aims for a 50 basis points margin improvement, targeting a 40% margin by the end of 2026 [43] Technology and AI Integration - SS&C views technology, including AI, as a means to enhance product quality and customer relationships [14] - The acquisition of Blue Prism has enabled SS&C to improve internal efficiencies and productivity, contributing to margin expansion [26] - The company has developed AI Gateway to securely utilize large language models while ensuring data privacy for clients [21] Client Relationships and Retention - SS&C has a strong client retention rate of 96.4%, indicating robust relationships and trust in its services [56] - The company emphasizes the importance of maintaining high customer satisfaction to foster long-term partnerships [53] Market Position and Competitive Dynamics - SS&C believes its established relationships and comprehensive service offerings provide a competitive advantage over startups with limited capabilities [54] - The company is well-positioned to capitalize on market opportunities, particularly in the context of technological advancements and regulatory changes [64] Future Outlook - SS&C is optimistic about its growth trajectory, focusing on customer retention, strategic acquisitions, and leveraging technology to enhance operational efficiency [62] - The company is prepared to navigate market uncertainties while continuing to deliver strong financial results and shareholder returns [66] Additional Insights - The company is exploring opportunities in tokenization through its acquisition of Calastone, which could enhance its service offerings in the asset management space [30][33] - SS&C's healthcare segment, while currently small, is expected to grow significantly as it leverages its new cloud-native system, DomaniRx [40][41]

Core Insights - SS&C Technologies reported record fourth-quarter results with adjusted revenue of $1.655 billion, an 8% increase year-over-year, and adjusted diluted earnings per share of $1.69, up 18% [4][7] - The company anticipates continued organic growth and margin expansion in 2026, with guidance for revenue between $6.65 billion and $6.74 billion and adjusted EPS between $6.70 and $7.02 [5][18] Financial Performance - GAAP fourth-quarter revenue was $1.654 billion, with net income of $193 million or $0.77 per diluted share [1] - Adjusted net income was $425 million, reflecting a 16.8% increase, and adjusted consolidated EBITDA reached $651 million, up 9% with a margin of 39.3% [4][8] - Operating cash flow for the year was $1.745 billion, with cash-flow conversion exceeding 100% for three consecutive years [6][9] Growth Drivers - Adjusted organic revenue growth for the quarter was 5.3% on a constant-currency basis, driven by strong performance in Global Investor & Distribution Solutions (GIDS) and GlobeOp, with revenue increases of 13.2% and 9.6% respectively [3] - The company is focusing on international growth, particularly in Australia, leveraging opportunities tied to recent superannuation mandates [3] Shareholder Returns - SS&C returned $384 million to shareholders in Q4, including $319 million in share repurchases and $66 million in dividends [10] - The company repurchased over $1 billion of stock in 2025, indicating a strong commitment to share buybacks in the absence of high-quality acquisition opportunities [6][10] Strategic Initiatives - Management views outsourcing and "lift-outs" as sustainable growth engines, with ongoing integration of the Calastone acquisition [5][12] - AI is considered a competitive advantage, with SS&C deploying AI solutions rapidly, leveraging its proprietary software and data [14][15] 2026 Outlook - The company expects to maintain strong performance throughout 2026, with guidance reflecting a focus on expense management, productivity, and technology leverage [16][17] - Q1 2026 guidance includes revenue of $1.608 billion to $1.648 billion and adjusted net income of $404 million to $420 million [18]

Core Insights - SS&C Technologies reported revenue of $1.65 billion for the quarter ended December 2025, reflecting an 8.1% increase year-over-year and surpassing the Zacks Consensus Estimate of $1.63 billion by 1.45% [1] - The company's EPS for the quarter was $1.69, up from $1.58 in the same quarter last year, exceeding the consensus EPS estimate of $1.62 by 4.48% [1] Financial Performance Metrics - Adjusted revenues from license, maintenance, and related services were $289.4 million, exceeding the three-analyst average estimate of $272.73 million, with a year-over-year change of 4.9% [4] - Adjusted revenues from software-enabled services reached $1.37 billion, slightly above the three-analyst average estimate of $1.36 billion, marking an 8.8% increase year-over-year [4] - Total revenues from license, maintenance, and related services were reported at $289.4 million, compared to the average estimate of $279.24 million based on two analysts, indicating a 5% year-over-year change [4] - Total revenues from software-enabled services were $1.36 billion, slightly above the estimated $1.35 billion by two analysts [4] Stock Performance - SS&C Technologies' shares have declined by 16.7% over the past month, contrasting with a 0.5% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - SS&C reported record adjusted revenue of $1.655 billion for Q4 2025, an increase of 8% year-over-year [5] - Adjusted diluted earnings per share (EPS) reached $1.69, reflecting an 18% increase [5] - Adjusted consolidated EBITDA was a record $651 million, up 9%, with an EBITDA margin of 39.3% [5][12] - Cash from operating activities for the full year was $1.745 billion, up 26% year-over-year [7] Business Line Data and Key Metrics Changes - GIDS experienced a revenue growth of 13.2%, while GlobeOp saw a 9.6% increase [6] - Intralinks showed modest growth in Q4, with expectations for momentum in 2026 [6] - The healthcare business faced challenges, but management remains optimistic about long-term growth opportunities [21][23] Market Data and Key Metrics Changes - The company is focusing on international growth opportunities, particularly in Australia with GlobeOp [6] - The alternative fund administration business showed exceptional growth in assets under administration, with expectations for continued growth in 2026 [27] Company Strategy and Development Direction - SS&C is leveraging AI and automation as a competitive advantage, believing it will drive long-term growth and profitability [4][19] - The company is prioritizing share repurchases and is optimistic about the early progress of the Calastone acquisition [8][19] - Management emphasized the importance of maintaining strong client relationships and expanding service offerings [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the healthcare sector but remains confident in the market's potential [21][23] - The company expects to maintain strong organic growth throughout 2026, with a focus on recurring revenue and long-term client partnerships [33] - Management is optimistic about the impact of AI on operational efficiency and competitive positioning [10][35] Other Important Information - SS&C ended Q4 with $462 million in cash and cash equivalents and $7.5 billion in gross debt, resulting in a net leverage ratio of 2.8 times [15] - The company plans to maintain capital expenditures at 4.4%-4.8% of revenues and continue share buybacks similar to 2025 levels [16] Q&A Session Summary Question: What drove the weakness in the healthcare business? - Management indicated that healthcare is a long-term play and noted the challenges of quarter-to-quarter comparisons, citing large license sales in the previous year [21][22] Question: Update on the Elevance relationship? - Management stated that DomaniRx is ready for onboarding, but highlighted the challenges of navigating relationships within large healthcare organizations [24] Question: Insights on alternative fund administration growth? - Management confirmed strong organic growth in the alternative fund administration sector, attributing part of the growth to the acquisition of Curo Fund Services [27] Question: Outlook for the intelligent automation business? - Management expressed optimism for the intelligent automation business, noting that it is a key area for innovation and growth [28][30] Question: Expectations for organic growth in wealth management? - Management is optimistic about the wealth management business, particularly the Black Diamond platform, which is expected to continue driving growth [38] Question: M&A environment insights? - Management is actively looking for acquisition opportunities and believes they are well-positioned to pursue larger acquisitions if the right opportunity arises [39]

Financial Data and Key Metrics Changes - SS&C Technologies reported record adjusted revenue of $1.655 billion for Q4 2025, an increase of 8% year-over-year, and adjusted diluted earnings per share of $1.69, reflecting an 18% increase [5][11] - Adjusted consolidated EBITDA reached a record $651 million, up 9%, with an adjusted EBITDA margin of 39.3% [5][12] - Cash from operating activities for the full year was $1.745 billion, up 26% year-over-year, with operating cash flow per share at $6.89, an increase of $1.42 from 2024 [7][14] Business Line Data and Key Metrics Changes - GIDS experienced a revenue growth of 13.2%, while GlobeOp saw a 9.6% increase in revenue [6] - Intralinks showed signs of improvement with modest growth in Q4, indicating potential momentum for 2026 [6] - The healthcare business faced challenges, with management noting that it is a long-term play and subject to regulatory complexities [21][23] Market Data and Key Metrics Changes - The company is focusing on international growth opportunities, particularly in Australia, leveraging recent superannuation mandates [6] - The alternative fund administration business showed exceptional growth in assets under administration, with expectations for continued strong performance in 2026 [27] Company Strategy and Development Direction - SS&C is prioritizing investments in artificial intelligence and automation, believing these will enhance efficiency and scalability, thereby strengthening competitive positioning [4][10] - The company is committed to returning capital to shareholders through share repurchases, having allocated over $1 billion in 2025 for this purpose [8][19] - Management expressed optimism about the Calastone acquisition and its potential for geographic expansion and growth opportunities [8][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the sell-off in software company shares but emphasized SS&C's strong market position and deep expertise [4] - The company expects to maintain strong organic growth and margin expansion, with guidance for Q1 2026 revenue between $1.608 billion and $1.648 billion [16][17] - Management remains confident in the sustainability of growth driven by long-term client partnerships and the advancement of AI technologies [9][10] Other Important Information - The effective non-GAAP tax rate for Q4 2025 was 19.2%, with a full-year effective tax rate of 22% [13] - SS&C ended Q4 with $462 million in cash and cash equivalents and a net debt of $7 billion, resulting in a net leverage ratio of 2.8 times [15] Q&A Session Summary Question: Concerns about the healthcare business's organic growth - Management noted that healthcare is a long-term play and highlighted the challenges of quarter-to-quarter comparisons, mentioning a notable multimillion-dollar license closed in early January 2026 [21][22] Question: Update on the Elevance relationship - Management indicated that DomaniRx is ready for onboarding but acknowledged the complexities of relationships within large healthcare organizations [24] Question: Growth expectations for alternative fund administration - Management confirmed strong organic growth in the alternative fund administration business and high expectations for 2026, attributing part of the growth to the acquisition of Curo Fund Services [27] Question: Outlook for the intelligent automation business - Management expressed optimism about the intelligent automation business, noting that it is a key area for innovation and expected to align with overall corporate organic growth rates [28][30] Question: Organic growth guidance for 2026 - Management stated that the strength of the business allows for more predictability in organic growth, with expectations for strong performance throughout the year [33] Question: Competitive advantage against emerging AI fintechs - Management emphasized the challenges of building a large organization and the importance of regulatory compliance, asserting that SS&C is well-positioned to maintain its competitive edge [34][35] Question: Medium-term outlook for wealth and investment management - Management expressed optimism about the wealth management business, highlighting the success of the Black Diamond platform and its integration with other services [38] Question: M&A environment and acquisition strategy - Management indicated ongoing interest in acquisitions, noting that they are well-positioned to pursue larger opportunities if the right targets are identified [40][41]