Summary of SS&C Technologies FY Conference Call Company Overview - **Company**: SS&C Technologies (NasdaqGS:SSNC) - **Date of Conference**: November 18, 2025 Key Points Industry and Business Performance - SS&C Technologies reported strong Q3 results with over 9% revenue growth in both its Global Business and Global Investor and Distribution Solutions (GIG) segments, which together account for over 50% of total revenue [2][3] - The company experienced margin expansion due to cost efficiency and a significant push towards AI and automation, allowing revenue growth without a proportional increase in expenses [2] Growth Opportunities - **GlobalOps**: The largest alternative fund administrator globally, showing a growth rate of 9.6% in Q3, driven by strong performance from hedge fund clients and consistent double-digit growth in private markets [3][4] - **Retail Alternatives**: This segment is the fastest-growing, with growth exceeding 20%, indicating a strong demand for alternative investments among high-net-worth individuals [4] - **Wealth and Investment Technologies (WIT)**: The WIT business, housing financial services software, is expected to grow mid-single digits, with significant contributions from the Black Diamond Wealth platform, which has successfully migrated over 400 clients from Morningstar [11][12][13] AI and Automation Initiatives - SS&C is focusing on intelligent automation and analytics, with successful implementations in healthcare, such as an AI agent that saves 15,000 radiologist hours annually [29] - The company is leveraging its own AI capabilities to enhance client services and improve operational efficiencies, which is expected to drive further growth [36][32] International Expansion - SS&C has seen significant international growth, particularly in Australia, Europe, and the Middle East, with acquisitions like Kiro Fund Services enhancing its local presence [26][27] - The Calastone acquisition is expected to strengthen SS&C's global network and facilitate electronic processes in investment management, enhancing cross-sell opportunities [20][21] Capital Allocation and Acquisitions - The company maintains strong cash flow and is actively looking for acquisitions that align with its growth strategy, focusing on revenue growth and margin improvement [42][43] - SS&C has a share buyback program in place, indicating confidence in its stock valuation [42] Market Position and Competitive Advantage - SS&C's unique offering of both fund accounting and transfer agency services positions it favorably in the market, particularly as demand for alternative investments grows [4][5] - The company emphasizes the importance of integrating complex systems and ensuring data security, which are critical in maintaining client trust and competitive advantage [32][33] Conclusion - SS&C Technologies is well-positioned for continued growth through its diverse service offerings, strong performance in key segments, and strategic focus on AI and automation. The company is also expanding its international footprint and actively pursuing acquisition opportunities to enhance its market position.

Core Insights - SS&C Technologies has completed the acquisition of Curo Fund Services, enhancing its presence in South Africa [1][2] - Curo Fund Services administers over R 3 trillion (approximately USD 170.4 billion) in assets, serving major clients like Sanlam and Old Mutual [2][5] - The acquisition will allow SS&C to provide South African clients with advanced automation, data, and operational expertise [2][4] Company Overview - Curo Fund Services is a prominent fund administrator in South Africa, offering comprehensive fund accounting, investor administration, and regulatory reporting services [5] - SS&C Technologies is a global provider of services and software for financial services and healthcare industries, with over 23,000 clients worldwide [6] Strategic Implications - The merger is expected to expand Curo's fund administration offerings and accelerate growth across South Africa and the African continent [2][4] - SS&C's global scale and expertise will enhance service delivery and client solutions, ensuring a seamless transition for existing clients [3][4]

Core Insights - SS&C Technologies Holdings, Inc. is enhancing operational efficiency in the financial and healthcare sectors through the introduction of AI agents, reflecting its commitment to integrating advanced technology into traditional industries [1][6] - Jefferies has a "Buy" rating for SS&C, with an increased price target from $98 to $105, indicating strong confidence in the company's future performance due to the positive impact of AI technology [2][6] Financial Metrics - The company has a price-to-earnings (P/E) ratio of approximately 24.13, suggesting that investors are willing to pay a premium for its earnings [3][6] - SS&C's price-to-sales ratio is about 3.34, indicating the market's valuation of its sales [3][6] - The enterprise value to sales ratio stands at around 4.38, reflecting a strong valuation relative to sales [3] - An enterprise value to operating cash flow ratio of approximately 17.22 shows how SS&C's valuation compares to its operational cash flow [4] - The earnings yield is about 4.14%, representing the return on investment for shareholders [4] - The debt-to-equity ratio is approximately 0.97, indicating a balanced approach to financing [4][6] - The current ratio of about 1.12 demonstrates SS&C's ability to cover short-term liabilities with short-term assets, highlighting its financial stability [5][6]

Revenue Growth - Total revenues for the three months ended September 30, 2025, increased by $102.2 million, or 7.0%, to $1,568.0 million, driven by organic revenue growth of $76.4 million and acquisitions contributing $16.6 million[74] - Software-enabled services revenues rose by $103.2 million, or 8.6%, primarily due to organic revenue growth of $79.4 million and acquisitions adding $16.6 million[75] - The company experienced an increase in organic revenue growth of $209.3 million, or 6.1%, for the nine months ended September 30, 2025, compared to the same period in 2024[76] Cost and Expenses - Total cost of revenues for the three months ended September 30, 2025, increased by $58.6 million, or 7.7%, primarily due to organic cost increases of $45.2 million and acquisitions adding $10.3 million[80] - Operating expenses for the three months ended September 30, 2025, increased by $3.0 million, or 0.8%, due to acquisitions adding $3.3 million in expenses and unfavorable foreign currency translation of $2.8 million[86] - Total operating expenses for the nine months ended September 30, 2025, increased by $39.6 million, or 3.5%, primarily due to organic operating expense growth of $28.6 million[87] Profitability - Gross margin percentage for the three months ended September 30, 2025, was 47.7%, compared to 48.0% for the same period in 2024[79] - The company reported a net income of $210.4 million for the three months ended September 30, 2025, compared to $164.6 million for the same period in 2024, representing a year-over-year increase of 27.0%[117] - Consolidated EBITDA for the nine months ended September 30, 2025, was $1,813.7 million, up from $1,704.4 million in the same period of 2024, reflecting a growth of 6.4%[117] Interest and Other Income - Net interest expense decreased to $104.2 million for Q3 2025 from $109.6 million in Q3 2024, primarily due to lower average interest rates of 6.20% compared to 6.78%[88] - Other income, net for Q3 2025 was $5.3 million, down from $9.3 million in Q3 2024, with significant contributions from foreign currency translation gains and dividend income[89] - Equity in earnings of unconsolidated affiliates showed a loss of $(11.6) million for Q3 2025, compared to a gain of $1.1 million in Q3 2024, primarily due to adjustments to decrease the carrying value of investments[90] Taxation - Provision for income taxes for Q3 2025 was $43.5 million with an effective tax rate of 17.1%, down from $60.0 million and 26.7% in Q3 2024[91] Cash Flow and Investments - Cash flows from operating activities increased to $1,101.3 million for the nine months ended September 30, 2025, compared to $902.0 million in the same period of 2024, reflecting a net income of $604.7 million[97] - Investing activities used net cash of $229.6 million in the nine months ended September 30, 2025, primarily for capitalized software development costs of $155.5 million[99] - Financing activities used net cash of $791.9 million for the nine months ended September 30, 2025, mainly due to $717.3 million in stock repurchases and $188.3 million in dividends paid[100] Financial Position - Total client funds obligations amounted to $3,664.6 million as of September 30, 2025[96] - The company held approximately $254.9 million in cash and cash equivalents at non-U.S. subsidiaries where a permanent reinvestment determination was made[101] - As of September 30, 2025, the company was in compliance with all financial and non-financial covenants under its amended senior secured credit facility[105] Leverage and Ratios - The company maintained a consolidated net secured leverage ratio of 1.45 as of September 30, 2025, significantly below the covenant requirement of 6.25x[118] - Average daily cash balances for the nine months ended September 30, 2025, were approximately $2.6 billion, with a potential annual net income increase of $12.6 million from a 100 basis point rise in interest rates[126] - Total variable interest rate debt as of September 30, 2025, was approximately $3,871.9 million, with a projected increase in interest expense of $38.7 million per year from a 100 basis point increase in interest rates[127] Compliance and Accounting - The company has the option to redeem the 6.5% Senior Notes at 103.250% of the principal amount starting June 1, 2027[108] - The company is subject to a 5.25x consolidated net secured leverage ratio requirement starting from the fiscal quarter ending December 31, 2024, which can increase to 5.75x following a material permitted acquisition[111] - Consolidated EBITDA is defined as earnings before interest, taxes, depreciation, and amortization, adjusted for unusual items, and is used to assess compliance with financial covenants[112] - The company plans to adopt new accounting standards related to income tax disclosures effective for fiscal years beginning after December 15, 2024[119] Risk Management - The company does not use derivative financial instruments for trading or speculative purposes, focusing instead on short-term, highly liquid financial instruments[125] - As of September 30, 2025, the fair value of investments subject to equity price risk was approximately $43.3 million, with a potential impact of a 10% change resulting in approximately $3.2 million effect on net income[128] - Approximately 32% of revenues for the nine months ended September 30, 2025, were generated from clients outside the United States, with 25% from currencies other than the U.S. dollar[129] - The British pound is the primary currency for revenues denominated outside the U.S. dollar[129] - Foreign currency transaction gains and losses are reported in other income, net, due to exposure from cross-currency intercompany balances and trade receivables and payables[130] - The company continuously assesses and monitors its exposure to foreign currency exchange rates, which can fluctuate due to acquisitions and other transactions[130] - The company does not engage in market risk sensitive instruments for trading or hedging purposes[130] - Actual future results may differ materially from projected results due to developments in global financial markets[131] - The analytical methods used to assess and minimize risk should not be considered projections of future events or losses[131]

Company Overview - SS&C Technologies Holdings, Inc. (NASDAQ: SSNC) is performing adequately as a provider of software and tech-enabled services for the healthcare and finance sectors [1] Analyst Background - The analyst has a background in petroleum and gas engineering and has transitioned into finance, focusing on how businesses grow and market reactions [1] - The analyst holds FMVA® and BIDA® certifications and specializes in tech, infrastructure, and internet services, emphasizing companies with strong fundamentals and growth potential [1] Investment Philosophy - The analyst aims to share investment ideas and connect with long-term investors, focusing on thoughtful analysis rather than short-term market noise [1]

Core Viewpoint - SS&C Technologies Holdings, Inc. is experiencing strong financial performance, with positive earnings and revenue growth, leading to an optimistic outlook from analysts [2][3][4][6]. Financial Performance - SSNC reported third-quarter earnings per share (EPS) of $1.57, exceeding the Zacks Consensus Estimate of $1.48 and showing a year-over-year improvement from $1.29, resulting in an earnings surprise of 6.08% [3][6]. - The company achieved revenues of $1.57 billion for the quarter ending September 2025, surpassing the Zacks Consensus Estimate by 0.84% and increasing from $1.47 billion in the same period last year, demonstrating consistent growth over the past four quarters [4][6]. Stock Performance - SSNC's stock is currently priced at $84.44, reflecting an increase of approximately 4.41% or $3.56, with a trading range between $83.04 and $85.77 for the day [5]. - Over the past year, the stock has reached a high of $91.07 and a low of $66.83, with a market capitalization of approximately $20.62 billion and a trading volume of 1,055,890 shares [5]. Analyst Ratings - RBC Capital has maintained an "Outperform" rating for SSNC and raised its price target from $97 to $99, indicating confidence in the company's financial performance [2][6].

Core Insights - SS&C Technologies reported quarterly earnings of $1.57 per share, exceeding the Zacks Consensus Estimate of $1.48 per share, and showing an increase from $1.29 per share a year ago, resulting in an earnings surprise of +6.08% [1] - The company achieved revenues of $1.57 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.84% and up from $1.47 billion year-over-year [2] - SS&C Technologies has consistently surpassed consensus EPS estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.59 on revenues of $1.62 billion, and for the current fiscal year, it is $5.96 on revenues of $6.23 billion [7] - The estimate revisions trend for SS&C Technologies was favorable ahead of the earnings release, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Computer - Software industry, to which SS&C Technologies belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - The company reported record adjusted revenue of $1.569 billion, an increase of 7% year-over-year, and adjusted diluted earnings per share of $1.57, reflecting a 17.2% increase [5][12] - Adjusted consolidated EBITDA reached $619 million, up 9.3%, resulting in a quarterly adjusted consolidated EBITDA margin of 39.5% [5][13] - Cash from operating activities for the nine months ended September 30, 2025, was $1.101 billion, a 22% increase over the prior year [6][15] - The company returned $305 million to shareholders in Q3, including $240 million for share repurchases and $65.8 million in dividends [6][7] Business Line Data and Key Metrics Changes - The GIDS business experienced a 9% revenue growth, while GlobeOp reported a 9.6% revenue growth, contributing to the overall performance [5][12] - Financial services recurring revenue growth was 6.7% in Q3 [5] Market Data and Key Metrics Changes - The company noted strength across all alternative markets and capitalized on international opportunities, particularly in Australia and the U.S. [5][10] - The acquisition of Curo Fund Services is expected to enhance the company's presence in the African market, which is still developing compared to European and U.S. markets [7][26] Company Strategy and Development Direction - The company aims to enhance user interfaces and client experiences as competitive differentiators, particularly through emerging technologies [10] - Intelligent automation and AI are viewed as both revenue opportunities and means to improve operational efficiency [9][10] - The company is focused on high-quality acquisitions and has recently completed the acquisition of Calastone, which adds capabilities in money markets, ETFs, and digital assets [8][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter, expecting revenue in the range of $1.59 billion to $1.63 billion and organic revenue growth of 4.5% at the midpoint [16][17] - The company anticipates continued strong performance in 2026, supported by a robust pipeline of liftouts and acquisitions [23][10] Other Important Information - The company raised its common stock dividend to $1.08, an 8% increase [7] - The effective non-GAAP tax rate was reported at 21.1% [13] Q&A Session Summary Question: Contribution of Battea to Q4 organic growth - Management expects Battea to contribute approximately $25 million in Q4, up from $16 million in the previous year [21] Question: Details on organic growth mechanics - A significant portion of organic growth was attributed to a large liftout in Sydney, Australia, completed on July 1 [23] Question: Revenue generation from Curo Fund Services - Curo is generating negligible revenue, approximately $15 million [27] Question: Update on agentic AI implementation - The company is infusing AI agents across its business, enhancing existing technologies with smarter capabilities [28] Question: Impact of lost business from State Street - Management indicated a small impact from lost business but remains confident in overall growth [31] Question: Margin outlook with GIDS and GlobeOp growth - The company expects continued margin improvement, driven by strong performance in GlobeOp and efforts to enhance GIDS margins [32] Question: Seasonality of Calastone's revenue - Management stated that Calastone does not have significant seasonality that would impact overall growth rates [39] Question: Confidence in healthcare business growth - Management expressed cautious optimism about the healthcare business, noting its lumpy nature but strong client relationships [43]

Financial Data and Key Metrics Changes - The company reported record adjusted revenue of $1.569 billion, an increase of 7% year-over-year, and adjusted diluted earnings per share of $1.57, reflecting a 17.2% increase [5][12] - Adjusted consolidated EBITDA reached $619 million, up 9.3%, resulting in a quarterly adjusted consolidated EBITDA margin of 39.5% [5][13] - Cash from operating activities for the nine months ended September 30, 2025, was $1.101 billion, a 22% increase over the prior year [6][15] - The company returned $305 million to shareholders in Q3, including $240 million for share repurchases and $65.8 million in dividends [6][7] Business Line Data and Key Metrics Changes - The GIDS business experienced a 9% revenue growth, while GlobeOp reported a 9.6% revenue growth, contributing to the overall performance [5][12] - Financial services recurring revenue growth was 6.7% in Q3 [5] Market Data and Key Metrics Changes - The company noted strength across all alternative markets and capitalized on international opportunities, particularly in Australia and the U.S. [5][10] - The acquisition of Curo Fund Services is expected to enhance the company's presence in the African market, which is still developing compared to Europe and the U.S. [7][26] Company Strategy and Development Direction - The company aims to enhance user interfaces and client experiences as competitive differentiators, particularly through emerging technologies [10] - Intelligent automation and AI are viewed as both revenue opportunities and means to improve operational efficiency [9][10] - The company is focused on high-quality acquisitions and has recently completed the acquisition of Calastone, which adds capabilities in money markets, ETFs, and digital assets [8][7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter and the remainder of the year, expecting continued strong performance [15][18] - The company anticipates revenue growth of approximately 4.5% in Q4 and has raised its full-year revenue guidance [17][18] - Management acknowledged the competitive landscape but remains confident in the company's growth trajectory despite some lost business [31][32] Other Important Information - The company is hosting its annual Deliver Conference, which will showcase its latest offerings and advancements in AI [18] - The effective non-GAAP tax rate was reported at 21.1% for the quarter [13] Q&A Session Summary Question: Contribution of Pathea to Q4 organic growth - Management expects Pathea to contribute approximately $25 million in Q4, up from $16 million in the previous year [20][21] Question: Details on organic growth mechanics - A significant portion of organic growth was attributed to a large liftout in Sydney, Australia, completed on July 1 [22][23] Question: Curo Fund Services deal attraction and revenue - The African market's potential and existing relationships with large insurers were key attractions, with Curo generating approximately $15 million in revenue [26][27] Question: Update on agentic AI implementation - The company is integrating AI across its business, enhancing existing technologies with smarter agents [28] Question: Impact of lost business from State Street - Management indicated a small impact from lost business but remains confident in overall growth [31] Question: Margin outlook with GIDS and GlobeOp growth - The company expects continued margin improvement due to strong performance from GlobeOp and efforts to enhance GIDS margins [32] Question: Seasonality of Calastone's revenue - Management stated that Calastone does not have significant seasonality that would impact overall growth rates [39] Question: M&A pipeline and Intralinks growth - Early indicators show improvement in the M&A pipeline, although revenue growth may lag behind [42] Question: Confidence in healthcare business growth - Management expressed cautious optimism about the healthcare business, highlighting its potential for large deals [43]

Financial Data and Key Metrics Changes - The company reported record adjusted revenue of $1,569 million, a 7% increase year-over-year, and adjusted diluted earnings per share of $1.57, reflecting a 17.2% increase [5][14] - Adjusted consolidated EBITDA reached $619 million, up 9.3%, with a quarterly adjusted consolidated EBITDA margin of 39.5% [5][14] - Cash from operating activities for the nine months ended September 30, 2025, was $1,101 million, a 22% increase over the prior year [6][16] Business Line Data and Key Metrics Changes - The Global Investor and Distribution Services (GIDS) business experienced a 9% revenue growth, while GlobeOp reported a 9.6% revenue growth [5][14] - Financial services recurring revenue growth was 6.7% in Q3 [6] Market Data and Key Metrics Changes - The company noted strength across all alternative markets and capitalized on international opportunities, particularly in Australia and the U.S. [5][6] Company Strategy and Development Direction - The company is focused on intelligent automation and AI as both a revenue opportunity and a means to enhance operational efficiency [11] - Recent acquisitions, including Kural Fund Services and Callistone, are aimed at expanding the company's market presence and capabilities, particularly in the African market and digital assets [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter, expecting continued growth and improved margins, while also acknowledging the competitive landscape [17][19] - The company anticipates revenue for 2025 to be in the range of $6,210 million to $6,250 million, with an organic revenue growth of 4.6% at the midpoint [17][18] Other Important Information - The company returned $305 million to shareholders in Q3, including share repurchases and dividends, and raised its common stock dividend by 8% to $1.8 [7][14] - The company ended Q3 with $388 million in cash and cash equivalents and $6.6 billion in gross debt, resulting in a net leverage ratio of 2.59 times [16] Q&A Session Summary Question: Contribution of Batea to Q4 organic growth - Management expects Batea to contribute approximately $25 million in Q4, up from $16 million in the previous year [22][23] Question: Mechanics behind GIDS organic growth - The organic growth was significantly driven by a large lift out completed in Sydney, Australia, and other successful lift outs [25][27] Question: Attractiveness of CuraFund services deal - The African market is still developing in fund administration, and the acquisition is expected to enhance relationships with large insurers [30][32] Question: Impact of lost business from State Street - Management indicated a small impact on revenue but emphasized that the WIP business will continue to grow [37] Question: Margin outlook with GIDS and GlobeOp growth - The strength of GlobeOp's margins contributed positively, and overall margin improvement is expected to continue [38] Question: Seasonality of Callistone's revenue - Management stated that there is no significant seasonality in Callistone's revenue that would impact growth rates [46] Question: Pipeline for Intralinks and competitive landscape - Early indicators of pipeline improvement were noted, although growth has not yet translated into improved results [48] Question: Confidence in healthcare business growth - Management expressed confidence in the healthcare business, citing strong client relationships and ongoing development efforts [50]