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]

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 [4][10] - Adjusted consolidated EBITDA reached $619 million, up 9.3%, resulting in a quarterly adjusted consolidated EBITDA margin of 39.5% [4][11] - Cash from operating activities for the nine months ended September 30, 2025, was $1.101 billion, a 22% increase over the prior year [5][12] - The effective non-GAAP tax rate was 21.1%, with adjusted net income of $396 million, up 16.5% [11][12] Business Line Data and Key Metrics Changes - The GIDS business experienced a 9% revenue growth, driven by successful liftouts, including a significant one in Australia [4][10] - GlobeOp reported a 9.6% revenue growth, benefiting from strength within the hedge fund client base and international wins in private markets [4][8] - Financial services recurring revenue growth was 6.7% in Q3 [4] Market Data and Key Metrics Changes - The company noted strength across all alternative markets and capitalized on international opportunities [4] - The acquisition of Curo Fund Services, a South African fund administration business, was aimed at deepening relationships with significant clients and establishing a local presence in Africa [5][6] Company Strategy and Development Direction - The company is focused on enhancing user interfaces and client experiences as competitive differentiators, particularly in the GlobeOp business [8] - SS&C aims to accelerate the transition from traditional automation to AI-powered automation, leveraging its position as "customer zero" to build comprehensive solution sets [9] - The company continues to prioritize share repurchases and high-quality acquisitions as part of its capital allocation strategy [5][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the fourth quarter, expecting revenue in the range of $1.59 to $1.63 billion and 4.5% organic revenue growth at the midpoint [13][15] - The company anticipates continued strong performance in its core businesses, despite some competitive pressures [26][40] - Management highlighted the importance of intelligent automation and AI in improving operational efficiency and enhancing employee career paths [8][9] Other Important Information - The company raised its common stock dividend to $1.08, an 8% increase [5] - The acquisition of Calastone is expected to enhance capabilities in money markets, ETFs, and digital assets [6][31] - The company hosted its annual Deliver Conference, showcasing its latest offerings and advancements in AI [16] 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 [19] Question: Details on the liftout contributing to organic growth - A significant liftout in Sydney, Australia, completed on July 1, contributed to organic growth, with additional large liftouts in the pipeline [21] Question: Insights on the Curo Fund Services deal - The African market is behind in fund administration, and the acquisition is expected to generate negligible revenue of around $15 million [22][23] Question: Update on agentic AI implementation - The company is infusing AI agents across its business, enhancing existing technologies with functional expertise [24] Question: Impact of lost business from State Street - Management anticipates a small impact from lost business but believes overall growth will continue [26] Question: Margin outlook with GIDS and GlobeOp growth - The company expects continued margin improvement, with GlobeOp contributing positively to overall margins [27] Question: Seasonality of Calastone's revenue - Management indicated that there is no significant seasonality in Calastone's revenue that would impact growth rates [32] Question: M&A pipeline and Intralinks growth - Early indicators show improvement in the M&A pipeline, although revenue growth for Intralinks may lag behind [38] Question: Confidence in healthcare business growth - The healthcare business has had positive growth, with significant clients and opportunities, though it remains lumpy [40]

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Financial Performance Highlights - Adjusted revenues for Q3 2025 reached $1,569.0 million, a 7.0% increase compared to $1,466.8 million in Q3 2024[6] - Adjusted organic revenue growth was 5.2% for Q3 2025[5, 13] - Financial Services recurring revenue growth was 6.7% for Q3 2025[5, 16] - Adjusted diluted earnings per share attributable to SS&C was $1.57, up 17.2% from $1.34 in Q3 2024[5, 6] - Adjusted consolidated EBITDA attributable to SS&C reached a quarterly record of $619.0 million for Q3 2025, a 9.3% increase[5, 6] - Adjusted consolidated EBITDA margin for Q3 2025 was 39.5%[5, 6] Cash Flow and Capital Allocation - Net cash generated from operating activities was $1,101.3 million for the nine months ended September 30, 2025, up 22.1% compared to the same period in 2024[5, 6] - The company returned $305.9 million to shareholders in Q3 2025, including $240.1 million for repurchasing 2.8 million shares and $65.8 million in common stock dividends[5, 11] - Paid down $233.1 million of debt in Q3 2025[11] Acquisitions - SS&C completed the acquisition of Calastone on October 14, 2025, for approximately $1.03 billion[11] - SS&C announced the acquisition of Curo Fund Services, expected to close in Q4 2025[11]

Financial Performance - Q3 2025 GAAP revenue reached $1,568 million, a 7.0% increase from Q3 2024, with adjusted revenue also at $1,569 million, reflecting the same growth rate [1][2]. - Fully diluted GAAP earnings per share increased by 27.7% to $0.83, while adjusted diluted earnings per share rose 17.2% to $1.57 [1][2]. - Operating income for Q3 2025 was $365.7 million, up 12.5% year-over-year, with an operating income margin of 23.3% [2][5]. - Adjusted consolidated EBITDA for Q3 2025 was $619 million, a 9.3% increase, with an adjusted EBITDA margin of 39.5% [4][5]. - Net income attributable to SS&C common stockholders for Q3 2025 was $210.0 million, a 27.7% increase from $164.4 million in Q3 2024 [13]. - Basic earnings per share for Q3 2025 was $0.86, compared to $0.67 in Q3 2024, representing a 28.4% increase [13]. - Net income for Q3 2025 was $210.4 million, compared to $164.6 million in Q3 2024, reflecting a 27.8% increase [27]. - GAAP net income for Q3 2025 was $210.4 million, up from $164.6 million in Q3 2024, representing a 27.8% increase [31]. - Adjusted net income for the nine months ended September 30, 2025, reached $1,131.6 million, compared to $1,012.0 million for the same period in 2024, reflecting a 11.8% growth [31]. Revenue Breakdown - Total revenues for Q3 2025 reached $1,568.0 million, a 7.0% increase from $1,465.8 million in Q3 2024 [20]. - Software-enabled services revenue was $1,309.4 million, up 8.6% from $1,206.2 million year-over-year [13]. - Adjusted revenues for the nine months ended September 30, 2025, were $4,621.6 million, up 6.1% from $4,355.0 million in the same period of 2024 [21]. - Software-enabled services revenue for Q3 2025 was $1,309.4 million, representing a 8.6% increase compared to $1,206.2 million in Q3 2024 [21]. Cash Flow and Shareholder Returns - Net cash generated from operating activities for the nine months ended September 30, 2025, was $1,101.3 million, up 22.1% compared to the same period in 2024 [5][6]. - The company returned $305.9 million to shareholders in Q3 2025, including $240.1 million for share repurchases and $65.8 million in dividends [5]. - The annual common stock dividend was increased by 8.0% to $1.08 [5]. Guidance and Future Outlook - Guidance for Q4 2025 includes adjusted revenue expectations of $1,590 – $1,630 million and adjusted net income of $394 – $410 million [7]. Asset and Leverage Metrics - Total current assets as of September 30, 2025, were $5,321.1 million, up from $4,862.4 million at the end of 2024 [15]. - Total assets increased to $19,489.4 million as of September 30, 2025, compared to $19,044.7 million at the end of 2024 [15]. - SS&C's consolidated net leverage ratio was 2.59 times consolidated EBITDA as of September 30, 2025 [6]. Strategic Initiatives - The company is focusing on AI-powered automation to enhance its offerings, indicating a strategic shift towards specialized, purpose-built agents [4]. Other Financial Metrics - Gross profit for Q3 2025 was $747.8 million, compared to $704.2 million in Q3 2024, reflecting a gross margin improvement [13]. - Adjusted operating income for Q3 2025 was $602.9 million, a 9.7% increase from $549.7 million in Q3 2024 [23]. - Adjusted Consolidated EBITDA for Q3 2025 was $619.5 million, up 9.1% from $567.1 million in Q3 2024 [27]. - The company reported a comprehensive income of $143.6 million for Q3 2025, down from $323.4 million in Q3 2024, primarily due to foreign currency exchange adjustments [13]. Cost and Expense Management - The company reported a total amortization of intangible assets of $157.8 million for Q3 2025, compared to $152.4 million in Q3 2024, indicating a 4.4% increase [31]. - The effective tax rate for adjusted net income was revised to 21.1% for Q3 2025, down from 24.0% previously, due to increased deductions related to equity awards [31]. - The company incurred $60.0 million in stock-based compensation for Q3 2025, compared to $52.2 million in Q3 2024, which is a 15.5% increase [31]. - Acquisition-related costs amounted to $3.8 million in Q3 2025, up from $1.8 million in Q3 2024, reflecting a 111.1% increase [31]. - Facilities and workforce restructuring costs were $12.0 million in Q3 2025, compared to $13.9 million in Q3 2024, showing a decrease of 13.7% [31]. - The company reported foreign currency translation losses of $3.2 million in Q3 2025, compared to losses of $4.2 million in Q3 2024, indicating an improvement [31].