SS&C(SSNC) - 2024 Q4 - Annual Report

Financial Performance and Risks - The company's operating results, including profit margins and profitability, are expected to fluctuate over time due to various factors such as the timing and nature of license and service transactions [109]. - An increase in subaccounting services performed by brokerage firms has adversely impacted revenues, with lower fees charged on a per unit basis compared to traditional shareowner accounting [113]. - The company has substantial investments in private equity funds, which are illiquid and may decline in value, potentially impacting financial condition [141]. - The company’s financial health may be adversely affected by increases in interest rates and economic volatility [164]. - Average daily cash balances maintained in bank accounts for 2024 were approximately $2.3 billion, with a 100 basis point change in interest rates equating to approximately$11.6 million in net income annually [302]. - Total debt as of December 31, 2024, was $7,045 million, including$4,295 million of variable interest rate debt, with a 100 basis point increase in interest rates resulting in an approximate $43 million change in interest expense per year [303]. - Fair value of investments subject to equity price risk as of December 31, 2024, was approximately$43.9 million, with a 10% change in fair value impacting net income by approximately $3.3 million [304]. Regulatory and Compliance Challenges - The regulatory landscape surrounding AI is evolving and uncertain, with emerging regulations that may vary across jurisdictions and are subject to change [133]. - The company is subject to examinations by various authorities, including tax authorities, which may affect its financial condition and results of operations [112]. - The evolving regulatory environment, including the Dodd-Frank Act and the E.U.'s AIFMD, poses compliance challenges that could lead to sanctions or operational limitations [152]. - The company is subject to extensive regulations that could impact demand for its products and services, particularly in the healthcare industry [154]. - The company is subject to various data privacy laws, including the U.S. Health Insurance Portability and Accountability Act (HIPAA) and the California Consumer Privacy Act (CCPA), which pose compliance challenges and potential costs [158]. - The company faces risks related to compliance with international data protection regulations, such as the EU's General Data Protection Regulation (GDPR), which imposes strict privacy and data security requirements [159]. - The company may incur significant costs and liabilities due to privacy concerns, which could inhibit the use of its platform and affect sales [161]. Operational and Market Risks - The company faces challenges in adapting to rapidly changing technology and evolving industry standards, which may affect its ability to enhance existing products and develop new ones [123]. - The development and use of machine learning and artificial intelligence (AI) present risks, including potential inaccuracies and biases in AI outputs, which could impact the company's business [125][126]. - Catastrophic events, such as pandemics or natural disasters, could adversely affect the company's operations and client relationships [114]. - A significant portion of the company's business is conducted outside the U.S., exposing it to risks from foreign currency exchange rate fluctuations [139]. - The company does not currently engage in material hedging activities, increasing its exposure to currency risks [140]. - Approximately 31$84.85 and as low as $6.64 since its initial public offering [175].