SS&C(SSNC) - 2025 Q1 - Quarterly Results

Earnings Release Summary Financial Highlights SS&C reported record first-quarter 2025 results, demonstrating significant growth in GAAP and adjusted revenue and earnings, alongside robust operating cash flow and strategic capital management Q1 2025 Financial Performance vs. Q1 2024 | (in millions, except per share data) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Results | | | | | Revenue | $1,513.9 | $1,435.0 | 5.5% | | Operating income | 357.9 | 332.9 | 7.5% | | Diluted earnings per share attributable to SS&C | $0.84 | $0.62 | 35.5% | | Net income attributable to SS&C | 213.0 | 157.6 | 35.2% | | Adjusted Non-GAAP Results | | | | | Adjusted revenue | $1,514.8 | $1,435.8 | 5.5% | | Adjusted operating income attributable to SS&C | 575.3 | 540.0 | 6.5% | | Adjusted diluted earnings per share attributable to SS&C | $1.44 | $1.33 | 8.3% | | Adjusted consolidated EBITDA attributable to SS&C | 591.9 | 556.8 | 6.3% | - Q1 Adjusted Organic Revenue Growth was 5.1%, and Financial Services Recurring Revenue Growth was 5.9%[5] - Generated net cash from operating activities of $272.2 million, a 50.8% increase compared to the same period in 2024[5] - In Q1 2025, the company repurchased 2.4 million shares for $206.9 million and paid down $155.0 million in debt, resulting in a net leverage ratio of 2.74 times consolidated EBITDA[5] CEO's Statement CEO Bill Stone highlighted record first-quarter adjusted revenues and EBITDA, attributing success to strategic investments and expanded capabilities while emphasizing the company's readiness to leverage AI and Quantum technologies for future growth - CEO Bill Stone announced record first-quarter adjusted revenues of $1,514.8 million and adjusted consolidated EBITDA of $591.9 million[4] - The company is actively embedding AI and Quantum technologies into its products and services, anticipating large-scale transformation in its key markets[4] Operating Cash Flow and Debt The company generated $272.2 million in net cash from operating activities, a 50.8% increase year-over-year, maintaining a strong cash position and a consolidated net leverage ratio of 2.74 times consolidated EBITDA as of March 31, 2025 - Net cash from operating activities for the three months ended March 31, 2025, increased by 50.8% to $272.2 million from $180.5 million in the prior year[6] Cash and Debt Position (as of March 31, 2025) | Metric | Value (in millions) | | :--- | :--- | | Cash and cash equivalents | $515.0 | | Gross debt | $6,892.8 | | Consolidated net leverage ratio | 2.74x | | Net secured leverage ratio | 1.57x | Financial Guidance SS&C provided its financial outlook for Q2 and full fiscal year 2025, projecting adjusted revenues and diluted EPS within specified ranges Q2 2025 and Full Year 2025 Guidance | Metric | Q2 2025 | FY 2025 | | :--- | :--- | :--- | | Adjusted Revenue ($M) | $1,489.0 – $1,529.0 | $6,118.0 – $6,238.0 | | Adjusted Net Income attributable to SS&C ($M) | $343.4 – $359.4 | $1,441.0 – $1,541.0 | | Adjusted Diluted EPS attributable to SS&C | $1.35 – $1.41 | $5.68 – $6.00 | | Cash from Operating Activities ($M) | – | $1,458.0 – $1,558.0 | - SS&C does not provide reconciliations of its adjusted revenue and net income guidance to comparable GAAP measures, citing the unreasonable efforts required to forecast certain items like acquisitions, foreign exchange changes, and other adjustments[7] Consolidated Financial Statements Condensed Consolidated Statements of Comprehensive Income Total revenues for Q1 2025 increased to $1,513.9 million, primarily driven by software-enabled services, leading to a significant rise in net income and diluted earnings per share attributable to SS&C common stockholders Q1 2025 Income Statement Highlights (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total revenues | $1,513.9 | $1,435.0 | | Software-enabled services | $1,269.9 | $1,187.7 | | Gross profit | $747.1 | $707.2 | | Operating income | $357.9 | $332.9 | | Net income attributable to SS&C | $213.0 | $157.6 | | Diluted EPS attributable to SS&C | $0.84 | $0.62 | Condensed Consolidated Balance Sheets As of March 31, 2025, SS&C's total assets and liabilities increased, primarily driven by client funds, while total equity also grew Balance Sheet Summary (in millions) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $515.0 | $567.1 | | Total current assets | $6,241.9 | $4,862.4 | | Goodwill | $9,283.9 | $9,218.1 | | Total assets | $20,404.9 | $19,044.7 | | Long-term debt, net | $6,837.0 | $6,989.6 | | Total liabilities | $13,545.1 | $12,435.6 | | Total SS&C stockholders' equity | $6,785.4 | $6,534.9 | Condensed Consolidated Statements of Cash Flows The company generated substantial net cash from operating activities in Q1 2025, with investing activities using cash and financing activities providing a net inflow, influenced by client funds and capital management Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $272.2 | $180.5 | | Net cash used in investing activities | ($63.3) | ($50.6) | | Net cash provided by (used in) financing activities | $935.3 | ($835.9) | | Net increase (decrease) in cash | $1,148.1 | ($709.8) | - Key financing activities in Q1 2025 included $175.0 million in debt repayments and $206.9 million in common stock repurchases[17] Non-GAAP Financial Measures Reconciliation Note 1. Reconciliation of Revenues to Adjusted Revenues This section reconciles GAAP revenues to adjusted revenues, primarily through purchase accounting adjustments for deferred revenue impacted by fair value adjustments at acquisition Reconciliation of Revenues to Adjusted Revenues (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues (GAAP) | $1,513.9 | $1,435.0 | | Purchase accounting adjustments impact on revenue | $0.9 | $1.6 | | ASC 606 adoption impact | $— | ($0.8) | | Adjusted revenues | $1,514.8 | $1,435.8 | Note 2. Reconciliation of Operating Income to Adjusted Operating Income GAAP operating income is reconciled to adjusted operating income attributable to SS&C, with primary adjustments including amortization of intangible assets and stock-based compensation Reconciliation to Adjusted Operating Income (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating income (GAAP) | $357.9 | $332.9 | | Amortization of intangible assets | $153.0 | $147.6 | | Stock-based compensation | $52.7 | $45.1 | | Other adjustments | $12.6 | $15.5 | | Adjusted operating income attributable to SS&C | $575.3 | $540.0 | Note 3. Reconciliation of Net Income to EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA This note details the reconciliation from GAAP Net Income to Adjusted Consolidated EBITDA, incorporating adjustments for interest, taxes, depreciation, amortization, stock-based compensation, and other non-recurring items Reconciliation to Adjusted Consolidated EBITDA (in millions) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (GAAP) | $213.2 | $158.0 | | Interest expense, net | $105.2 | $116.0 | | Provision for income taxes | $48.1 | $66.7 | | Depreciation and amortization | $170.8 | $165.5 | | EBITDA | $537.3 | $506.2 | | Stock-based compensation & other adjustments | $55.6 | $51.7 | | Adjusted Consolidated EBITDA attributable to SS&C | $591.9 | $556.8 | Note 4. Reconciliation of Net Income to Adjusted Net Income and Diluted Earnings Per Share This section reconciles GAAP Net Income and diluted EPS to their adjusted counterparts, accounting for amortization, stock-based compensation, and other specific adjustments Reconciliation to Adjusted Net Income and EPS (in millions, except per share) | | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income (GAAP) | $213.2 | $158.0 | | Amortization of intangible assets | $153.0 | $147.6 | | Stock-based compensation | $52.7 | $45.1 | | Income tax effect & other adjustments | ($51.2) | ($13.3) | | Adjusted net income attributable to SS&C | $366.4 | $336.3 | | Diluted EPS (GAAP) | $0.84 | $0.62 | | Adjusted diluted EPS | $1.44 | $1.33 |