SS&C(SSNC) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights This section provides a high-level overview of SS&C Technologies' Q2 2025 financial performance, key business achievements, cash flow, capital structure, and future guidance Q2 2025 Financial Overview SS&C Technologies reported strong Q2 2025 results with record adjusted revenues and EBITDA, showing GAAP revenue growth of 5.9% to $1,536.8 million and adjusted diluted EPS increasing by 9.8% to $1.45 Q2 2025 and YTD Q2 2025 Financial Performance (GAAP vs. Adjusted) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change (YoY) (%) | YTD Q2 2025 ($M) | YTD Q2 2024 ($M) | Change (YoY) (%) | | :--------------------------------------- | :-------- | :-------- | :----------- | :---------- | :---------- | :----------- | | GAAP Results | | | | | | | | Revenue | $1,536.8 | $1,451.5 | 5.9 | $3,050.7 | $2,886.5 | 5.7 | | Operating income | $344.5 | $327.6 | 5.2 | $702.4 | $660.5 | 6.3 | | Operating income margin | 22.4% | 22.6% | -20 bps | 23.0% | 22.9% | 10 bps | | Diluted EPS attributable to SS&C | $0.72 | $0.75 | (4.0) | $1.55 | $1.38 | 12.3 | | Net income attributable to SS&C | $180.8 | $190.3 | (5.0) | $393.8 | $347.9 | 13.2 | | Adjusted Non-GAAP Results | | | | | | | | Adjusted revenue | $1,537.8 | $1,452.4 | 5.9 | $3,052.6 | $2,888.2 | 5.7 | | Adjusted operating income attributable to SS&C | $583.5 | $541.7 | 7.7 | $1,158.8 | $1,081.7 | 7.1 | | Adjusted operating income margin | 37.9% | 37.3% | 60 bps | 38.0% | 37.5% | 50 bps | | Adjusted diluted EPS attributable to SS&C | $1.45 | $1.32 | 9.8 | $2.89 | $2.65 | 9.1 | | Adjusted consolidated EBITDA attributable to SS&C | $600.4 | $558.9 | 7.4 | $1,192.3 | $1,115.7 | 6.9 | | Adjusted consolidated EBITDA margin | 39.0% | 38.5% | 50 bps | 39.1% | 38.6% | 50 bps | Key Business Highlights SS&C achieved record adjusted revenues and EBITDA in Q2 2025, driven by strong organic growth in financial services and strategic acquisitions, with optimism for continued strong performance - SS&C reported record adjusted revenues of $1,537.8 million and record adjusted consolidated EBITDA surpassing $600 million[4][5] - Q2 Adjusted Organic Revenue Growth was 3.5 percent, with Financial Services Recurring Revenue Growth at 3.9 percent[5] - The company announced a definitive agreement to acquire Calastone for approximately $1.03 billion, expected to close in Q4 2025, enhancing access to new geographies, ETF, and Digital Asset capabilities[4][5] - SS&C repurchased 3.4 million shares for $269.0 million in Q2 2025 at an average price of $77.99 per share[5] Operating Cash Flow & Capital Structure SS&C demonstrated robust cash generation, with net cash from operating activities increasing significantly year-over-year, while maintaining a healthy capital structure with manageable leverage ratios Operating Cash Flow and Capital Structure Metrics | Metric | Value (June 30, 2025) | Change (YoY) | | :------------------------------------ | :-------------------- | :----------- | | Net cash from operating activities (Six Months) | $645.1 million | 14.1% increase | | Cash and cash equivalents | $480.3 million | | | Gross debt | $6,858.4 million | | | Consolidated net leverage ratio | 2.72 times | | | Net secured leverage ratio | 1.55 times | | Financial Guidance SS&C provided financial guidance for Q3 2025 and the full fiscal year 2025, projecting continued growth in adjusted revenue and earnings per share, alongside strong operating cash flow Q3 2025 and FY 2025 Financial Guidance | Metric | Q3 2025 Guidance | FY 2025 Guidance | | :--------------------------------------- | :----------------------- | :----------------------- | | Adjusted Revenue ($M) | $1,525.0 – $1,565.0 | $6,143.0 – $6,243.0 | | Adjusted Net Income attributable to SS&C ($M) | $364.0 – $380.0 | $1,462.0 – $1,542.0 | | Adjusted Diluted Earnings per Share attributable to SS&C | $1.44 – $1.50 | $5.82 – $6.06 | | Cash from Operating Activities ($M) | – | $1,479.0 – $1,559.0 | | Capital Expenditures (% of revenue) | – | 4.1% – 4.5% | | Diluted Shares (M) | 252.5 – 253.5 | 251.5 – 254.5 | | Effective Income Tax Rate (%) | 23.0% – 25.0% | 23.0% – 25.0% | - SS&C does not provide reconciliations of guidance for Adjusted Revenues and Adjusted Net Income to comparable GAAP measures due to the unreasonable efforts exception, as certain items are difficult to predict in advance[7] Company Information This section provides an overview of SS&C Technologies, including its business scope and investor relations contact details About SS&C Technologies SS&C Technologies is a global provider of software and services for the financial services and healthcare industries, serving over 22,000 organizations worldwide since its founding in 1986 - SS&C is a global provider of services and software for the financial services and healthcare industries, founded in 1986 and headquartered in Windsor, Connecticut[10] - More than 22,000 financial services and healthcare organizations globally rely on SS&C for expertise, scale, and technology[10] Investor Relations Contact Contact information for SS&C Technologies' investor relations team is provided for inquiries - Investor relations contacts include Brian Schell (CFO), Justine Stone (Head of Investor Relations), and Chand Madaka, with respective phone numbers and email addresses[11] Financial Statements (GAAP) This section presents SS&C Technologies' condensed consolidated GAAP financial statements, including comprehensive income, balance sheets, and cash flows Condensed Consolidated Statements of Comprehensive Income The condensed consolidated statements of comprehensive income show SS&C's revenue growth in both software-enabled services and license/maintenance, leading to increased gross profit and operating income for Q2 and YTD 2025, despite a slight decrease in net income for Q2 Key Comprehensive Income Data (Q2 and YTD Q2) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | YTD Q2 2025 ($M) | YTD Q2 2024 ($M) | | :--------------------------------------- | :----------- | :----------- | :--------------- | :--------------- | | Total revenues | 1,536.8 | 1,451.5 | 3,050.7 | 2,886.5 | | Software-enabled services revenue | 1,267.7 | 1,192.4 | 2,537.6 | 2,380.1 | | License, maintenance and related revenue | 269.1 | 259.1 | 513.1 | 506.4 | | Gross profit | 736.9 | 698.3 | 1,484.0 | 1,405.5 | | Operating income | 344.5 | 327.6 | 702.4 | 660.5 | | Net income attributable to SS&C common stockholders | 180.8 | 190.3 | 393.8 | 347.9 | | Diluted earnings per share attributable to SS&C common stockholders | 0.72 | 0.75 | 1.55 | 1.38 | Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows a slight decrease in total assets and current assets compared to December 31, 2024, primarily due to a reduction in client funds and cash, leading to an increase in total equity Key Balance Sheet Data | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :--------------------------------------- | :----------------- | :--------------------- | | Cash and cash equivalents | 480.3 | 567.1 | | Funds receivable and funds held on behalf of clients | 2,997.8 | 3,162.2 | | Total current assets | 4,660.4 | 4,862.4 | | Goodwill | 9,420.9 | 9,218.1 | | Total assets | 18,984.2 | 19,044.7 | | Client funds obligations | 2,997.8 | 3,162.2 | | Total current liabilities | 4,101.7 | 4,354.3 | | Long-term debt, net of current portion | 6,803.4 | 6,989.6 | | Total liabilities | 11,974.9 | 12,435.6 | | Total equity | 7,009.3 | 6,609.1 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, SS&C generated significantly more cash from operating activities, but increased cash usage in investing and financing activities resulted in a net decrease in cash and cash equivalents Key Cash Flow Data (Six Months Ended June 30) | Metric | 2025 ($M) | 2024 ($M) | | :--------------------------------------- | :-------- | :-------- | | Net cash provided by operating activities | 645.1 | 565.4 | | Net cash used in investing activities | (148.1) | (84.0) | | Net cash used in financing activities | (987.8) | (1,597.6) | | Net decrease in cash, cash equivalents and restricted cash | (479.1) | (1,120.1) | | Cash, cash equivalents and restricted cash, end of period | 2,891.4 | 1,878.5 | - Purchases of common stock for treasury increased to $477.2 million in YTD 2025 from $279.9 million in YTD 2024[17] - Repayments of debt significantly decreased to $312.0 million in YTD 2025 from $4,850.1 million in YTD 2024[17] Non-GAAP Financial Measures & Reconciliations This section details SS&C Technologies' non-GAAP financial measures and provides reconciliations to their GAAP equivalents for enhanced performance analysis Overview of Non-GAAP Measures SS&C utilizes various non-GAAP financial measures, including adjusted revenue, operating income, EBITDA, net income, and diluted EPS, to provide investors with additional insights into the company's underlying operational performance - Non-GAAP measures like adjusted revenue, adjusted operating income, adjusted consolidated EBITDA, adjusted net income, and adjusted diluted earnings per share are used to evaluate business performance and provide useful information to investors[8][19][22] - These non-GAAP measures are not recognized under GAAP and should not be considered alternatives to GAAP measures, nor are they necessarily comparable to similarly titled measures presented by other companies[19][22][27] - Adjustments typically include amortization of intangible assets, stock-based compensation, purchase accounting adjustments, and other non-recurring or non-operational expenses[22][27][29] Adjusted Revenues Reconciliation The reconciliation of GAAP revenues to adjusted revenues primarily accounts for purchase accounting adjustments and the impact of ASC 606 adoption, resulting in slightly higher adjusted revenue figures for both Q2 and YTD 2025 Reconciliation of Revenues to Adjusted Revenues | (in millions) | Q2 2025 | Q2 2024 | YTD Q2 2025 | YTD Q2 2024 | | :-------------------------------- | :-------- | :-------- | :---------- | :---------- | | Revenues (GAAP) | $1,536.8 | $1,451.5 | $3,050.7 | $2,886.5 | | ASC 606 adoption impact | — | (0.7) | — | (1.5) | | Purchase accounting adjustments impact on revenue | 1.0 | 1.6 | 1.9 | 3.2 | | Adjusted revenues | $1,537.8 | $1,452.4 | $3,052.6 | $2,888.2 | Breakdown of Adjusted Revenues by Service Type | (in millions) | Q2 2025 | Q2 2024 | YTD Q2 2025 | YTD Q2 2024 | | :-------------------------- | :-------- | :-------- | :---------- | :---------- | | Adjusted Software-enabled services | $1,268.7 | $1,193.3 | $2,539.5 | $2,381.8 | | Adjusted License, maintenance and related | $269.1 | $259.1 | $513.1 | $506.4 | | Total adjusted revenues | $1,537.8 | $1,452.4 | $3,052.6 | $2,888.2 | Adjusted Operating Income Reconciliation Adjusted operating income is derived from GAAP operating income by adding back non-cash expenses like amortization of intangible assets and stock-based compensation, as well as acquisition-related costs and restructuring charges, providing a clearer view of operational profitability Reconciliation of Operating Income to Adjusted Operating Income | (in millions) | Q2 2025 | Q2 2024 | YTD Q2 2025 | YTD Q2 2024 | | :--------------------------------------- | :-------- | :-------- | :---------- | :---------- | | Operating income (GAAP) | $344.5 | $327.6 | $702.4 | $660.5 | | Amortization of intangible assets | 157.0 | 149.1 | 310.0 | 296.7 | | Stock-based compensation | 60.2 | 50.6 | 112.9 | 95.7 | | Purchase accounting adjustments | 2.4 | 3.1 | 4.5 | 6.1 | | Acquisition related | 1.7 | 0.3 | 3.0 | 1.1 | | Facilities and workforce restructuring | 17.1 | 7.4 | 24.2 | 19.6 | | Adjusted operating income attributable to SS&C common stockholders | $583.5 | $541.7 | $1,158.8 | $1,081.7 | EBITDA and Adjusted Consolidated EBITDA Reconciliation The reconciliation from net income to Adjusted Consolidated EBITDA highlights the company's ability to service debt by adding back non-cash and non-operating expenses, showing a robust increase in Adjusted Consolidated EBITDA for Q2 and YTD 2025 Reconciliation of Net Income to Adjusted Consolidated EBITDA | (in millions) | Q2 2025 | Q2 2024 | YTD Q2 2025 | YTD Q2 2024 | | :--------------------------------------- | :-------- | :-------- | :---------- | :---------- | | Net income (GAAP) | $181.1 | $190.7 | $394.3 | $348.7 | | Interest expense, net | 105.5 | 113.3 | 210.7 | 229.3 | | Provision for income taxes | 58.4 | 13.8 | 106.5 | 80.5 | | Depreciation and amortization | 174.9 | 167.5 | 345.7 | 333.0 | | EBITDA | 519.9 | 485.3 | 1,057.2 | 991.5 | | Stock-based compensation | 60.2 | 50.6 | 112.9 | 95.7 | | Facilities and workforce restructuring | 17.1 | 7.5 | 24.2 | 19.7 | | Consolidated EBITDA | $601.3 | $560.0 | $1,194.2 | $1,117.9 | | Adjusted Consolidated EBITDA attributable to SS&C common stockholders | $600.4 | $558.9 | $1,192.3 | $1,115.7 | Adjusted Net Income and Adjusted Diluted EPS Reconciliation Adjusted net income and diluted EPS are presented to reflect operational performance by excluding non-operational items such as amortization of intangibles, stock-based compensation, and the tax effects of these adjustments, showing a higher and growing profitability metric Reconciliation of Net Income and Diluted EPS to Adjusted Measures | (in millions, except per share data) | Q2 2025 | Q2 2024 | YTD Q2 2025 | YTD Q2 2024 | | :--------------------------------------- | :-------- | :-------- | :---------- | :---------- | | GAAP – Net income | $181.1 | $190.7 | $394.3 | $348.7 | | Amortization of intangible assets | 157.0 | 149.1 | 310.0 | 296.7 | | Stock-based compensation | 60.2 | 50.6 | 112.9 | 95.7 | | Loss on extinguishment of debt | — | 27.7 | 0.9 | 28.8 | | Purchase accounting adjustments | 2.4 | 3.1 | 4.5 | 6.1 | | Facilities and workforce restructuring | 17.1 | 7.5 | 24.2 | 19.7 | | Income tax effect | (57.6) | (86.5) | (125.6) | (121.1) | | Adjusted net income attributable to SS&C common stockholders | $366.0 | $332.1 | $732.4 | $668.4 | | Adjusted diluted earnings per share attributable to SS&C common stockholders | $1.45 | $1.32 | $2.89 | $2.65 | | GAAP diluted earnings per share attributable to SS&C common stockholders | $0.72 | $0.75 | $1.55 | $1.38 | - An estimated effective tax rate of 24% was used for Q2 and YTD 2025, and 23.1% for Q2 and YTD 2024, to adjust the provision for income taxes in computing adjusted net income[30] Additional Information This section provides details regarding the Q2 2025 earnings call and important disclaimers about forward-looking statements Earnings Call & Forward-Looking Statements This section provides details for the Q2 2025 earnings call and includes a comprehensive disclaimer regarding forward-looking statements, emphasizing inherent risks and uncertainties - The Q2 2025 earnings call was scheduled for July 23, 2025, at 5:00 p.m. eastern time, with dial-in and webcast replay information provided[9] - Forward-looking statements are subject to various risks and uncertainties, including economic conditions, acquisition benefits, customer consolidation, market activity, cyber-attacks, regulatory changes, and substantial indebtedness[9] - Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of their date and are not subject to updates unless required by law[9]