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SS&C - Earnings Call - Q3 2025

October 23, 2025

Executive Summary

  • SS&C delivered a clean beat with revenue $1.568B (+7.0% YoY) and adjusted EPS $1.57 (+17.2% YoY); both topped S&P Global consensus by ~1.0% on revenue ($1.568B vs $1.5519B*) and ~6.5% on EPS ($1.57 vs $1.474*). Management posted record adjusted EBITDA of $619M (39.5% margin, +90 bps YoY).
  • FY25 guidance was raised: revenue to $6.210–$6.250B (midpoint +$37M from Q2) and adjusted EPS to $6.02–$6.08 (midpoint +$0.11), with Q4 guidance set at $1.59–$1.63B revenue and $1.56–$1.62 EPS.
  • Execution drivers: 5.2% adjusted organic growth; GlobeOp +9.6% and GIDS +9.0% organic growth; a large Australia lift-out closed July 1; lower interest expense (–$6M YoY) aided EPS.
  • Capital returns and balance sheet remain catalysts: Q3 buybacks $240.1M (2.8M shares), dividend up 8% to $1.08 annually, net leverage 2.59x; Calastone acquisition closed Oct 14 and AI Agents launched Oct 28 highlight product/adjacency momentum.

What Went Well and What Went Wrong

  • What Went Well

    • Organic growth accelerated to 5.2% with strength in alternatives; GlobeOp +9.6% and GIDS +9.0% drove mix and margin; adjusted EBITDA hit a quarterly record with 39.5% margin (+90 bps YoY). “Record adjusted revenues…attest to long-term financial and operating strength.”
    • Robust cash generation: operating cash flow up 22.1% YTD to $1.101B; Q3 cash flow conversion 115.2%. Management raised FY25 revenue and EPS guidance on strong execution.
    • Strategic momentum: closed Calastone (global funds network) and announced agentic AI solutions; management emphasized tokenization and purpose-built AI agents as new growth vectors.

  • What Went Wrong

    • Intralinks remained soft (–2.8% organic in Q3) despite early signs of pipeline improvement; management expects revenue to lag deal activity by weeks/months.
    • Equity in earnings swung to a loss (–$11.6M vs +$1.1M YoY) and GAAP other income trends were less favorable, partially offset by lower net interest expense (–$6M YoY).
    • Some product lines were flat/down YoY on licenses/maintenance ($258.6M vs $259.6M YoY), and management noted a small lost-insourcing impact at a client (State Street FPDR), though expected to be immaterial.
View the full earnings report

Transcript

Operator (participant)

Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to today's SS&C Technologies Q3 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. If you'd like to withdraw your question, simply press star one again. Thank you. I'd now like to turn the call over to Justine Stone, Head of Investor Relations. Justine?

Justine Stone (Head of Investor Relations)

Hi everyone, welcome and thank you for joining us for our Q3 2025 earnings call. I'm Justine Stone, Investor Relations for SS&C. With me today is Bill Stone, Chairman and Chief Executive Officer, Rahul Kanwar, President and Chief Operating Officer, and Brian Schell, our Chief Financial Officer. Before we get started, we need to review the Safe Harbor Statement. Please note that the various remarks we make today about future expectations, plans, and prospects, including the financial outlook we provide, constitute forward-looking statements for the purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC and can also be accessed on our website. These forward-looking statements represent our expectations only as of today, October 23, 2025, while the company... Financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctechs.com. I will now turn the call over to Bill.

Bill Stone (Chairman and CEO)

Thanks, Justine, and welcome everyone. Our third quarter results include record adjusted revenue of $1.569 billion, up 7%, and adjusted diluted earnings per share of $1.57, a 17.2% increase. We delivered record adjusted consolidated EBITDA of $619 million, up 9.3%, resulting in a quarterly adjusted consolidated EBITDA margin of 39.5%. Our third quarter adjusted organic revenue growth was 5.2%, with performance driven by GlobeOp with a 9.6% revenue growth, and our Global Investor and Distribution Solutions, our GIDS business, with a 9% revenue growth. We saw strength across all alternative markets, and we were capitalizing on international opportunities. In our GIDS business, we successfully completed a large liftout in Australia on July 1 and announced an additional liftout for our U.S. life and pensions provider. Q3 financial services recurring revenue growth was 6.7%.

For the nine months ended September 30, 2025, cash from operating activities was $1.101 billion, up 22% over the prior year. In Q3, we returned $305 million to shareholders, which included acquiring 2.8 million shares for $240 million at an average price of $86.82 and $65.8 million in common stock dividends. This quarter, we raised our common stock dividend to $1.08, an 8% increase. SS&C's strong cash flow characteristics allow us to return capital to our shareholders in multiple ways. We continue to believe our shares are undervalued and will continue to prioritize share repurchases. High-quality acquisitions that meet our financial criteria are also a key element of SS&C's capital allocation strategy. In September, we announced the acquisition of Curo Fund Services, a South African fund administration business. This acquisition deepens our relationship with two meaningful clients and gives SS&C a local presence in the African market.

Our Calastone acquisition closed on October 14. The global team of 250 employees will join our GIDS business, reporting in to Nick Wright. We are excited about Calastone's proprietary global funds network and the additional capabilities in money markets, ETFs, and digital assets they bring to the SS&C solution set. Tokenization is gaining meaningful traction amongst our clients, and we are pleased to offer a solution that supports their evolving digital asset strategies. I'll now turn it over to the call to Rahul to discuss the quarter in more detail.

Rahul Kanwar (President and COO)

Thanks, Bill. We had a strong third quarter with solid organic growth of 5.2% and improved margins. Across our business, we remain focused on taking care of our customers and deepening our product set and expertise, and we're pleased to see that focus translate into financial results. We continue to pay close attention to our cost structure and view intelligent automation and AI as both a revenue opportunity and a way to reduce repetitive tasks while enhancing career paths for our employees. We've seen the results of these efforts reflected in improved EBITDA margins to date and expect this positive trend to continue. GlobeOp had a good quarter with continued strength within our hedge fund client base, international wins in private markets, and benefits from the ongoing trend toward retail alternatives.

Looking ahead, we view GlobeOp as a key beneficiary of emerging technologies and aim to dramatically enhance user interfaces and client experiences as meaningful competitive differentiators. Our Global Investor and Distribution Solutions business had an excellent quarter, driven in part by successful liftouts across the globe. We're encouraged by the potential these mandates unlock. SS&C continues to help accelerate the global transformation from traditional automation to AI-powered automation, selling purpose-built agents as a managed service. With SS&C as customer zero, we can leverage millions of daily use cases to build deep and comprehensive solution sets, which provide for both internal efficiency and external revenue opportunities. As one example, we sold an AI agent to a U.K.-based healthcare organization to automate MRI, CT, and ultrasound request processing, saving over 15,000 radiologist hours annually.

This frees clinical capacity, reduces outsourcing costs, and addresses a global hospital challenge, as well as points to the utility of these AI agents in a wide range of applications. With that, I'll turn it over to Brian to walk through the financials.

Brian Schell (CFO)

Thanks, Rahul, and good day, everyone. Unless noted otherwise, the quarterly comparisons are Q3 2024. As disclosed in our press release, our Q3 2024 GAAP results reflect revenues of $1.568 billion, net income of $210 million, and diluted earnings per share of $0.83. Our adjusted non-GAAP results include revenues of $1.569 billion, an increase of 7%, and an adjusted diluted EPS of $1.57, a 17.2% increase. The adjusted revenue increase of $102 million was primarily driven by incremental revenue contributions from GlobeOp of $37 million, GIDS of $33 million, acquisitions of $17 million, and a favorable impact from foreign exchange of $9 million.

As a result, adjusted organic revenue growth on a constant currency basis was 5.2%, and core expenses increased 4.1% or $37 million. Adjusted consolidated EBITDA was $619 million, reflecting an increase of $53 million or 9.3% and margin expansion of 90 basis points to 39.5%. Note EBITDA of $619 million is a quarterly record high for SS&C. Net interest expense for the third quarter of 2025 was $104 million, a decrease of $6 million, primarily reflecting lower short-term interest rates. Adjusted net income was $396 million, up 16.5%, and adjusted diluted EPS was $1.57, an increase of 17.2%. Our effective non-GAAP tax rate was 21.1%. Note for comparison purposes, we have recast the 2024 adjusted net income to reflect the full year effective tax rate of 23.1%.

Also note that diluted share count is down year-over-year to 252.6 million from 254.1 million, primarily as a result of share repurchases. Cash flow from operating activities grew 22%, which was primarily driven by growth in earnings. Our quarterly cash flow conversion was 115%, up from 99% last year. Our year-to-date cash flow conversion is 98% versus 89% last year. SS&C ended the third quarter with $388 million in cash and cash equivalents and $6.6 billion in gross debt. SS&C's net debt was $6.2 billion, and our LTM consolidated EBITDA was $2.4 billion. The resulting net leverage ratio is 2.59x. As we look forward to the fourth quarter and the remainder of the year with respect to guidance, we will continue to focus on client service and assume that retention rates will be in the range of our most recent results.

We'll continue to manage our business to support long-term growth and manage our expenses by controlling and aligning variable expenses, increasing productivity to improve our operating margins, and effectively investing in the business through marketing, sales, and R&D. Specifically, we have assumed short-term interest rates to remain at current levels, an effective tax rate of approximately 23% on an adjusted basis, and capital expenditures to be 4.2%-4.6% of revenues, and revenues of approximately $20 million for the Calastone acquisition. For the fourth quarter of 2025, we expect revenue to be in the range of $1.59 billion-$1.63 billion and 4.5% organic revenue growth at the midpoint. Adjusted net income in the range of $394 million-$410 million. Interest expense, excluding amortization of deferred financing costs and original issue discount, in the range of $106 million-$108 million.

Diluted shares in the range of 251.5 million-252.5 million, and adjusted diluted EPS in the range of $1.56-$1.62. For the full year of 2025, we are raising our top line guidance by $37 million at the midpoint and now expect revenue to be in the range of $6.21 billion-$6.25 billion and 4.6% revenue growth at the midpoint. For the full year of 2025, we are also raising the midpoint of our earnings guidance. Specifically, we expect adjusted net income in the range of $1.522 billion-$1.538 billion, adjusted diluted EPS in the range of $6.02-$6.08, up $0.11 at the midpoint, and cash from operating activities to be in the range of $1.515 billion-$1.575 billion. Our 2025 guidance reflects our record results thus far in 2025, and we look forward to continued execution during Q4. Now, back to Bill.

Bill Stone (Chairman and CEO)

Thanks, Brian. SS&C's record-adjusted revenues and adjusted EBITDA this quarter attest to our strong and long-term financial and operating strength. The 22% increase to $1.1 billion in operating cash flow through three quarters gives us the flexibility to pursue growth opportunities as we continue to pay down debt and repurchase shares. We also look forward to hosting almost a thousand clients and prospects at our annual Deliver Conference beginning this Sunday in Phoenix, Arizona. This year's conference will feature the latest and greatest SS&C's offerings, and we'll have our Chief Technology Officer there, Anthony Caiafa, who will talk about all of our AI and advancements within SS&C in the market. Our keynote speaker is Victor Haghani, founder and CIO of Elm Wealth and a co-founder of Long Term Capital Management. We appreciate all of you being here on the call, and I'll now open it to questions.

Operator (participant)

Thanks, Bill. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. Once again, star one. We ask that you please limit your questions to one primary and one follow-up. If you do have additional questions after that, you can rejoin the queue. We will pause just a moment to compile the Q&A roster. All right, it looks like our first question today comes from the line of Dan Perlin with RBC Capital Markets. Dan, please go ahead.

Dan Perlin (Managing Director)

Thanks. Good evening, everyone, and a nice quarter here. I just wanted to try and get a sense around the Q4 organic guide, around 4.5%, kind of keeping in mind that Battea is contributing into that organic growth. I'm just wondering, can you tell us, you know, at least directly, what the contribution of Battea would be in that 4.5%, or is that just kind of a conservative kind of jumping-off point? It felt like it should be contributing, I think, more meaningfully in the fourth quarter.

Brian Schell (CFO)

I think that the one thing that I would just highlight is Q4 of the year before was by far our strongest quarter. We think that's a reasonable jumping-off point, not overly conservative, but also something that hopefully we can positively improve on. Battea's contribution, I think we did about $16 million in Q4 last year. We expect to do about $25 million in Q4 this year.

Dan Perlin (Managing Director)

Got it. Okay. That's great. Secondly, I mean, good to have a very successful organic quarter. I wanted to make sure I understood maybe the mechanics behind that a little bit. I think the contribution to that organic growth was driven by this liftout, but maybe if you could provide a little more details around that, that would be great. Thank you.

Bill Stone (Chairman and CEO)

Yeah, that was a big chunk. We had a big liftout in Sydney, Australia, that we completed July 1. We got a half a year from that, and we also sold other large liftouts as well. We have a pipeline, so we're pretty confident in Q4 for goods and 2026.

Dan Perlin (Managing Director)

Got it. Thank you very much.

Operator (participant)

All right. Thank you, Dan. Our next question comes from the line of Jeff Schmitt with William Blair. Jeff, please go ahead.

Jeff Schmitt (Financial Services and Technology Research Analyst)

Hi, thank you. On the Curo Fund Services deal, could you discuss what attracted you to that business and how much revenue is that generating? I guess, why is that going to be held under GIDS if it's a fund administration business?

Bill Stone (Chairman and CEO)

The African market is still quite a bit behind the European and the U.S. markets in fund administration. A lot of where you find these kinds of companies is in the life and pensions area. The two large clients we have are very large insurers, and they jointly owned Curo. That's why it's going into GIDS.

Jeff Schmitt (Financial Services and Technology Research Analyst)

Okay. Did you mention how much revenue that's generating?

Bill Stone (Chairman and CEO)

It's negligible. It's $15 million or so, I think.

Jeff Schmitt (Financial Services and Technology Research Analyst)

Okay, and then you had talked in recent quarters just about implementing agentic AI in Blue Prism. I think that had sort of been more bot-based automation in the past. Could you give us an update on kind of where you stand there and what other businesses are you developing that for?

Bill Stone (Chairman and CEO)

We call ourselves customer zero. We're doing it across our entire business. As we have been leaders in most of the technologies that have come out over the last several years, we're now infusing all of those technologies with AI agents and making them smarter and faster. Again, with the 27,000 people we have and literally thousands of experts, we believe that we bring the functional expertise to make really smart agents. You can use the greatest technology, but if you don't know what the hell you're talking about, they're not going to be particularly good agents. We think we have the largest, most sophisticated clients because we deliver. I think that's what you're going to find with our delivery of AI agents.

Jeff Schmitt (Financial Services and Technology Research Analyst)

Okay. Thank you.

Operator (participant)

Thank you, Jeff. Our next question comes from the line of Alexei Gogolev with JPMorgan. Alexei, please go ahead.

Alexei Gogolev (Executive Director)

Hi, Bill. It's clearly a competitive market out there. Could you elaborate on the potential impact from the lost business, that State Street insourced the FPDR? Will that impact on revenue be felt in 2026 or already in 4Q of this year?

Bill Stone (Chairman and CEO)

I mean, we'll have a small impact, but we still believe our wind business will still grow. You know, that was kind of an ancillary business anyway. You know, it's not something that we were investing in to see if we could, you know, do more distribution of spider-like products. You know, no, we don't ever like to lose revenue, but at the same time, this wasn't our focus. It's not really going to hurt us much. We look forward to taking those resources that we had there and apply them to things that we think can grow faster.

Alexei Gogolev (Executive Director)

Thank you, Bill. Brian, with GIDS and GlobeOp's growth performing quite well this quarter, how much does that revenue mix shift change margin outlook? I think you seem to have suggested that in 3Q 2024, SS&C had strong performance of Intralinks and significant license sale that boosted WIT business. Both of those have visibly higher margins than GIDS and GlobeOp. Can you elaborate on margin impact this quarter?

Brian Schell (CFO)

Yeah, no, I think what you saw is you saw the strength of the margin impact. Actually, obviously, with GlobeOp, obviously already has very strong margins above the consolidated average, and you saw an incremental contribution from them. I think that some of the things that GIDS has been doing is continuing to try and work on their margin as well. I'd say more broadly, because of the different growth areas, we're continuing to see positive signs from the rest of the business. That's why you've been able to continue to see actually a margin uptick, right, from overall, right? We're projecting that, you know, a greater than 50 basis point margin improvement EBITDA, which has always been our kind of our general target. That mix shift hasn't affected our overall plans on a consolidated level.

Bill Stone (Chairman and CEO)

At 39.5%, you can compare us to any of our peers. We perform admirably, relatively.

Alexei Gogolev (Executive Director)

Thank you, Bill. Thanks, Brian.

Operator (participant)

Thank you, Alexei. Our next question comes from the line of Peter Heckmann with D.A. Davidson. Peter, please go ahead.

Peter Heckmann (Managing Director and Senior Equity Research Analyst)

Hey, good afternoon, everyone. I wanted to follow up on Calastone a little bit. Two things there. Talk a little bit about how their existing operations complement your existing U.K. operations for advisory firms and then in wealth management firms. Number two is, remind us, is there any significant seasonality of Calastone's revenue? I soon remember there was some seasonality to the first quarter for year-end statementing, but I can't remember if that was correct.

Bill Stone (Chairman and CEO)

We're excited about Calastone. Jason Hammerson has built a great business, got 250 people, and I believe have about 4,600 clients, fund companies, and other asset managers and wealth managers around the world. It really has a powerful tokenization process. It has very powerful ETFs. Many of you know that it looks like dual share class ETFs have been approved, and that's going to be another boon to the ETF market, which is pretty strong in the U.S. The mutual fund industry, where Calastone is also real strong, is still strong in Asia and in Europe. We really like the synergies we get with the Calastone acquisition, and we look forward to building on our distribution networks together.

Peter Heckmann (Managing Director and Senior Equity Research Analyst)

Okay. On the seasonality revenue, anything significant there to call out?

Bill Stone (Chairman and CEO)

I don't think so. I think, you know, Pete, it's a great company, but relative size is not going to impact our growth rates. There's no seasonality in any one quarter that's going to make much of a difference.

Peter Heckmann (Managing Director and Senior Equity Research Analyst)

Really going to stand out. Okay, that's all I have for now. I'll get back in the queue. I appreciate it.

Operator (participant)

All right. Thank you, Peter. Our next question comes from the line of Patrick O'Shaughnessy with Raymond James. Patrick, please go ahead.

Patrick O'Shaughnessy (Managing Director and Equity Research Analyst)

Hey, good afternoon. It sounds like, at least anecdotally, the M&A pipeline is starting to pick up, but obviously, that really hasn't translated to improved growth for Intralinks quite yet. What are you seeing out there in terms of the pipeline for Intralinks and the competitive landscape?

Brian Schell (CFO)

Yeah, I think it's a little bit like you just pointed out. We are seeing the early indicators of the pipeline. The opportunities that we're talking to and the data rooms that are getting open, we're seeing those numbers improve. Generally, revenue lags several weeks to maybe a few months from there, but we are starting to see some positive signs.

Patrick O'Shaughnessy (Managing Director and Equity Research Analyst)

Got it. Appreciate that. The healthcare business has had two consecutive quarters of positive year-over-year growth. What's your confidence level that that business has positively inflected in a sustainable way?

Bill Stone (Chairman and CEO)

I think Patrick said one of the things people should keep in mind is we built DomaniRx while we ran this healthcare business, and we had a million hours in that development. The Domani runs at a, or our healthcare business runs at 30%-35% margins. It's lumpy. You get $10 million, $20 million deals, sometimes way bigger than that. We have a great client in Humana that we continue to build out further. We have another great client in Centene. We have opportunities. It's just, you know, selling into large banks, large insurance companies, large asset managers, sometimes I think they're nimble when I sell into large healthcare organizations.

Patrick O'Shaughnessy (Managing Director and Equity Research Analyst)

All right. Understood. Thank you.

Operator (participant)

Thanks, Patrick. Our next question comes from the line of Kevin McVeigh with UBS. Kevin, please go ahead.

Kevin McVeigh (Managing Director)

Great. Thanks so much. Congratulations on terrific results. I think you came in $0.07 above the high end of the range, including just some, seems like, obviously, implementation work. I guess, where was the source of the upside just relative to where expectations were on the EPS?

Bill Stone (Chairman and CEO)

We talked a little bit about the liftout we did in Australia that lifted the goods business. We also have had very strong performance out of GlobeOp. Even though we had some weaker revenue performance on Intralinks, they're still very profitable. All of our businesses are doing well with opportunities. In Q3, we had most of them hitting a pretty good stride. We think in Q4, we're pretty good out of the gates, right? It's certainly towards the end of October, which is one-third of the quarter. It's also got Thanksgiving and Christmas in the fourth quarter. We're reasonably optimistic, as you can tell.

Kevin McVeigh (Managing Director)

Oh, you sound really encouraged. I guess, Bill, you mentioned tokenization a couple of times with Calastone. Is there an opportunity to kind of implement that technology across the other business lines similar to what you've done with Blue Prism?

Bill Stone (Chairman and CEO)

There's opportunity. One of the great things we always talk about is that you have to get it right. A lot of people dabbled in things like machine learning and natural language processing or robotic process automation, but you buy a few licenses to UiPath or Automation Anywhere, and you don't have any substance. SS&C spent $1.6 billion, $1.7 billion to buy Blue Prism so that we had 1,400 people that are steeped in these technologies. Now, with what we're doing with AI agents and being customer zero, we get to add all kinds of capabilities in a very controlled manner so that we become your trusted source for AI in regulated and highly complex industries.

Kevin McVeigh (Managing Director)

Thank you.

Operator (participant)

Thank you, Kevin. Our next question comes from the line of James Faucette with Morgan Stanley. James, please go ahead.

James Faucette (Managing Director)

Thank you very much. I just wanted to ask a question on the general environment. Bill, you've had great insight previously into private credit flows, and there's been a lot of chatter about that market maybe beginning to show a little squishiness. Are you seeing anything from a flow perspective, or do you consider that a bit of noise right now?

Bill Stone (Chairman and CEO)

I think as more people get into it, James, people need to learn and understand the vagaries of the private markets versus the public markets. The smartest people in the industry are all over private credit and other new ways in which to develop returns that sometimes are not there in the public markets. We've had a bunch of the biggest players in the industry as our clients, and we've had talks by a number of them. They are talking 100 basis points, 200 basis points more in the private markets than what they can get in the public markets. As long as that's true, and there's nothing that's showing that it's not, I don't think it's going to slow down.

James Faucette (Managing Director)

Appreciate that. I wanted to ask on go-to-market. You've been more focused on selling some enterprise solutions that combine multiple products and services. Your organic results are still really strong, but anything you can share qualitatively or quantitatively on the impact of that initiative and how it may be impacting things like average deal size or even customer retention?

Bill Stone (Chairman and CEO)

Obviously, you work for a big investment bank and understand that you guys moving real quickly is kind of an oxymoron, right? I think what we see is that these larger and larger institutions, the top management wants to move fast. What they find is that really is out of character for these large commercial and investment banks. What they like about us is that we're still a pretty big place. We've got 27,000 people. We have 120 offices or 130 offices around the world. We can bring you scale, and we still move pretty quickly. Relative to the gigantic banks, we move very quickly.

James Faucette (Managing Director)

Appreciate that color. Thanks, Bill.

Operator (participant)

Thank you, James. It looks like there are no further questions. I will now turn the call back over to Bill Stone for closing remarks. Bill.

Bill Stone (Chairman and CEO)

Dan, thank you. I think from a standpoint of our third quarter, we're happy to have performed well. We look forward to talking with you after the new year, and hopefully, we will surprise you positively. Have a good quarter. Thanks.

View Q3 2025 Earnings Summary