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SS&C Technologies Holdings Inc (SSNC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record adjusted revenue of $1.5307B (+8.4% YoY) and adjusted diluted EPS of $1.58 (+25.4% YoY); GAAP revenue was $1.5297B and GAAP diluted EPS was $0.98 . Adjusted consolidated EBITDA reached $599.1M (39.1% margin), a quarterly record .
  • Results materially exceeded the company’s October guidance: adjusted revenue and EPS were above the high end; adjusted net income beat; net interest expense came in slightly above the range; share count in line. Management revised the non-GAAP effective tax rate methodology (FY24 to 23.1%, Q4 to 15.1%), adding ~$0.21 to FY24 adjusted EPS .
  • Organic revenue growth accelerated to 7.0% in Q4 (vs. 6.4% in Q3), led by GlobeOp, GIDS, Black Diamond, and record bookings at Intralinks; Healthcare posted better-than-expected license wins .
  • FY25 guidance targets adjusted revenue of $6.085–$6.245B, adjusted EPS of $5.64–$5.96, and cash from operations of $1.448–$1.548B; Q1 2025 guidance implies ~4% organic growth at the midpoint .
  • Capital allocation: $365.7M repurchases (4.9M shares) in Q4 at $74.46, $195M debt paydown; net leverage 2.89x; quarterly dividend maintained at $0.25 per share (Nov-2024) . Catalysts: visible FY25 growth, Insignia Financial superannuation lift-out, Battea cross-sell opportunity .

What Went Well and What Went Wrong

What Went Well

  • Accelerating organic growth: Q4 adjusted organic growth 7.0%, with Financial Services recurring revenue growth 7.4%; record adjusted consolidated EBITDA ($599.1M) .
  • Segment outperformance: GlobeOp new wins and strength across private markets/hedge funds; Black Diamond growing mid-teens; Intralinks delivered record bookings and revenue on stronger deal count and longer deal length .
  • Guidance beat and tax optimization: Adjusted revenue/EPS materially beat the October guidance; revised non-GAAP effective tax rate (23.1% FY24; 15.1% for Q4) increased FY24 adjusted EPS by ~$0.21. “The revised effective rate…is more consistent with our peers” .

What Went Wrong

  • Margin compression: Adjusted EBITDA margin down 70 bps YoY to 39.1% in Q4; operating income margin down 30 bps YoY to 23.4%, with core expenses up 8.3% on incentives/commissions/wages .
  • Interest expense slightly above guidance: Actual net interest expense of $113.0M vs guidance $110–$112M for Q4 .
  • Healthcare visibility remains lumpy: Management flagged difficulty projecting 90-day cycles at large health insurers, despite improved license deal momentum; the business remains sensitive to macro policy changes and cost pressures .

Financial Results

Headline Metrics vs Prior Quarters

MetricQ2 2024Q3 2024Q4 2024
GAAP Revenue ($USD Millions)$1,451.5 $1,465.8 $1,529.7
Adjusted Revenue ($USD Millions)$1,452.4 $1,466.8 $1,530.7
GAAP Diluted EPS ($USD)$0.75 $0.65 $0.98
Adjusted Diluted EPS ($USD)$1.27 $1.29 $1.58
Operating Income Margin (%)22.6% 22.2% 23.4%
Adjusted EBITDA Margin (%)38.5% 38.6% 39.1%

Segment Breakdown (Revenue)

SegmentQ4 2023Q3 2024Q4 2024
Software-enabled services ($USD Millions)$1,145.5 $1,206.2 $1,254.0
License, maintenance and related ($USD Millions)$266.1 $259.6 $275.7
Total Revenue ($USD Millions)$1,411.6 $1,465.8 $1,529.7

KPIs

KPIQ2 2024Q3 2024Q4 2024
Adjusted Organic Revenue Growth (%)6.4% 6.4% 7.0%
Financial Services Recurring Revenue Growth (%)7.7% 7.2% 7.4%
Adjusted Consolidated EBITDA ($USD Millions)$558.9 $566.2 $599.1
Operating Cash Flow ($USD Millions, quarter)$385.0 $336.6 $486.6
Share Repurchases (# shares; $USD Millions)3.7M; $227.0 1.2M; $89.4 4.9M; $365.7
Net Leverage (x)2.84x 2.94x 2.89x

Company Guidance vs Delivered (Q4 2024)

MetricGuidance (Oct 24, 2024)Actual Q4 2024Surprise
Adjusted Revenue ($USD Millions)$1,460.0 – $1,500.0 $1,530.7 Above high end
Adjusted Diluted EPS ($USD)$1.29 – $1.35 $1.58 Above high end
Adjusted Net Income ($USD Millions)$329.0 – $345.0 $403.2 Above high end
Net Interest Expense ($USD Millions)$110.0 – $112.0 $113.0 Slightly above
Diluted Shares (Millions)254.6 – 255.6 254.5 In range

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Revenue ($USD Millions)Q1 2025N/A$1,474.0 – $1,514.0 New
Adjusted Revenue ($USD Millions)FY 2025N/A$6,085.0 – $6,245.0 New
Adjusted Net Income ($USD Millions)Q1 2025N/A$348.0 – $364.0 New
Adjusted Net Income ($USD Millions)FY 2025N/A$1,431.0 – $1,531.0 New
Adjusted Diluted EPS ($USD)Q1 2025N/A$1.37 – $1.43 New
Adjusted Diluted EPS ($USD)FY 2025N/A$5.64 – $5.96 New
Net Interest Expense ($USD Millions)FY 2025N/A$408.0 – $418.0 New
Effective Tax Rate (%)FY 2024 vs FY 2025~26% (FY24 guidance) 23% – 25% (FY25) Lowered
Capital Expenditures (% of revenue)FY 2024 vs FY 20254.1% – 4.5% 4.1% – 4.5% Maintained
DividendQ4 2024$0.25 per share (Nov 21) $0.25 per share maintained into 2025 (policy) Maintained

Earnings Call Themes & Trends

TopicQ2 2024 (Prev)Q3 2024 (Prev)Q4 2024 (Current)Trend
AI/Automation (Blue Prism)Internal deployment; training ramp; GenAI features added to Blue Prism workflows >1,050 FTE-equivalent savings YTD; continued RPA rollout; margin efficiency ~1,550 digital workers; $150–$200M savings trajectory; integrating LLMs; targeting double-digit growth externally Improving execution
Wealth & Investment Tech (Black Diamond, Genesis)Pipeline strength; DomaniRx second release; Black Diamond enhancements WIT growth +10.9%; license pull-ins; consolidating Aloha into Genesis WIT +6.8%; Black Diamond mid-teens growth; Genesis modernization continues Healthy growth
Alternatives/Admin (GlobeOp & Intralinks)Strength across private markets, hedge, retail alts GlobeOp wins; Intralinks strong start to Q4; seasonality at Battea GlobeOp organic growth ~8% in 2024; Intralinks record bookings/revenue in Q4 Accelerating
Healthcare/DomaniRxSecond release (all lines of business); >100M claims processed; pipeline forming ~$8M of healthcare license deals slipped to Q4; confidence in DomaniRx latency self-serve/reporting Health above expectations with license wins; pipeline optimistic but lumpy Improving but uneven
Regulatory/MacroSecurity/outage resilience via private cloud; caution on high-priced M&A T+1 progression, operational readiness; tax rate unchanged in guidance EC cutting corporate reporting burdens: “less regulation → clients grow faster” Neutral tailwinds
Australia Superannuation——Insignia lift-out; top-20 client potential; meaningful H2’25 revenue Emerging catalyst
Battea-Class Action ServicesAcquisition closed; ~$95M revenue, 45%+ margin; accretive Seasonality (Q4 largest); cross-sell into SS&C’s 22k clients ~75 active cross-sell opps; 2025 revenue potential $100–$110M Expanding opportunity

Management Commentary

  • “SS&C ended 2024 with 7.0% Q4 organic revenue growth and record adjusted consolidated EBITDA of $599 million” — Bill Stone, CEO .
  • “The revised effective [non-GAAP] rate…more closely aligns with how we evaluate our financial performance and is more consistent with our peers…increases our reported adjusted EPS by approximately $0.21 in 2024.” — Brian Schell, CFO .
  • “We honestly believe that we're the best fund administrator in the world…most of the large-scale macro hedge funds are our clients.” — Bill Stone .
  • “Q4 was also a record bookings and revenue quarter for Intralinks due to solid deal count trends, greater deal length and technological advancements.” — Rahul Kanwar .

Q&A Highlights

  • Healthcare momentum and pipeline: Management won “a couple of big license deals” in Q4; pipeline with large insurers remains promising but lumpy over 90-day cycles .
  • Battea cross-sell scale: ~75 active opportunities; already closed ~15–20; 2025 revenue potential “upwards to $100–$110 million” with industry tailwind from increased class actions .
  • Insignia Financial lift-out: Expected to be a top-20 client; revenue largely H2 2025; final contracts targeted by end of Q1 and implementation starting Q2 .
  • Organic growth guardrails for FY25: ~±$80M from midpoint; drivers include new sales, implementation timing, macro fund flows/deal volume .
  • Automation ROI: ~1,550 digital workers; $150–$200M savings; accelerating efficiency across functions; integrating LLMs to augment Blue Prism .

Estimates Context

  • Wall Street consensus estimates (S&P Global) for Q4 2024 were not retrievable due to daily request limit; therefore, we cannot provide vs-consensus comparisons at this time. Values would normally be retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong execution: Broad-based strength across GlobeOp, GIDS, Black Diamond, and Intralinks drove a clear beat vs company guidance; organic growth trajectory improved to 7% in Q4 .
  • Margin quality: Despite slight margin compression YoY, EBITDA dollars and cash generation were robust; core expense inflation (incentives/wages) bears monitoring into FY25 .
  • FY25 setup: Guidance implies mid-single-digit organic growth, healthy cash generation, and consistent capex; tax methodology change supports EPS optics .
  • Pipeline catalysts: Insignia lift-out (Australia superannuation) and Battea cross-sell provide incremental revenue visibility in H2’25, particularly in alternatives and compliance adjacencies .
  • Capital returns: Aggressive buybacks (Q4 $365.7M) plus dividend underpin TSR; leverage at 2.89x provides flexibility .
  • Trading implications: Positive narrative on organic growth, visible bookings, and FY25 guidance could support near-term sentiment; watch interest expense vs ranges and any Healthcare lumpiness. Medium-term thesis: cross-sell breadth, automation-driven efficiency, and alternatives exposure support durable growth and cash generation .

*Values retrieved from S&P Global.