SS&C Technologies Holdings, Inc. Q1 FY2025 earnings call

• Adjusted revenue was $1,514,800,000, up 5.5%, and adjusted diluted EPS was $1.44, up 8.3%. Adjusted consolidated EBITDA was $591,900,000, up 6.3% with a margin of 39.1%. - Organic revenue growth was 5.1% driven by GlobeOp, Wealth & Investment Technology, and GIDS. - Cash from operating activities was $272,200,000, up 50.8% from Q1 2024. - Bought back 2,400,000 shares for $206,900,000. - Internationally, had success in Australia, Geneva, and The Middle East. - Launched global governance-first AI platform at Blue Prism Live and deployed 3,300 full-time equivalents since early 2023.

SS&C Technologies reported adjusted revenue of $1,514,800,000 in Q1 2025, up 5.5%. Organic revenue growth was 5.1%. GlobeOp wealth and investment technologies and global investor and distribution services had organic growth of 10.3% with positive trends in private market and retail alternatives. Wealth and investment technology saw strength in the wealth segment, and GIDS met client wins and volumes targets. Healthcare finished the quarter approximately flat. Private markets grew 14% in Q1. Internationally, SS&C signed a strategic lift-out agreement with Insignia Financial, Geneva had a strong quarter in EMEA, and opened a new office in Riyadh, Saudi Arabia. Revenue contribution details: GlobeOp, Wealth & Investment Technology, GIDS, Healthcare, Private Markets each contributed based on their performance.

• Second quarter 2025 revenue expected to be in the range of $1,489,000,000 to $1,529,000,000 with 2.5% organic growth midpoint. Adjusted net income range $343,000,000 to $359,000,000. - Full-year 2025 revenue range $6,110,000,000 to $6,238,000,000 with 4.4% organic growth midpoint. Adjusted net income range $1,441,000,000 to $1,541,000,000. - Plan to convert multiple general ledger systems to a single platform by end of third quarter 2025.

• Geopolitical and economic uncertainty leading to market volatility. - FX translation impact on organic growth. - Potential slowdown in new business due to economic uncertainty and geopolitical conditions.

Q: On healthcare, was it just a seasonally weak quarter for that business? And how does your pipeline look currently?

A: I think healthcare continues to build its pipeline. You know, we're selling into large-scale health insurance companies and others, so some of it is lumpy. But we have a lot of interest. We first rolled out Del MonteRx in January 2024, and in 2025, we're expecting to process several hundred million claims. So we have a lot of interest, and they are very large prospects for us. We remain optimistic.

Q: Your organic growth guide for the second quarter, I think it's 2.5%. Is that assuming a slowdown or pause in new business just given all the economic uncertainty? I may have missed that. And if so, could you kind of quantify what you're assuming there?

A: I would say, basically, we're just putting a measure of conservatism into the second quarter given everything that's happening in the world right now. We're a global business, and while we don't believe tariffs are really going to be a big impact on us from a financial standpoint, it's an opportunity to slow down deals. It's certainly possible. So I think we have a good pipeline. We've got a lot of deals we've sold, but the revenue has not started flowing in yet. So we're optimistic that we can hopefully surprise you positively.

Q: Congratulations on finalizing the Insignia deal. Now that it's closed, do you think you could give us a little bit more in terms of your expectations for its contribution to revenue, how much it might ramp up, and whether or not we would be able to see the impact of that ramp on the margins in the second half or the first half of 2026?

A: Well, we're going to rebadge about 1,400 people from Insignia to us, and that will happen around July 1, I believe. So most of the ramp is going to be in the third and fourth quarters. We'll get about a half a year, and that can range anywhere from $35,000,000 to $70,000,000. We're optimistic that we can do a great job for them and really take care of their members. That's what we're focusing on, and we've got a great team that's keeping this very well planned.

Q: Just at a high level, again, Bill, on the demand environment, I know we've heard from other players in the financial services market. Banks, in particular, have talked about some of their clients pausing. It doesn't sound like you're seeing that yet, but I just want to kind of make a finer point that, you know, what are those conversations like? Do you get the sense that they feel like there might be an air pocket in the business and decision-making, so they might want to hold off? I heard your comment on the organic growth being measured at conservative. So I get that. But, obviously, you talk to a lot of these. So I'm just curious what those conversations were like?

A: Well, I think, Dan, there's an awful lot of change happening in wealth and asset management. And there are sea changes that are being caused by things like AI and quantum and all kinds of new technologies, probably the biggest set of new technologies since, say, the Internet. So I think that there's going to be an awful lot of change, and I think that, you know, I read a note that said two-thirds of all CEOs are afraid that if they don't get AI right, they're going to lose their job. So I think there's a lot of trepidation about what's going to happen in the technological world, and SS&C is well-positioned to help our prospects and our clients get through this in a really pretty good fashion. We spend lots of money on this. We have all kinds of different tools and techniques that are very valuable to our clients, and we get lots of inquiries from them to help them.

Q: When we think about Intralinks and we look at everything that went right last year in terms of the introduction of the new platform, how are we thinking about the performance of Intralinks in the current environment? How much of a headwind do you think it's going to be, or how should we characterize what the current growth rate looks like and how it might evolve over the coming quarters?

A: Appropriately conservative is kind of the way I would describe us looking at it. And so we think Intralinks right now probably grows mid-single digits. And that's in effect what's implied in our forecast. We do have a number of things that we have rolled out in terms of new platforms and some AI-enabled technologies that allow us to grow despite the turmoil in the markets. And then if we start to see things turn around in the second half of the year, that ought to be really pretty positive for that business.

Q: On the demand environment. Totally understand the setup for the second quarter in terms of comments on conservatism and the mission-critical nature of what you guys do. But, you know, I'm just curious if you give us a sense of whether conversations and sales cycles have changed meaningfully in March and April. Obviously, it wouldn't be surprising, a huge amount of distraction out there. But I'm just curious, just put a finer point in terms of your conversation with clients and decision-making?

A: I mean, we still see a pretty good demand environment. We were with a prospect this afternoon, and they're anxious to deploy new technology to get better processes to close their books faster, to get information in their hands to help them run their business. I think that's the key to our business. It is being aware and then moving quickly to give our prospects and our clients information that they've wanted for a long time, and they don't get it in a month. They get it in a day. And I think it's that focus on process that slices it and dices it and delivers it. And I think that's something that we do with a lot of accuracy, and that gives our clients a lot of confidence.

Q: First, we want to double down about the strength in GlobeOp. You called out the strength in private markets of retail alternatives. How are you thinking about the forward organic growth of those markets in particular? Do you expect them to maintain their strength or taper off somewhat? And if you could remind us what is driving that strength, that'd be great. Thank you.

A: Well, I think when you look at why our private credit and other private markets, I think it's because they can structure things in ways that allow them to get additional yield on those assets. And some of the brightest people in the business are saying they can structure things in the private markets where they can get a couple hundred more basis points than they can get in the public markets. A couple hundred basis points on the kinds of billions that our clients manage is worth a ton of money. And I think that's the biggest thing. And then I also think in their structuring, what they are able to do is really identify where the risk points are and then structure these investments to be able to minimize those risk points.

Q: Hey guys, thank you for taking the question. I wanted to go back to this conversation on the demand environment. Totally understand the setup for the second quarter in terms of comments on conservatism and the mission-critical nature of what you guys do. But, you know, I'm just curious if you give us a sense of whether conversations and sales cycles have changed meaningfully in March and April. Obviously, it wouldn't be surprising, a huge amount of distraction out there. But I'm just curious, just put a finer point in terms of your conversation with clients and decision-making. Thanks so much.

A: I mean, we still see a pretty good demand environment. We were with a prospect this afternoon, and they're anxious to deploy new technology to get better processes to close their books faster, to get information in their hands to help them run their business. I think that's the key to our business. It is being aware and then moving quickly to give our prospects and our clients information that they've wanted for a long time, and they don't get it in a month. They get it in a day. And I think it's that focus on process that slices it and dices it and delivers it. And I think that's something that we do with a lot of accuracy, and that gives our clients a lot of confidence.

Q: First, we want to double down about the strength in GlobeOp. You called out the strength in private markets of retail alternatives. How are you thinking about the forward organic growth of those markets in particular? Do you expect them to maintain their strength or taper off somewhat? And if you could remind us what is driving that strength, that'd be great. Thank you.

A: Well, I think when you look at why our private credit and other private markets, I think it's because they can structure things in ways that allow them to get additional yield on those assets. And some of the brightest people in the business are saying they can structure things in the private markets where they can get a couple hundred more basis points than they can get in the public markets. A couple hundred basis points on the kinds of billions that our clients manage is worth a ton of money. And I think that's the biggest thing. And then I also think in their structuring, what they are able to do is really identify where the risk points are and then structure these investments to be able to minimize those risk points.

Q: Hey guys, thank you for taking the question. I wanted to go back to this conversation on the demand environment. Totally understand the setup for the second quarter in terms of comments on conservatism and the mission-critical nature of what you guys do. But, you know, I'm just curious if you give us a sense of whether conversations and sales cycles have changed meaningfully in March and April. Obviously, it wouldn't be surprising, a huge amount of distraction out there. But I'm just curious, just put a finer point in terms of your conversation with clients and decision-making. Thanks so much.

A: I mean, we still see a pretty good demand environment. We were with a prospect this afternoon, and they're anxious to deploy new technology to get better processes to close their books faster, to get information in their hands to help them run their business. I think that's the key to our business. It is being aware and then moving quickly to give our prospects and our clients information that they've wanted for a long time, and they don't get it in a month. They get it in a day. And I think it's that focus on process that slices it and dices it and delivers it. And I think that's something that we do with a lot of accuracy, and that gives our clients a lot of confidence.

Q: Batea seems to be trending well below the revenue that it had in 2023 when you guys acquired it. Is that just a function of the lumpiness of the just the nature of the business, or is there something else going on?

A: No. I think that's it. We're obviously taking some time to make sure we understand properly from an accounting standpoint what the flows are, and in some ways, I think there's some degree of being conservative reflected in that too. But as we get more comfortable, we do expect that some of those accounting rules will get relaxed a little. But on the underlying strength of that business, our ability to cross-sell that to our customers and how the Salesforce feels like they're being really well supported has us pretty optimistic.

Q: What is the FX impact on revenue that's embedded into the full-year guidance at this point?

A: Well, it's essentially the net difference. One of the metrics that you would just look at the overall financials. And I think we put this in, I think it's either in the K or the Q, but about 21% of the revenues are non-US dollar. So, obviously, any impact to that will have the corresponding adjustment. Right? So if it's up by 1%, it has a roughly 20 basis point impact change on the overall growth rate. And so we try to be conservative and look at where current rates are today.