Financial software provider SS&C Technologies (NASDAQ: SSNC) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 5.4% year on year to $1.51 billion. The company expects next quarter’s revenue to be around $1.51 billion, close to analysts’ estimates. Its non-GAAP profit of $1.44 per share was 2.2% above analysts’ consensus estimates.
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SS&C (SSNC) Q1 CY2025 Highlights:
- Revenue: $1.51 billion vs analyst estimates of $1.5 billion (5.4% year-on-year growth, 0.8% beat)
- Adjusted EPS: $1.44 vs analyst estimates of $1.41 (2.2% beat)
- Adjusted EBITDA: $592.9 million vs analyst estimates of $597.6 million (39.2% margin, 0.8% miss)
- The company slightly lifted its revenue guidance for the full year to $6.18 billion at the midpoint from $6.17 billion
- Management slightly raised its full-year Adjusted EPS guidance to $5.84 at the midpoint
- Operating Margin: 23.6%, in line with the same quarter last year
- Free Cash Flow Margin: 14%, up from 8.7% in the same quarter last year
- Billings: $1.53 billion at quarter end, up 4.7% year on year
- Market Capitalization: $19.14 billion
StockStory’s Take
SS&C’s first quarter results were driven by continued momentum in its GlobeOp and wealth and investment technology segments, with management attributing growth to strong performance in private markets and retail alternatives, as well as new client wins in Australia and the Middle East. CEO Bill Stone highlighted the company’s ability to outpace competitors in both functional breadth and operational scale, specifically referencing GlobeOp’s double-digit organic growth and deepening penetration in global markets.
Looking ahead, management slightly raised full-year revenue and non-GAAP earnings guidance, citing expectations for a ramp-up in the second half of the year from deals already won and continued expansion in international markets. CFO Brian Schell noted that the outlook incorporates current foreign exchange rates and continued expense discipline, while Stone acknowledged that the company’s approach remains conservative given ongoing macroeconomic and geopolitical uncertainty. Management also emphasized the strategic role of AI-driven automation and recent product launches in supporting long-term growth.
Key Insights from Management’s Remarks
Management cited GlobeOp’s strong performance and international business wins as primary drivers for the quarter, while also pointing to ongoing investment in AI and automation as foundational to SS&C’s strategy.
- GlobeOp and Private Markets: The GlobeOp segment posted over 10% organic growth, with management attributing this to increased demand for alternative assets and large international client wins, particularly in the Middle East and Australia.
- AI-Driven Automation Adoption: SS&C launched a governance-first AI platform through Blue Prism, introducing a trust layer for regulated customers and deploying 20 new AI agents for complex content processing. Management believes these solutions will reinforce SS&C’s position as a preferred technology partner for enterprise clients.
- International Expansion: The company expanded its presence in Australia with a strategic agreement with Insignia Financial and opened a new office in Riyadh, Saudi Arabia. Management highlighted early wins and strong engagement across these regions.
- Healthcare and Cross-Selling: The health segment finished the quarter flat, but management remains optimistic given a growing pipeline and the rollout of Del MonteRx, expecting significant claims volume in 2025.
- Expense Management and Margin Stability: Management noted that operational efficiencies, particularly via Blue Prism’s AI tools, contributed to maintaining adjusted EBITDA margins despite ongoing investment. The company’s free cash flow margin also improved year over year, underlining effective cost control.
Drivers of Future Performance
Management’s outlook for 2025 centers on continued international expansion, execution of existing deal pipelines, and increased client adoption of AI-enabled automation, while remaining attentive to macroeconomic risks.
- Deal Ramp and Implementation: Signed deals, including Insignia Financial, are expected to contribute more meaningfully in the second half of the year, supporting organic revenue growth and providing greater visibility for the full year.
- AI and Automation Rollout: Ongoing deployment of Blue Prism’s AI agents and trust layers is anticipated to enhance client retention and operational efficiency, which management believes will support both revenue growth and margin stability.
- Geopolitical and Macroeconomic Risks: Management cited potential slowdowns in client decision-making due to global uncertainty, emphasizing a conservative approach in its guidance and pipeline assumptions for the upcoming quarters.
Top Analyst Questions
- Jeff Schmitt (William Blair): Asked if flat healthcare results were due to seasonality and about the pipeline outlook; management cited large prospects and optimism for growth with Del MonteRx’s claims processing ramping up.
- Peter Heckmann (D.A. Davidson): Inquired about Insignia Financial’s expected revenue contribution and margin impact; management said most ramp will occur in the second half, with a modest revenue range and limited near-term EBITDA impact.
- Dan Perlin (RBC Capital Markets): Sought clarity on macro-driven deal pauses; management acknowledged taking a conservative stance in forecasts due to global uncertainty but noted the overall demand environment remains healthy.
- Surinder Thind (Jefferies): Questioned growth prospects for Intralinks and Blue Prism; management expects mid-single-digit growth for Intralinks and sees Blue Prism’s AI enhancements as key to expanding enterprise use cases.
- Andrew Schmidt (Citi): Asked about sales cycle length and confidence in second-half growth; management said visibility is good for large deals already won but acknowledged some required execution and implementation risk.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be tracking (1) the revenue ramp from newly signed international deals, especially the Insignia Financial lift-out and mandates in Australia and the Middle East, (2) the adoption rate and commercial impact of Blue Prism’s new AI platform and agents, and (3) further margin improvements from operational efficiency initiatives. Progress in healthcare claims processing and the success of cross-selling recently integrated platforms will also be important to monitor.
SS&C currently trades at a forward P/E ratio of 12.9×. In the wake of earnings, is it a buy or sell? Find out in our free research report.
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