SS&C Technologies (SSNC) posts higher Q1 2026 revenue and EPS with strong cash flow
Rhea-AI Filing Summary
SS&C Technologies Holdings delivered higher revenue and earnings for the quarter ended March 31, 2026. Total revenue rose to $1,647.1 million from $1,513.9 million, an 8.8% increase, driven mainly by technology-enabled services and recent acquisitions, with additional help from foreign currency.
Technology-enabled services revenue grew to $1,407.3 million, up 10.8% year over year, while license, maintenance and related revenue slipped slightly to $239.8 million. Operating income increased to $398.2 million from $357.9 million, and net income attributable to common stockholders improved to $226.1 million from $213.0 million. Diluted EPS rose to $0.91 from $0.84.
Operating cash flow was strong at $299.7 million, up from $272.2 million, while total debt remained high at about $7.43 billion, with a consolidated net secured leverage ratio of 1.69x. The company returned capital through $65.3 million of dividends and repurchased 2.3 million shares for roughly $168.5 million, even as total cash, cash equivalents and restricted cash declined, largely reflecting lower client funds obligations and financing outflows.
Positive
- None.
Negative
- None.
Key Figures
Key Terms
technology-enabled services financial
Consolidated EBITDA financial
variable interest entity financial
senior secured credit facilities financial
stock-based compensation expense financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
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(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Securities registered pursuant to Section 12(b) of the Act:
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SS&C TECHNOLOGIES HOLDINGS, INC.
INDEX
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PART I. FINANCIAL INFORMATION |
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Item 1. Financial Statements (unaudited) |
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Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025 |
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Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025 |
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Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 |
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Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025 |
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Notes to Condensed Consolidated Financial Statements |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. Controls and Procedures |
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PART II. OTHER INFORMATION |
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Item 1. Legal Proceedings |
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Item 1A. Risk Factors |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 6. Exhibits |
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EXHIBIT INDEX |
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SIGNATURE |
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SS&C Technologies Holdings, Inc., or “SS&C Holdings,” is our top-level holding company. SS&C Technologies, Inc., or “SS&C,” is our primary operating company and a wholly-owned subsidiary of SS&C Technologies Holdings, Inc. “We,” “us,” “our” and the “Company” mean SS&C Technologies Holdings, Inc. and its consolidated subsidiaries, including SS&C.
This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “expects”, “estimates”, “projects”, “forecasts”, “may”, “assume”, “intend”, “will”, “continue”, “opportunity”, “predict”, “potential”, “future”, “guarantee”, “likely”, “target”, “indicate”, “would”, “could” and “should” and similar expressions are intended to identify forward-looking statements. The important factors discussed under the caption “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission on February 26, 2026, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. We do not undertake an obligation to update our forward-looking statements to reflect future events or circumstances.
2
PART I
Item 1. Financial Statements
SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data) (Unaudited)
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March 31, |
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December 31, |
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2026 |
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2025 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Funds receivable and funds held on behalf of clients |
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Accounts receivable, net of allowance for credit losses of $ |
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Contract assets |
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Prepaid expenses and other current assets |
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Restricted cash and cash equivalents |
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Total current assets |
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Property, plant and equipment, net (Note 2) |
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Operating lease right-of-use assets |
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Investments (Note 3) |
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Unconsolidated affiliates (Note 4) |
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Contract assets |
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Goodwill (Note 5) |
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Intangible and other assets, net of accumulated amortization of $ |
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Total assets |
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$ |
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$ |
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Liabilities and Equity |
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Current liabilities: |
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Current portion of long-term debt (Note 6) |
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$ |
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$ |
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Client funds obligations |
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Accounts payable |
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Income taxes payable |
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Accrued employee compensation and benefits |
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Interest payable |
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Other accrued expenses |
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Deferred revenues |
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Total current liabilities |
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Long-term debt, net of current portion (Note 6) |
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Operating lease liabilities |
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Other long-term liabilities |
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Deferred income taxes |
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Total liabilities |
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Stockholders’ equity (Note 7): |
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Preferred stock, $ |
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Class A non-voting common stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Retained earnings |
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Cost of common stock in treasury, |
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Total SS&C stockholders’ equity |
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Noncontrolling interest (Note 8) |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions, except per share data) (Unaudited)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Revenues: |
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Technology-enabled services |
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$ |
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$ |
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License, maintenance and related |
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Total revenues |
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Cost of revenues: |
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Technology-enabled services |
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License, maintenance and related |
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Total cost of revenues |
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Gross profit |
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Operating expenses: |
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Selling and marketing |
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Research and development |
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General and administrative |
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Total operating expenses |
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Operating income |
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Interest expense, net |
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Other income, net |
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Equity in earnings of unconsolidated affiliates, net |
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Loss on extinguishment of debt |
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Income before income taxes |
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Provision for income taxes |
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Net income |
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Net income attributable to noncontrolling interest |
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Net income attributable to SS&C common stockholders |
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$ |
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$ |
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Basic earnings per share attributable to SS&C common stockholders |
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$ |
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$ |
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Diluted earnings per share attributable to SS&C common stockholders |
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$ |
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$ |
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Basic weighted-average number of common shares outstanding |
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Diluted weighted-average number of common and common equivalent shares outstanding |
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Net income |
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$ |
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$ |
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Other comprehensive (loss) income, net of tax: |
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Foreign currency exchange translation adjustment |
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Change in defined benefit pension obligation |
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Total other comprehensive (loss) income, net of tax |
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Comprehensive income |
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Comprehensive income attributable to noncontrolling interest |
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( |
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Comprehensive income attributable to SS&C common stockholders |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)
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Three Months Ended March 31, |
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2026 |
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2025 |
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Cash flow from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Equity in earnings of unconsolidated affiliates, net |
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Distributions received from unconsolidated affiliates |
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Stock-based compensation expense |
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Unrealized net losses on investments |
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Amortization of debt financing costs |
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Loss on extinguishment of debt |
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Deferred income taxes |
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Provision for credit losses |
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Changes in operating assets and liabilities, excluding effects from acquisitions: |
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Accounts receivable |
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Prepaid expenses and other assets |
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Contract assets |
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Accounts payable |
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Accrued expenses and other liabilities |
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Income taxes prepaid and payable |
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Deferred revenue |
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Net cash provided by operating activities |
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Cash flow from investing activities: |
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Business acquisitions, net of cash acquired |
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Additions to property and equipment |
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( |
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Additions to capitalized software |
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Investments in securities |
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Proceeds from sales / maturities of investments |
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Collection of other non-current receivables |
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Net cash used in investing activities |
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Cash flow from financing activities: |
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Cash received from debt borrowings |
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Repayments of debt |
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Net (decrease) increase in client funds obligations |
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Proceeds from exercise of stock options |
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Withholding taxes paid related to equity award net share settlement |
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Purchases of common stock for treasury |
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Dividends paid on common stock |
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Net cash (used in) provided by financing activities |
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Effect of exchange rate changes on cash, cash equivalents and restricted cash |
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Net (decrease) increase in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash and cash equivalents, beginning of period |
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Cash, cash equivalents and restricted cash and cash equivalents, end of period |
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$ |
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$ |
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Reconciliation of cash, cash equivalents and restricted cash and cash equivalents: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash and cash equivalents |
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Restricted cash and cash equivalents included in funds receivable and funds held on behalf of clients |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
5
SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In millions) (Unaudited)
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Three Months Ended March 31, 2026 |
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SS&C Stockholders |
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Common Stock |
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Number |
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Accumulated |
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of |
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Additional |
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Other |
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Total |
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Issued |
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Paid-in |
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Retained |
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Comprehensive |
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Treasury |
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Noncontrolling |
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Stockholders’ |
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Shares |
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Amount |
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Capital |
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Earnings |
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(Loss) Income |
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Stock |
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Interest |
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Equity |
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Balance, at December 31, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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Foreign exchange translation adjustment |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Change in defined benefit plan obligation |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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Exercise of options, net of withholding taxes |
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( |
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— |
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— |
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— |
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— |
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Dividends declared - $ |
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— |
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— |
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— |
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— |
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— |
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Purchases of common stock |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, at March 31, 2026 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Three Months Ended March 31, 2025 |
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SS&C Stockholders |
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|
|
|
|||||||||||||||||||||||
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Number |
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
of |
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
Total |
|
||||||||
|
|
Issued |
|
|
|
|
|
Paid-in |
|
|
Retained |
|
|
Comprehensive |
|
|
Treasury |
|
|
Noncontrolling |
|
|
Stockholders’ |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
(Loss) Income |
|
|
Stock |
|
|
Interest |
|
|
Equity |
|
||||||||
Balance, at December 31, 2024 |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
||||
Foreign exchange translation adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
||||
Exercise of options, net of withholding taxes |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||||
Dividends declared - $ |
|
|
— |
|
|
|
— |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Purchases of common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance, at March 31, 2025 |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1—Basis of Presentation and Principles of Consolidation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These accounting principles were applied on a basis consistent with those of the audited Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026 (the “2025 Form 10-K”). In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (consisting of only normal recurring adjustments, except as noted elsewhere in the notes to the Condensed Consolidated Financial Statements) necessary for a fair statement of our financial position as of March 31, 2026, the results of our operations for the three months ended March 31, 2026 and 2025, and our cash flows for the three months ended March 31, 2026 and 2025. These statements do not include all of the information and footnotes required by GAAP for annual financial statements. The unaudited Condensed Consolidated Financial Statements contained herein should be read in conjunction with the audited Consolidated Financial Statements and footnotes as of and for the year ended December 31, 2025, which were included in the 2025 Form 10-K. The December 31, 2025 Consolidated Balance Sheet data were derived from audited financial statements but do not include all disclosures required by GAAP for annual financial statements. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the expected results for any subsequent quarters or the full year. Within the condensed consolidated financial statements, the line items named technology-enabled services were previously named software-enabled services.
The accompanying unaudited condensed consolidated financial statements include the accounts of SS&C Technologies Holdings, Inc. and its subsidiaries, including a variable interest entity (“VIE”) for which we are the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.
We operate in one operating segment and one reportable segment. Our Chief Operating Decision Maker (“CODM”) is our president and chief operating officer, who reviews financial information presented on a consolidated basis. Our CODM uses consolidated net income as the sole measure of segment profit or loss and to decide how to make resource allocation decisions. Significant segment expenses include cost of technology-enabled services revenues, cost of license, maintenance and related revenues, selling and marketing, research and development, and general and administrative expenses. For these significant and other segment expenses incurred during the three months ended March 31, 2026 refer to our Condensed Consolidated Statements of Comprehensive Income.
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This standard provides all entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. We have adopted ASU 2025-05 and the adoption of this standard did not have a material impact on our financial position, results of operations or cash flows.
Recent Accounting Pronouncements Not Yet Effective
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, on a prospective basis with early adoption permitted. We are currently evaluating the potential impact the standard will have on our disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting guidance for internal-use software costs. The standard removes all references to software development project stages and instead requires capitalization when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of adopting ASU 2025-06.
7
Note 2—Property, Plant and Equipment, net
Property, plant and equipment and the related accumulated depreciation are as follows (in millions):
|
|
March 31, |
|
|
December 31, |
|
|
||
|
|
2026 |
|
|
2025 |
|
|
||
Land |
|
$ |
|
|
$ |
|
|
||
Building and improvements |
|
|
|
|
|
|
|
||
Equipment, furniture, and fixtures |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
|
Total property, plant and equipment, net |
|
$ |
|
|
$ |
|
|
||
Depreciation expense for the three months ended March 31, 2026 and 2025 was $
Amortization expense related to capitalized software development costs for the three months ended March 31, 2026 and 2025 was $
As of March 31, 2026 and December 31, 2025, unpaid property, plant and equipment additions totaling $
Note 3—Investments
Investments are as follows (in millions):
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Non-marketable equity securities |
|
$ |
|
|
$ |
|
||
Seed capital investments |
|
|
|
|
|
|
||
Marketable equity securities |
|
|
|
|
|
|
||
Partnership interests in private equity funds |
|
|
|
|
|
|
||
Total investments |
|
$ |
|
|
$ |
|
||
Realized and unrealized gains and losses for our equity securities are as follows (in millions):
|
|
Three Months Ended March 31, |
|
|
|||||
|
|
2026 |
|
|
2025 |
|
|
||
Unrealized losses on equity securities held as of the end of the period |
|
$ |
( |
) |
|
$ |
( |
) |
|
Realized gains for equity securities sold during the period |
|
|
|
|
|
|
|
||
Total losses recognized in other income, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
Fair Value Measurement
Authoritative accounting guidance on fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
As of March 31, 2026 and December 31, 2025, we held certain investment assets and certain liabilities that are required to be measured at fair value on a recurring basis. These investments include money market funds and marketable equity securities where fair value is determined using quoted prices in active markets. Accordingly, the fair value measurements of these investments have been classified as Level 1 in the tables below. Investments for which we elected net asset value as a practical expedient for fair value and investments measured using the fair value measurement alternative are excluded from the tables below. Fair value for deferred compensation liabilities that are credited with deemed gains or losses of the underlying hypothetical investments, primarily equity securities, have been classified as Level 1 in the tables below. The fair values of cash, accounts receivable, net, short-term borrowings, and accounts payable approximate the carrying amounts due to the short-term maturities of these instruments.
8
The following tables present assets and liabilities measured at fair value on a recurring basis (in millions):
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
||||||||||
|
|
March 31, 2026 |
|
|
Quoted prices in Active Markets for Identical Assets (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
||||
Money market funds (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Seed capital investments (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable equity securities (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred compensation liabilities (3) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
||||||||||
|
|
December 31, 2025 |
|
|
Quoted prices in Active Markets for Identical Assets (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
||||
Money market funds (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Seed capital investments (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable equity securities (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Deferred compensation liabilities (3) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
We have partnership interests in various private equity funds that are not included in the tables above. Our investments in private equity funds were $
Generally, our investments in private equity funds are non-transferable or are subject to long holding periods, and withdrawals from the private equity firm partnerships are typically not permitted. The maximum risk of loss related to our private equity fund investments is limited to the carrying value of its investments in the entities.
9
Note 4—Unconsolidated Affiliates
Investments in unconsolidated affiliates are as follows (in millions):
|
|
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Ownership Percentage (1) |
|
Carrying Value |
|
|
Excess carrying value of investment over proportionate share of net assets |
|
|
Carrying Value |
|
|
Excess carrying value of investment over proportionate share of net assets |
|
||||
Orbit Private Investments L.P. |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Broadway Square Partners, LLP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
International Financial Data Services L.P. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Pershing Road Development Company, LLC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other unconsolidated affiliates |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Investments in unconsolidated affiliates are accounted for under the equity method of accounting. We record our proportionate share of the results of the unconsolidated affiliates and amortization expense related to basis differences in equity in earnings of unconsolidated affiliates, net on the unaudited Condensed Consolidated Statements of Comprehensive Income. During the three months ended March 31, 2026, we received a distribution of $
Equity in earnings of unconsolidated affiliates, net are as follows (in millions):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Orbit Private Investments L.P. |
|
$ |
|
|
$ |
|
||
Broadway Square Partners, LLP |
|
|
( |
) |
|
|
( |
) |
International Financial Data Services L.P. |
|
|
( |
) |
|
|
|
|
Pershing Road Development Company, LLC |
|
|
|
|
|
|
||
Other unconsolidated affiliates |
|
|
( |
) |
|
|
|
|
Total |
|
$ |
|
|
$ |
|
||
Note 5—Goodwill
The change in carrying value of goodwill as of and for the three months ended March 31, 2026 is as follows (in millions):
Balance at December 31, 2025 |
|
$ |
|
|
Adjustments to prior acquisitions |
|
|
( |
) |
Effect of foreign currency translation |
|
|
( |
) |
Balance at March 31, 2026 |
|
$ |
|
10
Note 6—Debt
At March 31, 2026 and December 31, 2025, debt consisted of the following (in millions):
|
|
March 31, |
|
|
December 31, |
|
|
||
|
|
2026 |
|
|
2025 |
|
|
||
Senior secured credit facilities, weighted-average interest rate of |
|
$ |
|
|
$ |
|
|
||
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|||
Senior secured credit facilities revolving portion, weighted-average interest rate of |
|
|
|
|
|
|
|
||
Unamortized original issue discount and debt issuance costs |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||
Less: current portion of long-term debt |
|
|
|
|
|
|
|
||
Long-term debt |
|
$ |
|
|
$ |
|
|
||
The table below provides a summary of the key terms of our Senior Secured Credit Facilities and Senior Notes:
|
|
Amount Outstanding |
|
|
Maturity |
|
Scheduled Quarterly |
|
|
|
(in millions) |
|
|
Date |
|
Payments Required |
|
Senior Secured Credit Facilities |
|
|
|
|
|
|
|
|
Term B-8 Loans |
|
$ |
|
|
|
( |
||
Term A-9 Loans |
|
|
|
|
|
|||
Revolving Credit Facility (4) |
|
|
|
|
|
|||
|
|
|
|
|
||||
|
|
|
|
|
||||
As of March 31, 2026, we were in compliance with all financial and non-financial covenants.
Fair Value of Debt
The carrying amounts and fair values of debt are as follows (in millions):
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||
|
|
Carrying |
|
|
Fair |
|
|
Carrying |
|
|
Fair |
|
||||
|
|
Amount |
|
|
Value |
|
|
Amount |
|
|
Value |
|
||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Senior secured credit facilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Senior secured credit facilities, revolving portion |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The above fair values, which are Level 2 liabilities, were computed based on comparable quoted market prices.
11
Note 7—Stockholders’ Equity
Stock repurchase program
In July 2024, our Board of Directors authorized a stock repurchase program, which enabled us to repurchase up to $
Dividends
We paid quarterly cash dividends of $
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss balances, net of tax, consist of the following (in millions):
|
|
Foreign Currency Translation |
|
|
Defined Benefit Obligation |
|
|
Accumulated Other Comprehensive Loss |
|
|||
Balance, December 31, 2025 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net current period other comprehensive (loss) income (1) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance, March 31, 2026 |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
(1)
Note 8—Variable Interest Entity
In July 2021, we entered into an agreement whereby we obtained an
The carrying value of the assets and liabilities associated with DomaniRx included in our unaudited condensed consolidated balance sheet at March 31, 2026 and December 31, 2025, which are limited for use in its operations and do not have recourse against our general credit or our senior secured credit facilities, are as follows:
|
|
March 31, |
|
December 31, |
|
||
|
|
2026 |
|
2025 |
|
||
Assets: |
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
$ |
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
||
Intangible assets |
|
|
|
|
|
||
Other assets |
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
||
Note 9—Revenues
We generate revenues primarily through our technology-enabled services. Our technology-enabled services are generally provided under contracts with initial terms of to
12
Deferred revenues primarily represent unrecognized fees billed or collected for maintenance and professional services. Deferred revenues are recognized as (or when) we perform under the contract. Long-term deferred revenue of $
As of March 31, 2026, revenue of approximately $
We record revenue net of any taxes assessed by governmental authorities.
Revenue Disaggregation
The following table disaggregates our revenues by geography (in millions):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Americas |
|
$ |
|
|
$ |
|
||
Europe, Middle East and Africa |
|
|
|
|
|
|
||
Asia-Pacific |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Revenue recognized from customers in the United States was $
The following table disaggregates our revenues by source (in millions):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Technology-enabled services |
|
$ |
|
|
$ |
|
||
Maintenance and term licenses |
|
|
|
|
|
|
||
Professional services |
|
|
|
|
|
|
||
Perpetual licenses |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Note 10—Stock-based Compensation
Stock options, PSUs and RSUs
The amount of stock-based compensation expense recognized in our unaudited Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2026 and 2025 was as follows (in millions):
|
|
Three Months Ended March 31, |
|
|||||
Condensed Consolidated Statements of Comprehensive Income Classification |
|
2026 |
|
|
2025 |
|
||
Cost of technology-enabled services |
|
$ |
|
|
$ |
|
||
Cost of license, maintenance and other related |
|
|
|
|
|
|
||
Total cost of revenues |
|
|
|
|
|
|
||
Selling and marketing |
|
|
|
|
|
|
||
Research and development |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
|
||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
||
13
The following table summarizes stock options, performance stock units (“PSUs”) and restricted stock units (“RSUs”) activity, for the three months ended March 31, 2026 (shares in millions):
|
|
Stock Options |
|
|
PSUs and RSUs |
|
|
||
Outstanding at December 31, 2025 |
|
|
|
|
|
|
|
||
Granted |
|
|
|
|
|
|
|
||
Cancelled/forfeited |
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
n/a |
|
|
|
Vested |
|
n/a |
|
|
|
( |
) |
|
|
Outstanding at March 31, 2026 |
|
|
|
|
|
|
|
||
Note 11—Income Taxes
The effective tax rate was
On July 4, 2025, the One Big Beautiful Bill Act was enacted in the United States. Certain provisions of the legislation became effective in 2025 while others became effective in 2026. The legislation did not have a material impact on our provision for income taxes in the year ended December 31, 2025 or the three months ended March 31, 2026.
In 2021, the OECD (“Organisation for Economic Co-operation and Development”)/G20 Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two. Further guidance continues to be released each year. Many non-U.S. tax jurisdictions in which we operate have either recently enacted legislation or are in the process of enacting legislation to adopt certain components of the Pillar Two Model Rules. The enactments effective in 2025 and 2026 were not material to our provision for income taxes.
Note 12—Earnings per Share
The following table sets forth the computation of basic and diluted EPS (in millions, except per share amounts):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income attributable to SS&C common stockholders |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Shares attributable to SS&C: |
|
|
|
|
|
|
||
Weighted-average common shares outstanding – used in calculation of basic EPS |
|
|
|
|
|
|
||
Weighted-average common stock equivalents – stock options and restricted shares |
|
|
|
|
|
|
||
Weighted-average common and common equivalent shares outstanding – used in calculation of diluted EPS |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Earnings per share attributable to SS&C common stockholders – Basic |
|
$ |
|
|
$ |
|
||
Earnings per share attributable to SS&C common stockholders – Diluted |
|
$ |
|
|
$ |
|
||
Weighted-average stock options, RSUs and PSUs representing
Note 13—Commitments and Contingencies
From time to time, we are subject to legal proceedings and claims. In our opinion, we are not involved in any litigation or proceedings that would have a material adverse effect on us or our business.
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, is intended to provide readers of our Condensed Consolidated Financial Statements with the perspectives of management. It presents, in narrative form, information regarding our financial condition, results of operations, liquidity and certain other factors that may affect our future results. It should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026 (the “2025 Form 10-K”) and the Condensed Consolidated Financial Statements included in this Form 10-Q. Within the condensed consolidated financial statements, the line items named technology-enabled services were previously named software-enabled services.
We use the term organic to refer to the businesses and operations that are included in the comparable prior year period on a constant currency basis. Organic includes the change in an acquired business, but excludes the impact of any business which we acquired for the time period which would impact the comparable prior year period.
Ongoing macroeconomic conditions, such as changes in interest rates and inflation, volatility in capital markets, global trade issues, geopolitical tensions, foreign currency exchange rate fluctuations, and other similar factors, could have impacts on our results that are uncertain and, in many respects, outside our control. The situations remain dynamic and subject to rapid and possibly material change, which ultimately could result in material negative effects on our business and results of operations. We will continue to evaluate the nature and extent of the potential impacts to our business, consolidated results of operations, liquidity and capital resources.
Critical Accounting Estimates
A number of our accounting policies require the application of significant judgment by our management, and such judgments are reflected in the amounts reported in our Condensed Consolidated Financial Statements. In applying these policies, our management uses its judgment to determine the appropriate assumptions to be used in the determination of estimates. Those estimates are based on our historical experience, terms of existing contracts, management’s observation of trends in the industry, information provided by our clients and information available from other outside sources, as appropriate. Actual results may differ significantly from the estimates contained in our Condensed Consolidated Financial Statements. There have been no material changes to our critical accounting estimates and assumptions or the judgments affecting the application of those estimates and assumptions since the filing of our 2025 Form 10-K. Our critical accounting policies are described in the 2025 Form 10-K and include:
Results of Operations
Our results of operations below include the results of our recent acquisitions from the date of acquisition. FPS Trust Company was acquired in February 2025, Calastone Limited in October 2025 and Curo Fund Services in November 2025.
15
Revenues
We derive our revenues from two sources: technology-enabled services revenues and license, maintenance and related revenues. As a general matter, fluctuations in our technology-enabled services revenues are attributable to our customer retention, the number of new technology-enabled services clients as well as total assets under management in our clients’ portfolios and the number of outsourced transactions managed for our existing clients. Technology-enabled services revenues also fluctuate as a result of reimbursements received for “out-of-pocket” expenses, such as postage and telecommunications charges, which are recorded as revenues on an accrual basis. Because these additional revenues are offset by the reimbursable expenses incurred, there is no impact on gross profit, operating income and net income, however the reimbursements billed and expenses incurred can lead to fluctuations in revenues, cost of revenues and gross margin percentage each period. License, maintenance and related revenues consist primarily of term and perpetual license fees, maintenance fees and professional services. Maintenance revenues vary based on customer retention and on the annual increases in fees, which are generally tied to the consumer price index. License and professional services revenues tend to fluctuate based on the number of new licensing clients, the timing and terms of contract renewals and demand for consulting services.
The following table provides the percentage of total revenue derived by the two sources of revenue:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Technology-enabled services |
|
|
85.4 |
% |
|
|
83.9 |
% |
License, maintenance and related |
|
|
14.6 |
% |
|
|
16.1 |
% |
Total revenues |
|
|
100.0 |
% |
|
|
100.0 |
% |
The following table sets forth revenues (dollars in millions) and percent change in revenues for the periods indicated:
|
|
Three Months Ended March 31, |
|
|
Percent |
|
||||||
|
|
2026 |
|
|
2025 |
|
|
|
|
|||
Technology-enabled services |
|
$ |
1,407.3 |
|
|
$ |
1,269.9 |
|
|
|
10.8 |
% |
License, maintenance and related |
|
|
239.8 |
|
|
|
244.0 |
|
|
|
(1.7 |
)% |
Total revenues |
|
$ |
1,647.1 |
|
|
$ |
1,513.9 |
|
|
|
8.8 |
% |
Three Months Ended March 31, 2026 and 2025. Our revenues increased $133.2 million, or 8.8%, primarily due to an increase of $75.9 million in organic revenue growth driven by strength in the SS&C GlobeOp fund administration and Global Investor and Distribution Solutions businesses. Our revenues also increased due to acquisitions, which contributed $34.9 million, and the favorable impact from foreign currency translation of $22.4 million.
Technology-enabled services revenues increased $137.4 million, or 10.8%, primarily due to an increase in organic revenues of $86.2 million as well as acquisitions, which added $34.9 million in revenues, and the favorable impact from foreign currency translation of $16.3 million. License, maintenance and related revenues decreased $4.2 million, or 1.7%, due to a decrease in organic revenues of $10.3 million, partially offset by the favorable impact from foreign currency translation of $6.1 million.
Cost of Revenues
Cost of technology-enabled services revenues consists primarily of costs related to personnel who deliver our technology-enabled services and amortization of certain intangible assets. Cost of license, maintenance and other related revenues consists primarily of the costs related to personnel utilized in servicing our maintenance contracts and to provide implementation, conversion and training services to our software licensees, as well as system integration and custom programming consulting services and amortization of intangible assets.
The following tables set forth each of the following cost of revenues as a percentage of their respective revenue source for the periods indicated:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cost of technology-enabled services |
|
|
52.6 |
% |
|
|
52.5 |
% |
Cost of license, maintenance and related |
|
|
43.7 |
% |
|
|
40.8 |
% |
Total cost of revenues |
|
|
51.3 |
% |
|
|
50.7 |
% |
Gross margin percentage |
|
|
48.7 |
% |
|
|
49.3 |
% |
16
The following table sets forth cost of revenues (dollars in millions) and percent change in cost of revenues for the periods indicated:
|
|
Three Months Ended March 31, |
|
|
Percent |
|
||||||
|
|
2026 |
|
|
2025 |
|
|
|
|
|||
Cost of technology-enabled services |
|
$ |
740.5 |
|
|
$ |
667.3 |
|
|
|
11.0 |
% |
Cost of license, maintenance and related |
|
|
104.8 |
|
|
|
99.5 |
|
|
|
5.3 |
% |
Total cost of revenues |
|
$ |
845.3 |
|
|
$ |
766.8 |
|
|
|
10.2 |
% |
Three Months Ended March 31, 2026 and 2025. Our total cost of revenues increased by $78.5 million, or 10.2%, primarily due to an increase of $42.8 million in organic costs as well as acquisitions, which added $19.8 million in costs, and the unfavorable impact from foreign currency translation, which increased costs by $15.9 million. Our organic cost increase reflects continued investment in delivering client service.
Cost of technology-enabled services revenues increased $73.2 million, or 11.0%, due to an increase of $40.1 million in organic costs, acquisitions, which added $19.8 million in costs, and the unfavorable impact from foreign currency translation of $13.3 million. Cost of license, maintenance and related revenues increased $5.3 million, or 5.3%, due to an increase of $2.7 million in organic costs and the unfavorable impact from foreign currency translation of $2.6 million.
Operating Expenses
Selling and marketing expenses consist primarily of the personnel costs associated with the selling and marketing of our products, including, but not limited to, salaries, commissions and travel and entertainment. Selling and marketing expenses also include amortization of certain intangible assets, trade shows and marketing and promotional materials. Research and development expenses consist primarily of personnel costs attributable to the enhancement of existing products and the development of new software products. General and administrative expenses consist primarily of personnel costs related to management, accounting and finance, information management, human resources and administration and associated overhead costs, as well as fees for professional services.
The following table sets forth the percentage of our total revenues represented by each of the following operating expenses for the periods indicated:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Selling and marketing |
|
|
9.2 |
% |
|
|
10.1 |
% |
Research and development |
|
|
8.2 |
% |
|
|
8.5 |
% |
General and administrative |
|
|
7.1 |
% |
|
|
7.1 |
% |
Total operating expenses |
|
|
24.5 |
% |
|
|
25.7 |
% |
The following table sets forth operating expenses (dollars in millions) and percent change in operating expenses for the periods indicated:
|
|
Three Months Ended March 31, |
|
|
Percent |
|
||||||
|
|
2026 |
|
|
2025 |
|
|
|
|
|||
Selling and marketing |
|
$ |
151.7 |
|
|
$ |
152.3 |
|
|
|
(0.4 |
)% |
Research and development |
|
|
134.6 |
|
|
|
129.1 |
|
|
|
4.3 |
% |
General and administrative |
|
|
117.3 |
|
|
|
107.8 |
|
|
|
8.8 |
% |
Total operating expenses |
|
$ |
403.6 |
|
|
$ |
389.2 |
|
|
|
3.7 |
% |
Three Months Ended March 31, 2026 and 2025. Operating expenses increased $14.4 million, or 3.7%, due to acquisitions, which added $15.6 million in expenses and the unfavorable impact from foreign currency translation of $9.1 million. These increases were partially offset by a decrease of $10.3 million in organic operating expenses. Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily decreased due to lower personnel costs.
17
Comparison of the Three Months Ended March 31, 2026 and 2025 for Interest, Taxes and Other
Interest expense, net. Net interest expense totaled $105.4 million and $105.2 million for the three months ended March 31, 2026 and 2025, respectively. We had an average interest rate of 5.69% and 6.09% for the three months ended March 31, 2026 and 2025, respectively.
Other income, net. Other income, net was $6.8 million and $7.2 million for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026, other income, net consisted primarily of dividend income of $9.4 million, partially offset by foreign currency translation losses of $1.4 million. For the three months ended March 31, 2025, other income, net consisted primarily of dividend income of $11.2 million, partially offset by foreign currency translation losses of $2.2 million and investment losses due to mark-to-market adjustments of $1.8 million.
Equity in earnings of unconsolidated affiliates, net. Equity in earnings of unconsolidated affiliates, net totaled $3.9 million and $2.3 million for the three months ended March 31, 2026 and 2025, respectively.
Provision for income taxes. The following table sets forth the provision for income taxes (dollars in millions) and effective tax rates for the periods indicated:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Provision for income taxes |
|
$ |
76.8 |
|
|
$ |
48.1 |
|
Effective tax rate |
|
|
25.3 |
% |
|
|
18.4 |
% |
Our effective tax rate for the three months ended March 31, 2026 differs from the statutory rate of 21.0% primarily due to the composition of income before income taxes from foreign and domestic tax jurisdictions, foreign income that is being taxed in the U.S. offset by foreign tax credits that are being limited and the recognition of windfall tax benefits from stock awards. The change in the effective tax rate for the three months ended March 31, 2026 compared to the prior year was primarily related to a decrease in recognition of windfall tax benefits from stock awards in the current year and a proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions. While we have income from multiple foreign sources, the majority of our non-U.S. operations are in the United Kingdom and India. We anticipate the statutory tax rates in 2026 to be 25.0% in the United Kingdom and approximately 25.5% in India. A future change in the composition of income before income taxes from foreign and domestic tax jurisdictions could impact our periodic effective tax rate.
On July 4, 2025, the One Big Beautiful Bill Act was enacted in the United States. Certain provisions of the legislation became effective in 2025 while others became effective in 2026. The legislation did not have a material impact on our provision for income taxes in the year ended December 31, 2025 or the three months ended March 31, 2026.
In 2021, the OECD (“Organisation for Economic Co-operation and Development”)/G20 Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two. Further guidance continues to be released each year. Many non-U.S. tax jurisdictions in which we operate have either recently enacted legislation or are in the process of enacting legislation to adopt certain components of the Pillar Two Model Rules. The enactments effective in 2025 and 2026 were not material to our provision for income taxes.
Liquidity and Capital Resources
Our principal cash requirements are for delivering value to our clients, investing in research and development, pursuing new sales opportunities, making payments with respect to our indebtedness, acquiring complementary businesses or assets, repurchasing shares of our common stock and paying dividends on our common stock. We expect our cash on hand, cash flows from operations and cash available under our Credit Agreement to provide sufficient liquidity to fund our current obligations, projected working capital requirements and capital spending for at least the next twelve months.
We paid quarterly cash dividends of $0.27 per share of common stock in March 2026 totaling $65.3 million. We paid quarterly cash dividends of $0.25 per share of common stock in March 2025 totaling $61.6 million.
Client funds obligations include our transfer agency client balances invested overnight, claims administration funds due to our customers, as well as our contractual obligations to remit funds to satisfy client pharmacy claim obligations and are recorded on the unaudited Condensed Consolidated Balance Sheets when incurred, generally after a claim has been processed by us. Our contractual
18
obligations to remit funds to satisfy client obligations are primarily sourced by funds held on behalf of clients. We had $3,617.5 million of client funds obligations at March 31, 2026.
Cash flows from operating, investing and financing activities, as reflected in our Condensed Consolidated Statements of Cash Flows, are summarized in the following table (in millions):
|
|
Three Months Ended March 31, |
|
|
|
|
||||||
Net cash, cash equivalents and restricted cash and cash equivalents provided by (used in): |
|
2026 |
|
|
2025 |
|
|
Change From Prior Year |
|
|||
Operating activities |
|
$ |
299.7 |
|
|
$ |
272.2 |
|
|
$ |
27.5 |
|
Investing activities |
|
|
(65.5 |
) |
|
|
(63.3 |
) |
|
|
(2.2 |
) |
Financing activities |
|
|
(741.1 |
) |
|
|
935.3 |
|
|
|
(1,676.4 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
(6.4 |
) |
|
|
3.9 |
|
|
|
(10.3 |
) |
Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents |
|
$ |
(513.3 |
) |
|
$ |
1,148.1 |
|
|
$ |
(1,661.4 |
) |
Net cash provided by operating activities was $299.7 million for the three months ended March 31, 2026. Cash provided by operating activities primarily resulted from net income of $226.3 million adjusted for non-cash items of $257.7 million, partially offset by changes in our working capital accounts totaling $184.3 million. The changes in our working capital accounts were mainly driven by a decrease in accrued expenses and increases in accounts receivable and prepaid expenses as well as changes in income taxes prepaid and payable due to the timing of tax payments.
Investing activities used net cash of $65.5 million for the three months ended March 31, 2026, primarily related to $62.0 million in capitalized software development costs, $7.6 million investment in securities, and $6.0 million in capital expenditures, partially offset by proceeds from the sales / maturities of investments of $7.6 million and the collection of other non-current receivables of $2.7 million.
Financing activities used net cash of $741.1 million for the three months ended March 31, 2026, primarily related to a net decrease in client funds obligations of $470.2 million, $168.0 million of purchases of common stock for treasury, $65.3 million in quarterly dividends paid, and $54.9 million in withholding taxes paid related to equity award net share settlements, partially offset by proceeds of $22.3 million from stock option exercises.
We have made a permanent reinvestment determination in certain non-U.S. operations that have historically generated positive operating cash flows. At March 31, 2026, we held approximately $231.0 million in cash and cash equivalents at non-U.S. subsidiaries where we had made such a determination and in turn no provision for income taxes had been made.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Senior Secured Credit Facilities and Senior Notes
The table below provides a summary of the key terms of our Senior Secured Credit Facilities and Senior Notes:
|
|
Amount Outstanding |
|
|
Maturity |
|
Scheduled Quarterly |
|
|
|
(in millions) |
|
|
Date |
|
Payments Required |
|
Senior Secured Credit Facilities |
|
|
|
|
|
|
|
|
Term B-8 Loans |
|
$ |
3,861.9 |
|
|
May 9, 2031 |
|
(1) |
Term A-9 Loans |
|
|
770.0 |
|
|
September 27, 2029 (2) |
|
0.625% (3) |
Revolving Credit Facility (4) |
|
|
80.0 |
|
|
December 28, 2027 |
|
None |
5.5% Senior Notes |
|
|
2,000.0 |
|
|
September 30, 2027 |
|
None |
6.5% Senior Notes |
|
|
750.0 |
|
|
June 1, 2032 |
|
None |
19
Debt Terms
Our obligations under the Term B-8 Loans and Term A-9 Loans are guaranteed by our existing and future wholly-owned domestic restricted subsidiaries (subject to customary exceptions and limitations). The obligations of the loan parties under the amended senior secured credit facility are secured by substantially all of the assets of such persons (subject to customary exceptions and limitations), including a pledge of all of the capital stock of substantially all of the U.S. wholly-owned restricted subsidiaries of such persons (with customary exceptions and limitations) and 65% of the capital stock of certain foreign restricted subsidiaries of such persons (with customary exceptions and limitations).
The amended senior secured credit facility includes negative covenants that, among other things and subject to certain thresholds and exceptions, limit our ability and the ability of our restricted subsidiaries to incur debt or liens, make investments (including in the form of loans and acquisitions), merge, liquidate or dissolve, sell property and assets, including capital stock of our subsidiaries, pay dividends on our capital stock or redeem, repurchase or retire our capital stock, alter the business we conduct, amend, prepay, redeem or purchase subordinated debt, or engage in transactions with our affiliates. The amended senior secured credit facility also contains customary representations and warranties, affirmative covenants and events of default, subject to customary thresholds and exceptions. In addition, the amended senior secured credit facility contains a financial covenant for the benefit of the Revolving Credit Facility requiring us to maintain a maximum consolidated net secured leverage ratio. The amended senior secured credit facility also contains a financial maintenance covenant for the benefit of the Term A-9 Loans that will require us to maintain a separate maximum consolidated net secured leverage ratio. In addition, under the amended senior secured credit facility, certain defaults under agreements governing other material indebtedness could result in an event of default under the amended senior secured credit facility, in which case the lenders could elect to accelerate payments under the amended senior secured credit facility and terminate any commitments they have to provide future borrowings. As of March 31, 2026, we were in compliance with all financial and non-financial covenants.
The 5.5% Senior Notes are guaranteed, jointly and severally, by SS&C Holdings and all of its existing and future domestic restricted subsidiaries that guarantee our existing senior secured credit facilities or certain other indebtedness. The 5.5% Senior Notes are unsecured senior obligations that are equal in right of payment to all of our existing and future senior unsecured indebtedness. Interest on the 5.5% Senior Notes is payable on March 30 and September 30 of each year.
At any time after March 30, 2025, we may, at our option, redeem some or all of the 5.5% Senior Notes, in whole or in part, at 100% of the principal amount, plus accrued and unpaid interest to the redemption date.
At any time prior to June 1, 2027, we may, at our option, redeem some or all of the 6.5% Senior Notes, in whole or in part, at a price equal to 100% of the principal amount of the 6.5% Senior Notes, plus a “make-whole” premium, plus accrued and unpaid interest, if any, to, the date of redemption. On and after June 1, 2027, we may, at our option, redeem some or all of the 6.5% Senior Notes, in whole or in part, at the redemption prices set forth in the following table, expressed as a percentage of the principal amount, plus accrued and unpaid interest to the redemption date:
Year |
|
Price |
|
|
On or after June 1, 2027 |
|
|
103.250 |
% |
On or after June 1, 2028 |
|
|
101.625 |
% |
June 1, 2029 and thereafter |
|
|
100.000 |
% |
We may also, from time to time in our sole discretion, purchase, redeem, or retire any outstanding 5.5% Senior Notes and 6.5% Senior Notes, through tender offers, in privately negotiated or open market transactions, or otherwise.
The indentures governing the 5.5% Senior Notes and 6.5% Senior Notes contain a number of covenants that restrict, subject to certain thresholds and exceptions, our ability and the ability of our domestic restricted subsidiaries to incur debt or liens, make certain investments, pay dividends, dispose of certain assets, or enter into transactions with its affiliates. Any event of default under the amended senior secured credit facility that leads to an acceleration of those amounts due also results in a default under the indenture governing each of the Senior Notes.
20
Covenant Compliance
Under the Revolving Credit Facility portion of the amended senior secured credit facility, we are required to satisfy and maintain a specified financial ratio at the end of each fiscal quarter if the sum of (i) outstanding amount of all loans under the Revolving Credit Facility and (ii) all non-cash collateralized letters of credit issued under the Revolving Credit Facility in excess of $20 million is equal to or greater than 30% of the total commitments under the Revolving Credit Facility. In addition, the Term A-9 Loans will be subject to a 5.25x consolidated net secured leverage ratio commencing at the fiscal quarter ending December 31, 2024, which will, at our option, increase to 5.75x for four consecutive fiscal quarters following a material permitted acquisition. Our ability to meet either financial ratio can be affected by events beyond our control, and we cannot assure you that we will meet either ratio. Any breach of either financial covenant could result in an event of default under the amended senior secured credit facility. Upon the occurrence of any event of default under the amended senior secured credit facility, the lenders could elect to declare all amounts outstanding under the amended senior secured credit facility to be immediately due and payable and terminate all commitments to extend further credit. Any default and subsequent acceleration of payments under the amended senior secured credit facility would have a material adverse effect on our results of operations, financial position and cash flows. Additionally, under the amended senior secured credit facility, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is also tied to baskets and ratios based on Consolidated EBITDA.
Consolidated EBITDA is a non-GAAP financial measure used in key financial covenants contained in the amended senior secured credit facility, which is the material facility supporting our capital structure and providing liquidity to our business. Consolidated EBITDA is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), further adjusted to exclude unusual items and other adjustments permitted in calculating covenant compliance under the amended senior secured credit facility. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Consolidated EBITDA is appropriate to provide additional information to investors to demonstrate compliance with the specified financial ratio and other financial condition tests contained in the amended senior secured credit facility.
Management uses Consolidated EBITDA, among other financial metrics, to help gauge the costs of our capital structure. Management further believes that providing this information allows our investors greater transparency and a better understanding of our ability to meet our debt service obligations and make capital expenditures.
Consolidated EBITDA does not represent net income or cash flow from operations as those terms are defined by generally accepted accounting principles, or GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. Further, the amended senior secured credit facility requires that Consolidated EBITDA be calculated for the most recent four fiscal quarters. As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or any complete fiscal year.
Consolidated EBITDA is not a recognized measurement under GAAP and investors should not consider Consolidated EBITDA as a substitute for measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities. Because other companies may calculate Consolidated EBITDA differently than we do, Consolidated EBITDA may not be comparable to similarly titled measures reported by other companies. Consolidated EBITDA has other limitations as an analytical tool, when compared to the use of net income, which is the most directly comparable GAAP financial measure, including:
21
The following is a reconciliation of net income to Consolidated EBITDA attributable to SS&C common stockholders as defined in our amended senior secured credit facility.
|
|
Three Months Ended March 31, |
|
|
Twelve Months Ended March 31, |
|
||||||
(in millions) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|||
Net income |
|
$ |
226.3 |
|
|
$ |
213.2 |
|
|
$ |
811.8 |
|
Interest expense, net |
|
|
105.4 |
|
|
|
105.2 |
|
|
|
426.4 |
|
Provision for income taxes |
|
|
76.8 |
|
|
|
48.1 |
|
|
|
204.9 |
|
Depreciation and amortization |
|
|
181.0 |
|
|
|
170.8 |
|
|
|
714.0 |
|
EBITDA |
|
|
589.5 |
|
|
|
537.3 |
|
|
|
2,157.1 |
|
Stock-based compensation |
|
|
61.7 |
|
|
|
52.7 |
|
|
|
266.6 |
|
Acquired EBITDA and cost savings (1) |
|
|
— |
|
|
|
— |
|
|
|
31.4 |
|
Loss on extinguishment of debt |
|
|
0.4 |
|
|
|
0.9 |
|
|
|
2.8 |
|
Equity in earnings of unconsolidated affiliates, net |
|
|
(3.9 |
) |
|
|
(2.3 |
) |
|
|
7.7 |
|
Purchase accounting adjustments (2) |
|
|
1.1 |
|
|
|
1.0 |
|
|
|
4.5 |
|
ASC 606 adoption impact |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.4 |
|
Foreign currency translation losses |
|
|
1.4 |
|
|
|
2.2 |
|
|
|
1.0 |
|
Investment gains (3) |
|
|
(8.7 |
) |
|
|
(9.3 |
) |
|
|
(13.4 |
) |
Facilities and workforce restructuring |
|
|
9.2 |
|
|
|
7.1 |
|
|
|
47.2 |
|
Acquisition related (4) |
|
|
0.9 |
|
|
|
1.3 |
|
|
|
11.2 |
|
Other (5) |
|
|
0.5 |
|
|
|
1.9 |
|
|
|
39.8 |
|
Consolidated EBITDA |
|
$ |
652.2 |
|
|
$ |
592.9 |
|
|
$ |
2,556.3 |
|
Consolidated EBITDA attributable to noncontrolling interest (6) |
|
|
(1.2 |
) |
|
|
(1.0 |
) |
|
|
(3.5 |
) |
Consolidated EBITDA attributable to SS&C common stockholders |
|
$ |
651.0 |
|
|
$ |
591.9 |
|
|
$ |
2,552.8 |
|
________________________
Our covenant requirement for consolidated net secured leverage ratio for the benefit of the Revolving Credit Facility and the actual ratio as of March 31, 2026 are as follows:
|
|
Covenant |
|
Actual |
|
|
Maximum consolidated net secured leverage to |
|
6.25x |
|
|
1.69 |
|
_____________________________________________________
22
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not use derivative financial instruments for trading or speculative purposes. We have generally invested our available cash in short-term, highly liquid financial instruments, having initial maturities of three months or less. When necessary, we have borrowed to fund acquisitions.
Interest Rate Risk
We derive revenues from investment earnings related to cash balances maintained in bank accounts on which we are the agent for clients. The balances maintained in the bank accounts will fluctuate. The effect of changes in interest rates attributable to earnings derived from cash balances we hold for clients is offset by changes in interest rates on our variable debt. For the three months ended March 31, 2026, our average daily cash balances of approximately $2.6 billion were maintained in such accounts. We estimate that a 100 basis point increase in the interest rate would equal approximately $12.8 million of net income, net of income taxes, on an annual basis.
At March 31, 2026, total variable interest rate debt was approximately $4,711.9 million. As of March 31, 2026, a 100 basis point increase in interest rates would result in an increase in interest expense of approximately $47.1 million per year.
Foreign Currency Exchange Rate Risk
During the three months ended March 31, 2026, approximately 35% of our revenues were from clients located outside the United States and approximately 24% of our revenues were from currencies other than the United States dollar. The British pound represents the majority of revenues denominated in a currency other than the United States dollar. While revenues and expenses of our foreign operations are primarily denominated in their respective local currencies, some subsidiaries do enter into certain transactions in currencies that are different from the local currency. These transactions consist primarily of cross-currency intercompany balances and certain trade receivables and payables. As a result of these transactions, we have exposure to changes in foreign currency exchange rates that result in foreign currency transaction gains and losses, which we report in other income, net. The amount of these balances can fluctuate in the future as we bill customers and buy products or services in currencies other than our functional currency (i.e., the United States dollar), which could increase our exposure to foreign currency exchange rates. Our exposures to foreign currency exchange rates can also fluctuate as a result of acquisitions. Accordingly, we continuously assess and monitor our exposure to foreign currency exchange rates. We do not enter into any market risk sensitive instruments for trading or hedging purposes.
The foregoing risk management discussion and the effect thereof are forward-looking statements. Actual results in the future may differ materially from these projected results due to actual developments in global financial markets. The analytical methods used by us to assess and minimize risk discussed above should not be considered projections of future events or losses.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
23
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
The information regarding certain legal proceedings in which we are involved as set forth in Note 13 – Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements (Part I, Item 1 of this Quarterly Report on Form 10-Q) is incorporated by reference into this Item 1.
In addition, we are involved in various other legal proceedings arising in the normal course of our businesses. At this time, we do not believe any material losses under these claims to be probable. While the ultimate outcome of such legal proceedings cannot be predicted with certainty, it is in the opinion of management, after consultation with legal counsel, that the final outcome in such proceedings, in the aggregate, would not have a material adverse effect on our consolidated financial condition, results of operations or cash flows.
Item 1A. Risk Factors
As of the date of this report, there have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following is a summary of the repurchases of our common stock in the three months ended March 31, 2026 (in millions, except average price per share):
Period (1) |
|
(a) Total Number of Shares Purchased (2) |
|
|
(b) Average Price Paid per Share |
|
|
(c) |
|
|
(d) |
|
||||
January 1, 2026 – January 31, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
919.1 |
|
February 1, 2026 – February 28, 2026 |
|
|
0.8 |
|
|
$ |
73.32 |
|
|
|
0.8 |
|
|
$ |
860.4 |
|
March 1, 2026 – March 31, 2026 |
|
|
1.5 |
|
|
$ |
72.51 |
|
|
|
1.5 |
|
|
$ |
750.6 |
|
Total |
|
|
2.3 |
|
|
|
|
|
|
2.3 |
|
|
|
|
||
(1) Information is based on trade dates of repurchase transactions.
(2) Represents shares repurchased in open market transactions pursuant to our common stock repurchase program.
(3) Stock repurchases were made pursuant to the common stock repurchase program authorized by our Board of Directors in May 2025. The program allows for the purchase of up to $1.5 billion of outstanding common stock in one or more transactions on the open market or in privately negotiated purchases.
24
Item 6. Exhibits
The exhibits listed in the Exhibit Index immediately preceding such exhibits are filed as part of this Report.
EXHIBIT INDEX
Exhibit |
|
Description of Exhibit |
|
|
|
31.1 |
|
Certification of the Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* |
|
|
|
31.2 |
|
Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* |
|
|
|
32 |
|
Certification of the Registrant’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished and not filed for purposes of sections 11 or 12 of the Securities Act and section 18 of the Exchange Act)* |
|
|
|
101.INS |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.* |
|
|
|
104 |
|
Cover page formatted as Inline XBRL and contained in Exhibit 101.
|
* Filed herewith
25
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SS&C TECHNOLOGIES HOLDINGS, INC. |
||
|
|
|
By: |
|
/s/ Brian N. Schell |
|
|
Brian N. Schell Executive Vice President and Chief Financial Officer (Duly Authorized Officer, Principal Financial and Accounting Officer) |
Date: April 30, 2026
26