SS&C Technologies Q1 2025 Earnings Report

SS&C Technologies EPS Results

• Actual EPS: $1.44
• Consensus EPS: $1.41
• Beat/Miss: Beat by +$0.03
• One Year Ago EPS: $1.28

SS&C Technologies Revenue Results

• Actual Revenue: $1.51 billion
• Expected Revenue: $1.50 billion
• Beat/Miss: Beat by +$9.44 million
• YoY Revenue Growth: +5.50%

SS&C Technologies Announcement Details

• Quarter: Q1 2025
• Date: 4/24/2025
• Time: After Market Closes
• Conference Call Date: Thursday, April 24, 2025
• Conference Call Time: 5:00PM ET

SS&C Technologies (NASDAQ:SSNC) engages in the development and provision of software solutions to the financial services and healthcare industries. It operates through the following geographical segments: United States, Europe, Middle East and Africa, Asia Pacific and Japan, Canada, and the Americas, excluding the United States and Canada. Its products include advent genesis, antares, asset allocators, AWD, axys, BANC mall, BRIX, DST vision, evare, lightning, and moxy. The company was founded by William Charles Stone in March 1986 and is headquartered in Windsor, CT.

SS&C Technologies Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the SS and C Technologies First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I will now hand today's call over to

[Chandana Madaka, Investor Relations at SS&C Technologies]

Chand

[Chandana Madaka, Investor Relations at SS&C Technologies]

Madhaka, Investor Relations for SS and C. With me today is Bill Stone, Chairman and Chief Executive Officer Rahul Kanwar, President and Chief Operating Officer and Brian Shell, our Chief Financial Officer. Before we get started, we need to review the safe harbor statement. Please note that various remarks we make today about future expectations, plans and prospects, including the financial outlook we provide, constitute forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

[Chandana Madaka, Investor Relations at SS&C Technologies]

Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10 ks, which is on file with the SEC and can also be accessed on our website. These forward looking statements represent our expectations only as of today, 04/24/2025. While the company may elect to update these forward looking statements, it specifically disclaims any obligation to do so. During today's call, we will be referring to certain non GAAP financial measures. A reconciliation of these non GAAP financial measures to comparable GAAP financial measures is included in today's earnings release, which is located in the Investor Relations section of our website at www.ssctech.com.

[Chandana Madaka, Investor Relations at SS&C Technologies]

I will now turn over the call to Bill.

[William Stone, Chairman & CEO at SS&C]

John, and welcome, everyone. Our first quarter results are adjusted revenue of $1,514,000,000.000800000 dollars up 5.5% and adjusted diluted earnings per share of 1.44 an 8.3% increase. Adjusted consolidated EBITDA was 591,900,000.0 up 6.3%, resulting in quarterly adjusted consolidated EBITDA margin of 39.1%. Our first quarter adjusted organic revenue growth was 5.1. Performance was driven by our GlobeOp Wealth and Investment Technologies and Global Investor and Distribution Services business.

[William Stone, Chairman & CEO at SS&C]

GlobeOp posted strong results with organic growth of 10.3% and positive trends in private market and retail alternatives. Wealth and Investment Technologies saw continued strength in the wealth segment and kids met its client wins and volumes targets. We continue to feel good about our health business, which finished the quarter approximately flat. Our recurring revenue growth rate for financial services was 5.9% in Q1, which includes all software enabled services and maintenance revenue. For the three months ended 03/31/2025, cash from operating activities was $272,200,000 up 50.8% from Q1 'twenty four.

[William Stone, Chairman & CEO at SS&C]

We bought back 2,400,000.0 shares for $206,900,000 at an average price of 87.21 Consistent with our historical capital allocation practices, we will continue to buy shares opportunistically. Continue to see success internationally across several of our businesses. During the quarter, we signed our strategic lift out agreement with Insignia Financial and have since won additional Australian mandates. In March, we hosted one SS and C event in Sydney, which has led to an increased profile, and we met with a number of our largest clients. And we remain bullish on Australia.

[William Stone, Chairman & CEO at SS&C]

Geneva had one of its best quarters in EMEA history, winning three major deals in the region. We are outpacing our competitors in discriminating functional depth and breadth globally. Private markets has also enjoyed the fruits of international expansion, growing 14% in Q1. We are currently focusing efforts on The Middle East with flagship clients driving regional growth. We've strengthened our presence in The Middle East by opening a new office in Riyadh, Saudi Arabia, in addition to our offices in Abu Dhabi and Dubai.

[William Stone, Chairman & CEO at SS&C]

I'll now turn the call over to Rahul to discuss the quarter in more detail.

[Rahul Kanwar, President & COO at SS&C]

Thanks, Bill. We had a strong first quarter with organic revenue growth of 5.1%. GlobeOp started 2025 on a high note posting 10.3% organic growth. The integration of Bateya is also progressing well and we've already won 10 cross sell customers. In addition to these results, we're seeing healthy activity in key areas, particularly in retail alternatives and private markets.

[Rahul Kanwar, President & COO at SS&C]

Our Wealth and Investment Technologies business delivered strong results driven by Alps Advisors and the Black Diamond Wealth Platform. Our strategic alliance with Morningstar is expanding the opportunity set. We're also advancing customer transitions to the Genesis platform with solid engagement across our prospects. Global Investor and Distribution Solutions business saw steady growth supported by key customer renewals and new retirement mandates. We continue to see a healthy flow of opportunities across global markets.

[Rahul Kanwar, President & COO at SS&C]

Demand for AI driven automation remains high. Earlier this month, we launched our global governance first AI platform at Blue Prism Live in London. As part of the launch, we introduced a unified trust layer designed to help regulated customers adopt advanced technologies with confidence using embedded guardrails and policy based execution. This positions Blue Prism as a trusted partner in enterprise transformation. We also continue to deploy Blue Prism and other automation technologies internally, and we've achieved a cumulative benefit of more than 3,300 full time equivalents since we launched this effort in early twenty twenty three.

[Rahul Kanwar, President & COO at SS&C]

We recently introduced 20 new AI agents capable of handling complex, unstructured content, including vendor contracts and limited partner capital statements. These innovations are central to efforts to support customers on their own AI journeys. With that, I'll turn it over to Brian to talk through the financials.

[Brian Schell, Executive VP & CFO at SS&C]

Thanks, Rahul, and good day, everyone. As noted in our press release, our Q1 twenty twenty five GAAP results reflect revenues of $1,514,000,000 net income of $213,000,000 and diluted earnings per share of $0.84 Our adjusted non GAAP results include revenues of $1,510,000,000 an increase of 5.5% over Q1 twenty twenty four and adjusted diluted EPS of $1.44 an 8.3% increase over Q1 twenty twenty four. The adjusted revenue increase of $79,000,000 over Q1 'twenty four was primarily driven by incremental organic revenue contributions from GlobeOp of $34,000,000 WIT of $14,000,000 and Gibbs of $9,000,000 offset by an unfavorable impact from foreign exchange of $7,000,000 As a result, adjusted organic revenue growth was 5.1% and our core expenses also increased 5.1% or $45,000,000 which excludes acquisitions and on a constant currency basis. Adjusted consolidated EBITDA was $592,000,000 reflecting an increase of $35,000,000 or 6.3% from Q1 twenty twenty four and a margin of 39.1%, a 30 basis point expansion. Net interest expense for the quarter was $105,000,000 a decrease of $11,000,000 from Q1 twenty twenty four, primarily reflecting lower short term interest rates.

[Brian Schell, Executive VP & CFO at SS&C]

Adjusted net income was $366,000,000 up 9%, resulting in adjusted diluted EPS of 1.44 the increase of 8.3%. Our effective non GAAP tax rate was 24%. Note for comparison purposes, we have recast the 2024 adjusted net income quarterly results to reflect the full year effective tax rate of 23.1. An increase in the average share price drove the diluted share count up from 254,900,000.0 from 253,300,000.0 year over year. Cash flow from operating activities grew 51%, which is driven by growth in earnings as well as improved working capital utilization.

[Brian Schell, Executive VP & CFO at SS&C]

Our quarterly cash flow conversion was 74%, up from 54% last year. SS C ended the first quarter with $515,000,000 in cash and cash equivalents and $6,900,000 in gross debt. SSDs net debt was $6,400,000,000 and our LTM consolidated EBITDA was $2,300,000,000 The resulting net leverage ratio is 2.74 times. We look forward to the second quarter and the remainder of the year with respect to guidance. We will continue to focus on client service and assume retention rates will continue to be in the range of our most recent results.

[Brian Schell, Executive VP & CFO at SS&C]

We will continue to manage our expense by controlling and aligning variable expenses, increasing productivity to improve our operating margins and effectively investing in the business through marketing, sales and R and D. Specifically, we have assumed foreign currency exchange will be at current levels, interest rates to remain at current levels and effective tax rate of approximately 24% on an adjusted basis, capital expenditures to be 4% to 4.4% of revenues, which is a slight reduction from prior guidance and a stronger weighting to share repurchases versus debt reduction. For the second quarter of twenty twenty five, we expect revenue to be in the range of 1,489,000,000.000 to $1,529,000,000 and 2.5 percent organic revenue growth at the midpoint. Adjusted net income in the range of $343,000,000 to $359,000,000 interest expense excluding amortization and deferred financing costs and original issue discount in the range of $102,000,000 to $104,000,000 diluted shares in the range of $254,000,000 to $255,000,000 and adjusted diluted EPS in the range of $1.35 to $1.41 For the full year 2025, we are modestly raising our top line guidance by $13,000,000 at the midpoint and now expect revenue to be in the range of 6,110,000,000.00 to $6,238,000,000 Bearing in mind recent macro uncertainty, geopolitical conditions and market volatility, we note FX translation has influenced our organic growth rate guide for the next for the year.

[Brian Schell, Executive VP & CFO at SS&C]

Current FX rates provide a potential top line benefit, though we remain appropriately conservative in the current environment. We now expect 4.4% organic revenue growth at the midpoint. We continue to expect organic growth to ramp up in the second half of the year based on our current view of the pipeline, expected contribution from already sold deals and Bettea turning organic. For the full year 2025, we are slightly raising our earnings guidance. Specifically, we expect adjusted net income in the range of $1,441,000,000 to $1,541,000,000 diluted shares in the range of $253,700,000 to $256,700,000 adjusted diluted EPS in the range of $5.68 to $6 up $04 at the midpoint and cash from operating activities to be in the range of $1,458,000,000 to $1,558,000,000 Our 2025 guidance reflects our solid results in Q1 with a continued positive outlook for the remainder of the year.

[Brian Schell, Executive VP & CFO at SS&C]

We are also positioning ourselves to better support our growth, acquisitions and integration plans with the conversion of our multiple general ledger systems into a single platform by the end of the third quarter this year. And now back to Bill.

[William Stone, Chairman & CEO at SS&C]

Thanks, Brian. We also added Francesco Vanni D'Arcetti to our board in March, and we welcome him. He had a very impressive career at Citibank, and he currently serves as Chairman of the Board of Directors of Euroclear Holdings and as a member of the Board of MAPFREY. We are excited about the extensive experience he brings in operational management and corporate transactions. We are operating in an environment of geopolitical and economic uncertainty, leading to volatility in the global markets.

[William Stone, Chairman & CEO at SS&C]

SS and C has a long history of resilient performance during challenging operating environments, and we are confident in our business model. We closed out a solid first quarter and continue to execute against our plan. And I will now open it up

[Operator]

Your first question is from the line of Jeff Schmitt with William Blair.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Hi, good afternoon. On Healthcare, was it just a seasonally weak quarter for that business? And how does your pipeline look currently?

[William Stone, Chairman & CEO at SS&C]

I think health care continues to build its pipeline. We're selling into large scale health insurance companies and others. And so some of it is lumpy. So but we have a lot of you know, I I think we first rolled out Del MonteRx in January 24. And I think in '25, we're expecting to process several hundred million claims.

[William Stone, Chairman & CEO at SS&C]

And so we have a lot of interest. They're very large prospects for us, and we remain optimistic.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

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

[William Stone, Chairman & CEO at SS&C]

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

[William Stone, Chairman & CEO at SS&C]

So we're optimistic that we can hopefully surprise you positively.

[Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C]

Okay. Great. Thank you.

[Operator]

Your next question is from the line of Peter Heckmann with D. A. Davidson and Company.

[Peter Heckmann, MD - Equity Research at D.A. Davidson]

Hey. Good afternoon. Hopefully, you can hear me. It's a little choppy on this end, but congratulations on finalizing the Insignia deal. Now that it's closed, do think you'd give us a little bit more in terms of your expectations for its contribution to revenue, how much it might ramp up, and, you know, whether or not we would be able to, you know, see the impact see see the impact of that ramp on on margins in the second half or the first half of twenty twenty six?

[William Stone, Chairman & CEO at SS&C]

Well, I I you know, that the we're we're gonna rebadge about 1,400 people from Insignia to us, and then that that will happen, like, July 1, I believe. So most obviously, the ramp is gonna be in the third and fourth quarter. So we'll get a you know, about a half a year, you know, and that can range anywhere from 35,000,000 to $70,000,000. And so we're we're we're optimistic that we can can really do a great job for them and and really take care of their members. And and that's what we're focusing on, and we've got a great team that's that's really keeping this thing very well planned.

[Peter Heckmann, MD - Equity Research at D.A. Davidson]

Okay. All right. That's helpful. And then just as a follow-up on your decision or the announcement to dissolve another one of the joint ventures with State Street. As that is dissolved, do you expect to to pick up any additional revenue?

[Peter Heckmann, MD - Equity Research at D.A. Davidson]

Like, what what would you say would be the kind of the net effect to to revenue? There's some additional revenue recognized at the corporate level, and what would you expect the impact to be on the EBITDA line?

[Rahul Kanwar, President & COO at SS&C]

As of right now, we're not expecting much impact as a result of that. Most of that is operational. The processing is done within SS and C and in effect what we're doing is simplifying the entity structure. There may be some reduction in costs because it simplifies it, we're not expecting that to be very significant.

[Peter Heckmann, MD - Equity Research at D.A. Davidson]

Okay. And then just last thing is, when do you expect that to actually finalize and occur?

[Rahul Kanwar, President & COO at SS&C]

We're working through it right now. We don't have a definitive timeline as yet.

[Peter Heckmann, MD - Equity Research at D.A. Davidson]

All right. Thank you.

[Operator]

Your next question is from the line of Dan Perlin with RBC Capital Markets.

[Dan Perlin, Managing Director at RBC Capital Markets]

Thanks. So just at a high level, again, Bill, the demand environment, I we've heard from from other players in the financial services market, banks in particular, talked about some

[Dan Perlin, Managing Director at RBC Capital Markets]

of their clients

[Dan Perlin, Managing Director at RBC Capital Markets]

pausing. Doesn't sound like you're seeing that yet, but I just wanna kinda make a a finer point that what are those conversations like? Do you get the sense that they feel like there's there might be an air pocket in the business and decision making so they they might wanna hold off? I heard your I heard your comment on the organic growth being measured and conservative. So I I get that.

[Dan Perlin, Managing Director at RBC Capital Markets]

But, obviously, you talked to a lot of a lot of

[Dan Perlin, Managing Director at RBC Capital Markets]

these businesses. I'm just just curious what, what those conversations are like.

[William Stone, Chairman & CEO at SS&C]

Well, I I think you know, Dan, that there's a there's an awful lot of change happening in particular in wealth and asset management. And and there are are sea changes that are being caused by by things like AI and and quantum and and and all kinds of new technologies. Probably, you know, the the biggest set of new technologies since, say, the Internet. You know? So I I think that that there's gonna be an awful lot of change.

[William Stone, Chairman & CEO at SS&C]

And and and I think that, you know, I I I read a a note that said two thirds of all CEOs are afraid that if they don't get AI right, they're gonna lose their job. So I I think there's a lot of trepidation about what's gonna happen in the technological world, and SS and C is well positioned to to help our prospects and our clients, you know, get through this in a in a really pretty good fashion. We spend lots of money on this. We we have all kinds of different tools and techniques that that are very valuable to our clients, and and we get lots of inquiries from them to help them.

[Dan Perlin, Managing Director at RBC Capital Markets]

Yep. Yep. Excellent. Can I just ask just another quick question, in particular, around insignia in Australia, maybe the market in general? I think I heard you say you signed, several new mandates, you know, since kind of the announcement.

[Dan Perlin, Managing Director at RBC Capital Markets]

And I'm just wondering, like, obviously, the demand environment there seems seems high. I feel like, almost you guys sound giddy about the opportunity. So I'm just trying to make sure we kinda ring fence, like, what kind of cadence do you expect, in terms

[Dan Perlin, Managing Director at RBC Capital Markets]

of how that can potentially ramp? Thank you.

[William Stone, Chairman & CEO at SS&C]

Well, you know, Dan, when you get to be my age, being giddy is one of the pleasures in life. Other than that, you get to push up daisies, I think. So so so giddy sounds better to me. But but it really is you you know, they call the superannuation business in Australia the wall of money. You know?

[William Stone, Chairman & CEO at SS&C]

So, you know, everyone's required to participate, but it's their own accounts. As you know, here in The US, you know, saying that you have your own account in in Social Security, you you you have more analysis than me. So I I I think that, you know, the the services companies in Australia, you know, have maybe not kept up quite as well on the the technology like we have. So we're we're coming in there as, you know, an at

[William Stone, Chairman & CEO at SS&C]

scale

[William Stone, Chairman & CEO at SS&C]

company that has technology that they want and and a whole cadre of talented people that can help them. And and that's the feeling. We're we're we're getting embraced. You know? Now I hope we still get embraced because, you know, the geopolitical things, but I don't think so.

[William Stone, Chairman & CEO at SS&C]

I mean, we're we're really doing doing well. We you know, we're investing, and and they know it. So I think that's going to be a really great market for us.

[Operator]

Your

[Operator]

next question is from the line of Surinder Thind with Jefferies.

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

Thank you.

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

Bill, just a few questions on some of the segments here. When we think about Intralinks and we look at everything that, you know, went right last year in terms of the introduction of the new platform, how are we thinking about the performance of Intralinks in in kind of the current environment? How much of a headwind do you think it's going to be? Or how should we characterize what what the current growth rate looks like and how it might evolve over the the coming quarters?

[Rahul Kanwar, President & COO at SS&C]

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

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

Got it. And then, Rahul, can you maybe provide a similar update on kind of Blue Prism and all of the enhancements and the rollout strategy there? And how are you thinking about that over the course of the year?

[Rahul Kanwar, President & COO at SS&C]

I think our primary opportunity or the thing that we're most excited about is there's a lot of as you know around the world, enterprises are trying to figure out how to use AI. And so they need to have some controls, particularly in regulated industries on how people go out and use the various AI tools. And a big part of what we have invested in is building in, as I mentioned in my comments, the trust layers and the guardrails and things like that, which we think are extremely valuable to us, but they're also really valuable to positioning Blue Prism as that trusted partner. So our opportunity set is really strong and we feel good about it. And in particular, using agents and AgenTeq AI is a big part of what we expect to do over the next couple of quarters.

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

Got it. And then I guess turning that question internally in terms of, the digital workers. Just any color on the complexity of the use cases you're now able to address and how you're thinking about that on a go forward basis? It sounds like you're able to solve bigger problems at this point or

[Rahul Kanwar, President & COO at SS&C]

Well, that's exactly right. I think that the we've got some momentum. We've now been at this since the start of 2023. We are, as you said, getting deeper and richer into our own processing. And just as important as the internal efficiencies we're getting, those applications then become really good proof points for our customers and prospects.

[Rahul Kanwar, President & COO at SS&C]

So they look at what we've been able to achieve. And we had recently had a customer tell us that they got a number of demos from our competitors, but not a single work in use case. And meanwhile, within SS and C, they could see it already operating at scale. So that's pretty powerful.

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

And then what does that mean for margins? Do you feel like there's structural tailwind that you have at this point that that will continue? Or or how should we think about that? Not necessarily this year, but as we kind of conceptually think about this or maybe even this year. So

[William Stone, Chairman & CEO at SS&C]

So, Serena, that's really a great question, and and we appreciate it because you get one question and then, apparently, four follow ups. But but

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

we thought I was the last person in the queue.

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

That that's okay, Bill. We can we can we can take it

[Surinder Thind, Equity Research Analyst at Jefferies Financial Group]

off that.

[William Stone, Chairman & CEO at SS&C]

That's okay. I'm just kidding. Yeah. But I think that we still think that what's allowed us to do is maintain margins.

[William Stone, Chairman & CEO at SS&C]

I think the adjusted EBITDA margin this quarter was 39.1%, up about thirty, forty basis points. And we're investing heavily, right? So there's a lot of expenses that we're running through and still driving margins up. And I think we we would attribute a a nice portion of that to the ability of our different business units to deploy, you know, Blue Prism's technologies into their businesses. And as you said, it's getting to to be increasingly complex processes that that that allow us to to be able to even take some really experienced people and give them capabilities that that that really extend, you know, their their ability to help our prospects and our customers.

[Operator]

The next question is from the line of James Faucette with Morgan Stanley.

[Michael Infante, Vice President - Equity Research at Morgan Stanley]

Hi, everyone. It's Michael Infante on for James. Thanks for taking our question. I just wanted to ask on the GlobeOp business. Obviously, really impressive results again.

[Michael Infante, Vice President - Equity Research at Morgan Stanley]

I think that I mean, that business has accelerated sequentially every quarter for more than a year now. Like, can you just unpack what's driving that? Is that net new momentum? Is that pricing? What are you sort of seeing just in terms of the complexion of the growth drivers within that business?

[Michael Infante, Vice President - Equity Research at Morgan Stanley]

Thanks.

[William Stone, Chairman & CEO at SS&C]

You know, the the the great thing that we have with GlobeOp is is that it's a global business. You know? So as we start talking about what we're doing in in The Middle East, you know, we're getting large scale customers that are investing increasingly in alternative assets, and they want the best technology supported by the best firm. And and that's what we believe we have proven quarter after quarter after quarter. And I think that shows up in how we explain what we're gonna do, how we're gonna train them, what asset classes, you know, that they can invest in, whether it's real estate or private credit or whatever, you know, and we bring real expertise that really helps them get up to speed in short order.

[William Stone, Chairman & CEO at SS&C]

And and and that is the big secret of of of our success on GLOBA.

[Michael Infante, Vice President - Equity Research at Morgan Stanley]

Makes sense. Maybe just on the on the competitive front, Bill. Obviously, a lot of, acquisition activity in the space, particularly in in the hedge fund and investment accounting space. I know some of these acquisitions are are quite small relative to the totality of your business, but any just high level thoughts on on that deal and sort of how you're thinking about, you know, your ability to sort of, continue to to gain share in in the start up hedge fund environment, particularly just given some of this integration activity that's obviously coming? Well,

[William Stone, Chairman & CEO at SS&C]

I think what's happening in that start up is that it's kind of being led by very seasoned investors, and and they're they're starting with larger pools of money. Right? So they're already sophisticated, and they wanna they wanna hit the ground running. So as they're doing their fundraising, they're also planning out what technologies they're going to use, often they turn to us. And we have an awful lot global macro firms use us and an awful lot of the assets that have been going into alternatives go into the global macro funds.

[William Stone, Chairman & CEO at SS&C]

And so we're in a very nice position, and we're not resting on our laurels as we continue to bring out additional feature, additional functionality and really to the delight of our customers.

[Operator]

Your next question is from the line of Andrew Schmidt with Citi.

[Andrew Schmidt, Equity Research Analyst at Citi Global Markets]

Hey guys. Thank you for taking the question. I wanted to go back to this conversation on the demand environment. Totally understand the setup for the second quarter in terms of comments on conservatism and the mission critical nature of what you guys do. But I'm just curious if you give us a sense of whether conversations and sales cycles have changed meaningfully March into April, obviously, wouldn't be surprising, a huge amount of distraction out there.

[Andrew Schmidt, Equity Research Analyst at Citi Global Markets]

But I'm just curious, just to put a finer point in terms of your conversation with the clients and decision making. Thanks so much.

[William Stone, Chairman & CEO at SS&C]

I mean, we still see a pretty good demand environment. We were with a prospect this afternoon, and and, you know, they're they're anxious to to deploy new technology, to get better processes, to close their books faster, to to to get information in their hands that help them run their business. You know, I I think that's the key to our business. It is being aware and then moving quickly to to give our prospects and our clients information that that they wanted for a long time, and they don't get it in a month. You know, they get it in a day.

[William Stone, Chairman & CEO at SS&C]

You know? And I I think it's that focus on, you know, process it, slice it and dice it, and deliver it. And I I think that's something that we do with a lot of accuracy, and that gives our clients a lot of confidence.

[Andrew Schmidt, Equity Research Analyst at Citi Global Markets]

Got it. Thanks so much for that, Bill. And then maybe just on the back half ramp, I knew you articulated a few things that are drivers there. A part of that seems like it's insignia and other signed deals. But maybe just give more detail on the confidence of the back half ramp, what signed versus go get?

[Andrew Schmidt, Equity Research Analyst at Citi Global Markets]

I know there's always a level of go get, you got to go out there and sell and close deals. But just maybe more details on the drivers and confidence in that ramp would be helpful. Thank you.

[Rahul Kanwar, President & COO at SS&C]

Yes. Andrew, obviously and you pointed this out, there's always an element of go get. I'd say we feel pretty good. Obviously, there's a fair amount of execution left to do and some deals left to close and implementations left to go live and all those things, although by no means certain, right? But we feel pretty good.

[Rahul Kanwar, President & COO at SS&C]

We have a lot of visibility into some of the big pockets of revenue coming online in Q3 and Q4, and that helps with that.

[Operator]

Your next question is from the line of Alexey with JPMorgan.

[Ella Smith, Analyst at JP Morgan]

Hi. This is Ella Smith on for Alexey Goglev. Thank you so much for taking our question. So first, we want to double down about the strength in GlobeOp. You called out the strength in the private markets of retail alternatives.

[Ella Smith, Analyst at JP Morgan]

How are you thinking about the forward organic growth of those markets in particular? Do you expect them to maintain their strength or taper off somewhat? And if you could remind us what is driving that strength, that'd be great. Thank you.

[William Stone, Chairman & CEO at SS&C]

Well, I I I think,

[William Stone, Chairman & CEO at SS&C]

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

[Ella Smith, Analyst at JP Morgan]

Great. That makes a lot of sense. And, for my follow-up, I hear your enthusiast enthusiasm about AgenTek AI and bringing that to customers. Do you expect those offerings to begin to show up in organic growth in the near term, or do you think that there's going to be an investment building out phase that needs to transpire and finish first?

[William Stone, Chairman & CEO at SS&C]

I mean, it's it's not gonna be snap your fingers and and we get 400 basis points of of organic growth. But, you you know, it it's gonna make what is already a very sticky business, what is already a highly profitable business, which is already a high cash flow generation business. And, you you know, right now, like someone had asked about acquisitions and and even what you see in in the market, you know, it's continuation funds and and and additional investments in in in companies that they already own. So I I think that the the robustness of the m and a market might might pick up in, like, the fourth quarter because I think increasingly, the private equity funds are are feeling like that they they need to get some stuff out into the marketplace so that they can give cash back to their LPs, and then the LPs can reinvest it with them.

[Ella Smith, Analyst at JP Morgan]

That makes a lot of sense. Thank you so much.

[Operator]

Your next question is from the line of Kevin McVeigh with UBS.

[Kevin McVeigh, Managing Director at UBS Group]

Great. Thanks so much. Congratulations on the results and what's obviously a choppy environment. Bill, if I got this question once intra quarter, I got it 30 times about hedge funds degrossing and what that means. And obviously, your AUA continues to increase year on year and increase sequentially.

[Kevin McVeigh, Managing Director at UBS Group]

Can you maybe just help remind us because, again, we got the question a lot, you know, why the AUA and we even analyzed in COVID, it just continues to grow. And it's just, I think, one of the really underappreciated parts of the story, but just maybe help dimensionalize that just, you know, given obviously some of the volatility in the market we've seen.

[William Stone, Chairman & CEO at SS&C]

Well, Kevin, as you know, when you see volatility, people are looking for, like, safe havens. You know? And what what they've seen over the last thirty, forty years that the, you know, the risk adjusted returns in the hedge fund industry are pretty non correlated to to to these different markets, and that's why money moves to them. And I I think that hasn't changed, and I don't think it's gonna change in the near term. If anything, I mean, we've seen them, the hedge fund industry move to cash or more cash.

[William Stone, Chairman & CEO at SS&C]

And I think that they're just waiting to pounce again. And I think that's the nature of the brightest investors, I think that will continue.

[Kevin McVeigh, Managing Director at UBS Group]

That's helpful. And then, Bill, with Insignia, does that from a business segment perspective, does that all fit within GlobeOp or GIDS? Or where would that sit across kind of the segments, or is it or is it multiple?

[Rahul Kanwar, President & COO at SS&C]

GIDS. It's primarily in GIDS.

[Kevin McVeigh, Managing Director at UBS Group]

Primarily in GIDS. Terrific. Okay. Thank you.

[Operator]

Your next question is from the line of Patrick Shaughnessy with Raymond James.

[Patrick O’Shaughnessy, MD - Capital Markets at Raymond James]

Hey, good evening. So BATEA seems to be trending well below the revenue that it had in 2023 when you guys acquired it. Is that just a function of the lumpiness of the just the nature of the business? Or is there something else going on?

[Rahul Kanwar, President & COO at SS&C]

No. Think that's it. We're obviously taking some time to make sure we understand properly from an accounting standpoint what the flows are. And in some ways I think there's some degree of being conservative reflected in that too. But as we get more comfortable, we do expect that some of those accounting rules will get relaxed a little.

[Rahul Kanwar, President & COO at SS&C]

But on the underlying strength of that business and our ability to cross sell that to our customers and how the sales force feels like they're being really well supported has us pretty optimistic.

[Patrick O’Shaughnessy, MD - Capital Markets at Raymond James]

What sort of forward looking

[Patrick O’Shaughnessy, MD - Capital Markets at Raymond James]

view do you have into that business? Like at this point into the second quarter, do you have a pretty good sense for what 2Q revenue is going look like? Or does stuff kind of come in relatively quickly?

[Rahul Kanwar, President & COO at SS&C]

Well, I think we have a

[Rahul Kanwar, President & COO at SS&C]

pretty good view right now of the cases that we're in and the settlements that have already been announced and are kind of our portion of those. So looking out a couple of years, we have a pretty good sense of what the aggregate amount is that is already baked. What we don't have as good a sense of is which quarter it shows up in and that's a part of this.

[Patrick O’Shaughnessy, MD - Capital Markets at Raymond James]

Got it. That's helpful. Thank you. And then maybe just a quick housekeeping question. What is the FX impact on revenue that's embedded into the full year guidance at this point?

[Brian Schell, Executive VP & CFO at SS&C]

Well, it's essentially the net difference. The kind of one of

[Brian Schell, Executive VP & CFO at SS&C]

the metrics that you would just look at the overall financials, and I think we put this in the I think it's either it's in the K or the Q, but about 21 of the revenues are non U. S. Dollar. So obviously, impact to that can will have the corresponding, you know, adjustment. Right?

[Brian Schell, Executive VP & CFO at SS&C]

So if it's up by 1%, it has a whatever, roughly 20 bps, impact change on the, overall growth rate. And so we try to be conservative and kind of look at where current rates are today.

[Operator]

At this time, there are no further questions. I will now hand today's presentation back over to our presenters for any closing remarks.

[William Stone, Chairman & CEO at SS&C]

Well, we really appreciate all of you taking time to sit in on our call, and we're excited about our business, and we'll continue to work hard for our shareholders. Thank you.

[Operator]

This concludes today's call. Thank you for joining. You may now disconnect your lines.

Participants

Executives

• Chandana Madaka, Investor Relations
• William Stone, Chairman & CEO
• Rahul Kanwar, President & COO

Analysts

• Brian Schell, Executive VP & CFO at SS&C
• Jeff Schmitt, Research Analyst - Financial Services and Technology at William Blair & Company, L.L.C
• Peter Heckmann, MD - Equity Research at D.A. Davidson
• Dan Perlin, Managing Director at RBC Capital Markets
• Surinder Thind, Equity Research Analyst at Jefferies Financial Group
• Michael Infante, Vice President - Equity Research at Morgan Stanley
• Andrew Schmidt, Equity Research Analyst at Citi Global Markets
• Ella Smith, Analyst at JP Morgan
• Kevin McVeigh, Managing Director at UBS Group
• Patrick O’Shaughnessy, MD - Capital Markets at Raymond James