SS&C Technologies Holdings Inc

Previous wording

Ongoing macroeconomic conditions, such as increases in interest rates, inflation and changes in foreign currency exchange rates, 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.

Current wording

Ongoing macroeconomic conditions, such as increases in interest rates and inflation, volatility in capital markets, and changes in foreign currency exchange rates, 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.

Previous wording

Certain 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 2023 Form 10-K. Our critical accounting policies are described in the 2023 Form 10-K and include:

Current wording

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 2024 Form 10-K. Our critical accounting policies are described in the 2024 Form 10-K and include:

Previous wording

Our results of operations below include the results of our recent acquisition from the date which it was acquired. The Iress Managed Funds Administration Business (“2023 acquisition”) was acquired in October 2023 and Battea-Class Action Services, LLC (“Battea”) was acquired in September 2024.

Current wording

Our results of operations below include the results of our recent acquisition from the date which it was acquired. Battea-Class Action Services, LLC (“Battea”) was acquired in September 2024. FPS Trust Company was acquired in February 2025.

Previous wording

Three Months Ended September 30, 2024 and 2023. Our revenues increased $99.9 million, or 7.3%, primarily due to an increase of $87.5 million in organic revenues driven by strength in the SS&C GlobeOp fund administration, Global Investor and Distribution Solutions, Wealth and Investment Technologies and virtual data room services businesses. Our revenues also increased due to acquisitions, which contributed $7.7 million in revenues and the favorable impact from foreign currency translation of $4.7 million. Software-enabled services revenues increased $84.1 million, or 7.5%, primarily due to an increase in organic revenues of $73.4 million, acquisitions, which added $7.0 million in revenues, and the favorable impact from foreign currency translation of $3.7 million. License, maintenance and related revenues increased $15.8 million, or 6.5%, primarily due to an increase in organic revenues of $14.1 million, the favorable impact from foreign currency translation of $1.0 million and acquisitions, which added $0.7 million in revenues.

Current wording

Three Months Ended March 31, 2025 and 2024. Our revenues increased $78.9 million, or 5.5%, primarily due to an increase of $72.8 million in organic revenue growth driven by strength in the SS&C GlobeOp fund administration, Wealth and Investment Technologies, Global Investor and Distribution Solutions and virtual data room services businesses. Our revenues also increased due to acquisitions, which contributed $13.0 million in revenues which was offset by the unfavorable impact from foreign currency translation of $6.9 million. Software-enabled services revenues increased $82.2 million, or 6.9%, primarily due to an increase in organic revenues of $74.3 million and acquisitions, which added $13.0 million in revenues, offset by the unfavorable impact from foreign currency translation of $5.1 million. License, maintenance and related revenues decreased $3.3 million, or 1.3%, due to a decrease in organic revenues of $1.5 million and the unfavorable impact from foreign currency translation of $1.8 million.

Previous wording

Three Months Ended September 30, 2024 and 2023. Our total cost of revenues increased by $50.1 million, or 7.0%, primarily due to an increase of $41.1 million in organic costs, acquisitions, which added costs of $6.3 million and the unfavorable impact from foreign currency translation, which increased costs by $2.7 million. Our organic cost increase reflects continued investment in delivering client service. Cost of software-enabled services revenues increased $44.1 million, or 7.1%, primarily due to an increase of $35.8 million in organic costs, acquisitions, which added $6.3 million in costs and the unfavorable impact from foreign currency translation of $2.0 million. Cost of license, maintenance and related revenues increased $6.0 million, or 6.4%, primarily due to an increase of $5.3 million in organic costs and the unfavorable impact from foreign currency translation of $0.7 million.

Current wording

Three Months Ended March 31, 2025 and 2024. Our total cost of revenues increased by $39.0 million, or 5.4%, primarily due to an increase of $34.2 million in organic costs and acquisitions, which added costs of 9.3 million in costs, offset by the favorable impact from foreign currency translation, which decreased costs by $4.5 million. Our organic cost increase reflects continued investment in delivering client service. Cost of software-enabled services revenues increased $33.5 million, or 5.3%, primarily due to an increase of $28.0 million in organic costs and acquisitions, which added $9.3 million in costs, offset by the favorable impact from foreign currency translation of $3.8 million. Cost of license, maintenance and related revenues increased $5.5 million, or 5.9%, primarily due to an increase of $6.2 million in organic costs offset by the favorable impact from foreign currency translation of $0.7 million.

Previous wording

Selling and marketing expenses consist primarily of the personnel costs associated with the selling and marketing of our products, including salaries, commissions and travel and entertainment. Such expenses also include amortization of intangible assets, the cost of branch sales offices, 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.

Current wording

Selling and marketing expenses consist primarily of the personnel costs associated with the selling and marketing of our products, including salaries, commissions and travel and entertainment. Such expenses also include amortization of intangible assets, the cost of branch sales offices, 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.

Previous wording

Three Months Ended September 30, 2024 and 2023. Operating expenses increased $31.1 million, or 8.9%, due to an increase of $26.5 million in organic operating expenses, acquisitions, which added $2.3 million in expenses, and the unfavorable impact from foreign currency translation of $2.3 million. Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily increased due to resource needs to support organic growth.

Current wording

Three Months Ended March 31, 2025 and 2024. Operating expenses increased $14.9 million, or 4.0%, due to an increase of $14.8 million in organic operating expenses and acquisitions, which added $3.8 million in expenses, offset by the favorable impact from foreign currency translation of $3.7 million. Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily increased due to resource needs to support organic growth.

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 for Interest, Taxes and Other

Current wording

Comparison of the Three Months Ended March 31, 2025 and 2024 for Interest, Taxes and Other

Previous wording

Interest expense, net. Net interest expense totaled $109.6 million and $338.9 million for the three and nine months ended September 30, 2024, respectively, compared to $120.6 million and $350.5 million for the three and nine months ended September 30, 2023, respectively. The decrease in interest expense, net for 2024 as compared to 2023, for the three months ended is primarily due to lower average debt balances. The decrease in interest expense, net for the nine months ended September 30, 2024 is due to lower average debt balances, partially offset by slightly higher average interest rates. We had an average interest rate of 6.78% and 6.81% for the three and nine months ended September 30, 2024, respectively, compared to 6.87% and 6.56% for the three and nine months ended September 30, 2023, respectively.

Current wording

Interest expense, net. Net interest expense totaled $105.2 million and $116.0 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in interest expense, net for the three months ended is primarily due to lower average interest rates. We had an average interest rate of 6.09% and 6.86% for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Other income (expense), net. Other income (expense), net was $9.3 million and $16.5 million for the three and nine months ended September 30, 2024, respectively, compared to $(5.0) million and $15.3 million for the three and nine months ended September 30, 2023, respectively. For the three months ended September 30, 2024, other income (expense), net consisted primarily of foreign currency translation gains of $4.2 million, investment gains due to mark-to market adjustments of $3.1 million and dividend income of $2.2 million. For the nine months ended September 30, 2024, other income (expense), net consisted primarily of dividend income of $14.8 million and investment gains due to mark-to-market adjustments of $2.5 million, partially offset by foreign currency translation losses of $1.6 million. For the three and nine months ended September 30, 2023, other (expense) income, net included investment losses due to mark-to-market adjustments of $2.7 million and $0.9 million, respectively, and foreign currency translation losses of $2.5 million and $3.7 million, respectively, as well as dividend income of $2.3 million and $14.6 million, respectively. During the nine months ended September 30, 2023, other income also included income of $13.4 million from the settlement of a dispute related to pre-acquisition matters and losses of $7.3 million related to the fair value adjustments on assets held for sale.

Current wording

Other income (expense), net. Other income (expense), net was $7.2 million and $6.6 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, other income (expense), net consisted primarily of dividend income of $11.2 million offset by foreign currency translation losses of $2.2 million and investment losses due to mark-to market adjustments of $1.8 million. For the three months ended March 31, 2024, other (expense) income, net consisted primarily of dividend income of $10.5 million, partially offset by foreign currency translation losses of $4.7 million.

Previous wording

Equity in earnings of unconsolidated affiliates, net. Equity in earnings of unconsolidated affiliates, net totaled $1.1 million and $20.7 million for the three and nine months ended September 30, 2024, respectively, compared to $27.5 million and $42.6 million for the three and nine months ended September 30, 2023, respectively. Our equity in earnings of unconsolidated affiliates, net in 2024 included a $17.1 million adjustment for the nine months ended September 30, 2024 to increase the carrying value of one of our investments. Our equity in earnings of unconsolidated affiliates, net in 2023 included a $26.4 million and $38.8 million adjustment for the three and nine months ended September 30, 2023, respectively, to increase the carrying value of one of our investments.

Current wording

Equity in earnings of unconsolidated affiliates, net. Equity in earnings of unconsolidated affiliates, net totaled $2.3 million for each of the three month periods ended March 31, 2025 and 2024.

Previous wording

Our effective tax rates for the three and nine months ended September 30, 2024 and 2023 differ 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. Our effective tax rates for the three and nine months ended September 30, 2024 include benefits of $1.1 million and $41.9 million, respectively, related to releases of uncertain tax positions and $1.5 million and $7.2 million, respectively, of tax refunds, due to closed audits and statute of limitations expirations. The change in the effective tax rate for the three months ended September 30, 2024 compared to the prior year was primarily related to a proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions, partially offset by an increased recognition of windfall tax benefits from stock awards in the current year. The change in the effective tax rate for the nine months ended September 30, 2024 compared to the prior year was primarily related to releases of uncertain tax positions in the current year due to closed audits, an increased 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 2024 to be 25.0% in the United Kingdom and approximately 25.4% 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.

Current wording

Our effective tax rates for the three months ended March 31, 2025 differ 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, 2025 compared to the prior year was primarily related to an increased 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 2025 to be 25.0% in the United Kingdom and approximately 25.3% 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.

Previous wording

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 has been released throughout 2022 and 2023. Certain aspects of Pillar Two are effective January 1, 2024 and other aspects are effective January 1, 2025. 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 beginning in 2024 or in future years. We do not expect the provisions effective in 2024 to materially impact our financial results, financial position and cash flows.

Current wording

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 has been released throughout 2022 and 2023. Certain aspects of Pillar Two are effective January 1, 2024 and other aspects are effective January 1, 2025. 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 beginning in 2024 or in future years. The provisions effective in 2024 and 2025 were not material to our financial position and cash flows.

Previous wording

Our principal cash requirements are to finance the costs of our operations pending the billing and collection of client receivables, to fund payments with respect to our indebtedness, to invest in research and development, to acquire complementary businesses or assets, to repurchase shares of our common stock and to pay 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.

Current wording

Our principal cash requirements are to finance the costs of our operations, to fund payments with respect to our indebtedness, to invest in research and development, to acquire complementary businesses or assets, to repurchase shares of our common stock and to pay 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.

Previous wording

We paid quarterly cash dividends of $0.24 per share of common stock in each of March 2024 and June 2024 and $0.25 per share of common stock in September 2024 totaling $182.6 million in the aggregate. We paid quarterly cash dividends of $0.20 per share of common stock in each of March 2023 and June 2023 and $0.24 per share of common stock in September 2023 totaling $160.9 million in the aggregate.

Current wording

We paid quarterly cash dividends of $0.25 per share of common stock in March 2025 totaling $61.6 million. We paid quarterly cash dividends of $0.24 per share of common stock in March 2024 totaling $59.7 million.

Previous wording

Client funds obligations include our transfer agency client balances invested overnight as well as our contractual obligations to remit funds to satisfy client pharmacy claim obligations and are recorded on the Condensed Consolidated Balance Sheet when incurred, generally after a claim has been processed by us. Our contractual obligations to remit funds to satisfy client obligations are primarily sourced by funds held on behalf of clients. We had $2,081.5 million of client funds obligations at September 30, 2024.

Current wording

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 Condensed Consolidated Balance Sheet when incurred, generally after a claim has been processed by us. Our contractual obligations to remit funds to satisfy client obligations are primarily sourced by funds held on behalf of clients. We had $4,560.4 million of client funds obligations at March 31, 2025.

Previous wording

Net cash provided by operating activities was $902.0 million for the nine months ended September 30, 2024. Cash provided by operating activities primarily resulted from net income of $513.3 million adjusted for non-cash items of $640.0 million, partially offset by changes in our working capital accounts totaling $251.3 million. The changes in our working capital accounts were driven by an increase in accounts receivable, decreases in accrued expenses, a decrease in accounts payable and an increase in contract assets.

Current wording

Net cash provided by operating activities was $272.2 million for the three months ended March 31, 2025. Cash provided by operating activities primarily resulted from net income of $213.2 million adjusted for non-cash items of $206.3 million, partially offset by changes in our working capital accounts totaling $147.3 million. The changes in our working capital accounts were driven by a decrease in accrued expenses.

Previous wording

Investing activities used net cash of $802.6 million for the nine months ended September 30, 2024, primarily related to $646.9 million paid for business acquisitions, net of cash acquired and asset acquisitions, $149.7 million in capitalized software development costs and $41.7 million in capital expenditures, partially offset by $24.4 million in distributions received from unconsolidated affiliates, the collection of other non-current receivables of $7.7 million and proceeds from the sale of property and equipment of $3.3 million.

Current wording

Investing activities used net cash of $63.3 million for the three months ended March 31, 2025, primarily related to $47.0 million in capitalized software development costs, $12.7 million in capital expenditures and $6.2 million paid for business acquisitions, net of cash acquired, partially offset by the collection of other non-current receivables of $2.5 million.

Previous wording

Financing activities used net cash of $790.1 million for the nine months ended September 30, 2024, primarily representing a net decrease in client fund obligations of $952.2 million, $369.3 million of purchases of common stock for treasury, $182.6 million in quarterly dividends paid, $36.6 million in payments of deferred financing fees and $20.3 million in withholding taxes paid related to equity award net share settlements. These expenditures were partially offset by net borrowings of $484.9 million, proceeds of $271.1 million from stock option exercises and proceeds from noncontrolling interests of $14.9 million.

Current wording

Financing activities provided net cash of $935.3 million for the three months ended March 31, 2025, primarily representing a net increase in client fund obligations of $1,200.4 million and proceeds of $201.8 million from stock option exercises, offset by $206.9 million of purchases of common stock for treasury, net repayments of debt of $155.0 million, $61.6 million in quarterly dividends paid and $43.4 million in withholding taxes paid related to equity award net share settlements.

Previous wording

We have made a permanent reinvestment determination in certain non-U.S. operations that have historically generated positive operating cash flows. At September 30, 2024, we held approximately $251.9 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.

Current wording

We have made a permanent reinvestment determination in certain non-U.S. operations that have historically generated positive operating cash flows. At March 31, 2025, we held approximately $264.2 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.

Previous wording

The senior secured credit facility has a revolving credit facility available for borrowings by SS&C with $600.0 million in available commitments (“Revolving Credit Facility”), of which $596.9 million was available as of September 30, 2024. The Revolving Credit Facility also contains a $75.0 million letter of credit sub-facility, of which $3.1 million was utilized as of September 30, 2024.

Current wording

The senior secured credit facility has a revolving credit facility available for borrowings by SS&C with $600.0 million in available commitments (“Revolving Credit Facility”), of which $597.2 million was available as of March 31, 2025. The Revolving Credit Facility also contains a $75.0 million letter of credit sub-facility, of which $2.8 million was utilized as of March 31, 2025.

Previous wording

At any time and from time to time, we may, at our option, redeem some or all of the 5.5% 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:

Current wording

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.

Previous wording

Calculated as the ratio of consolidated net secured funded indebtedness, net of cash and cash equivalents, excluding $159.0 million of cash and cash equivalents held at DomaniRx, to Consolidated EBITDA, as defined by the amended senior secured credit facility, for the period of four consecutive fiscal quarters ended on the measurement date. Consolidated net secured funded indebtedness is comprised of indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.

Current wording

Calculated as the ratio of consolidated net secured funded indebtedness, net of cash and cash equivalents, as defined by the amended senior secured credit facility, for the period of four consecutive fiscal quarters ended on the measurement date. Consolidated net secured funded indebtedness is comprised of indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.

Previous wording

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). The standard requires more enhanced disclosures specifically related to effective tax rate reconciliation and income taxes paid. The new requirements will be effective for fiscal years beginning after December 15, 2024, on a prospective basis. Early adoption and retrospective application are permitted. We are currently evaluating the potential impact the standard will have on our income tax disclosures.

Current wording

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740). The standard required more enhanced disclosures specifically related to effective tax rate reconciliation and income taxes paid. The new requirements were effective for fiscal years beginning after December 15, 2024, on a prospective basis. We plan to adopt the standard in our consolidated financial statements for the year ending December 31, 2025, and we expect the standard will impact financial statement disclosures only and will not impact our financial position, results of operations or cash flows.