SS&C Technologies Holdings Inc

(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 and Form 10-K/A for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2025 and March 4, 2025, respectively (the “2024 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, 2025, the results of our operations for the three months ended March 31, 2025, and our cash flows for the three months ended March 31, 2025 and 2024. These statements do not include all of the information and footnotes required by GAAP for annual financial statements. The 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, 2024, which were included in the 2024 Form 10-K. The December 31, 2024 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, 2025 are not necessarily indicative of the expected results for any subsequent quarters or the full year.

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 software-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, 2025 and 2024 refer to our Condensed Consolidated Statements of Comprehensive Income.

Recent Accounting Pronouncements Not Yet Effective

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.

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, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

Note 2—Property, Plant and Equipment, net

Property, plant and equipment and the related accumulated depreciation are as follows (in millions):

Depreciation expense for the three months ended March 31, 2025 and 2024 was $17.8 million and $17.9 million, respectively. Amortization expense related to capitalized software development costs for the three months ended March 31, 2025 and 2024 was $34.3 million and $28.1 million, respectively. As of March 31, 2025 and December 31, 2024, assets held for sale were $5.9 million and $5.9 million, respectively, and are presented in prepaid expenses and other current assets in our condensed consolidated balance sheet. As of March 31, 2025 and December 31, 2024, unpaid property, plant and equipment additions totaling $3.7 million and $3.6 million, respectively, are included in accounts payable and other accrued expenses, in our condensed consolidated balance sheet.

Note 3—Investments

Investments are as follows (in millions):

Unrealized gains and losses for our equity securities are as follows (in millions):

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, 2025 and December 31, 2024, 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.

The following tables present assets and liabilities measured at fair value on a recurring basis (in millions):

(1)

As of March 31, 2025, included $173.3 million of cash and cash equivalents, $1.0 million of restricted cash and $3,665.5 million of funds receivable and funds held on behalf of clients on the Condensed Consolidated Balance Sheet. As of December 31, 2024, included $184.2 million of cash and cash equivalents, $2.5 million of restricted cash and $2,450.8 million of funds receivable and funds held on behalf of clients on the Condensed Consolidated Balance Sheet.

(2)

Included in Investments on the Condensed Consolidated Balance Sheet.

(3)

Included in Other long-term liabilities on the Condensed Consolidated Balance Sheet.

We have partnership interests in various private equity funds that are not included in the tables above. Our investments in private equity funds were $8.4 million and $8.6 million at March 31, 2025 and December 31, 2024, respectively, of which $7.2 million and $7.3 million, respectively, were measured using net asset value as a practical expedient for fair value and $1.2 million and $1.3 million, respectively, were accounted for under the equity method of accounting. The investments in private equity funds represent underlying investments in domestic and international markets across various industry sectors.

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.

Note 4—Unconsolidated Affiliates

Investments in unconsolidated affiliates are as follows (in millions):

(1)

Ownership percentage is as of March 31, 2025 and December 31, 2024.

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 Condensed Consolidated Statements of Comprehensive Income.

Equity in earnings of unconsolidated affiliates, net are as follows (in millions):

Note 5—Acquisitions

The following unaudited pro forma information is provided for illustrative purposes only and assumes that the acquisition of Battea-Class Action Services, LLC (“Battea”) occurred on January 1, 2023, after giving effect to certain adjustments, including amortization of intangibles, interest, transaction costs and tax effects. This unaudited pro forma information (in millions) should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had actually occurred on that date, nor of the results that may be obtained in the future.

In addition, we acquired FPS Trust Company in February 2025 for approximately $6.0 million.

Note 6—Goodwill

The change in carrying value of goodwill as of and for thethree months ended March 31, 2025 is as follows (in millions):

Note 7—Debt

At March 31, 2025 and December 31, 2024, debt consisted of the following (in millions):

The table below provides a summary of the key terms of our Senior Secured Credit Facilities and Senior Notes:

(1)

Per the September 2024 Incremental Joinder, scheduled quarterly payments of 0.25% are required. We have made prepayments on our Term B-8 Loans and do not have any principal quarterly payments due until March 2030.

(2)

The Term A-9 Loans will mature on the earlier to occur of (1) September 27, 2029 or (2) 91 days prior to the maturity of (x) the 5.5% Senior Notes if more than $150.0 million aggregate principal amount remains outstanding on the 91 st day prior to such maturity or (y) the Revolving Credit Facility if more than $150.0 million aggregate principal amount of commitments remain outstanding on the 91 st day prior to such maturity, whichever of (x) or (y) comes first.

(3)

Scheduled quarterly payment required for the first eight fiscal quarters commencing with the fiscal quarter ending December 31, 2024. The scheduled quarterly payment will increase to 1.250% for each quarter thereafter until the maturity date of the Term A-9 Loans.

As of March 31, 2025, we were in compliance with all financial and non-financial covenants.

Fair Value of Debt

The carrying amounts and fair values of financial instruments are as follows (in millions):

The above fair values, which are Level 2 liabilities, were computed based on comparable quoted market prices.

Note 8—Stockholders’ Equity

Stock repurchase program

In July 2023, our Board of Directors authorized a stock repurchase program, which enabled us to repurchase up to $1 billion in the aggregate of our outstanding common stock on the open market or in privately negotiated transactions until the one-year anniversary of the Board’s authorization, unless earlier terminated by the Board. In July 2024, our Board of Directors authorized a stock repurchase program, which enables us to repurchase up to $1 billion in the aggregate of our outstanding common stock on the open market or in privately negotiated transactions until the one-year anniversary of the Board’s authorization, unless earlier terminated by the Board. During thethree months ended March 31, 2025 and 2024, we repurchased 2.4 million and 0.8 million shares, respectively, of common stock for approximately $206.9 million and $52.9 million, respectively. We use the cost method to account for treasury stock purchases. Under the cost method, the price paid for the stock is charged to the treasury stock account.

Dividends

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

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss balances, net of tax, consist of the following (in millions):

Adjustments to accumulated other comprehensive loss are as follows (in millions):

Note 9—Variable Interest Entity

In July 2021, we entered into an agreement whereby we obtained an 80.2% interest in DomaniRx, LLC (“DomaniRx”), a variable interest entity under GAAP. We have the power to direct the majority of the activities of DomaniRx that most significantly impact its economic performance, the obligation to absorb losses and the right to receive benefits from DomaniRx. Accordingly, we determined that we are the primary beneficiary of DomaniRx and consolidate its results.

The carrying value of the assets and liabilities associated with DomaniRx included in our condensed consolidated balance sheet at March 31, 2025 and December 31, 2024, 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:

Note 10—Revenues

We generate revenues primarily through our software-enabled services. Our software-enabled services are generally provided under contracts with initial terms ofone tofive years that require monthly or quarterly payments and are subject to automatic annual renewal at the end of the initial term unless terminated by either party. We also generate revenues by licensing our software to clients through either perpetual or term licenses and by selling maintenance services. We classify license revenues related to sales-based royalty arrangements as term license revenue. Maintenance services are generally provided under annually renewable contracts. Our pricing typically scales as a function of our clients’ assets under management, the complexity of asset classes managed, the volume of transactions and the level of service the client requires. Revenues from professional services consist mostly of services provided on a time and materials basis.

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 $42.0 million and $42.4 million, was included in other long-term liabilities as of March 31, 2025 and December 31, 2024, respectively, in our condensed consolidated balance sheet. Deferred revenues are recorded on a net basis with contract assets at the contract level. Accordingly, as of March 31, 2025 and December 31, 2024, approximately $66.1 million and $72.3 million, respectively, of deferred revenue is presented net within contract assets arising from the same contracts. The amount of revenues recognized in the period that was included in the opening deferred revenues balance was $156.0 millionfor the three months ended March 31, 2025.

As of March 31, 2025, revenue of approximately$989.7 million is expected to be recognized from remaining performance obligations for license, maintenance and related revenues, of which$501.6 million is expected to be recognized over the next twelve months and the remainder is expected to be recognized over a weighted average period of approximately two years.

We record revenue net of any taxes assessed by governmental authorities.

Revenue Disaggregation

The following table disaggregates our revenues by geography (in millions):

The following table disaggregates our revenues by source (in millions):

Note 11—Stock-based Compensation

Stock options, SARs, PSUs and RSUs

The amount of stock-based compensation expense recognized in our Condensed Consolidated Statements of Comprehensive Income for thethree months ended March 31, 2025 and 2024 was as follows (in millions):

The following table summarizes stock option and stock appreciation rights (“SARs”) activity, as well as performance stock units (“PSUs”) and restricted stock units (“RSUs”) activity, for thethree months ended March 31, 2025 (shares in millions):

Note 12—Income Taxes

The effective tax rate was 18.4% and 29.7% for the three months ended March 31, 2025 and 2024, respectively. The change in the effective tax rate for the three months ended March 31, 2025 compared to the prior year wasprimarily due to an increase 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. It is possible our unrecognized tax benefits could be reduced by approximately $20 million in the next 12 months as a result of cash payments made in connection with ongoing tax authority audits.

Note 13—Earnings per Share

The following table sets forth the computation of basic and diluted EPS (in millions, except per share amounts):

Weighted-average stock options, SARs, RSUs and PSUs representing 5.4 million and 18.4 million shares were outstanding for thethree months ended March 31, 2025 and 2024, respectively, but were not included in the computation of diluted EPS because the effect of including them would be anti-dilutive.

Note 14—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.