SS&C Technologies Holdings Inc

Previous wording

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 and Form 10-K/A for the year ended December 31,

Current wording

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.

Previous wording

Intangible Assets and Goodwill

Current wording

Acquisition Accounting, Intangible Assets and Goodwill

Previous wording

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

Current wording

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.

Previous wording

We derive our revenues from two sources: software-enabled services revenues and license, maintenance and related revenues. As a general matter, fluctuations in our software-enabled services revenues are attributable to our customer retention, the number of new software-enabled services clients as well as total assets under management in our clients’ portfolios and the number of outsourced transactions provided to our existing clients. Software-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.

Current wording

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.

Previous wording

Three Months Ended September 30, 2025 and 2024. Our revenues increased $102.2 million, or 7.0%, primarily due to an increase of $76.4 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 $16.6 million, and the favorable impact from foreign currency translation of $9.2 million.

Current wording

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.

Previous wording

Software-enabled services revenues increased $103.2 million, or 8.6%, primarily due to an increase in organic revenues of $79.4 million as well as acquisitions, which added $16.6 million in revenues, and the favorable impact from foreign currency translation of $7.2 million. License, maintenance and related revenues decreased $1.0 million, or 0.4%, due to a decrease in organic revenues of $3.0 million, partially offset by the favorable impact from foreign currency translation of $2.0 million.

Current wording

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.

Previous wording

Cost of software-enabled services revenues consists primarily of costs related to personnel who deliver our software-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.

Current wording

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.

Previous wording

Three Months Ended September 30, 2025 and 2024. Our total cost of revenues increased by $58.6 million, or 7.7%, primarily due to an increase of $45.2 million in organic costs as well as acquisitions, which added $10.3 million in costs, and the unfavorable impact from foreign currency translation, which increased costs by $3.1 million. Our organic cost increase reflects continued investment in delivering client service.

Current wording

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.

Previous wording

Three Months Ended September 30, 2025 and 2024. Operating expenses increased $3.0 million, or 0.8%, due to acquisitions, which added $3.3 million in expenses and the unfavorable impact from foreign currency translation of $2.8 million. These increases were partially offset by a decrease of $3.1 million in organic operating expenses. Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily decreased due to lower personnel costs.

Current wording

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.

Previous wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024 for Interest, Taxes and Other

Current wording

Comparison of the Three Months Ended March 31, 2026 and 2025 for Interest, Taxes and Other

Previous wording

Interest expense, net. Net interest expense totaled $104.2 million and $314.9 million for the three and nine months ended September 30, 2025, respectively, compared to $109.6 million and $338.9 million for the three and nine months ended September 30, 2024, respectively. The decrease in interest expense, net for 2025 as compared to 2024 is primarily due to lower average interest rates. We had an average interest rate of 6.20% and 6.14% for the three and nine months ended September 30, 2025, respectively, compared to 6.78% and 6.81% for the three and nine months ended September 30, 2024, respectively.

Current wording

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.

Previous wording

Other income, net. Other income, net was $5.3 million and $11.4 million for the three and nine months ended September 30, 2025, respectively, compared to $9.3 million and $16.5 million for the three and nine months ended September 30, 2024, respectively. For the three months ended September 30, 2025, other income, net consisted primarily of foreign currency translation gains of $3.2 million and dividend income of $2.2 million. For the nine months ended September 30, 2025, other income, net consisted primarily of dividend income of $15.9 million, partially offset by investment losses due to mark-to-market adjustments of $2.4 million. For the three months ended September 30, 2024, other income, 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, 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.

Current wording

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.

Previous wording

Equity in earnings of unconsolidated affiliates, net. Equity in earnings of unconsolidated affiliates, net totaled $(11.6) million and $(7.7) million for the three and nine months ended September 30, 2025, respectively, compared to $1.1 million and $20.7 million for the three and nine months ended September 30, 2024, respectively. The equity in earnings of unconsolidated affiliates, net in 2025 is primarily related to adjustments of $(11.5) million and $(11.4) million for the three and nine months ended September 30, 2025, respectively, to decrease the carrying value of one of our investments. 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.

Current wording

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.

Previous wording

Our effective tax rates for the three and nine months ended September 30, 2025 and 2024 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 and nine months ended September 30, 2025 compared to the prior year was primarily driven by the releases of uncertain tax positions due to closed audits, recognition of windfall tax benefits from stock awards and a proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions. The effective tax rates for the three and nine months ended September 30, 2025 include tax benefits of $17.5 million related to releases of uncertain tax positions due to closed audits and statute of limitation expirations. The effective tax rates for the three and nine months ended September 30, 2024 include tax 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 limitation expirations. 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.

Current wording

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.

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 was released throughout 2022 and 2023. Certain aspects of Pillar Two were effective January 1, 2024 and other aspects were 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. The provisions effective in 2024 and 2025 were not material to our 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 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.

Previous wording

Our principal cash requirements are for delivering value to our clients, pursuing new sales opportunities, making payments with respect to our indebtedness, investing in research and development, 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.

Current wording

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.

Previous wording

We paid quarterly cash dividends of $0.25 per share of common stock in each of March and June 2025 and $0.27 per share of common stock in September 2025, totaling $188.3 million for the nine months ended September 30, 2025. We paid quarterly cash dividends of $0.24 per share of common stock in each of March and June 2024 and $0.25 per share of common stock in September 2024, totaling $182.6 million for the nine months ended September 30, 2024.

Current wording

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.

Previous 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 unaudited 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 $3,664.6 million of client funds obligations at September 30, 2025.

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 unaudited Condensed Consolidated Balance Sheets 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 $3,617.5 million of client funds obligations at March 31, 2026.

Previous wording

Net cash provided by operating activities was $1,101.3 million for the nine months ended September 30, 2025. Cash provided by operating activities primarily resulted from net income of $604.7 million adjusted for non-cash items of $770.5 million, partially offset by changes in our working capital accounts totaling $273.9 million. The changes in our working capital accounts were driven by increases in accounts receivable, prepaid expenses and contract assets, as well as a decrease in deferred revenue and changes in income taxes prepaid and payable due to the timing of tax payments. These changes were partially offset by a decrease in accrued expenses.

Current wording

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.

Previous wording

Investing activities used net cash of $229.6 million for the nine months ended September 30, 2025, primarily related to $155.5 million in capitalized software development costs, $70.3 million in capital expenditures, $9.8 million contributed to unconsolidated affiliates and $5.9 million paid for business acquisitions, net of cash acquired, partially offset by the collection of other non-current receivables of $7.9 million.

Current wording

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.

Previous wording

Financing activities used net cash of $791.9 million for the nine months ended September 30, 2025, primarily related to $717.3 million of purchases of common stock for treasury, net repayments of debt of $423.1 million, $188.3 million in quarterly dividends paid, $73.2 million in withholding taxes paid related to equity award net share settlements and $21.8 million in distributions to noncontrolling interests, offset by proceeds of $362.4 million from stock option exercises and a net increase in client fund obligations of $269.4 million.

Current wording

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.

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, 2025, we held approximately $254.9 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, 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.

Previous wording

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.

Current wording

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

Previous wording

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.

Current wording

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% as of December 31, 2026 for each quarter thereafter until the maturity date of the Term A-9 Loans.

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 $593.8 million was available as of September 30, 2025. The Revolving Credit Facility also contains a $75.0 million letter of credit sub-facility, of which $6.2 million was utilized as of September 30, 2025.

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 $513.3 million was available as of March 31, 2026. The Revolving Credit Facility also contains a $75.0 million letter of credit sub-facility, of which $6.7 million was utilized as of March 31, 2026.

Previous wording

Management uses Consolidated EBITDA to gauge the costs of our capital structure on a day-to-day basis when full financial statements are unavailable. 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.

Current wording

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.

Previous wording

Consolidated EBITDA does not reflect the provision of income tax expense in our various jurisdictions;

Current wording

Consolidated EBITDA does not reflect the provision of income tax expense in the jurisdictions in which we operate;

Previous wording

Acquired EBITDA reflects the EBITDA impact of significant businesses that were acquired during the period as if the acquisition occurred at the beginning of the period, as well as cost savings enacted in connection with acquisitions.

Current wording

Acquired EBITDA reflects the EBITDA impact of significant businesses that were acquired during the last twelve months as if the acquisition occurred at the beginning of the trailing twelve-month period, as well as cost savings enacted in connection with acquisitions.

Previous wording

Other includes additional expenses and income that are permitted to be excluded per the terms of our amended senior secured credit facility from Consolidated EBITDA, a financial measure used in calculating our covenant compliance.

Current wording

Other includes additional expenses and income that are permitted to be excluded per the terms of our amended senior secured credit facility from Consolidated EBITDA, a financial measure used in calculating our covenant compliance, and includes a loss on the sale of fixed assets of $33.3 million during the twelve months ended March 31, 2026.