SSNC Q3 CY2025: Product Expansion, AI Initiatives, and Margin Improvement Stand Out

Financial software provider SS&C Technologies (NASDAQ:SSNC) announced better-than-expected revenue in Q3 CY2025, with sales up 6.9% year on year to $1.57 billion. The company expects next quarter’s revenue to be around $1.61 billion, close to analysts’ estimates. Its non-GAAP profit of $1.57 per share was 6.5% above analysts’ consensus estimates.

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StockStory’s Take

SS&C delivered a stronger than expected Q3, with management attributing performance to recurring growth in both its GlobeOp and Global Investor and Distribution Services businesses. CEO Bill Stone highlighted "strength across all alternative markets" and cited international wins and successful client lift-outs as key contributors. The company also saw increased operating cash flow and improved margins, supported by ongoing investment in automation and product depth, helping to offset softer results in some legacy segments. Notably, GlobeOp's growth with hedge fund clients and GIDS's expansion in Australia were singled out as drivers.

Looking ahead, SS&C’s forward guidance is shaped by a combination of anticipated contributions from new acquisitions, ongoing investments in AI automation, and a focus on maintaining operating discipline. Management underscored the potential for enhanced efficiency and expanded product capabilities from the integration of recent deals like Calastone and Curo Fund Services. President Rahul Kanwar emphasized, "We continue to help accelerate the global transformation from traditional automation to AI-powered automation," suggesting the company expects its technology investments to drive both internal productivity and new revenue streams.

Key Insights from Management’s Remarks

Management attributed the quarter’s success to recurring revenue from core businesses, international expansion, and targeted acquisitions, while also emphasizing ongoing operating discipline and investment in automation.

• GlobeOp and GIDS momentum: The GlobeOp segment saw robust client demand in hedge funds and private markets, while GIDS benefited from new mandates, notably a large client lift-out in Australia that contributed meaningfully to organic growth.
• AI and automation adoption: SS&C highlighted its strategy of being "customer zero" for AI agents, using automation internally to enhance efficiency and offering these capabilities to clients. Management cited an example where AI solutions freed up 15,000 radiologist hours for a healthcare client, demonstrating practical business value.
• Acquisitions expand capabilities: The company completed the Curo Fund Services acquisition, providing a foothold in Africa, and closed the Calastone deal, adding global funds network and digital asset capabilities. These moves are expected to deepen relationships with key clients and broaden product offerings.
• Margin improvement focus: Operating margin and adjusted EBITDA margin rose, supported by cost controls and productivity gains from automation. CFO Brian Schell noted that GlobeOp’s growth, which carries above-average margins, was a positive contributor, while GIDS is working to improve its profitability profile.
• Shareholder returns and capital allocation: SS&C returned $305 million to shareholders via repurchases and dividends this quarter, and management reiterated a commitment to capital return, while also signaling continued interest in high-quality acquisitions to supplement organic growth.

Drivers of Future Performance

SS&C’s forward-looking performance will hinge on integrating recent acquisitions, scaling its AI-powered automation solutions, and maintaining margin discipline amid a competitive market.

• AI-powered automation expansion: Management is prioritizing the rollout of advanced AI automation tools across its service lines, aiming to drive both revenue growth and operational efficiency. CEO Bill Stone emphasized that being a leader in deploying these technologies gives SS&C a competitive edge, especially in regulated industries.
• M&A integration and new markets: The integration of Calastone and Curo Fund Services is expected to open up new market segments and enhance the company’s global distribution capabilities. Management believes these deals will create cross-selling opportunities and help support mid-single-digit organic revenue growth.
• Margin and expense management: Management expects margin improvement from automation, ongoing cost control, and a favorable business mix. However, they also flagged potential headwinds from competitive pressures and the need for ongoing investment in R&D and sales to sustain growth.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the pace and impact of Calastone and Curo Fund Services integration on cross-selling and international growth, (2) evidence of further margin expansion from automation and AI-powered solutions, and (3) momentum in organic growth from core segments like GlobeOp and GIDS. Execution on cost control and capturing value from recent acquisitions will be key signs of progress.

SS&C currently trades at $85.18, up from $80.87 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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