Summary
SS&C Technologies posted GAAP revenue of $1,465.8 million for the third quarter of fiscal 2024, up 7.3% from the prior-year quarter. Gross profit of $704.2 million rose 7.6%. Operating income of $325.1 million climbed 6.1%, and net income attributable to SS&C of $164.4 million was up 5.4%. Diluted earnings per share of $0.65 rose 6.6%. On a nine-month basis, revenue of $4,352.3 million was up 6.4% and operating cash flow of $902.0 million was up 9.1%.
The margin picture was mixed. Gross margin of 48.0% was up 0.1 percentage points from 47.9%, while operating margin of 22.2% was down 0.3 percentage points from 22.4%. Adjusted revenue, a non-GAAP measure, reached a record $1,466.8 million, up 7.3%. Adjusted diluted earnings per share of $1.29 was up 10.3%, and adjusted consolidated EBITDA attributable to SS&C of $566.2 million was up 6.0%. Organic revenue growth was 6.4%, and financial services recurring revenue growth was 7.2%.
Growth was uneven by business. Wealth and Investment Technologies organic growth was 10.9% in the quarter and Intralinks was 11.5%. Alternatives grew 6.1%, Blue Prism 5.8% and Global Investor and Distribution Solutions 4.7%. Healthcare moved the other way, declining 13.1%. Management traced the organic strength to SS&C GlobeOp fund administration, Global Investor and Distribution Solutions, Wealth and Investment Technologies and virtual data room services.
Cash generation was the standout. Operating cash flow of $336.6 million in the quarter was up 38.8% from the prior-year quarter. Capital expenditures of $25.9 million were up 57.0%, a cash outflow shown as a positive amount. Deferred revenue of $464.0 million was up 1.2%, and remaining performance obligations of $1,010.6 million were up 7.4%. The company ended the quarter with $694.7 million in cash and cash equivalents against $7,243.1 million in gross debt. Net leverage was 2.94 times consolidated EBITDA and net secured leverage was 1.74 times, inside the 6.25 times covenant maximum tied to the revolving credit facility.
Capital allocation leaned on acquisitions. SS&C closed the purchase of Battea-Class Action Services on September 27, 2024 for approximately $670 million, funded in part with $800.0 million of Term A-9 loans. The company also repurchased 1.2 million shares for $89.4 million at an average price of $72.72 and paid $62.8 million in common stock dividends during the quarter.
Guidance for the fourth quarter of fiscal 2024 calls for adjusted revenue of $1,460.0 million to $1,500.0 million and adjusted diluted earnings per share of $1.29 to $1.35. For the full fiscal year 2024, management guided adjusted revenue of $5,815.0 million to $5,855.0 million, adjusted net income attributable to SS&C of $1,299.0 million to $1,315.0 million and adjusted diluted earnings per share of $5.12 to $5.18. Full-year cash from operating activities is expected between $1,330.0 million and $1,370.0 million, with capital expenditures at 4.1% to 4.5% of revenue, an effective income tax rate of 26% and diluted shares of 253.6 million to 253.8 million. The company does not reconcile the adjusted revenue or adjusted net income guidance to comparable GAAP measures.
The balance sheet and the acquisition pipeline carry real risk. Gross debt of $7,243.1 million keeps interest costs material even after lower average debt balances. The filing also flags the state of the economy and the financial services industry, customer consolidation, competition, evolving regulation and increased scrutiny from regulators, privacy concerns around collecting and storing personal information, foreign currency swings, and the ability to realize anticipated benefits from acquisitions such as DST Systems. Integration of Battea and the durability of healthcare revenue are the two items to watch into fiscal 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.47B | $1.45B | +1.0% | $1.37B | +7.3% |
| Gross profit | $704.2M | $698.3M | +0.8% | $654.4M | +7.6% |
| Gross margin | 48.0% | 48.1% | -0.1 pp | 47.9% | +0.1 pp |
| Research & development | $131.3M | $128.7M | +2.0% | $117.7M | +11.6% |
| Sales & marketing | $144.1M | $142.6M | +1.1% | $134.7M | +7.0% |
| General & administrative | $103.7M | $99.4M | +4.3% | $95.6M | +8.5% |
| Total operating expenses | $379.1M | $370.7M | +2.3% | $348.0M | +8.9% |
| Operating income (loss) | $325.1M | $327.6M | -0.8% | $306.4M | +6.1% |
| Operating margin | 22.2% | 22.6% | -0.4 pp | 22.4% | -0.3 pp |
| Net income (loss) | $164.6M | $190.7M | -13.7% | $156.6M | +5.1% |
| Net margin | 11.2% | 13.1% | -1.9 pp | 11.5% | -0.2 pp |
| Diluted EPS | $0.65 | $0.75 | -$0.10 | $0.61 | +$0.04 |
Risks
The May 2024 refinancing was accounted for as a debt extinguishment, with $27.7 million of Existing Term Loans borrowing costs expensed in the nine months ended September 30, 2024, and outstanding debt includes $3,690.0 million of Term B-8 Loans, $800.0 million of Term A-9 Loans and $2,750.0 million of senior notes. The Term A-9 Loans carry a 5.25x consolidated net secured leverage ratio covenant beginning with the quarter ending December 31, 2024, and any breach could result in an event of default and acceleration.
MD&A states ongoing macroeconomic conditions including increases in interest rates, inflation and changes in foreign currency exchange rates could have impacts on results that are uncertain and largely outside the company's control, and remain dynamic and subject to rapid and possibly material change. Foreign currency translation added $4.7 million to revenue for the quarter ended September 30, 2024 and $8.7 million for the nine months ended September 30, 2024, while also increasing costs.
The company completed the Battea-Class Action Services acquisition in September 2024 and the Iress Managed Funds Administration Business in October 2023, paying $646.9 million for business and asset acquisitions, net of cash acquired, in the nine months ended September 30, 2024. Acquisitions added $7.7 million of revenue for the quarter but also $6.3 million of cost of revenues and $2.3 million of operating expenses, reflecting integration and purchase accounting complexity.
Net interest expense was $109.6 million for the quarter and $338.9 million for the nine months ended September 30, 2024, and the company reported an average interest rate of 6.78% for the quarter and 6.81% for the nine months ended September 30, 2024, versus 6.87% and 6.56% in the prior-year periods. The nine-month increase relative to prior year reflects slightly higher average interest rates even as average debt balances declined.
The effective tax rate was 26.7% for the quarter ended September 30, 2024 versus 24.6% in the prior-year quarter, and 21.5% for the nine months ended September 30, 2024 versus 28.8% in the prior-year period. Results include benefits of $1.1 million and $41.9 million for the quarter and nine months, respectively, from releases of uncertain tax positions; the company cautions that a future change in the composition of income before income taxes from foreign and domestic jurisdictions could impact the periodic effective tax rate.
Equity in earnings of unconsolidated affiliates, net totaled $1.1 million for the quarter and $20.7 million for the nine months ended September 30, 2024, compared to $27.5 million and $42.6 million in the prior-year periods, with 2024 including a $17.1 million upward carrying value adjustment for one investment and 2023 including adjustments of $26.4 million and $38.8 million. Other income (expense), net also swung to $9.3 million for the quarter from $(5.0) million in the prior-year quarter on mark-to-market investment gains.
Client funds obligations were $2,081.5 million at September 30, 2024, and financing activities for the nine months ended September 30, 2024 included a net decrease in client fund obligations of $952.2 million, which the company must manage alongside contractual obligations to remit funds to satisfy client pharmacy and transfer agency balances.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Adjusted Consolidated EBITDA Margin
Adjusted Organic Revenue Growth
Financial Services Recurring Revenue Growth
Cash Flow Conversion
Summary, forecast, risks and KPIs are extracted from SS&C Technologies Holdings Inc's SEC filings for Q3 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.