SS&C Technologies at William Blair Conference: Strategic Growth Insights

SS&C Technologies (NASDAQ:SSNC) presented a confident strategic overview at the 45th Annual William Blair Growth Stock Conference on Wednesday, 04 June 2025. The company’s CFO, Brian Shell, highlighted robust financial performance and strategic initiatives aimed at sustaining growth, while addressing potential challenges in the second quarter. The presentation underscored SS&C’s commitment to reinvestment and shareholder value.

Key Takeaways

• SS&C Technologies forecasts 2025 revenue of approximately $6.2 billion, with a focus on organic growth.
• The company achieved a 5% organic revenue growth and a 6% EBITDA increase in the first quarter of 2024.
• SS&C maintains a high revenue retention rate of 97%, emphasizing client satisfaction and loyalty.
• Strategic capital allocation includes share repurchases, debt reduction, and modest dividend increases.
• SS&C aims for international expansion and enhanced product offerings to drive future growth.

Financial Results

• Organic Revenue Growth: 5% in the first quarter of 2024
• EBITDA Growth: 6% with a 30 basis point margin expansion
• EPS Growth: 8%
• Cash Flow from Operations Growth: 51%
• Revenue Retention: 97%
• Targeted Full-Year Margin Expansion: 50 basis points

Operational Updates

• SS&C’s business units, including GlobeOp, Kids, and Wealth and Investment Technology (WIT), generate 75% of revenue.
• Key products like Black Diamond and Blue Prism play a significant role in the company’s offerings.
• The company is focusing on reinvestment in research and development to sustain long-term growth.

Future Outlook

• SS&C targets a 4.5% full-year organic revenue growth for 2025.
• Growth initiatives include international expansion, new product development, and enhanced client services.
• The company is working to improve pricing impacts and client retention rates beyond the current 97%.

Q&A Highlights

• The CFO reaffirmed a 2.5% organic revenue growth guidance for the second quarter.
• Insignia is expected to contribute between $35 million and $70 million to the guidance.
• Bateya is anticipated to aid organic growth in the fourth quarter.

For a more detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Jeff Schmidt, Analyst, William Blair: Good afternoon, everyone. Why don’t we go ahead and get started? So my name is Jeff Schmidt. I cover wealth tech stocks here at William Blair. I’d like to introduce SS and C Technologies, their leading provider of enterprise software and outsourcing solutions for the financial services industry.

And it was actually our top pick for the year. So we have with us today Brian Shell, he’s the CFO, to discuss the business. But first, I do want to point you to our website for a list of research disclosures and any potential conflicts of interest. And with that, I will open it up to turn it over to Brian.

Brian Shell, CFO, SS and C Technologies: Thank you. And we appreciate the invite. It’s a it’s a great great conference, a great opportunity to to meet with all of you and have a lot of really good dialogue on SS and C. I’ve got a slide presentation we’ll run through here. I’ll try to not necessarily hit every single bullet point on every slide And obviously, I’ll go with the obligatory safe harbor statement.

And if some of you are newer to the story, I’ll I’ll still cover some high level points, but still try to get some of those who are existing shareholders and have followed the story for a while, try to tease out some of the finer points about what we do with respect to what we provide in our software for financial services and healthcare industries. We think it’s mission critical and we think that’s why we’d weathered much of the the storm that a lot of folks have had to go through. I’d say probably one of the best slides, one of my favorite slides in the deck is this kind of our placemat slide because if there’s one slide that I had to talk to about SS and C, this would be it. Because it really covers, you know, our investment thesis, what we do, some of the key metrics, and and the industries that we serve. Right?

So as we we tried to summarize, you know, why do we exist? What do we have is, you know, what we want to do and and and why we have what we have is, we think there’s value in the depth and breadth of our offerings to financial services clients and to the to the health care industry. And when you look across the gamut of everything of what we do, right? So, there’s transaction processing, there’s investment accounting, there’s trading, there’s supporting of operations, there’s investor services, there’s compliance work, there’s the analytics that we provide. And again, I talked about the asset coverage, the industry coverage we have, right?

We have asset management, we had hedge funds, we have private banking, anybody who manages or touches assets, we are likely providing a software solution or software enabled service to help them do that more effectively and more accurately. And again, focusing on automation and data are all the things that we think are really important. A couple of the of of key metrics, right? So been in business for over thirty eight plus years, founder led, still our CEO and chairman of the board, about a $20,000,000,000 market cap right now, 27,000 employees, enterprise value of 26,000,000,000, and over 22,000 clients. So very diverse set of clients over 35 different countries and closer to $6,000,000,000 in revenue in all likelihood in 2025.

A couple of other, I think are pretty interesting metrics that are still amazed by is, it’s not on the slide, but over $4,000,000,000 of AUA that that we that we help provide services for, over 45,000,000 accounts on our transfer agency platform, and over 500,000,000 health care claims processed on our our SS and C technology platform. So that kind of gives you a broad overview of SS and C and kind of what we do. Just to dig into a little bit deeper, a different look, we’ve tried to simplify what we look like and and and what is SS and C by breaking up in these different six business units. SS and C has built been built on on the back of a lot of acquisitions over over its history, A lot of organic growth, but also that organic growth on top of a lot of acquisitions. And so we’ve over the last couple years, we simplified tried to simplify our investor story to understand what do we do, what do we look like.

And the easiest way to think about that is 75% of our revenue is generated by three of the largest business units. Right? So the largest one is the GlobeOp business, which people generally think of as an honest SS and C is, you know, servicing the alternative asset space. Hedge funds, you know, private markets, retail alts, those types of assets that, know, are different than say the second largest business which is kids, which is more about a transfer agency type of service and related services. That’s about another 25% of the business.

And then the third leg of that 75% is our wealth and investment technology affectionately referred to as WIT, which again is selling those software licenses and to multiple, call it segments within the the industry with focus on wealth, alternatives, asset management, know, the insurance market. So lots of really strong offerings and product leading industry leading products. And one of the I think the key benefits or the that we have or key advantages that SSCC has is that we own the software that we use to service our clients. So, if there’s an edit, if there’s a change, if there’s enhancements we need to make, there is no supply chain issue. We have it, we control it, and we get that implemented for others.

Then the rest of the business, remaining 25%, think about it, obviously, 5% with health care that I talked about, and the other 20% are more really two verticals. One is the intelligent automation business and analytics that kind of go can go across a broad set of industries, primarily financial services. And then the other is many know about Intralinks, which primarily associated with the supporting transactions. Again, product spot spotlight, a couple of things, and you may have heard of many of these products with respect to, you know, in the different groups that I just mentioned. Black Diamond, that services the wealth market.

It’s been a probably maybe the number one, know, I’d say RA software right now and we’re seeing that continue to grow. Probably the fastest growing software solution that we do have in our probably our entire portfolio that’s of size. DomainRx is the pharmacy platform, claims adjudication platform that we JV’d with. We have a couple of partners, Elavance and Humana that’s processing the claims. I mentioned about Interlinks and its deal center is the primary product there.

And then Blue Prism, which is the robotic process automation that was in that intelligent automation piece of the business that I talked about. The other obviously two large products that are not on the screen here is Geneva, which is what is used primarily to service a lot of the alternative asset space and as which many of you probably know with the order management system is primarily associated with. And we’ve been able to integrate those into many of our product offerings. Some recent big wins kind of my hair up on the screen and a lot of these wins in 2023 and 2024 has led to the strong growth that we’ve already seen in 2025 starting off the year. I won’t read through all the names, but these have been important as we continue to build a foundation going forward.

I don’t have 2025 updated, but probably one of the marquee wins out there is doing some work in Australia with the superannuation funds and the largest there as far as the first revenue contribution to SS and C has been insignia. To briefly touch on the financials, again, just popped in a slide of the first quarter just to remind people of the first quarter highlights. A little over 5% organic growth rate. We had a growth in our EBITDA of a little over 6% and we had a margin expansion over the prior year of about 30 bps. Again, targeting as far as the guidance go a route about 50 basis points for the full year, so we’re making progress along the way.

And then you can see the earnings growth, EPS growth of a little over 8%. And then we had a really strong cash flow conversion this quarter and grew the cash flow from operations by over 51%, primarily some some enhancements in working capital more broadly. Again, being familiar with the SSSC business, do have a fairly healthy margin business, is the EBITDA margin. We had we’re operating at been operating right around 40% and we were doing that up until 2022 and 2022 reflects a dip from the Blue Prism acquisition, which was about $300,000,000 in revenue with essentially no EBITDA at the time that we bought it. And so we’ve completely turned that around from an earnings contribution perspective.

And you could see us gradually increasing productivity, leveraging our scale over the last several years building that up closer to that 40% level with this past year ending at 39.3%. And we’ve generally target about a 50 basis point improvement year over year, which allows for continued productivity enhancements as well as an opportunity to reinvest in the business to make sure that we’re growing revenues in the longer term, but still providing cash to our shareholders. Revenue retention has been relatively strong at 97%. You can see there’s been a little bit of a variation with a few basis points here and there over any any, you know, kind of any of the the quarters, but generally around 97%. Again, that’s given the nature of the recurring revenue nature of the business, the stickiness of the of the services that we sell because they’re more critical to their overall operations.

And so it’s not something that’s easily changed. So, like I said, so this makes it more a little bit easier to forecast some of the revenues that we have. But again, it shows to its strength of SS and C and its overall business model. Again, just a quick overview of how we’ve seen EPS grow over time. The current the $5.85 that you see on the slide here for $25 is analyst consensus.

Overall, it’s been a roughly a 5% growth rate going back to ’20. You see a little bit of the dip in ’22 and ’23. On the balance sheet, we had a lot of floating rate debt. And when SOFR spiked, short term rates spiked, they took a big big dent out of some of the EPS. But you see that’s recovering back with more top line growth and a stabilization of rates and reduction of some of that debt along the way as well.

If we look at one of the things that we do like to talk about and we like to raise and this is what we think drives future revenues and future earnings is we still think it’s important to continue to reinvest in the SS and C platform. So we like to highlight the R and D spend that we have with the percentage of revenue, percentage of kind of the more quote software related revenue with the licensing maintenance fees. And so, it’s a number that continues to increase every year. We want to make sure we’re you know, we’re ensuring the growth longer term of our business. I mean, it’s easy to take money to the bottom line and not spend it, but not reinvest, but we think it’s really important again to drive that longer term growth rate.

And we think that this is something that it’s important for us. And if you see, you know, maybe any others that you’re comparing us to, when you look at the other software organizations, you know, take a look at this line item and make sure that they’re keeping up. Again, we think it’s important to continue to reinvest, taking that client feedback and putting it back into the product and the services that we have. In the shorter term, some of the guidance that we’ve laid out for the quarter is for the full year we’re looking at about 4.5% organic revenue growth rate. You can see the revenue range there of roughly $6,200,000,000 I’m just rounding there.

And we tried to lay out some of the key metric for the investor community to try and get a sense of what we see happening, what we have visibility to. So we think it’s important to lay out our expectations hold us accountable for what we think is going to go on and as we look into our own operations and trying to perform against that. One of the things that we’ve continued to work on is driving down our tax rate. I think you’ve noticed that in recent periods and continue to, overall manage, the cash flow and continue to raise that cash flow conversion. Spending a little bit of time on our, three year, organic growth rate, target.

We put a number, a range out there which is, you know, admittedly a little bit wider of four to 8% as far as a targeted range of of revenue growth and, you know, how do we get there and what are the component parts. Right? So we continue to look at, you know what’s the growth of the, I call it the share of wallet of our clients, know and continuing to provide them more and more services, I think has been a nice big part of that growth. We look at the new products not just enhancements that we have, but also brand new products that we think can provide additional services. We look at the cross sell and up sell to existing clients.

And one of the things we’re trying to do there to improve those results is continue to enhance an enterprise, call it, sales team that has knowledge of the entire suite of products that we have versus a siloed approach of a product by product. This is something I think we’re making more traction on. We’re supporting that with stronger CRM data across the entire enterprise to make sure we understand who the key decision makers are and the relationship managers, particularly within the larger institutions who they may not know themselves within their own four walls, who other may be buying SS and C services within their own organization. Helping make that introduction and make that consistent is not necessarily rocket science, but it is gritty work and we’re doing it. So I think we’re making some nice strides there.

We think pricing can become an increasingly important part of our overall growth story. Traditionally, it’s been 1% to 1.5% and we’re looking to make that you know that potentially could increase over time as we look to be more strategic and looking at those overall rate changes. I’ve mentioned insignia with Australia and the superannuation funds. We do think international can continue to be a big part of our growth strategy more broadly, organically. And the last part of that is is is a little bit harder to move, but has been client retention.

Right? We’ve seen that that number consistently run 97%, but, you know, you move that by another hundred basis points that obviously just enhances your growth rate right on top of it. So, are things we’re looking to do is looking at our customer service and how can we enhance that efficiently kind of across the board, and then implement that where we see the successes. The last thing on last thing on this bullet on the on the left hand side of the chart, and spend a little more time on this page, I want to make sure we kind of cover some of the key growth initiatives, are the lift outs. And essentially as outsourcing, rebadging employees and providing services to large financial institutions, because we think we can do it at lower cost, more efficiently, and on our own services, and really leverage the SS and C scale and network that we have.

This is actually what insignia we would call a lift out, where we’re essentially taking on 1,400 of their employees and providing those services to them. But we believe, and hopefully the outcome there is from a service model, is it’s enhanced, it’s higher quality, more accuracy, and more efficient. So that along the way, it adds to our bottom line, but also adds to their bottom line because we’re doing it more efficiently than what they were able to do it. As far as the M and A, and this approach is a little bit around the capital allocation approach, but just to to touch on it is the reason that that M and A has been important to us is that is that we do think that while we like the adjacency of the businesses that we may acquire, that over time we think that can continue to actually boost and enhance the overall organic growth rate. You know, if we can’t over time consistently add one to two percentage points of revenue growth from M and A inorganically, and then turn even more of that, then grow from that base into even further organic revenue, that’s a real win.

And that’s what we look for in the transactions. So we’re looking for those types of transactions that we can leverage our existing products, our existing cost base, the existing geographies, and again we’re looking to make sure that that happens in a way that’s additive to our revenue growth rate as well as adding to our overall EPS accretion. But the most important thing that in in M and A for us has been making sure we have the appropriate price discipline. Right? So I know that’s a tall order for M and A is to have something that’s revenue growth accretive, it makes money, but we’re not gonna play, you know, pay a really, really high multiple that doesn’t make sense for our shareholders.

So maintaining that price discipline has has been really important. So we want to make sure the M and A adds value to our shareholders. I’m to touch a little bit on capital allocation. This tends to be one of the larger and probably the most one of the most important things that we talk about and to make sure that your management team is doing what it needs to be doing is as we think about M and A, you know, absent the M and A, excuse me, for capital allocation. Absent the M and A, you know, share repurchase has been a big priority for us.

We recently announced a new share repurchase authorization. We actually announced it a quarter earlier than we normally do. We actually upsized it by 50% and you know reading between the lines or what caused that. One is in the absence of the M and A that we think can be accretive to our shareholders. We think it’s the the best utilization of that capital is share repurchase, particularly where it’s priced today.

So we essentially had exhausted our previous authorization earlier than anticipated. We continued to increase the amount of cash flow that we do have, so we needed to implement a new program as well as just given our growth and our size, we actually decided to increase the level of the authorization as well from 1,000,000,000 to to a billion 5. So we think that was pretty positive sign. After that, we will also on the edges pay down debt. You know, cost of the debt right now is roughly 6.3, six point four percent depending on where so frustrating.

And so that still is accretive to the bottom line. It still helps create additional debt capacity if we want to go out and pursue M and A opportunities as of scale, and this allows us to be able to do that without getting in the way of of being able to execute on that transaction. So around the edges, we will do that. We’ve been able to reduce the leverage ratio to roughly 2.7 times now. So we’re pretty close to investment grade territory, not necessarily our goal to be investment grade.

We like the financial flexibility and where we are and to be able to lever up to pursue a transaction that we think can be again add value to our shareholders. And then the last thing I’ll say here is that, you know, we will continue to to look at the dividend, look at the payout, and and add to that modestly on an annual basis. But it’s not a huge focus of of of return of capital. One of the items, and this kind of ties it all together with respect to some of the M and A that we’ve done these next couple of slides, these are just kind of representative of some of the larger transactions that we’ve executed. I mentioned that SS and C was a lot of it was built on M and A over the last ten, fifteen years.

And you can see some of the more sizable transactions here, 2018 being a very significant year where a lot of transactions were closed and a lot of leverage was added and helped generate a lot of the revenues that we see today. But you can see how this is really kind of placed across the board with some of the key businesses that we have today with respect to GlobeOp, Interlinks, Advent Software, which forms the basis of our wealth and investment technology software business. Obviously, DST had multiple portions of that business with healthcare within our existing GIDS business. Obviously, you’re aware of Interlinks, and then Ez is also part of our wealth and investment technology business more broadly. And then Blue Prism was a foundation of our intelligent automation and analytics group.

And then finally with Bateia, which is called class action litigation services as far as claims and recovering claims for people who own those securities. That’s been a real nice win and we’ve been very pleased with that with that transaction. Here’s just how we approach M and A and the debt capital markets and when we’ve looked at it is you can see that we’ve levered up for each of those kind of sampling of transactions anywhere between four and five times. And we’ve made the commitment to delever to our the debt capital markets and the rating agencies with levering down, focusing capital allocation to get it to a call it a more manageable level and acceptable level. And so this is the financial flexibility that we like to have.

We think this again can add value to shareholders versus necessarily buying something with equity. We like the idea of using debt. I was recently at a debt capital markets conference and they would like to see more debt. So they’re anxious to anxious and in positive way, would like to see some more acquisition activity. Obviously, assuming it makes sense, so they can actually want to invest in more paper.

I’ll be honest. So they were a little bit selfish in their once there, so not to blame them. So again, this is a slide that kind of indicates our approach to capital allocation and leveraging that market. That concludes the slides that I had prepared for you today. We’re about five minutes early.

I don’t know if you want to try to do questions or we just save that for for later.

Jeff Schmidt, Analyst, William Blair: Jump in.

Brian Shell, CFO, SS and C Technologies: I have questions. Okay.

Jeff Schmidt, Analyst, William Blair: Your organic growth, I mean you guided to for the second quarter, I think 2.5%, which certainly felt very conservative. And now that we’re much of the way through there, obviously there’s a very more economic uncertainty, but where is that kind of shaping up? Is that looking to be conservative?

Brian Shell, CFO, SS and C Technologies: Yeah, so for I assume everybody could hear the question, but basically asking about in our 2Q forecast for guidance for organic revenue growth. And we knew going in to the year when I look at back where we were at the end of last year when we set out the full year guidance and looked at how do we think the revenue growth rate was going to fall. We knew 2Q was going to be a lower growth rate relative to the other quarter, certainly the first quarter and the second half. And you know, we’re not officially or formally changing guidance on the two, roughly 2.5%. I would say that you know, there’s probably less uncertainty around market dynamics or people have gotten used to the volatility around whether it be the market changes, administrative changes, know, the the the potential tariff battles.

So we’ve not seen any slowdown in the dialogue with people’s commitments to wanting to to transact with us. So that negative, which we didn’t see at the time, has not surfaced. So that’s that’s the good news, the absence of that negative. So, you know, is it we’ll see if it at the end of the day, if it proves to be conservative. I only have one one month so far in my head.

We’re I’ll have the second month here soon, as far as closing out the quarter. So, right now, we hope to prove it proves to be conservative, but, you know, we’ll see. There’s nothing negative that has surfaced that makes us change that guidance right now.

Jeff Schmidt, Analyst, William Blair: And for the year, is Insignia in that organic so $35,000,000 to 70,000,000 for of revenue for can you hear me? Is this yeah. So Insignia, I think you’re projecting 35,000,000 to 70,000,000 of revenue. And so if if you sort of back into your numbers and you look at you’re basically projecting 5% organic in the second half, but at least a point of that is from Insignia, if not a little bit more. So you’re kinda guiding a little softly or at least to the very bottom of your range.

Brian Shell, CFO, SS and C Technologies: Yeah. So the the Insignia is the 35 to 70. 30 five was a reference to just the was that call it the second half results, so only half year. The 70 would be the annualization number of that. So so that is in our guidance.

So that explains some of the strength and confidence in the second half of the year, some of the growth rates. The other remaining portions of why do we feel confident about the overall growth rate for the year is, again, just looking at pipeline where they line up from the other transactions. I mentioned Bateya and this is just kind of more math than anything else, but it becomes organic in its growth in the fourth quarter. So the second half of the year And it’s set up to be a stronger fourth quarter, say, than the prior year as we look at its the pipeline of cases and looking at the history of settlement and when that occurs. The courts like to kind of clean off their docket in the fourth course.

We typically will see a stronger fourth quarter as the strongest quarter of any of them, so it tends to be a little bit lumpy. So we try to forecast that and try to bake that in. We have really good visibility over a two to three year perspective, but sometimes on a quarterly basis a little bit more challenging because some of that rev rec is dependent on the court’s decision to basically for some repayment. So those are things that we’re looking at, I think that gives us confidence in some of the growth rate numbers.

Jeff Schmidt, Analyst, William Blair: Thank you. So, the breakout will be in Jennie A in ten minutes. And thank you, Brian.

Brian Shell, CFO, SS and C Technologies: This presentation has now finished. Please check back shortly for the archive.

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