SS&C Technologies Hldgs (NASDAQ:SSNC) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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Summary
SS&C Technologies Hldgs reported Q1 2026 adjusted revenue of $1.648 billion, a 9% increase, and adjusted diluted EPS of $1.69, a 14% increase, both records for the company.
The company is leveraging AI to enhance software development and operational efficiencies, with initiatives like the Blue Prism Work HQ platform and increased AI integration.
SS&C Technologies Hldgs raised its 2026 guidance, anticipating revenue between $6.664 billion and $6.824 billion and adjusted diluted EPS growth of approximately 12% at the midpoint.
The company returned $233 million to shareholders in Q1 through share repurchases and dividends, maintaining a strong focus on shareholder returns.
Management emphasized the strategic importance of AI and technology-enabled services, highlighting strong client relationships and market opportunities, particularly in the asset management and healthcare sectors.
Full Transcript
OPERATOR
Good day and thank you for standing by. Welcome to the SSC Technology’s first quarter 2026 earnings call. At this time, all participants are in a listen only mode. Please be advised that today’s conference is being recorded. After the speaker’s presentation, there will be a question and answer session. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. I would now like to hand the conference over to your speaker today. Justine Stone, Head of Investor Relations.
Justine Stone (Head of Investor Relations)
Welcome and thank you for joining us for our Q1 2026 earnings call. I’m Justine Stone, Investor Relations for SS&C Technologies Hldgs. With me today is Bill Stone, Chairman and Chief Executive Officer Rahul Kanwar, President and Chief Operating Officer and Brian Schell, our Chief Financial Officer. Before we get started, we need to review the Safe Harbor Statement. Please note the various remarks we make about future expectation plans and prospects, including the financial outlook we provide, constitute forward looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent annual report on Form 10-K, which is on file with the SEC and can also be accessed on our website. These forward looking statements represent our expectations only as of today, April 23, 2026. While the company may elect to update these forward looking statements, it specifically disclaims any obligation to do so. During today’s call we will be referring to certain non GAAP financial measures. A reconciliation of these non GAAP financial measures to comparable GAAP financial measures is included in today’s earnings release which is located in the Investor Relations section of our website at www.ssctech.com. I will now turn the call over to Bill.
Bill Stone (Chairman and Chief Executive Officer)
Thanks Justine and welcome everyone. The first quarter of 2026 included a war in Iran, tariffs galore, spiking oil prices and other macro headwinds. Nevertheless, we delivered strong first quarter results underscoring SS&C Technologies Hldgs’s resilience based on our performance and visibility. Today we are raising 2026 guidance. We recently rang the NASDAQ closing Bell to celebrate SS&C Technologies Hldgs’s 40 year anniversary of powering mission critical systems our financial services and healthcare clients rely on every day. Our business is built on deep domain expertise, strong trusted client relationships and constant innovation guided by what we call our Customer Zero strategies. These strengths position us well as our industry enters the next phase of technology transformation. Driven by AI, we are updating the name of our largest revenue line item to better reflect the deeply embedded technology framework powering our services business. Technology Enabled Services encompasses our proprietary data streams, domain expertise software, private cloud data center infrastructure with ISO and SOC certifications and the redundancy and multi layered cybersecurity measures required by our sophisticated client base. First quarter results were adjusted revenue of $1,648,000,000 up 9% and adjusted diluted earnings per share of $1.69, a 14% increase. We delivered adjusted consolidated EBITDA of 651 million, up 10% and an adjusted consolidated EBITDA margin of 39.5%. The dollar figures I just said are all Q1 records. Adjusted organic revenue growth was 5% with performance driven by GIDS which grew 10.4%, Globeop, which grew 6.7 and our recent acquisitions are executing ahead of expectation, strengthening our global capabilities and expanding our addressable markets. Intralinks grew 3.2% with positive leading indicators and an increasing adoption of its next generation AI enabled deal center platform. The resilience of our business is highlighted by the 581 billion assets under administration we have added to our fund administration business since Q1 of 2024. Across SSC, we are leveraging AI to enhance software development, increase our speed to market, accelerate implementations, improve customer experience and drive efficiencies. These initiatives support both revenue opportunities and cost leverage over time. All of our teams are partnering closely with Blue Prism to scale our AI operations in a governed and secure manner. For the three months ended March 31, 2026, cash from operating activities was $300 million, up 10% year over year. In Q1 we returned $233 million to shareholders which included 2.3 million shares repurchased for 168 million at an average price of 72.60 and 65 million in common stock dividends. Through share repurchases and our dividend policy, 98% of our allocated capital in Q1 was returned directly to our shareholders. At current levels, our conviction around share repurchase has strengthened and we are prioritizing repurchases. Absent high quality accretive acquisitions replacement, we remain bullish on our opportunities and continue to view AI as a structural tailwind for our business. Our platforms are deeply embedded in our clients day to day operation serving as systems of record and execution. That positioning makes SSZ a natural partner as clients look to advance their AI strategy, I mean their artificial intelligence intelligence strategies. I’ll now turn it over to Rahul.
Rahul Kanwar (President and Chief Operating Officer)
Thanks Bill. We had a strong first quarter. Gids and Globeop built on last year’s sales performance with additional new logo wins and continued upsell and cross sell activity across the business. Disciplined attention to our clients is generating new opportunities. SS&C Technologies Hldgs’s pipelines are robust and as always, execution remains the priority. Our AI capabilities, including agents and workflow orchestration are accelerating how services are delivered. Our Customer Zero strategy is working as intended. Internal adoption of AgentIQ capabilities is driving product maturity, credibility and faster time to market. Deep product expertise is the prerequisite for harnessing these tools and we are well positioned. We serve the largest and most sophisticated firms in the world and as their businesses grow more complex, our platforms grow with them. We sit at the center of their operating models with deeply embedded workflows. These workflows form the natural foundation for further innovation. As Bill mentioned, we’ve renamed our largest revenue line to Technology Enabled Services. Our clients are buying services such as NAV computations, tax returns, regulatory filings, investor interactions, risk calculations and hundreds of others. These services are usually tied to contracts for services rather than software license agreements. Delivery requires deep domain knowledge, expertise, operating complex workflows refined over decades, the networks we operate across counterparties, and secure, resilient infrastructure. We estimate that software, largely in the form of subscriptions, represents 11% of this category. With that, I’ll turn it over to Brian to walk through the financials.
Brian Schell (Chief Financial Officer)
Thanks Rahul and good day everyone. Unless noted otherwise, the quarterly comparisons are to Q1 2025 as disclosed in our press release. Our Q1 2026 GAAP results reflect revenues of $1.647 billion, net income of $226 million, and diluted earnings per share of $0.91. Our adjusted non GAAP results include revenues of $1.648 billion, an increase of 8.8%, adjusted diluted EPS at $1.69, a 14.2% increase. The adjusted revenue increase of $133 million was primarily driven by incremental revenue contributions from GIDS of $38 million, Globeop of $29 million and a favorable impact from foreign exchange of $22 million. As a result, adjusted organic revenue growth on a Constant currency basis was 5% and our core expenses increased 2.9%, or $27 million, which also excludes acquisition and impact of FX. Adjusted consolidated EBITDA was a first quarter record of $651 million, reflecting an increase of $59 million or 10%, and a margin of 39.5% 40 basis point expansion. Net interest expense for the quarter for Q1 2026 was $105 million flat year over year adjusted net income was $418 million up 11.1%. Our effective non GAAP tax rate was 22.5% this quarter. Note. For comparison purposes, we have recast the 2025 adjusted net income and EPS to reflect the full year effective tax rate of 22%. Also note the Q1 diluted share count share count is down $247.6 million from $254.9 million year over year primarily due to lower dilutive shares and continued impact of treasury share. Cash flow from operating activity growth of 10% was driven by growth in earnings. SSC ended the first quarter with $421 million in cash and cash equivalents and $7.5 billion in gross debt. SSC’s net debt was $7.1 billion and our last 12 months consolidated EBITDA was $2.6 billion. Resulting net leverage ratio was 2.76 times as we look forward to the second quarter and full year of 2026 with respect to guidance, we will continue to focus on client service and assume that retention rates will be in the range of our most recent results. We will continue to manage our business to support our long term growth and manage our expenses by controlling and aligning variable expenses, increasing productivity and leveraging technology to improve our operating margins and effectively investing in the business especially with respect to R and D sales and marketing. Specifically, we have assumed short term interest rates remain at current levels an effective tax rate of approximately 22.5% on an adjusted basis capital expenditures to be 4.4 to 4.8% of revenues and a stronger weighting to share repurchases versus debt reduction. 2Q26 we expect revenue to be in the range of 1.64 to $1.68 billion and 5.6% organic revenue growth at the midpoint adjusted net income in the range of 408 to $424 million interest expense excluding amortization, deferred financing costs and original issue discount in the range of 102 to $104 million and adjusted diluted EPS in the range of $1.64 to $1.70 for the full year 2026. We increased our expectations to revenue to be in the range of 6.664 to $6.824 billion …
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