Financial software provider SS&C Technologies (NASDAQ: SSNC) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 5.9% year on year to $1.54 billion. The company expects next quarter’s revenue to be around $1.55 billion, close to analysts’ estimates. Its non-GAAP profit of $1.45 per share was 4.2% above analysts’ consensus estimates.

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“SS&C reported record adjusted revenues of $1,537.8 million and record adjusted consolidated EBITDA surpassing $600 million,” says Bill Stone, Chairman and Chief Executive Officer. “We are bullish on our opportunity across the globe in Europe, the Middle East, and Australia, and expect strong performance through the second half of the year. Additionally, we’re excited about what the Calastone acquisition brings — access to new geographies, ETF and Digital Asset capabilities, and cross-sell opportunity.”

Company Overview

Founded in 1986 as a bridge between technology and financial services, SS&C Technologies (NASDAQ: SSNC) provides software and software-enabled services that help financial firms and healthcare organizations automate complex business processes.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $6.05 billion in revenue over the past 12 months, SS&C is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, SS&C’s sales grew at a decent 5.3% compounded annual growth rate over the last five years. This shows its offerings generated slightly more demand than the average business services company, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. SS&C’s annualized revenue growth of 6% over the last two years aligns with its five-year trend, suggesting its demand was stable.

This quarter, SS&C reported year-on-year revenue growth of 5.9%, and its $1.54 billion of revenue exceeded Wall Street’s estimates by 1.4%. Company management is currently guiding for a 5.4% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 4.6% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and implies its products and services will face some demand challenges.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

SS&C’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 22.7% over the last five years. This profitability was elite for a business services business thanks to its efficient cost structure and economies of scale.

Looking at the trend in its profitability, SS&C’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q2, SS&C generated an operating margin profit margin of 22.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

SS&C’s unimpressive 7.1% annual EPS growth over the last five years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

SS&C’s two-year annual EPS growth of 13.1% was good and topped its 6% two-year revenue growth.

Diving into the nuances of SS&C’s earnings can give us a better understanding of its performance. While we mentioned earlier that SS&C’s operating margin was flat this quarter, a two-year view shows its margin has expanded by 1.3 percentage pointswhile its share count has shrunk 1.1%. Improving profitability and share buybacks are positive signs for shareholders as they juice EPS growth relative to revenue growth.

In Q2, SS&C reported EPS at $1.45, up from $1.27 in the same quarter last year. This print beat analysts’ estimates by 4.6%. Over the next 12 months, Wall Street expects SS&C’s full-year EPS of $5.76 to grow 7.4%.

Key Takeaways from SS&C’s Q2 Results

It was encouraging to see SS&C raise its full-year revenue and EPS guidance. We were also happy its revenue, EPS, and EBITDA outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 1.7% to $85.08 immediately following the results.

Is SS&C an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.