Financial software provider SS&C Technologies (NASDAQ: SSNC) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 5.4% year on year to $1.51 billion. On the other hand, next quarter’s revenue guidance of $1.51 billion was less impressive, coming in 1.4% below analysts’ estimates. Its non-GAAP profit of $1.44 per share was 2.4% above analysts’ consensus estimates.
Is now the time to buy SS&C? Find out by accessing our full research report, it’s free.
SS&C (SSNC) Q1 CY2025 Highlights:
- Revenue: $1.51 billion vs analyst estimates of $1.50 billion (5.4% year-on-year growth, 0.8% beat)
- Adjusted EPS: $1.44 vs analyst estimates of $1.41 (2.4% beat)
- Adjusted EBITDA: $591.9 million vs analyst estimates of $597.6 million (39.1% margin, 0.9% miss)
- The company slightly lifted its revenue guidance for the full year to $6.18 billion at the midpoint from $6.17 billion
- Management slightly raised its full-year Adjusted EPS guidance to $5.84 at the midpoint
- Operating Margin: 23.6%, in line with the same quarter last year
- Free Cash Flow Margin: 17.1%, up from 8.7% in the same quarter last year
- Market Capitalization: $18.82 billion
“SS&C reported adjusted revenues of $1,514.8 million and adjusted consolidated EBITDA of $591.9 million, both of which are first quarter record results,” says Bill Stone, Chairman and Chief Executive Officer.
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.
Data & Business Process Services
A combination of increasing reliance on data and analytics across various industries and the desire for cost efficiency through outsourcing could mean that companies in this space gain. As functions such as payroll, HR, and credit risk assessment rely on more digitization, key players in the data & business process services industry could be increased demand. On the other hand, the sector faces headwinds from growing regulatory scrutiny on data privacy and security, with laws like GDPR and evolving U.S. regulations potentially limiting data collection and monetization strategies. Additionally, rising cyber threats pose risks to firms handling sensitive personal and financial information, creating outsized headline risk when things go wrong in this area.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $5.96 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. However, its scale is a double-edged sword because finding new avenues for growth becomes difficult when you already have a substantial market presence. To expand meaningfully, SS&C likely needs to tweak its prices, innovate with new offerings, or enter new markets.
As you can see below, SS&C’s 4.9% annualized revenue growth over the last five years was mediocre. This shows it couldn’t generate demand in any major way and is a tough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. SS&C’s annualized revenue growth of 5.5% 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 5.4%, and its $1.51 billion of revenue exceeded Wall Street’s estimates by 0.8%. Company management is currently guiding for a 3.9% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 5.1% over the next 12 months, similar to its two-year rate. This projection is above the sector average and suggests its newer products and services will help support its recent top-line performance.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
Operating Margin
SS&C has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 22.7%.
Analyzing the trend in its profitability, SS&C’s operating margin rose by 1.1 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, SS&C generated an operating profit margin of 23.6%, 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 EPS grew at an unimpressive 7.1% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 4.9% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of SS&C’s earnings can give us a better understanding of its performance. As we mentioned earlier, SS&C’s operating margin was flat this quarter but expanded by 1.1 percentage points over the last five years. On top of that, its share count shrank by 4%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
In Q1, SS&C reported EPS at $1.44, up from $1.28 in the same quarter last year. This print beat analysts’ estimates by 2.4%. Over the next 12 months, Wall Street expects SS&C’s full-year EPS of $5.57 to grow 8.3%.
Key Takeaways from SS&C’s Q1 Results
It was good to see SS&C narrowly top analysts’ revenue expectations this quarter. We were also happy its EPS outperformed Wall Street’s estimates. On the other hand, its revenue and EPS forecast for next quarter missed despite the company raising its full-year outlook. Overall, this was a softer quarter. The stock traded down 1.8% to $76 immediately following the results.
SS&C didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
