Financial software provider SS&C Technologies (NASDAQ: SSNC) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 7% year on year to $1.57 billion. The company expects next quarter’s revenue to be around $1.61 billion, close to analysts’ estimates. Its non-GAAP profit of $1.57 per share was 6.5% above analysts’ consensus estimates.

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“SS&C reported record adjusted revenues of $1,569 million and adjusted consolidated EBITDA of $619 million. These numbers attest to the company’s long-term financial and operating strength. The 22% increase to $1,101 million in operating cash flow through three quarters gives us flexibility to pursue growth opportunities as we continue to pay down debt and repurchase shares,” 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.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $6.15 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 grew its sales at a decent 5.7% 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 6.4% 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 7%, and its $1.57 billion of revenue exceeded Wall Street’s estimates by 1.3%. Company management is currently guiding for a 5.2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 4.9% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its products and services will see some demand headwinds.

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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 generally stayed the same, averaging 22.8% 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 Q3, SS&C generated an operating margin profit margin of 23.3%, up 1.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.

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 7.3% 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.

For SS&C, its two-year annual EPS growth of 15.6% was higher than its five-year trend. This acceleration made it one of the faster-growing business services companies in recent history.

In Q3, SS&C reported adjusted EPS of $1.57, up from $1.29 in the same quarter last year. This print beat analysts’ estimates by 6.5%. Over the next 12 months, Wall Street expects SS&C’s full-year EPS of $6.04 to grow 7.9%.

Key Takeaways from SS&C’s Q3 Results

It was good to see SS&C beat analysts’ EPS expectations this quarter. We were also happy its full-year EPS guidance narrowly outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance was in line and its EPS guidance for next quarter fell slightly short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 2.6% to $83 immediately after reporting.

Big picture, is SS&C a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.