SS&C Technologies: revenue up $1.2 billion, owner cash flow up $6 million

Since 2021 SS&C Technologies has added $1.2 billion of annual revenue. Free cash flow after capitalized software and stock pay, the hardest measure I can build from its filings, was $1,178 million in 2021 and $1,185 million in 2025. Screeners show the shares at 11.5 times trailing free cash flow. On the harder measure the multiple is 16.4, and 16.4 times for a business that has not grown its owner cash flow in four years is a different proposition.

At the October 15, 2026 regular session close of $84.19 the shares trade 2.3% below my triangulated Base value of $86.20, an upside of 2.4%. The Bear value of $59.14 is 29.8% below the price and the Bull value of $120.23 is 42.8% above it. Confidence is grade C (17/25), the required margin of safety (MOS) is 40%, and the maximum buy price is $51.72. The U.S. market was still open on October 16 when I wrote this; a broker quote of $83.74 that evening was about 0.5% under the close, so that day's trading is not used. Third quarter results are not reflected.

Valuation route: software and technology-enabled services company for financial services and healthcare clients. Primary method: present value of owner free cash flow (cash from operations less all capital spending including capitalized software, less stock pay) over ten years. Secondary method: enterprise value (EV, equity plus net debt) against EBITDA after stock pay. Classification: Standard company, 4 of 12 on the generic scorecard, one point under Quality Growth. Values are present fair value estimates, not 12 month price targets.

What SS&C is

SS&C is based in Windsor, Connecticut and run by its founder William Stone, who is chairman and chief executive. It sells software and, more importantly, runs back-office work for financial services and healthcare clients: fund administration for hedge funds and private markets, investor servicing and distribution, data rooms (Intralinks), automation software (Blue Prism) and, since October 2025, Calastone, a network that routes orders for funds. In the second quarter 83% of revenue was technology-enabled services, work SS&C does for the client, and 17% was license, maintenance and related revenue.

Calastone cost about £766 million ($1.03 billion), closed on October 14, 2025 and was financed with a $1,050 million increase in the term loan B at SOFR plus 2.00%, maturing in 2031. The company gave no revenue figure for it. Management now says acquisitions added about $36 million to second quarter revenue (call transcript, an automated version, so treat it as approximate) and that Calastone is ahead of plan.

Organic growth is the number to watch, because acquisitions have always been a large part of the SS&C story. It was 4.8% in 2025, 5.3% in the fourth quarter and 7.6% in the second quarter of 2026. About 200 basis points of the latest figure came from a few large license renewals, which are recognized up front under ASC 606, the revenue accounting standard. That is why third quarter guidance is only about 5% organic at the midpoint.

The latest quarter and half year

The quarter was good. Revenue grew 10.3%, adjusted EBITDA margin rose 50 basis points to 39.5%, and the company raised full year adjusted EPS guidance from $6.70 to $7.02 to $6.93 to $7.25. Fund administration looks healthy: management says assets under administration rose $581 billion over two years and that its hedge fund redemption index hit its lowest reading since the series began around 2009 (call transcript, automated, so approximate).

Earnings quality needs a second look. GAAP operating income was $417.1 million against $653.8 million adjusted. The gap is $163.3 million of amortization of acquired intangibles, $62.0 million of stock pay, $9.4 million of restructuring and $3.6 million of other items. Amortization is a non-cash result of past deals and I do not count it. Stock pay is a cost, and it is the add-back that has grown fastest: $114 million in 2021 and $258 million in 2025, 22.6% a year against revenue growth of 5.6%. Adjusted EPS of $1.76 compares with GAAP EPS of $0.97.

Cash flow, debt and capital returns

The bottom rows are the ones I use. Screeners compute free cash flow as cash from operations less property and equipment only, which gives $1,752 million for the last 12 months. SS&C also capitalizes software it builds, $222 million in 2025 and $248 million over the last 12 months, and that cash leaves the company just as surely. The company's own capital spending guidance of 4.4% to 4.8% of revenue includes it. Add stock pay and the measure falls to $1,235 million. The capitalized software and stock pay lines came from an aggregator for 2021 to 2024 (its 2025 and first half 2026 figures match the company's releases and the 10-Q).

Revenue grew 5.6% a year from 2021 to 2025, and owner free cash flow per share grew 1.5% a year, from $4.40 to $4.68, while the screener version grew 6.3% a year. The endpoints matter. 2021 was a strong cash year and 2022 and 2023 were weak: measured from 2023 owner free cash flow per share grew 21.7% a year. I think the truth sits between the two. The business converts better than in 2022 and 2023, but capitalized software, stock pay and interest have absorbed most of the revenue growth since 2021. I did not itemize interest and tax for 2021.

One more caution on the base year. The last 12 months of cash from operations ($1,816 million) look better than the guide. The guidance midpoint of $1,767 million less $716.4 million in the first half leaves $1,051 million for the second half, 4.5% below the $1,100 million of the second half of 2025 (my arithmetic). I use the guidance midpoint, not the trailing figure.

Gross debt was $7,613.5 million on the credit agreement basis ($7,577.2 million on the balance sheet, net of issue costs) and cash was $434.8 million, so net debt is $7,178.7 million (my calculation; the company says $7.2 billion). That is 2.75 times by the credit agreement and 3.09 times EBITDA after stock pay (my arithmetic). The senior secured facilities were $4,626.9 million at a weighted average rate of 5.56%, so about $2.95 billion is notes (my subtraction). Interest expense is guided to $406 to $416 million, about 5.4% of gross debt. Management says it is exploring a refinancing of notes that mature in 2027 (call transcript, automated). The 10-Q text I read stopped inside the debt note, so I show no maturity schedule. Noncontrolling interest of $69.8 million is deducted. Operating leases (noncurrent liability $200.1 million) stay out, since rent is already in EBITDA and cash flow.

Capital returns have run ahead of cash flow. In 2025 SS&C spent $1,036.0 million on buybacks and $253.8 million on dividends, $1,290 million in total against owner free cash flow of $1,185 million. In the first half of 2026 it returned $735.0 million against $571.5 million of cash flow after capital spending and before stock pay. The $164 million gap was met with $140 million of net new borrowing and $27 million of cash. Leverage stayed flat because EBITDA grew, but that is the mechanism, not a free lunch.

Which earnings to value

I use the middle of the 2026 guidance. Capital spending is 4.6% of revenue ($310.6 million). Stock pay of $280 million is my estimate: the first half was $123.7 million, up 9.6%, and the same growth on the 2025 total of $257.7 million gives $282 million. Owner free cash flow for 2026 comes to $1,176.4 million, or $4.90 a diluted share, a margin of 17.4%.

Primary valuation: present value of owner free cash flow

SS&C sits in the standard value branch of my method, a technology company with a stable cash flow, and scores 4 of 12 on the generic scorecard, one point short of Quality Growth. A standard company is valued as a normalized cash flow times a justified multiple. Because this cash flow is growing, I build the multiple from a growth path and a discount rate instead of picking a tier. The table tier for an average stable company, 11 times owner free cash flow, gives $53.88 and I treat it as a sanity check close to my Bear value.

Years 1 to 5 grow at a stated rate, years 6 to 10 fade in a straight line to terminal growth, and a Gordon growth terminal value follows. The discount rate is my 10% default, tested at 9% and 11%. Interest is already deducted from the cash flow, so debt stays flat, and buybacks and dividends are not subtracted because they are how the cash reaches owners. Equity value is divided by 240.2 million diluted shares: 234.7 million outstanding on July 23 plus 5.5 million for options and units (my estimate).

Base growth of 6.5% comes from revenue growth of 5.0% a year (organic growth was 4.8% in 2025 and guidance implies about 5.5% for 2026) and an owner margin that rises 0.3 points a year. That is slower than the roughly 0.5 point a year that management targets for EBITDA margin, because interest, capital spending and stock pay are growing too.

Sensitivity: value per share (cash flow method only, terminal growth 2.5%)

A single point of discount rate is worth +$13.37 or -$10.20 a share, and a point of growth about $4.5, so no one input rescues or sinks the case. The price of $84.19 sits between the 10% row at 6.5% and 7.5% growth.

Secondary valuation: EV to EBITDA

The second method asks what the market normally pays for EBITDA after stock pay. I do not have a clean peer table. On the aggregator's own basis Broadridge trades at 12.6 times EBITDA and FIS at 11.1 times. On my basis (year-end enterprise value over adjusted EBITDA less stock pay) SS&C stood at 12.6 times in 2025 and 12.3 times in 2024, and trades at 11.4 times 2026 EBITDA now (11.8 times the last 12 months). The bases differ, so the multiple is an assumption, tested at 11 and 13 times.

Net debt and noncontrolling interest are today's figures in all three cases, so the method does not count future cash flow twice. The Bear multiple of 10 times is below anything in the 2021 to 2025 year-end range that I could check, which is the point of a Bear case.

History and growth diagnostics

The most useful history is the one on the hardest metric. Divide the year-end market value by that year's owner free cash flow and SS&C has stood between 16.4 and 20.2 times, with a median of 18.0. At 16.4 times the last 12 months it is about 9% below that median. Applying the median to the last 12 months of owner free cash flow gives $92.65 a share, +10.0% against the price. I use it as a cross-check only, with no weight.

The growth-adjusted check (PEG) is a diagnostic only. The price is 11.9 times the middle of 2026 adjusted EPS of $7.09, and that EPS is expected to grow about 15.5%, a PEG near 0.8. I do not rely on it. Adjusted EPS leaves out amortization of about $650 million a year and all stock pay, so dividing it by adjusted growth mixes accounting bases, and the growth is helped by share buybacks (diluted shares fell from 253.1 million in 2025 to 242.0 million in the second quarter) and acquisitions. Growth durability: acquisition-affected. PEG is not meaningful. Cyclical distortion: low, although volumes in fund administration and license renewal timing add noise.

Free cash flow growth quality is the weak spot, as the table above shows. Owner free cash flow was $1,178 million in 2021 and $1,185 million in 2025, an absolute rise of $6 million in four years, and its share of revenue fell from 23.3% to 18.9%. Per share, it grew 1.5% a year over those four years and 21.7% a year from the low 2023 base, which I class as low base distorted. Forward yield on my 2026 figure is 5.8% and trailing yield on the harder measure is 6.1%, against 8.7% on the screener measure. Estimate reliability is medium: the company guides one year and I do not use analyst forecasts. The stress test on the cash flow method:

Valuation triangulation

The two Base values differ by 7.9% measured against their midpoint, inside my 20% comfort band. I weight the cash flow method 60% because it deducts the costs the EBITDA method ignores (capitalized software, interest and stock pay beyond the multiple) and relies on fewer assumed multiples. Equal weights would give $86.88. The history cross-check of $92.65 sits above both.

What is the market already pricing in?

At $84.19 and 240.2 million diluted shares the market value is $20,219 million and the enterprise value, with net debt and minorities, is $27,467 million, 11.4 times my Base EBITDA after stock pay against my 12.0 times. A reverse calculation with my method says the price needs owner free cash flow to grow 4.0% a year for five years at a 9% discount rate, 6.7% at 10% and 9.1% at 11%. Put another way, if growth is my 6.5%, the price needs 2026 owner free cash flow of $1,187 million, 0.9% above my $1,176 million.

So the price assumes that SS&C hits its guidance and keeps growing owner cash flow near its revenue growth plus a little margin, which it has not done since 2021. As earnings, the shares trade at 11.9 times adjusted EPS of $7.09 and 24.2 times trailing GAAP EPS of $3.48 (aggregator). The gap between those two is the amortization and the stock pay.

Bear, base and bull scenarios

Bear: clients use AI to push back on pricing and renewals, license timing reverses, hedge fund redemptions return, and the owner free cash flow margin stays at 16.5% with revenue growing 2.5% a year. Stock pay is $295 million, the discount rate is 11% and the market pays 10 times EBITDA. Base: guidance is met, organic growth settles near 5%, and the owner margin gains 0.3 points a year. Bull: organic growth stays near the second quarter's 7.6% (I use 7.0% a year), the margin gains about 0.4 points a year, Calastone grows at the mid-teens rate management describes, the discount rate is 9% and the multiple 14 times, above the 12.3 to 12.6 times of the last two year-ends.

The probability-weighted value is $87.94, 4.5% above the price. The skew is 43% up against 30% down, which is a decent shape, but the upside comes from a 14 times multiple and 9% discount rate, both of which I would want to see earned.

How the buy price is set

A Confidence C score carries a base margin of safety of 35%. I add 5 points for leverage ($7.2 billion of net debt, 3.1 times EBITDA after stock pay, floating-rate term loans and 2027 notes to refinance). No other modifier applies. The required MOS is 40% and the maximum buy price is $86.20 times 0.60, or $51.72. That is 38.6% below the current price and 12.6% below the Bear value of $59.14. At $51.72 the equity would be worth about $12,421 million, 10.6 times my 2026 owner free cash flow, a yield of 9.5%.

Single-input changes in the stress test move the Base between $80.08 and $94.22, so the buy zone runs from about $48 to $57, and the verdict stays Hold in all of them. I checked that no risk is counted twice:

Dividend and buybacks

The aggregator lists a dividend of $1.20 a year ($0.30 a quarter), a 1.43% yield at $84.19. The 10-Q shows $64.0 million paid in the second quarter, about $0.27 a share, so I read the $0.30 as a raise that took effect with the September 1 ex-dividend date (my inference). Dividends paid rose from $174.0 million in 2021 to $253.8 million in 2025, 9.9% a year, and the 2025 payout was 21% of owner free cash flow. The dividend is well covered. Buybacks are the larger return: in 2025 SS&C bought 12.3 million shares at an average $84.12, within 0.1% of today's price, and in the second quarter it bought 6.4 million for $435.2 million. Dividends paid to non-U.S. holders face U.S. withholding tax, and the rate depends on your tax treaty and your broker.

Reasons to own SS&C

• The revenue is sticky. Technology-enabled services are 83% of revenue, the work runs inside client operations, and the adjusted EBITDA margin was 39.2% in 2025 and 39.5% in the second quarter.
• Organic growth has picked up. It rose from 4.8% in 2025 to 7.6% in the second quarter, with about 2 points from renewal timing, and guidance for the year is about 5.5%.
• It generates cash. 2026 cash from operations is guided to $1,717 to $1,817 million, and capital spending of about $310 million (4.6% of revenue) still leaves a free cash flow of about $1.46 billion before stock pay (my arithmetic).
• The share count is falling. Diluted shares were 253.1 million in 2025 and 242.0 million in the second quarter, and the third quarter guide is 237.6 to 240.6 million.
• The price is below its own history. 16.4 times owner free cash flow compares with a year-end median of 18.0, worth $92.65 a share.

What could go wrong?

• Thesis breaker: owner cash flow stays flat while revenue grows. It did exactly that from 2021 to 2025. If capitalized software ($248 million over the last 12 months) and stock pay ($268.5 million) keep growing faster than revenue, a business at 16.4 times is paying for growth it does not deliver.
• Leverage and refinancing. Gross debt is $7.6 billion, interest is guided at $406 to $416 million, notes mature in 2027, and buybacks ran $164 million ahead of cash flow in the first half.
• AI. Analysts have cited AI risk to the stock since at least February 2026. Management says it sees no sign of clients using AI to push on price and points to AI as a driver of its own margin. A Bear case with 2.5% growth is how I price the possibility.
• License renewals are lumpy. About 2 points of second quarter organic growth came from a few large renewals, and the third quarter guide of about 5% shows the reversal.
• Healthcare policy. Management described the Medicare GLP-1 program as a six-month government trial with about even odds of continuing (automated transcript). I could not size its revenue.
• Acquisition accounting. Goodwill ($9,930.0 million) and intangibles ($3,873.8 million) add up to $13,803.8 million against equity of $6,710.5 million. Return on invested capital is 8.7% on the aggregator's measure, close to a cost of capital.
• Data quirk. One aggregator shows net debt of negative $7.33 billion and labels it net cash. It is net debt, not cash, and I use my own $7,178.7 million.

Management execution

William Stone has run the company since he founded it and is both chairman and chief executive. Insiders own 14.4% of the shares (aggregator). The record is good on the measurable items: full year EPS guidance was raised from $6.70 to $7.02 to $6.93 to $7.25, net leverage drifted from 2.80 times at year end to 2.75 times, margin guidance is on track, and the second quarter buyback was the largest in the company's history. Against that, SS&C has spent about $3.3 billion in cash on acquisitions since 2022 (aggregator), adjusted figures leave out amortization and stock pay, stock pay has grown 22.6% a year, and one person holds both top jobs. Assessment: 13/20, strong operators, heavy adjustments.

Stock Analyza scorecard

Return on invested capital is 8.7% on the aggregator's measure, far below the 15% line. Revenue grew 5.6% a year from 2021 to 2025, below 8%. Free cash flow per share grew 6.3% a year on the screener measure and 1.5% on mine, so it earns nothing. The balance sheet gets no point because net debt is about 3 times EBITDA after stock pay with notes to refinance. Unit economics get the point for an adjusted EBITDA margin that has held at 39% to 39.5% in the periods I checked. Recurring economics earn both points on the 83% services share. Runway gets one point: fund administration, Calastone and automation have room, but an 8.7% return on capital says added capital does not earn high returns.

At 4 the score is one point under Quality Growth. A Quality Growth multiple would add premiums for growth, returns and recurring revenue and subtract for leverage and dilution, which is close to what my multiple build does, so the answer would not move much. Character change: acquisition-led, with $1.03 billion for Calastone in 2025. I treat it as neutral, because organic growth has held above 4.8% and the deals are funded with term debt that is already in net debt.

Business quality is 54/100: moat and pricing power 14/20, return versus cost of capital 7/20, balance sheet and resilience 7/15, earnings and cash flow quality 9/15, growth and runway 8/15, management and capital allocation 6/10, dilution and governance 3/5. The valuation score is 45/100: discount to Base 8/40, protection against the Bear case 5/20, agreement between methods 13/15, position against own history 9/10, market-implied expectations 6/10, data and model quality 4/5.

Confidence score

Headline figures come from SS&C's own release and 10-Q, but stock pay for the second half, the diluted share count, the debt maturities and four years of capitalized software come from my estimates or an aggregator, so data quality scores 4. Predictability is good for a services business with 83% recurring work, held back by renewal lumpiness and acquisitions. Valuation robustness is 3 because the terminal value is 52% of the Base and one point of discount rate moves it by about 15%. Scenario values run from $59.14 to $120.23, a range of 73% of the price.

What I would watch from here

Today's readings: organic growth of 7.6% (about 5.5% guided for the year) and a 39.5% margin are green. Leverage of 3.09 times EBITDA after stock pay is yellow today, and so is stock pay at about 4.1% of revenue (2025: 4.1%, 2026 estimate $280 million on $6,752 million). Cash from operations is guided at the midpoint, green on paper until delivered. The next review point is the third quarter report, listed for October 22.

The three most important thesis breakers

1. Owner free cash flow fails again to grow with revenue, because capitalized software and stock pay take the gains, which would confirm the 2021 to 2025 pattern and push the value toward my Bear -30%.
2. Organic growth falls below 3% for two quarters, or renewals come with price concessions, which would be the first evidence that AI pressure is real.
3. Debt costs rise or the 2027 refinancing is expensive while buybacks keep running ahead of cash flow, taking leverage above 3.25 times EBITDA after stock pay.

Stress test and independent check

I recomputed the tables in a separate script written from the raw inputs: the owner free cash flow bridge, the ten-year present value, the grid, the EBITDA method, the triangulation, the scenario values, the reverse calculation, the history ratios, the dividend and buyback arithmetic and the margin of safety. Inputs come from the second quarter 2026 release, the 10-Q for June 30, 2026, the fourth quarter and full year 2025 release and the Calastone completion release. The price is the close shown by a market data aggregator for October 15, 2026; the aggregator's page also showed $82.05 for October 14.

Changes to the share count, stock pay, leases, terminal growth, method weights or the EBITDA multiple move the value by 8% or less, which is why this is a Hold and not a Reduce or a Buy. The discount rate and growth matter more: 9% gives $94.22 and 11% gives $80.08. The harshest combination gives $66.92, 20.5% under the price, which is a Bear-like outcome that still sits above the maximum buy price of $51.72.

The strongest counter-thesis for the bulls: adjusted EPS of $7.09 at 13 times is $92, the buyback is shrinking the share count 4% a year, and the history cross-check says $92.65. My response is that adjusted EPS leaves out stock pay and amortization, and that owner free cash flow has not grown since 2021. For the bears: owner cash flow is flat, leverage is held steady by EBITDA growth rather than repayment, buybacks run ahead of cash, and the 2026 cash flow guide already implies a weaker second half.

Main data limits: I could not verify a peer table or a like-for-like multiple history, I did not read the debt maturity schedule, Calastone's revenue is not disclosed, second half stock pay, the dilution gap, the EBITDA growth cases and the $250 million of operating leases in the stress test are my estimates, the EBITDA growth of 9.3% and several operating details come from an automated call transcript, and the history of shares, market values and capitalized software before 2025 comes from an aggregator.

Final verdict: hold at $84.19

SS&C is a durable, cash-generating business, and the 11.5 times that screeners show is too flattering because it ignores $248 million of capitalized software and $268 million of stock pay. On the harder measure the shares cost 16.4 times, a little under their own five-year median, and at $84.19 the price equals what guidance-level growth is worth. Below $51.72 the margin of safety would be wide enough to buy without any of that growth showing up.

Verdict: HOLD at $84.19, watchlist for new money. Triangulated Base value $86.20, upside 2.4%, Confidence C (17/25), required margin of safety 40%, maximum buy price $51.72.

The bull case is not wrong. It needs owner free cash flow to finally grow as fast as revenue, and the 2021 to 2025 record says that has not happened yet.

Sources

Primary sources include SS&C's second quarter 2026 results release of July 23, 2026, the 10-Q for the period ended June 30, 2026 and the fourth quarter and full year 2025 results release. The Calastone terms come from the company's completion release. Management commentary comes from an automated second quarter earnings call transcript. Price history, multiples and the long cash flow series come from a third-party market data aggregator (price history, cash flow, ratios, Broadridge, FIS). Broker price targets and ratings are not used.

The reference market price is $84.19, the regular session close on October 15, 2026. Net debt is gross debt of $7,613.5 million less cash of $434.8 million at June 30, 2026. Values per share use 240.2 million diluted shares. Owner free cash flow, stock pay for 2026, multiples, scenario values and robustness tests are analytical estimates, not company guidance.