SS&C Technologies Hldgs Q3 2026 Earnings Call Transcript

SS&C Technologies Hldgs (NASDAQ:SSNC) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

SS&C Technologies Hldgs reported strong Q3 2026 results with adjusted revenues of $1.691 billion, up 7.8%, and adjusted diluted EPS of $1.78, up 14.8%.

The company achieved record adjusted consolidated EBITDA of $674.8 million, a 9% increase, and an EBITDA margin of 39.9%, a 40 basis points improvement.

Cash from operating activities reached $1.216 billion, an increase of 10.4% year over year. The company returned $225 million to shareholders through share repurchases and dividends.

Strategic initiatives included the unveiling of AI Gateway and WorkHQ platforms at their annual client conference, emphasizing next-generation AI solutions.

SS&C continues to pursue M&A opportunities, focusing on high-value acquisitions while maintaining discipline on pricing.

The company raised its full-year 2026 guidance, expecting revenue of $6.736 to $6.776 billion and adjusted diluted EPS of $7.11 to $7.17.

Operational highlights included expanding their global footprint in the Middle East, Australia, and Europe, and advancements in AI and intelligent automation.

Management expressed confidence in their strategic direction, emphasizing strong client relationships and the ability to leverage AI to enhance service offerings.

Full Transcript

OPERATOR

Good day and thank you for standing by. Welcome to the SS&C Technologies Hldgs third 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 one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one 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)

Hi everyone. Welcome and thank you for joining us for our third quarter 2026 earnings call. I’m Justine Stone, Head of IR for SS&C. 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 today about future expectations, plans and prospects, including the financial outlook we provide, constitute forward-looking statements for the 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, October 22, 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 on the Investor Relations section of our website at www.ssctech.com. I will now turn the call over to Bill.

Bill Stone (Chief Executive Officer)

Thanks, Justine, and welcome everyone. I’m happy to report another strong quarter for SS&C. With growth in revenues, earnings and margin expansion, we have momentum to finish the year strong. Our third quarter results were adjusted revenues of $1.691 billion, up 7.8%, and adjusted diluted earnings per share of $1.78, a 14.8% increase. We delivered record adjusted consolidated EBITDA of $674,800,000, up 9%, and an adjusted EBITDA margin of 39.9%, a 40 basis points improvement.

Adjusted organic revenue growth was 5.2%. With continued performance by our largest businesses throughout the quarter, we had strong sales to both new and existing customers, achieved implementation milestones, and benefited from market tailwinds. Our pipelines continue to grow and we are bullish on several large mandates as we look into 2027. For the nine months ended September 30, 2026, cash from operating activities were $1.216 billion, up 10.4% year over year. This quarter we returned $225 million to shareholders, which included 1.9 million shares repurchased for $154.8 million and $70.5 million in dividends.

In August, we increased our common stock dividend 11.1% to $1.20 per share annually, which reflects the strength and consistency of our cash flow. Our business keeps generating strong recurring free cash flow and that gives us real flexibility in how we put capital to work. We can raise our dividend, keep buying back shares, pay down debt and pursue high-quality acquisitions all at once. We don’t have to choose. On M&A, the opportunity set is growing as private equity firms look to exit some of their holdings. We continue to pursue the right deals aggressively, but we’ll stay disciplined on price.

Financial services technology and services M&A continue to command high valuations, making our own stock one of the most attractive investments we can make. Last month, more than 1,000 leaders from financial services and healthcare clients joined us in Orlando for SS&C Deliver, our annual client conference. The message from that room was clear. Our clients are no longer asking whether to transform, they’re asking how, how fast and with whom. At Deliver, we unveiled a portfolio of next-generation solutions built on two SS&C platforms: AI Gateway, our AI governance platform, and WorkHQ, our award-winning agentic orchestration platform.

Together, they let our clients put AI agents to work on their most complex, highly regulated workflows. These agents work securely with governance built in from day one. AgentIQ is moving quickly from experimentation into production. We see it inside SS&C, where our Customer Zero program is driving innovation and efficiency across all operations. To date, over 900 AgentIQ workflows, 200 AI agents and over 60 digital workers have been built in the WorkHQ development environment. As our business units explore dozens of use cases, we’re bringing the same approach to tokenization. As traditional and digital assets come together, our clients need infrastructure that handles both and SS&C already sits at the center of that infrastructure.

Across all of this, our clients are rethinking their operating models end to end. That’s a transformation, not a single technology purchase. It takes a partner with deep domain expertise, global scale and a proven track record of execution. Few companies can bring all three. SS&C can, and we’re doing it today. I’ll now turn the call over to Rahul to discuss the quarter in more detail.

Rahul Kanwar (President and Chief Operating Officer)

Thanks, Bill. As you noted, we delivered strong third quarter results with 5.2% organic revenue growth and 39.9% EBITDA margins. These results are driven by deep customer relationships and the critical role our products and services play. Our clients keep growing with us and the multiple ways we deliver broad and deep solutions, including outsourcing, co-sourcing and lift-outs, are a competitive advantage. In our technology businesses, we see a steady rate of multi-year renewals reflecting our customers’ confidence in the enduring benefit they will receive from our applications. We also see sustained interest in our new products and services, reinforcing that as a technology provider and outsourcer with scale, we are uniquely positioned to deliver the next generation of AI-enhanced applications. We handle huge volumes of trades, reconciliations, NAV calculations, investor transactions, regulatory filings and hundreds of other functions that require expertise.

Our intelligent automation and analytics business, built around the Blue Prism acquisition in 2022, is at the center of how we capture the opportunities new technologies bring. As Bill mentioned, we have hundreds of AI-enhanced processes and agents in production, many more in development. These make us faster and more accurate and expand our capacity to take on new business as our clients grow. Externally, our new products are gaining traction. We’re also bringing AI directly to clients through collaborations with frontier model companies, integrations with the leading AI platforms and new features built into our applications. Our global footprint is growing and remains a competitive advantage. We are expanding our presence in the Middle East, Australia and Europe, and have recently expanded our operations in Luxembourg and Thailand. 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 Q3 2025 as disclosed in our press release. Our Q3 2026 GAAP results reflect revenues of $1.69 billion, net income of $199 million and diluted earnings per share of $0.83. Our adjusted non-GAAP results include revenues of $1.691 billion, an increase of 7.8%, and adjusted diluted EPS of $1.78, a 14.8% increase. The adjusted revenue increase of $122 million included acquisitions of $39 million and a small favorable impact from foreign exchange of approximately $1.7 million.

As a result, adjusted organic revenue growth on a constant currency basis was 5.2%, and our core expenses increased 4.3% or $42 million, which also excludes acquisitions and impact of FX. Adjusted consolidated EBITDA was $675 million, reflecting an increase of $56 million or 9%, a margin of 39.9%, the 40 basis point expansion. Net interest expense for the third quarter was $107 million, an increase of $3 million compared to last year. Adjusted net income was $429 million, up 9.6%, resulting in the adjusted diluted EPS of $1.78. Our effective non-GAAP tax rate was 22.5% this quarter. Note for comparison purposes, we have recast the 2025 adjusted net income to reflect the full-year effect of tax rate of 22%. The diluted share count is down nearly 5% to 20.46 million from 252.6 million shares year over year, primarily due to the continued impact of treasury share purchases.

Cash flow from operating activities grew 10%, largely driven by growth in earnings. SS&C ended the third quarter with $525 million in cash and cash equivalents and $7.5 billion in gross debt. SS&C’s net debt was $7 billion and our last 12 months consolidated EBITDA was $2.7 billion. The resulting net leverage ratio is 2.63. We are currently in the process of refinancing our $2 billion of notes due next year and will provide an update when that has been completed.

As we look forward to the fourth quarter and full year 2026, with respect to guidance, we will continue to focus on client service and expect 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 and AI tools to improve our operating margins, and strategically investing in the business, especially with respect to R&D and sales and marketing.

Specifically, we have assumed short-term interest rates to 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. For 4Q26 we expect revenue to be in the range of $1.7 to $1.74 billion and 4% organic revenue growth at the midpoint, adjusted net income in the range of $454 to $470 million, interest expense excluding amortization of deferred financing costs and original issue discount in the range of $103 to $105 million, and adjusted diluted EPS in the range of $1.88 to $1.94.

For the full year 2026, we increased several revenue and earnings expectations as follows: revenue to be in the range of $6.736 to $6.776 billion and 5.5% organic revenue growth at the midpoint; adjusted net income in the range of $1.726 to $1.742 billion; adjusted diluted EPS in the range of $7.11 to $7.17, reflecting approximately 16.3% growth at the midpoint. We are now targeting EBITDA growth of 10%, EBITDA margin expansion of 90 basis points for the year, and exiting the year with 41% EBITDA margins.

And now back to Bill.

Bill Stone (Chief Executive Officer)

Thanks, Brian. We’re pleased with our third quarter and the momentum we’re carrying into the rest of the year. We exceeded expectations on revenue and margins, and we are raising our outlook for the full year. Our clients continue to invest in SS&C and expand their relationships with us, and our pipelines are healthy across our businesses and region. As we look ahead to 2027, we’re excited about the opportunities in front of us. Demand for our outsourcing solutions remains strong.

Our technology keeps getting better, and the capabilities we’re building are changing how we serve clients. As always, we’ll stay disciplined in how we operate, invest and allocate capital to create long-term shareholder value. And with that we’ll start taking questions.

OPERATOR

Thank you. As a reminder to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1. Again, please limit yourself to one question and one follow-up and then you may rejoin the queue. One moment for questions. Our first question comes from Dan Perlin with RBC Capital Markets. You may proceed.

Dan Perlin (Analyst at RBC Capital Markets)

Good evening. I had a question on the kind of midpoint of the organic growth assumptions for 4Q. Obviously you had big renewals in the second quarter. This quarter at 5.2 seemed like more normalized and so I’m just trying to make sure I understand kind of what’s the, what’s the gating factor to get this to decelerate. I know that there’s the anniversary partially of Insignia that probably plays into that but everything else seems to be going fairly well.

So any details around what would be the key drivers to that would be helpful.

Bill Stone (Chief Executive Officer)

Dan. I think in general, right, it’s again that we have a lot of pretty big mandates in our pipelines. And while we’re getting buy signals all over the place, we prefer ink on contracts. And so that’s the thing that changes organic revenue growth. 100–150 basis points, 200 basis points. That’s just the nature of large-scale contracts. And so our contracts now could be $25, $50 million and up. And, you know, so there’s a lot of lawyers out there. They haven’t gone away, you know, and so it’s getting that down and negotiated and signed and then getting them live.

Dan Perlin (Analyst at RBC Capital Markets)

Got it. No, that makes total sense.

Brian Schell (Chief Financial Officer)

Hey, very quickly, if I could just add to the back of that, you know, the other thing is, as you will note, absolute revenue is actually up in Q4 relative to Q3. Right. And very much in line with kind of, I’d say ahead of where we thought we were going to be for the year. So most of this is really just quarter-over-quarter timing. So if you look back at Q3 and Q4 last year, that’s probably part of the explanation. That was one of the largest growth quarters we had last year. Fourth quarter of last year as you recall too.

Dan Perlin (Analyst at RBC Capital Markets)

Yep, that’s a very good point. Just a quick follow-up, Bill, on the M&A commentary looking more interesting, I guess, as PE firms are kind of looking at the exit of their portfolios. I’m just wondering what are the areas that you’re most interested in looking to expand as you think about these opportunities that are facing the company in ’27 and ultimately ’28? Thank you.

Bill Stone (Chief Executive Officer)

Well, as you see, right, I mean there’s been a lot of FinTech M&A in the last 90 days even and the multiples are pretty eye-popping, you know. So we think we have very valuable businesses. You know, a number of our businesses are bigger in those areas than some of the M&A that’s going on and more profitable. So, you know, we have big successful businesses and, you know, we’ll probably expand and, you know, if we could find stuff in fund administration we would.

But, you know, we’ve probably bought 20 fund administration companies, you know, over the last 20 years and we were kind of the pioneer in that. And now they drive prices to points where you wonder if that’s where we should go. And we’ve also done really a great job of transforming our Global Investor and Distribution Services that we acquired with DST and that’s now got great momentum with Insignia. That’s still a very large client with a lot of work for us to do. But on what we’ve done for them so far, outsourcing their business as usual to us has been a very big success. And I believe that’s what’s going to happen with a number of other large institutions that become somewhat constricted in what they can do and how fast they can do it.

And we move a little faster. We’re a little more decisive in what we do. And, you know, as I’ve said many times, we don’t dabble. As Rahul said earlier, we bought Blue Prism in 2022 for about 1.6 billion. Last year we bought Cowstone, which gives us a real leg up in tokenization. And they also run about a 7,000 funds network. So we don’t dabble. We get in, we get the expertise, and we distribute it on a global scale.

Dan Perlin (Analyst at RBC Capital Markets)

Excellent. Thank you.

OPERATOR

Thank you. Our next question comes from Kevin McVeigh with UBS. You may proceed.

Kevin McVeigh (Analyst at UBS)

Great. Thanks so much. Congratulations on the results. I mean, just really continue to execute at a super high level. I guess the margins continue to really, really impress. Bill, as you’re absorbing these ever larger engagements, maybe talk to that a little bit and where you are on the AI journey. And I guess related to all of that, does that change the acquisition strategy in terms of willing to even size up something more, just given how strong you are operationally at this point?

Bill Stone (Chief Executive Officer)

You know, Kevin, you’ve been around us for a while and you kind of understand the process we go through to kind of validate what acquisitions we want and what areas we want to get larger in. We would do a big acquisition and there’s a lot of companies out there that ever since the mass scare on SaaS businesses, some of them haven’t recovered nearly like we have. I don’t believe they have as strong a business as we do, but that’s somewhat in the eye of the beholder.

But, you know, we continue, like earnings are up 14.8%, you know, and, you know, we generate 1.216 billion in cash flow in nine months. And, you know, as we said in our prepared remarks, you know, we don’t have to choose on what we want to do. We can do all of them. We can fund them ourselves. You know, we can execute. The capital markets are very friendly to us. You know, they know we borrow money and we pay it back. Right. And we work hard for our shareholders, you know, and that’s a constant theme with anyone you talk to at SS&C. So we’re, you know, we’re pretty focused. We’re pretty ambitious. And we’re also pretty judicious. So I think that’s kind of what we’re looking at at M&A. You know, I’m pretty certain there’s some really big places that are for sale and we just have to make sure that if we were to buy one, we got it at the right price.

Kevin McVeigh (Analyst at UBS)

Super helpful. And then just real quick, the AUA just continues to move ahead despite, you know, the volatility and, you know, concern about private equity, so on and so on. Anything to call out in terms of just the sequential build, because it’s just that the pacing of it is just really, really impressive. Is that just, you know, spin-outs that you’re winning or just normal pace? Anything to call out on the AUA?

Bill Stone (Chief Executive Officer)

Well, you know, Kevin, again we have almost all of the large-scale global macro funds, you know, so. And they tend to be the ones hoovering up the most assets that are out there. So we get a very large chunk of those and, you know, we invest heavily to make sure that we can satisfy their needs and then also branch into where they want to go, you know, whether that’s Abu Dhabi or that’s private markets, you know, so it’s something that we invest a lot of money and it has proven, as you see on how big those assets grow every quarter, to have been a pretty successful strategy.

And I think, you know, Rahul’s really close to that business.

Rahul Kanwar (President and Chief Operating Officer)

Yes. So in addition to, you know, our big clients having a lot of success in getting bigger, the other thing that’s happening is with all the focus on technology, folks are starting to realize that ownership of the entire technology stack that runs the fund administration business is a huge advantage. Right. And gives us the opportunity to deploy AI and new functionality at a very, very quick pace. And so that’s helped us, it’s helped us in the win rate.

Bill Stone (Chief Executive Officer)

Yeah. And it gives us, you know, we talk about across the entire fund administration tech stack, you know, we have very powerful trading systems. We have a very powerful network that’s in, you know, 60, 70 countries, you know, so, you know, we have a big fixed network. Right. So there’s not many things that we don’t do. We have models that will value fixed income. You know, we have tons of different strategies across all the different fund type companies.

And so, you know, we’re pretty optimistic about where we sit and we remain very competitive.

Kevin McVeigh (Analyst at UBS)

That’s terrific. Congrats again. Thank you.

OPERATOR

Thank you. Our next question comes from Jeff Schmidt with William Blair. You may proceed.

Jeff Schmidt (Analyst at William Blair)

Hi. Thank you. So debt leverage is low compared with historical levels, with interest rates rising. And then you have debt refinancing coming up next year. How are you thinking about capital allocation in ’27, especially if the Fed keeps hiking?

Bill Stone (Chief Executive Officer)

Well, again, right now, if you look at our stock trading in the mid-80s, we’re going to generate $7.25 in cash or something like that, and we pay a $1.20 dividend. So that gets you up to, say, $8.50 maybe. So $8.50 on an $85 stock is 10%. So we think buying back our stock, where we save that $8.50 on every share, is a little more attractive than paying down 6.57% debt, whose interest is tax deductible. So that’s kind of the math we do. But we still pay down some debt all the time and we buy back shares all the time and we look at acquisitions all the time and we raise our dividend most of the time.

So I think that’s kind of how we look at the capital allocation. And, you know, people say, so, you know, why do you talk to your debt holders? Because we might want to do a big acquisition and we’re going to have to borrow money. Right. So it’s making sure that we have constant communications with the banks. We have constant communications with our clients, you know, as well as with obviously our workforce. And that’s something that I think we really pride ourselves on.

Jeff Schmidt (Analyst at William Blair)

Okay, great. And then for the intelligent automation and analytics, organic growth declined 4.5% in the quarter. Just curious how much of that reflects kind of continued pressure in Blue Prism. And could newer offerings like Work HQ return that business to growth?

Rahul Kanwar (President and Chief Operating Officer)

I think it’s two things. One, the second part of what you said there is what we think. There’s a fair amount of product development, new product bringing to market in that process. Right. And so I think there’s probably a natural lag that is somewhat reflected in the numbers. But I think the other thing that I would highlight is that business is at the center of all the AI-related commentary that you’ve heard us make in our prepared remarks. And really the new products, the new services, the strength in our fund administration business, the strength in our technology businesses, a lot of that is driven out of that.

So sometimes the growth and the success we have is reflected in different places as opposed to just in that business.

Bill Stone (Chief Executive Officer)

As you well know, we also, it’s kind of a crossover. You know, we think some of our smarter clients recognize that RPA works very well for them in some large sections of what they do. And, you know, ripping out your infrastructure is long, painful, breaking rocks in the desert. Right? So. But if you can keep your RPA bots working for you and then add agentic agents, you get the best of both worlds because you get to transition at your speed. And you still are automating and automating and automating.

And that’s something that we think is very attractive and we’re attracting some very big clients to our platform.

Jeff Schmidt (Analyst at William Blair)

Got it. That’s helpful. Thank you.

OPERATOR

Thank you. Our next question comes from Pete Heckman with DA Davidson. You may proceed.

Pete Heckman (Analyst at DA Davidson)

Hey, good afternoon. I had a similar question on that. Let me get back in the queue and look at my list. Sorry.

OPERATOR

Thank you. And as a reminder to ask a question, please press star 1 1 on your telephone. Our next question comes from Alexi Gogolev with JP Morgan. You may proceed.

Bella Kamajan (Analyst at JP Morgan)

Hi, this is Bella Kamajan for Alexi. Thanks so much for taking our questions. So, for the first one, looking at the WIT segment’s organic growth deceleration after much stronger nearly 10 last quarter, could you help us dig a little more into what drove that change and whether investors should view that as mainly timing-related or possibly indicative of a more normalized demand environment?

Bill Stone (Chief Executive Officer)

Well, you know, we had a very large renewal in the last quarter in WIT, and you know, those things with 606, you’re going to get spikes in revenue. And so there’s no way around that. And, you know, I would say that, you know, what they’re doing is extending their contracts, you know, for multiple years, you know, five to 10 years. And that’s a great big, great big flush to earnings or to revenue, which also goes to earnings pretty much. So I would say it’s not, you know, our demand in WIT is high, remains high, it remains widespread, global.

And so I don’t think that the reduction in organic revenue in Q3 compared to Q2 is anything other than that really big renewal. Yeah, well, I think, you know, I think we really believe that, you know, the large-scale financial institutions around the world, you know, need to have a partner that can understand their business and then platform them away from where they are now so that they get a chance to improve their business. Right. So, you know, when you think about a large-scale system going into a large-scale institution, sometimes the institution doesn’t stay up with the releases and they can get multiple releases behind and then it becomes almost impossible to catch up, you know, and that means they sacrifice all the improvements in those applications when companies like us come out with new releases. So that’s what’s driving that. I don’t think it’s going to change. I think more and more institutions are going to recognize that, you know, SS&C Technologies Hldgs is a specialist firm, right.

We’ve got thousands and thousands of CPAs and chartered accountants and MBAs and CFAs and mathematicians. So, you know, it’s specialized. We’re not investment bankers and we’re not investment professionals from the standpoint of, you know, which sector or which area of the world that you should be investing in. But wherever you’re investing, we’re expert in how to process them, how to make sure the regulators are satisfied, how to get information back to you very quickly and have it in a format that you want.

Thank you.

OPERATOR

Thank you. And as a reminder to ask a question, please press star one one on your telephone. Our next question comes from James Fossett with Morgan Stanley. You may proceed.

James Fossett (Analyst at Morgan Stanley)

Thanks. A couple of, I guess, strategic and development questions here. Just wondering how, and you’ve talked about AI and how that’s starting to price some benefits, wondering how and if that’s impacting customer pricing dynamics. I mean, as you’ve had more conversations with customers around AI and agentic automation, how’s that influencing the commercial part of the negotiations and rules? Are customers demonstrating a willingness to pay more for the enhanced automation or are they increasingly viewing AI-driven productivity as a reason to push back on pricing, and just wondering how we should think about the net impact on your long-term organic growth opportunity.

Bill Stone (Chief Executive Officer)

Well, of course, really smart organizations are pushing back on price the whole time. This is just one more, you know, kind of arrow in their quiver about, you know, where to come at, you know, technology companies such as us, you know, and what we have to do is make sure that our offering is differentiated. You know, you really can’t walk into the Mercedes dealership and think you’re going to pay for a Volkswagen. You’re not going to be able to do that.

And that’s what we do. We spend more money on R&D, we spend more money training our people, we spend more money making sure we have a global footprint so that companies such as yours and others can feel comfortable that we have the expertise, the broad-based knowledge of different markets and different time zones and that we’re going to be there. And that peace of mind for senior executives is pretty important. And that’s what we strive to do, is to give, you know, whether it’s Ted Pick or Jamie Dimon, the feeling that, hey, we’re there, we’re not going anywhere and we can process volume and we can process it globally.

James Fossett (Analyst at Morgan Stanley)

Got it, got it. Appreciate that perspective. I think it’s a good one. And then wanted to ask about tokenization and just what you’re seeing there. We’ve seen a lot of headlines and we ourselves have done quite a bit of research on how we’re seeing some assets come on chain. But, you know, that could end up being widespread. How should we think about, you know, the impact to the Calistone business and, you know, what the opportunities, challenges may be there?

Thank you.

Bill Stone (Chief Executive Officer)

Well, you know, we talked about it a little bit before and, you know, Rahul’s done a lot of work in this area too. I just learned how to spell tokenization. But we really believe that, you know, the concept that, you know, the token is like a poker chip, so it becomes very portable and it also isn’t something that you have to go do a 10-Q and a 10-K and everything in order to get some liquidity. So we think it’s going to continue to be attractive in all kinds of different markets.

And Calistone continues to grow handsomely in the double digits.

Rahul Kanwar (President and Chief Operating Officer)

And, you know, I think maybe the one thing that I would add is what we’ve always tried to do across all of our services and capabilities is be ready for what our customers might need us for. This is a perfect example of that. So we’ve got customers at every end of the spectrum, some that are embracing it wholeheartedly, some that are experimenting, some that want to learn more. And the fact that we have this capability is yet another differentiator.

James Fossett (Analyst at Morgan Stanley)

Thanks for the input there, guys.

OPERATOR

Thank you. Our next question comes from Patrick O’Shaughnessy with Raymond James. You may proceed.

Patrick O’Shaughnessy (Analyst at Raymond James)

Hey, good afternoon. Is there anywhere in your business where you’re seeing signs of competitive disruption from AI-native startups or clients looking to take activities in-house by leveraging AI capabilities themselves?

Bill Stone (Chief Executive Officer)

You know, Patrick, I think that there’s a lot of noise and I think there’s a lot of companies that are trying things, you know, and you get some of the people that are on the, you know, on the front-office side of asset managers and different funds that, you know, basically say, look, I can get my kid with AI and, you know, in two weeks we could rewrite Geneva. Yeah, good luck. You know, I would suggest you get well provisioned for those two weeks because at the end of the two weeks, you’ll go, wow, where should we get started?

So, you know, the complexity, the scale, all of that comes into being able to deploy. And as you know, you’re highly regulated, you know, and as soon as something comes up and agentic didn’t do it right, and something got duped or something like that, you know, the brakes come on so fast that you can’t get it, you know, you can’t get it released again. So I think that’s what we’ve tried to be, is a trusted partner that can show you. Come into our offices.

We process trades to the millions every day. All kinds of transactions all over the world in every currency. Come see how we do it. Come see how we do Work HQ. Come see how our governance and AI gateway protects us and just how we can deliver to you. So it protects you. So that’s what we’re doing. And we think it’s a very, very sound strategy. We’ve won some very nice accounts. And I know we’ve mentioned Marsh before, but there’s others that we’ve been adding, you know, but it’s new technology and you have to get people to adopt it and they have to get comfortable, and then you have to go, go, go, go.

You know, when I started in this business, you know, people said I would never put my assets on a PC. Well, you’re not putting your assets on a PC, you know, kind of whatever. So, you know, your assets are at DTC, right? And this is just an accounting system, you know, so it is something where we need to continue to teach and educate and have people be comfortable with what they’re doing and how they can use, you know, AI and all the different models which, you know, are coming out every week or every day and try to make it so that, you know, you succeed with the technology, you don’t drown in it.

And I think we’ve been doing this for a long time. Whether it’s when they first came out with Excel or, you know, dBase and then, and then Novell Networks, and then everything’s client server, you know, we always tried to be true client server. I never quite knew what that meant. We weren’t ever false client server that I knew of, you know, and so that’s how technology goes, you know, and you were around when, you know, the Internet and the bubble, and then the bubble pops and ooh, that hurt, you know.

So I think that’s what we’re trying to do is take a measured approach. We have very, I think, very slick technology that works and we have a lot of confidence that it’s going to drive a lot of revenue.

Patrick O’Shaughnessy (Analyst at Raymond James)

Understood, thank you. And then getting back to the Wealth and Investment Technologies business, is there an opportunity for that business to consistently kind of get to mid single-digit or better revenue growth or is it just kind of structurally more mature, competitive end market?

Rahul Kanwar (President and Chief Operating Officer)

I think if you normalize the growth rate, it probably is at mid single digits now. Right. You just got to—it’s what Bill said earlier—you really do have to strip out, you know, and normalize the 606-related spikes and things like that. But if you, you know, we had a really big Q2 as one example. In general, when we think about that business and we look at it in terms of annual recurring revenue and correct for some of those kinds of things, we’re seeing a business pretty close to mid single digits, right.

With certain of their assets growing at quite a bit higher than that. So like Black Diamond, which is our primary wealth platform, is growing at double digits and continues to show strength, you know, against all the other wealth platforms that are out there. And we think that will continue.

Patrick O’Shaughnessy (Analyst at Raymond James)

All right, terrific. Thank you.

OPERATOR

Thank you. I would now like to turn the call back over to Bill Stone for any closing remarks.

Bill Stone (Chief Executive Officer)

You know, once again, we really appreciate everybody being on our third quarter conference call. And, you know, we’re working hard in the fourth quarter and, you know, we hope to talk to you in February and discuss another strong quarter, which will be Q4 of 26. Thank you.

OPERATOR

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

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