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What changed in SS&C Technologies Holdings Inc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SS&C Technologies Holdings Inc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+253 added−261 removedSource: 10-K (2024-02-28) vs 10-K (2023-02-28)

Top changes in SS&C Technologies Holdings Inc's 2023 10-K

253 paragraphs added · 261 removed · 220 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+8 added−16 removed148 unchanged
Biggest changeOur competitors’ healthcare administration and health outcomes optimization solutions are primarily based on complete replacement of a payer’s core system. With a component-based approach, health payer clients can choose core application replacement, or adopt component applications to address areas that offer the most opportunity for improvement, with minimal disruption to business operations.
Biggest changeWith a component-based approach, health payer clients can choose core application replacement, or adopt component applications to address areas that offer the most opportunity for improvement, with minimal disruption to business operations. 16 Insurance: In our insurance market, we compete with a variety of vendors depending on client characteristics such as size, type, location, computing environment and functionality requirements.
Based on our experience, we believe numerous solution providers address highly particularized financial services needs or provide specialized services that would meet our disciplined acquisition criteria. Acquisitions are discussed further in Liquidity and Capital Resources and in Note 8 to our Consolidated Financial Statements.
Based on our experience, we believe numerous solution providers address highly particularized financial services needs or provide specialized services that would meet our disciplined acquisition criteria. 8 Acquisitions are discussed further in Liquidity and Capital Resources and in Note 8 to our Consolidated Financial Statements.
Using Advent Custodial Data, firms can reconcile positions, transactions and cash activity on an exceptions-only basis, or firms can post data directly into their portfolio accounting system. o Advent Corporate Actions delivers reports on all corporate actions affecting clients’ portfolios and provides staff with reliable transaction instructions. o Advent Portfolio Data extends the delivery of account-level data for reconciliation and other workflows from global custodians and counterparties. o Advent Market Data is a single, cloud-based platform with connectivity to several leading global market data sources, allowing clients to acquire critical data for managing portfolios. • ALPS Advisors – ALPS Advisors is a comprehensive suite of asset servicing, distribution solutions and asset management for open-end mutual funds, closed-end funds, exchange-traded funds and alternative investment funds.
Using Advent Custodial Data, firms can reconcile positions, transactions and cash activity on an exceptions-only basis, or firms can post data directly into their portfolio accounting system. o Advent Corporate Actions delivers reports on all corporate actions affecting clients’ portfolios and provides staff with reliable transaction instructions. o Advent Portfolio Data extends the delivery of account-level data for reconciliation and other workflows from global custodians and counterparties. o Advent Market Data is a single, cloud-based platform with connectivity to several leading global market data sources, allowing clients to acquire critical data for managing portfolios. 10 • ALPS Advisors – ALPS Advisors is a comprehensive suite of asset servicing, distribution solutions and asset management for open-end mutual funds, closed-end funds, exchange-traded funds and alternative investment funds.
SS&C’s Tier1 supplies CRM capabilities to sell-side financial services firms, including research, trading, and sales teams within capital markets groups, 10 and provides a deal management CRM experience to investment banks. • Advent Managed Services – Advent Managed Services provides a full spectrum of tailored options to our clients’ specific needs, from cloud-delivered technology to co-sourcing specific workflows to full outsourcing of operational processes including data management services such as full account aggregation, daily portfolio reconciliation, corporate actions processing and reference data management.
SS&C’s Tier1 supplies CRM capabilities to sell-side financial services firms, including research, trading, and sales teams within capital markets groups, and provides a deal management CRM experience to investment banks. • Advent Managed Services – Advent Managed Services provides a full spectrum of tailored options to our clients’ specific needs, from cloud-delivered technology to co-sourcing specific workflows to full outsourcing of operational processes including data management services such as full account aggregation, daily portfolio reconciliation, corporate actions processing and reference data management.
Its multi-currency, multi-instrument portfolio accounting supports complex securities, sophisticated investment strategies, multi-currency investment management, multiple-bases accounting, and global tax and regulatory processing requirements such as generally accepted accounting principles and Schedule D. o InnoTrust – InnoTrust supports the accounting and reporting needs of trust companies, banks, private banks, retirement plan administrators, and others that need to control, account for and report on assets held in trust, wealth and retirement accounts.
Its multi-currency, multi-instrument portfolio accounting supports complex securities, sophisticated investment strategies, multi-currency investment management, multiple-bases accounting, and global tax and regulatory processing requirements such as generally accepted accounting principles and Schedule D. 12 o InnoTrust – InnoTrust supports the accounting and reporting needs of trust companies, banks, private banks, retirement plan administrators, and others that need to control, account for and report on assets held in trust, wealth and retirement accounts.
In addition, automation and integration eliminate offline workarounds and manual processes. 12 o Aloha – Aloha is an all-new investment operations platform that provides extensive asset class and functional support across the front-, middle-, and back-office. Built natively for the cloud with advanced technology, Aloha features an innovative user experience, actionable monitors, notifications and alerts infused with AI.
In addition, automation and integration eliminate offline workarounds and manual processes. o Aloha – Aloha is an all-new investment operations platform that provides extensive asset class and functional support across the front-, middle-, and back-office. Built natively for the cloud with advanced technology, Aloha features an innovative user experience, actionable monitors, notifications and alerts infused with AI.
With data translation, rules-based matching and superior investigative tools, our Recon and Verify solutions streamlines operational efficiency delivering full visibility into cash, holdings, transactions, trial balances and security masters. 13 • Trading Software o Order Management (Moxy, Eze OMS) – SS&C’s trade order management systems provide centralized platforms for making and managing trade order decisions quickly and confidently.
With data translation, rules-based matching and superior investigative tools, our Recon and Verify solutions streamlines operational efficiency delivering full visibility into cash, holdings, transactions, trial balances and security masters. • Trading Software o Order Management (Moxy, Eze OMS) – SS&C’s trade order management systems provide centralized platforms for making and managing trade order decisions quickly and confidently.
SS&C also services mutual fund structures in many other fund domiciles. GIDS leverages SS&C’s global regulatory expertise to provide a consistent global approach to regulatory compliance, enabling providers to reduce risk and improve client service. Our highly tenured staff of industry experts allow us to deliver consistent service excellence to the asset management 6 customers we service.
SS&C also services mutual fund structures in many other fund domiciles. GIDS leverages SS&C’s global regulatory expertise to provide a consistent global approach to regulatory compliance, enabling providers to reduce risk and improve client service. Our highly tenured staff of industry experts allow us to deliver consistent service excellence to the asset management customers we service.
If we are unable to protect our proprietary technology and other confidential information, our success and our ability to compete will be subject to various risks, such as third-party infringement claims, unauthorized use of our technology, disclosure of our proprietary information or inability to license technology from third-parties. 18 Rapid technological change characterizes the software development industry.
If we are unable to protect our proprietary technology and other confidential information, our success and our ability to compete will be subject to various risks, such as third-party infringement claims, unauthorized use of our technology, disclosure of our proprietary information or inability to license technology from third parties. Rapid technological change characterizes the software development industry.
We are operating our proprietary software to provide these services, ensuring all aspects of our offering are optimized to deliver cost-effective, accurate solutions. As a publicly-traded company, our clients and prospects have access to our periodic filings with the SEC, giving them transparency into our overall financial strength.
We are operating our proprietary software to provide these services, ensuring all aspects of our offering are optimized to deliver cost-effective, accurate solutions. 6 As a publicly-traded company, our clients and prospects have access to our periodic filings with the SEC, giving them transparency into our overall financial strength.
We also have solutions catered to insurance accounting and commercial, consumer and residential loan accounting. o Geneva – Geneva is a global portfolio management platform designed to meet the real-time needs of global asset managers, hedge funds, prime brokers, fund administrators, private equity firms and family offices worldwide.
We also have solutions catered to insurance accounting and commercial, consumer and residential loan accounting. 11 o Geneva – Geneva is a global portfolio management platform designed to meet the real-time needs of global asset managers, hedge funds, prime brokers, fund administrators, private equity firms and family offices worldwide.
The SS&C Blue Prism team supports this process through automation specialists, pre-built automations, training and certification, and our customer support. o SS&C Chorus – Chorus is our digital process automation product suite, encompassing intelligent automation, business process management, content management, case management, outbound communications and a low code development platform.
The SS&C Blue Prism team supports this process through automation specialists, pre-built automations, training and certification, and our customer support. 13 o SS&C Chorus – Chorus is our digital process automation product suite, encompassing intelligent automation, business process management, content management, case management, outbound communications and a low code development platform.
Precision LM manages all aspects of our clients’ loan process, including pre-qualifying loan requests, processing applications, commitment processing, loan disposition, servicing and accounting. 14 • Research, Analytics, Risk and Training o Algorithmics – Algorithmics’ cloud-based solutions deliver risk analytics to address the impact of business and regulatory changes.
Precision LM manages all aspects of our clients’ loan process, including pre-qualifying loan requests, processing applications, commitment processing, loan disposition, servicing and accounting. • Research, Analytics, Risk and Training o Algorithmics – Algorithmics’ cloud-based solutions deliver risk analytics to address the impact of business and regulatory changes.
Our strengths in this market include our flexible technology platform and our ability to provide integrated solutions for our clients. 17 Retirement: In our retirement solutions market, we compete with a variety of vendors and service providers depending on client characteristics such as size, type and functional requirements.
Our strengths in this market include our flexible technology platform and our ability to provide integrated solutions for our clients. Retirement: In our retirement solutions market, we compete with a variety of vendors and service providers depending on client characteristics such as size, type and functional requirements.
In many cases, we have also increased revenues generated by acquired products and services by leveraging our existing products and services, larger sales capabilities and client base. 8 We generally seek to acquire companies that satisfy our financial metrics, including expected return on investment.
In many cases, we have also increased revenues generated by acquired products and services by leveraging our existing products and services, larger sales capabilities and client base. We generally seek to acquire companies that satisfy our financial metrics, including expected return on investment.
We provide our larger clients with a dedicated client support team whose primary responsibility is to answer questions and provide solutions to address ongoing needs. Direct telephone support is provided during extended business hours and additional hours are available during peak periods.
We provide our larger clients with a dedicated client support team whose 14 primary responsibility is to answer questions and provide solutions to address ongoing needs. Direct telephone support is provided during extended business hours and additional hours are available during peak periods.
The 16 key competitive factors in marketing software and services to the alternative investment industry are the need for independent fund administration, features and adaptability of the software, level and quality of customer support and onboarding, level of software development expertise and total cost of ownership.
The key competitive factors in marketing software and services to the alternative investment industry are the need for independent fund administration, features and adaptability of the software, level and quality of customer support and onboarding, level of software development expertise and total cost of ownership.
We believe our acquisitions have been an extension of our research and development effort that has enabled us to purchase proven products and remove the uncertainties associated with software development projects.
We 7 believe our acquisitions have been an extension of our research and development effort that has enabled us to purchase proven products and remove the uncertainties associated with software development projects.
In addition, under SS&C GlobeOp, SS&C Direct provides similar middle- and back-office outsourcing services and application hosting to institutional asset managers, insurance companies and real estate investment trusts. • Global Investor and Distribution Solutions (“GIDS”) – Utilizing proprietary software applications, GIDS delivers global transfer agency and investor servicing powered by a single global servicing platform.
In addition, under SS&C GlobeOp, SS&C provides similar middle- and back-office outsourcing services and application hosting to institutional asset managers, insurance companies and real estate investment trusts. 9 • Global Investor and Distribution Solutions (“GIDS”) – Utilizing proprietary software applications, GIDS delivers global transfer agency and investor servicing powered by a single global servicing platform.
Our solutions enable 9 our clients to focus on core operations, better monitor and manage business performance and risk, improve operating efficiency and reduce operating costs.
Our solutions enable our clients to focus on core operations, better monitor and manage business performance and risk, improve operating efficiency and reduce operating costs.
Our revenues are highly diversified, with our largest client in 2022 accounting for less than 5% of our revenues. Additional financial information, including geographic information, is available in our Consolidated Financial Statements and Note 13 to our Consolidated Financial Statements. 4 Our Industry We serve a number of vertical markets within the financial services and healthcare industries.
Our revenues are highly diversified, with our largest client in 2023 accounting for less than 5% of our revenues. Additional financial information, including geographic information, is available in our Consolidated Financial Statements and Note 13 to our Consolidated Financial Statements. 4 Our Industry We serve a number of vertical markets within the financial services and healthcare industries.
Our senior management team has a track record of operational excellence, an average of more than 20 years of experience in the financial services and healthcare industries and a proven ability to acquire and integrate complementary businesses, as demonstrated by the 65 businesses we have acquired since 1995.
Our senior management team has a track record of operational excellence, an average of more than 20 years of experience in the financial services and healthcare industries and a proven ability to acquire and integrate complementary businesses, as demonstrated by the 66 businesses we have acquired since 1995.
We will seek to opportunistically acquire, at reasonable valuations, businesses, products and technologies in our existing or complementary vertical markets that will enable us to better satisfy our clients’ rigorous and evolving needs. We have proven our ability to integrate complementary businesses as demonstrated by the 65 businesses we have acquired since 1995.
We will seek to opportunistically acquire, at reasonable valuations, businesses, products and technologies in our existing or complementary vertical markets that will enable us to better satisfy our clients’ rigorous and evolving needs. We have proven our ability to integrate complementary businesses as demonstrated by the 66 businesses we have acquired since 1995.
For the year ended December 31, 2022, revenues from professional services represented 2% of total revenues. Product support We believe a close and active service and support relationship is vital to enhancing client satisfaction and furnishes an essential source of information regarding evolving client issues.
For the year ended December 31, 2023, revenues from professional services represented 2% of total revenues. Product support We believe a close and active service and support relationship is vital to enhancing client satisfaction and furnishes an essential source of information regarding evolving client issues.
In addition, we believe our acquisitions have been an extension of our research and development effort and have enabled us to add to our product and service offerings without incurring the uncertainties sometimes associated with software development projects. Since 1995, we have acquired 65 businesses within our industry.
In addition, we believe our acquisitions have been an extension of our research and development effort and have enabled us to add to our product and service offerings without incurring the uncertainties sometimes associated with software development projects. Since 1995, we have acquired 66 businesses within our industry.
Smart, innovative technologies matched with deep functionality streamlines clients businesses and provides users with critical business intelligence via machine learning, workflow engine and KPI and system health monitoring. o HiPortfolio – HiPortfolio is an investment accounting and asset servicing solution for third-party administrators, asset managers, and insurance firms in over 35 countries.
Smart, innovative technologies matched with deep functionality streamlines clients businesses and provides users with critical business intelligence via machine learning, workflow engine and KPI and system health monitoring. o HiPortfolio – HiPortfolio is an investment accounting and asset servicing solution for third-party administrators, asset managers, and insurance firms in more than 35 countries.
By providing mission-critical, reliable software products and services for over 35 years, we have developed a large and growing installed base within the financial services industry. Our clients include some of the largest and most well-recognized financial services firms.
By providing mission-critical, reliable software products and services for more than 35 years, we have developed a large and growing installed base within the financial services industry. Our clients include some of the largest and most well-recognized financial services firms.
We believe there is a significant market opportunity to provide software and services to financial services providers outside North America. In the year ended December 31, 2022, we generated 25% of our revenues from clients outside North America. We are building our international operations to increase our sales outside North America.
We believe there is a significant market opportunity to provide software and services to financial services providers outside North America. In the year ended December 31, 2023, we generated 27% of our revenues from clients outside North America. We are building our international operations to increase our sales outside North America.
Product engineering management efforts focus on enterprise-wide strategies, implementing best-practice technology regimens, maximizing resources and mapping out an integration plan for our entire umbrella of products as well as third-party products. For the years ended December 31, 2022, 2021 and 2020, our research and development expenses were $447.3 million, $414.9 million and $399.4 million, respectively.
Product engineering management efforts focus on enterprise-wide strategies, implementing best-practice technology regimens, maximizing resources and mapping out an integration plan for our entire umbrella of products as well as third-party products. For the years ended December 31, 2023, 2022 and 2021, our research and development expenses were $473.8 million, $447.3 million and $414.9 million, respectively.
With over 20,000 clients spanning the health and financial services industries, our customers’ needs and requirements are always at the forefront of our strategy.
With more than 20,000 clients spanning the health and financial services industries, our customers’ needs and requirements are always at the forefront of our strategy.
Through a series of carefully selected acquisitions and organic growth, the breadth and depth of SS&C’s expertise in financial services and healthcare technology are unmatched. Founded in 1986 and headquartered in Windsor, Connecticut, the Company is home to over 27,000 employees and has 121 offices in 90 cities globally.
Through a series of carefully selected acquisitions and organic growth, the breadth and depth of SS&C’s expertise in financial services and healthcare technology are unmatched. Founded in 1986 and headquartered in Windsor, Connecticut, the Company is home to more than 26,000 employees and has 114 offices in 90 cities globally.
These changes enforce the need for streamlined technology that is flexible and scalable, accurate and reliable analytics, cybersecurity and consumer-directed access to electronic health information. Rapid transformation and market expectations have created an ongoing need for industry expertise and outsourcing, contributing to opportunity.
These changes enforce the need for streamlined technology that is flexible and scalable, accurate and reliable analytics, cybersecurity and consumer-directed access to electronic health information. Rapid transformation and market expectations have created an ongoing demand for industry expertise and outsourcing, presenting opportunities in the healthcare space.
We intend to continue to employ a highly disciplined and focused acquisition strategy to broaden and enhance our product and service offerings, expand our intellectual property portfolio, add new clients and supplement our internal development efforts.
Continue to capitalize on acquisitions of complementary businesses and technologies. We intend to continue to employ a highly disciplined and focused acquisition strategy to broaden and enhance our product and service offerings, expand our intellectual property portfolio, add new clients and supplement our internal development efforts.
The National Committee for Quality Assurance, Centers for Medicare & Medicaid Services and state regulations 5 around health equity are resulting in the need for in-depth, whole-person population segmentation with the ability to include social determinants of health characteristics. New and more stringent guidelines must now be met to satisfy quality ratings and protect revenue.
The National Committee for Quality Assurance, Centers for Medicare & Medicaid Services and state regulations around health equity resulted in a need for in-depth, whole-person population segmentation with the ability to include social determinants of health characteristics. New and more stringent guidelines are still evolving to satisfy quality ratings and protect revenue.
We are a global business providing a broad portfolio of software products and software-enabled services and have approximately 121 offices worldwide. As of December 31, 2022, we had over 24,000 development, service and support professionals with significant expertise across the industries we serve and deep working knowledge of our clients’ businesses.
We are a global business providing a broad portfolio of software products and software-enabled services and have 114 offices worldwide. As of December 31, 2023, we had more than 22,000 development, service and support professionals with significant expertise across the industries we serve and deep working knowledge of our clients’ businesses.
We also believe we have an opportunity to expand our footprint within existing clients. We will continue to focus on cross-selling our products and bundling solutions. Our software-enabled services revenues increased from $3,891.3 million for the year ended December 31, 2020 to $4,273.9 million for the year ended December 31, 2022.
We also believe we have an opportunity to expand our footprint within existing clients. We will continue to focus on cross-selling our products and bundling solutions. Our software-enabled services revenues increased from $4,256.1 million for the year ended December 31, 2021 to $4,488.3 million for the year ended December 31, 2023.
Overall, we continue to see increasing migration to the cloud to achieve operational scalability and lower fixed costs. ● Increased demands for transparency, efficiency and risk management in financial services . Firms continue to focus on operational risk, resulting from discoveries of fraud and mismanagement during the 2008-2009 U.S. financial crisis and concerns regarding transparency and counterparty exposure.
Overall, we continue to see increasing migration to the cloud to achieve operational scalability and lower fixed costs. ● Increased demands for transparency, efficiency and risk management in financial services . Firms continue to focus on operational risk, resulting from concerns regarding transparency and counterparty exposure.
We plan to continue to expand our global market presence by leveraging our existing software products and software-enabled services. We also plan to leverage our growing presence in the Asia Pacific region due to recent acquisitions. Over the last three years, revenue from the Asia Pacific region has increased 33.6% to $258.2 million.
We plan to continue to expand our global market presence by leveraging our existing software products and software-enabled services. We also plan to leverage our growing presence in the Asia Pacific region due to recent acquisitions and large client wins. Over the last three years, revenue from the Asia Pacific region has increased 22.7% to $279.8 million.
Human Capital As of December 31, 2022, we had approximately 27,600 full-time employees, including approximately 16,200 in our international operations, consisting of approximately: ● 4,100 employees in research and development; ● 20,300 employees in client support, consulting and services; ● 1,600 employees in sales and marketing; and ● 1,600 employees in finance, administration and information technology.
Human Capital As of December 31, 2023, we had approximately 26,600 full-time employees, including approximately 15,600 in our international operations, consisting of approximately: ● 4,200 employees in research and development; ● 18,700 employees in client support, consulting and services; ● 1,600 employees in sales and marketing; and ● 2,100 employees in finance, administration and information technology.
Software-enabled Services • SS&C GlobeOp – Named “Best Administrator" for hedge funds and private equity by Hedgeweek and Global Custodian in 2022, SS&C GlobeOp serves a worldwide clientele of hedge funds, private equity funds, funds of funds, real asset funds, managed accounts, family office and undertakings for collective investments in transferable securities (“UCITS”), with more than $2.2 trillion in assets under administration.
Credit Awards 2023 and “Best Administrator – Technology” by Hedgeweek European Awards 2023, SS&C GlobeOp serves a worldwide clientele of hedge funds, private equity funds, funds of funds, real asset funds, managed accounts, family office and undertakings for collective investments in transferable securities (“UCITS”), with more than $2.2 trillion in assets under administration.
We generated revenues of $5,283.0 million for the year ended December 31, 2022 as compared to revenues of $5,051.0 million for the year ended December 31, 2021. In 2022, we generated 75% of our revenues from clients in North America and 25% from clients outside North America.
We generated revenues of $5,502.8 million for the year ended December 31, 2023 as compared to revenues of $5,283.0 million for the year ended December 31, 2022. In 2023, we generated 73% of our revenues from clients in North America and 27% from clients outside North America.
We can also increase our margins by implementing more technology in our services business, including automating traditionally manual accounting functions and utilization of the Blue Prism intelligent automation platform.
We can also increase our margins by implementing more technology in our services business, including automating traditionally manual accounting functions and utilization of the Blue Prism intelligent automation platform. Our Acquisitions As mentioned above, we intend to employ a highly disciplined and focused acquisition strategy.
These options include core claims processing, operational software and high value applications for risk adjustment and quality management. These solutions enable us to serve a large population of payer clients across the market segments. Our business model is characterized by high revenue retention rates and significant cash flow. We generate revenues primarily through our high-value software-enabled services.
These solutions enable us to effectively meet the needs of a wide-ranging population of payer clients across all market segments . Our business model is characterized by high revenue retention rates and significant cash flow. We generate revenues primarily through our high-value software-enabled services.
We embrace hybrid ways of working and encourage employees to take time off to maintain a healthy work/life balance when they need it. In addition, we offer professional development and tuition reimbursement for degree programs and job-related coursework.
We embrace hybrid ways of working and encourage employees to take time off to maintain a healthy work/life balance when they need it.
We expect regulatory changes to increase the complexity of compliance and the demand for our products and services and motivate clients to develop infrastructure and research management processes to mitigate regulatory exposure.
We expect regulatory changes to increase the complexity of compliance and the demand for our products and services and motivate clients to develop infrastructure and research management processes to mitigate regulatory exposure. We plan to benefit from the growing software spend in the increasingly complex and more highly regulated financial services and healthcare landscape.
Our integrated care management solution is a real-time, intuitive, workflow-driven solution suite that assists clients to improve member outcomes and manage costs. In addition to our proprietary systems, we are the exclusive distributor of the Johns Hopkins ACG System (Adjusted Clinical Groups) to health plans in the United States.
Our integrated care management solution comprises a real-time, intuitive, and workflow-driven suite that supports clients in enhancing member outcomes and effectively managing costs. We provide population health analytics via both a proprietary solution for certified HEDIS® measures and exclusive distribution of the Johns Hopkins ACG® System (Adjusted Clinical Groups) to health plans in the United States.
During the year ended December 31, 2022, our top 10 clients represented approximately 13% of total revenues, with no single client accounting for more than 5% of total revenues. 15 Sales and Marketing We believe a direct sales organization is essential in successfully implementing our business strategy, given the complexity and importance of the operations and information managed by our products, the extensive regulatory and reporting requirements of each industry, and the unique dynamics of each vertical market.
Sales and Marketing We believe a direct sales organization is essential in successfully implementing our business strategy, given the complexity and importance of the operations and information managed by our products, the extensive regulatory and reporting requirements of each industry, and the unique dynamics of each vertical market.
Our strengths in this market include our client services model and managed services offering, technology, our ability to deliver functionality by multiple delivery methods and our ability to package our offerings with other SS&C products and services for complete front-to-back support.
Our strengths in this market include our client services model and managed services offering, technology, our ability to deliver functionality by multiple delivery methods and our ability to package our offerings with other SS&C products and services for complete front-to-back support. 17 Robotic Process Automation: RPA is one of the fastest growing and competitive markets as current competitors expand their product offerings and new companies enter the market.
Additional Information We were incorporated in Delaware in July 2005, as the successor to a corporation originally formed in Connecticut in March 1986. Our principal executive offices are located at 80 Lamberton Road, Windsor, Connecticut 06095, and the telephone number of our principal executive offices is (860) 298-4500. Our website address is www.ssctech.com.
Our principal executive offices are located at 80 Lamberton Road, Windsor, Connecticut 06095, and the telephone number of our principal executive offices is (860) 298-4500. Our website address is www.ssctech.com.
Insurance: In our insurance market, we compete with a variety of vendors depending on client characteristics such as size, type, location, computing environment and functionality requirements. Competitors in this market range from large providers of investment operations, accounting and analytics systems, such as State Street (Princeton Financial Systems), Clearwater Analytics and FIS, to smaller providers of specialized applications and services.
Competitors in this market range from large providers of investment operations, accounting and analytics systems, such as State Street (Princeton Financial Systems), Clearwater Analytics and FIS, to smaller providers of specialized applications and services. We also compete with outsourcers, as well as the internal processing and IT departments of our clients and prospective clients.
These services include pharmacy claims administration, pharmacy network solutions, government programs administration, formulary and rebate management, trend control and quality compliance programs, member services and discount drug card programs. ▪ DomaniRx – Domani Rx, LLC, our joint venture with Humana and Elevance Health (formerly Anthem), to create a new cloud-native, API-driven claims adjudication platform.
These services include pharmacy claims administration, pharmacy network solutions, government programs administration, formulary and rebate management, trend control and quality compliance programs, member services and discount drug card programs. ▪ DomaniRx – Domani Rx, LLC, our joint venture with Humana and Elevance Health provides healthcare organizations with end-to-end transparency and data analytics to help them keep up with an ever-changing regulatory environment.
We have generally issued a major release of our core products during the second or third quarter of each fiscal year, including both functional and technical enhancements.
Our research and development engineers work closely with our marketing and support personnel to ensure that product evolution reflects developments in the marketplace and trends in client requirements. We have generally issued a major release of our core products during the second or third quarter of each fiscal year, including both functional and technical enhancements.
The result will be a single cloud-native user experience with proven scalability, resiliency and best-in-class transactional processing capabilities. o Healthcare Administration – We use our proprietary software applications to provide medical claim administration services and health plan compliance and revenue integrity services for payers and providers in the domestic healthcare industry.
This claims adjudication platform leverages SS&C’s technology capabilities and resides on SS&C’s private cloud. The outcome is a unified, cloud-native user experience featuring demonstrated scalability, resilience and best-in-class transactional processing capabilities. o Healthcare Administration – Our proprietary software applications deliver medical claim administration services, health plan compliance and revenue integrity services for payers and providers in the domestic healthcare industry.
In addition, GIDS leverages SS&C’s global regulatory expertise to provide a consistent global approach to regulatory compliance, enabling providers to lower risk and improve client service.
In addition, GIDS leverages SS&C’s global regulatory expertise to provide a consistent global approach to regulatory compliance, enabling providers to lower risk and improve client service. Services include anti-money laundering and fraud detection, blue sky administration and reporting, event center services, reconciliation, remittance, registered fund services and trade monitoring/surveillance.
SS&C Health’s market segments are health plans and pharmacy benefit managers, specifically, those who serve government-funded member segments and those who are seeking a flexible and scalable alternatives to larger integrated vendors. As a total health partner, our suite of solutions spans across health plan operations.
SS&C Health targets health plans and pharmacy benefit managers, specifically, those catering to government-funded member segments and those seeking a flexible and scalable alternative to larger integrated vendors. As a comprehensive health partner, our range of solutions spans across health plan operations. These options encompass core claims processing, operational software and high value applications for risk adjustment and quality management.
Services include outsourced recordkeeping and call center operations, SaaS recordkeeping, rollover and income portability, retirement intelligence, advisor practice management, personalized education and financial wellness.
Our digital retirement solutions help financial services providers drive more efficient processes, move critical yet cumbersome procedures online, and implement a flexible platform for growth. Services include outsourced recordkeeping and call center operations, SaaS recordkeeping, rollover and income portability, retirement intelligence, advisor practice management, personalized education and financial wellness.
Combined with our health outcomes optimization solutions described below, 11 our solutions are offered as stand-alone component solutions to complement health plans, existing operations or systems, or as an integrated core administration package. o Health Outcomes Optimization – We provide solutions to optimize healthcare through our integrated care management and population health analytics applications and professional services for health plans and providers in the domestic healthcare industry.
Healthcare administration services are offered via software license, remote or business process outsourcing. Solutions are offered as stand-alone components to complement existing operations/systems, or integrated into a core administration package. o Healthcare Optimization – We offer comprehensive care management, population health analytics applications and a customizable member portal to optimize client revenue.
Our clients include many of the largest and most well-recognized financial services and healthcare firms.
Our clients include many of the largest and most well-recognized financial services and healthcare firms. During the year ended December 31, 2023, our top 10 clients represented approximately 14% of total revenues, with no single client accounting for more than 5% of total revenues.
Our healthcare solutions include claims adjudication, benefit management, care management and business intelligence solutions.
Our healthcare solutions include claims adjudication, benefit management, care management and business intelligence solutions. Software-enabled Services • SS&C GlobeOp – Named “Best Middle Office Services” by Hedgeweek and Private Equity Wire U.S.
Integrated with intelligent business process management functionality and digital applications, Bluedoor helps our clients engage with customers in a meaningful way and provides a flexible approach to deploying new products. • SS&C Retirement Solutions – SS&C’s retirement solutions business provides technology, administration, and record-keeping processes on TRAC’s end-to-end digital platform.
Integrated with intelligent business process management and digital applications, it facilitates effective customer engagement and product deployment flexibility. • SS&C Retirement Solutions – SS&C’s retirement solutions business provides technology, administration, and record-keeping processes on TRAC’s end-to-end digital platform. SS&C supports organizations that represent more than 12 million participants and approximately 400,000 plan sponsors.
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The core purpose of our health business is to enable our clients to provide better healthcare by efficiently operationalizing and effectively scaling their care strategies through improved quality, cost, experience and outcomes to their members.
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The core purpose of our health business is to enable our clients to provide better healthcare to their members. With a demonstrated commitment to invest and innovate, our solutions include pharmacy and medical claims processing, clinical programs, population health analytics, digital workers and member engagement, all delivered in a cloud-enabled, cost-efficient service model at scale.
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We do this by applying modern technology to medical and pharmacy claims processing, data and analytics and simplifying and improving the experience for our client users and their members.
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The financial services industry continues to seek more efficient and lower cost operating models in order to achieve their cost savings and margin goals. SS&C sees increased interest in third-party outsourcing and cloud-based solutions as a way for financial services companies to control costs, gain efficiency and decrease operational risk. ● Transformation of healthcare industry’s business model.
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The COVID-19 pandemic presented a number of challenges for our customer base due to the global shift to a remote workforce.
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Further changes to the healthcare industry come with the No Surprises 5 Act, requiring cost sharing of unplanned out-of-network services, the Interoperability and Prior Authorization regulation, a CMS (“Centers for Medicare & Medicaid Services”) requirement for digital data availability, and the Inflation Reduction Act, which gives the federal government control of drug pricing for (among others) high-spending brands.
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SS&C continues to see robust interest in its solutions to drive transformation as customers look to emerge from the crisis with more resilience and agility and expect a lasting effect on the way financial services and healthcare firms conduct business.
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Bluedoor, SS&C’s integrated registry system for UK and Australian wealth managers and fund platforms, delivers real-time automation and streamlined processes, enhancing efficiency and reducing costs.
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The post-COVID-19 pandemic environment requires an increased focus on operational efficiency, infrastructure stability, and ability to access systems and data via cloud-based, web-based portals. ● Transformation of healthcare industry’s business model. The COVID-19 pandemic brought about a shift in focus to equitable healthcare.
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Long recognized as a worldwide leader in population health analytics, the ACG System delivers actionable insights to address patient care needs, integrate SDoH (Social Determinants of Health) and measure Health Equity. Our platform-agnostic member portal enables 24/7 access to personalized benefit information.
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Further changes to the healthcare space come with new policy initiatives that shift the role of the federal government beyond coverage and enrollment into modernizing member-facing plan technology and transparency (such as the Interoperability and No Surprises Act), and managing costs, (either for taxpayers or enrollees) through direct negotiating of drug pricing and direct accrual of rebates.
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In addition, we have made significant investments in intellectual property through 15 our acquisitions and software development. For the years ended December 31, 2023, 2022 and 2021, we spent $194.9 million, $144.9 million and $85.3 million, respectively, on capitalized software projects.
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We plan to benefit from the growing software spend in the increasingly complex and more highly regulated financial services and healthcare landscape. 7 Continue to capitalize on acquisitions of complementary businesses and technologies.
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Our competitors’ healthcare administration and health outcomes optimization solutions are primarily based on complete replacement of a payer’s core system.
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Along with the productivity improvements mentioned above, and as a result of the COVID-19 pandemic and SS&C's flexible working policy, we believe we can reduce our real estate footprint and related costs over the medium term. Our Acquisitions As mentioned above, we intend to employ a highly disciplined and focused acquisition strategy.
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In addition, we offer professional development and tuition reimbursement for degree programs and job-related coursework. 18 Additional Information We were incorporated in Delaware in July 2005, as the successor to a corporation originally formed in Connecticut in March 1986.
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Services include anti-money laundering and fraud detection, blue sky administration and reporting, event center services, reconciliation, remittance, registered fund services and trade monitoring/surveillance. • Bluedoor – SS&C’s Bluedoor is an integrated registry system for wealth managers and fund platforms in the UK and Australia, delivering real-time automation and high levels of straight-through-processing, allowing these financial institutions to improve service efficiency and reduce expenditure and technology debt.
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SS&C supports organizations that represent more than 12 million participants and approximately 400,000 plan sponsors. Our digital retirement solutions help financial services providers drive more efficient processes, move critical yet cumbersome procedures online, and implement a flexible platform for growth.
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The goal of the venture is to arm healthcare organizations with end-to-end transparency and data analytics to help them keep up with an ever-changing regulatory environment. DomaniRx’s claims adjudication platform will leverage SS&C’s technology capabilities and reside on SS&C’s private cloud.
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Healthcare administration services are offered on a software license, remote and business process outsourcing (“BPO”) basis.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlthough we seek to ensure that appropriate security and other standards are maintained by these third-parties, these third-parties are also subject to the risks discussed in the preceding risk factor, and there is no guarantee that they will maintain systems and procedures sufficient to protect against system failures and security breaches, including as a result of cyber-attacks. 25 In addition, the third-parties with which we do business or which facilitate our business activities, including financial intermediaries, are susceptible to the risks described in the preceding risk factor (including regarding the third-parties with which they are similarly interconnected), and our or their business operations and activities may therefore be adversely affected, perhaps materially, by failures, terminations, errors or malfeasance by, or attacks or constraints on, one or more financial, technology or infrastructure institutions or intermediaries with whom they are interconnected or conduct business.
Biggest changeIn addition, the third parties with which we do business or which facilitate our business activities, including financial intermediaries, are susceptible to the risks described in the preceding risk factor (including regarding the third parties with which they are similarly interconnected), and our or their business operations and activities may therefore be adversely affected, perhaps materially, by failures, terminations, errors or malfeasance by, or attacks or constraints on, one or more financial, technology or infrastructure institutions or intermediaries with whom they are interconnected or conduct business.
Risks Relating to Our Business ● our business is greatly affected by changes in the state of the general economy and the financial markets, and uncertainty in the general economy, the financial services industry or other industries in which our clients operate, could disproportionately affect the demand for our products and services; ● we may not achieve the anticipated benefits from our acquisitions and may face difficulties in integrating them; ● consolidations or failures among our clients or within their respective industries could adversely affect us by causing a decline in demand for our products and services; ● our revenues may decrease due to declines in the levels of participation and activity in the securities markets; ● our business has become increasingly focused on the hedge fund industry, and we are subject to the variations and fluctuations of that industry; ● if we are unable to retain and attract clients, our revenues and net income would remain stagnant or decline; ● if we cannot attract, train and retain qualified employees, we may not be able to provide adequate technical expertise and customer service to our clients; ● we face significant competition with respect to our products and services, which may result in price reductions, reduced gross margins or loss of market share; ● our software-enabled services may be subject to disruptions, attacks or failures that could adversely affect our reputation and our business; ● we expect that our operating results, including our profit margins and profitability, may fluctuate over time; ● additional tax expense or additional tax exposures could affect our future profitability; ● if third-party service providers on which we rely, or other third-parties with which we do business or which facilitate our business activities, suffer disruptions to their IT systems, our business could be harmed; ● an increase in subaccounting services performed by brokerage firms has and will continue to adversely impact our revenues; ● catastrophic events may adversely affect our business; ● we have substantial operations and a significant number of employees in India and we are therefore subject to regulatory, economic and political uncertainties in India; ● we are dependent on our senior management and their continued performance and productivity; ● if we are unable to protect our proprietary technology and other confidential information, our success and our ability to compete will be subject to various risks, such as third-party infringement claims, unauthorized use of our technology, disclosure of our proprietary information or inability to license technology from third-parties. ● we may be unable to adapt to rapidly changing technology and evolving industry standards and regulatory requirements; ● undetected software design defects, errors or failures, or employee errors, may result in defects, delays, loss of our clients’ data, litigation against us and harm to our reputation and business; ● investment decisions with respect to cash balances, market returns or losses on investments, and limits on insurance applicable to cash balances held in bank and brokerage accounts, including those held by us and as agent on behalf of our clients, could expose us to losses of such cash balances and adversely affect revenues attributable to cash balance deposit investments; ● a substantial portion of our revenues are derived, and a substantial portion of our operations are conducted, outside the U.S.; ● we are exposed to fluctuations in currency exchange rates that could negatively impact our operating results and financial condition; 20 ● our investments in funds and our joint ventures could decline in value; ● we do not control certain businesses in which we have significant ownership; ● some of our joint venture investments are subject to buy-sell agreements, which could, among other things, restrict us from selling our interests even if we were to determine it would be prudent to do so; ● a material weakness in our internal controls could have a material adverse effect on us; Legal or Regulatory Risks ● our businesses expose us to risks of claims and losses that could be significant and damage our reputation and business prospects; ● our business is subject to evolving regulations and increased scrutiny from regulators; ● our role as a fund administrator has in the past, and may in the future, expose us to claims and litigation from clients, their investors, regulators or other third-parties; ● because our platform could be used to collect and store personal information of our customers’ employees or customers, privacy concerns could result in additional cost and liability to us or inhibit use of our platform; ● we could become subject to litigation regarding our or a third-party’s intellectual property rights or other confidential or proprietary information, which could seriously harm our business and require us to incur significant costs; Risks Relating to Our Indebtedness ● our substantial indebtedness could adversely affect our financial health and operations; ● to service our indebtedness, we require a significant amount of cash.
Risks Relating to Our Business ● our business is greatly affected by changes in the state of the general economy and the financial markets, and uncertainty in the general economy, the financial services industry or other industries in which our clients operate, could disproportionately affect the demand for our products and services; ● we may not achieve the anticipated benefits from our acquisitions and may face difficulties in integrating them; ● consolidations or failures among our clients or within their respective industries could adversely affect us by causing a decline in demand for our products and services; ● our revenues may decrease due to declines in the levels of participation and activity in the securities markets; ● our business has become increasingly focused on the hedge fund industry, and we are subject to the variations and fluctuations of that industry; ● if we are unable to retain and attract clients, our revenues and net income would remain stagnant or decline; ● if we cannot attract, train and retain qualified employees, we may not be able to provide adequate technical expertise and customer service to our clients; ● we face significant competition with respect to our products and services, which may result in price reductions, reduced gross margins or loss of market share; ● our software-enabled services may be subject to disruptions, attacks or failures that could adversely affect our reputation and our business; ● we expect that our operating results, including our profit margins and profitability, may fluctuate over time; ● additional tax expense or additional tax exposures could affect our future profitability; ● if third-party service providers on which we rely, or other third parties with which we do business or which facilitate our business activities, suffer disruptions to their IT systems, our business could be harmed; 19 ● an increase in subaccounting services performed by brokerage firms has and will continue to adversely impact our revenues; ● catastrophic events may adversely affect our business; ● we have substantial operations and a significant number of employees in India and we are therefore subject to regulatory, economic and political uncertainties in India; ● we are dependent on our senior management and their continued performance and productivity; ● if we are unable to protect our proprietary technology and other confidential information, our success and our ability to compete will be subject to various risks, such as third-party infringement claims, unauthorized use of our technology, disclosure of our proprietary information or inability to license technology from third parties; ● we may be unable to adapt to rapidly changing technology and evolving industry standards and regulatory requirements; ● undetected software design defects, errors or failures, or employee errors, may result in defects, delays, loss of our clients’ data, litigation against us and harm to our reputation and business; ● investment decisions with respect to cash balances, market returns or losses on investments, and limits on insurance applicable to cash balances held in bank and brokerage accounts, including those held by us and as agent on behalf of our clients, could expose us to losses of such cash balances and adversely affect revenues attributable to cash balance deposit investments; ● a substantial portion of our revenues are derived, and a substantial portion of our operations are conducted, outside the U.S.; ● we are exposed to fluctuations in currency exchange rates that could negatively impact our operating results and financial condition; ● our investments in funds and our joint ventures could decline in value; ● we do not control certain businesses in which we have significant ownership; ● some of our joint venture investments are subject to buy-sell agreements, which could, among other things, restrict us from selling our interests even if we were to determine it would be prudent to do so; ● a material weakness in our internal controls could have a material adverse effect on us; Legal or Regulatory Risks ● our businesses expose us to risks of claims and losses that could be significant and damage our reputation and business prospects; ● our business is subject to evolving regulations and increased scrutiny from regulators; ● our role as a fund administrator has in the past, and may in the future, expose us to claims and litigation from clients, their investors, regulators or other third-parties; ● because our platform could be used to collect and store personal information of our customers’ employees or customers, privacy concerns could result in additional cost and liability to us or inhibit use of our platform; ● we could become subject to litigation regarding our or a third party’s intellectual property rights or other confidential or proprietary information, which could seriously harm our business and require us to incur significant costs; Risks Relating to Our Indebtedness ● our substantial indebtedness could adversely affect our financial health and operations; ● to service our indebtedness, we require a significant amount of cash.
For example, it may: ● require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund acquisitions, working capital, capital expenditures, research and development efforts and other general corporate purposes; ● increase our vulnerability to and limit our flexibility in planning for, or reacting to, change in our business and the industry in which we operate; ● restrict our ability to make certain distributions with respect to our capital stock due to restricted payment and other financial covenants in our credit facilities and other financing agreements; ● expose us to the risk of increased interest rates as borrowings under our senior credit facility are subject to variable rates of interest; ● place us at a competitive disadvantage compared to our competitors that have less debt; and ● limit our ability to borrow additional funds.
For example, it may: ● require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund acquisitions, working capital, capital expenditures, research and development efforts and other general corporate purposes; ● increase our vulnerability to and limit our flexibility in planning for, or reacting to, change in our business and the industry in which we operate; ● restrict our ability to make certain distributions with respect to our capital stock due to restricted payment and other financial covenants in our credit facilities and other financing agreements; ● expose us to the risk of increased interest rates as borrowings under our senior credit facility are subject to variable rates of interest; 32 ● place us at a competitive disadvantage compared to our competitors that have less debt; and ● limit our ability to borrow additional funds.
We may not realize the benefits we anticipate from acquisitions, such as lower costs, increased revenues, synergies and growth opportunities, or we may realize such benefits more slowly than anticipated, due to our inability to: ● combine operations, facilities and differing firm cultures; ● maintain employee morale or retain the clients or employees of acquired entities; ● generate market demand for new products and services; ● coordinate geographically dispersed operations and successfully adapt to the complexities of international operations, including compliance with laws, rules and regulations in multiple jurisdictions; ● integrate the technical teams of acquired companies within our organization; or ● incorporate acquired technologies, products and services into our current and future product and service lines.
We may not realize the benefits we anticipate from acquisitions, such as lower costs, increased revenues, synergies and growth opportunities, or we may realize such benefits more slowly than anticipated, due to our inability to: ● combine operations, facilities and differing firm cultures; ● maintain employee morale or retain the clients or employees of acquired entities; 21 ● generate market demand for new products and services; ● coordinate geographically dispersed operations and successfully adapt to the complexities of international operations, including compliance with laws, rules and regulations in multiple jurisdictions; ● integrate the technical teams of acquired companies within our organization; or ● incorporate acquired technologies, products and services into our current and future product and service lines.
Although we are continuing to take steps to comply with applicable portions of the GDPR , the scope of many of the GDPR’s requirements remains unclear and regulatory guidance on several topics is still forthcoming. Therefore, we cannot assure you that such steps will be sufficient. Moreover, Brexit has led and could continue to lead to additional compliance costs.
Although we are continuing to take steps to comply with applicable portions of the GDPR , the scope of many of the GDPR’s 31 requirements remains unclear and regulatory guidance on several topics is still forthcoming. Therefore, we cannot assure you that such steps will be sufficient. Moreover, Brexit has led and could continue to lead to additional compliance costs.
If we fail to comply with any applicable laws, rules or regulations, we may be subject to censure, fines or other sanctions, including revocation of our licenses and/or registrations with various regulatory agencies, criminal penalties and civil lawsuits. The U.S. Foreign Corrupt Practices Act (“FCPA”) and anti-bribery laws in other jurisdictions, including the U.K.
If we fail to comply 30 with any applicable laws, rules or regulations, we may be subject to censure, fines or other sanctions, including revocation of our licenses and/or registrations with various regulatory agencies, criminal penalties and civil lawsuits. The U.S. Foreign Corrupt Practices Act (“FCPA”) and anti-bribery laws in other jurisdictions, including the U.K.
Such events include IT attacks or failures, threats to physical security, sudden increases in transaction volumes, electrical or telecommunications outages, damaging weather or other acts of nature, or employee or contractor error or malfeasance. In particular, cybersecurity threats have become prevalent in our industry as well as for many firms that process information.
Such events include IT attacks or failures, threats to physical 23 security, sudden increases in transaction volumes, electrical or telecommunications outages, damaging weather or other acts of nature, or employee or contractor error or malfeasance. In particular, cybersecurity threats have become prevalent in our industry as well as for many firms that process information.
Even in the absence of such factors, the global hedge fund industry is subject to fluctuations in assets under management that are impossible to predict or anticipate. These risks and trends could significantly and adversely affect some or all of our hedge fund clients, which could adversely affect our business, results of operations and financial condition.
Even in the absence of such factors, the global hedge fund industry is subject to fluctuations in assets under management that are impossible to predict or anticipate. These risks and trends could significantly and adversely affect some or all of our hedge fund clients, which could adversely affect our business, results of operations and financial 22 condition.
Any violation of applicable regulations could expose us or those businesses to civil or criminal liability, significant fines or sanctions, 30 damage our reputation, the revocation of licenses, censures, or a temporary suspension or permanent bar from conducting business, which could adversely affect our business, results of operations and our financial condition.
Any violation of applicable regulations could expose us or those businesses to civil or criminal liability, significant fines or sanctions, damage our reputation, the revocation of licenses, censures, or a temporary suspension or permanent bar from conducting business, which could adversely affect our business, results of operations and our financial condition.
If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital 33 expenditures, strategic acquisitions, investments and joint ventures. We may not be able to effect such actions, if necessary, on commercially reasonable terms or at all.
If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and joint ventures. We may not be able to effect such actions, if necessary, on commercially reasonable terms or at all.
In addition, Delaware law imposes requirements that may restrict the ability of our subsidiaries, including SS&C, to pay dividends to SS&C Holdings. These limitations could reduce our attractiveness to investors. 35 Our management has broad discretion in the use of our existing cash resources and may not use such funds effectively.
In addition, Delaware law imposes requirements that may restrict the ability of our subsidiaries, including SS&C, to pay dividends to SS&C Holdings. These limitations could reduce our attractiveness to investors. Our management has broad discretion in the use of our existing cash resources and may not use such funds effectively.
The process of developing our software products is complex and is expected to become increasingly complex and expensive in the future due to the introduction of new platforms, operating systems and 27 technologies. Current areas of significant technological change include mobility, cloud-based computing and the processing and analyzing of large amounts of data.
The process of developing our software products is complex and is expected to become increasingly complex and expensive in the future due to the introduction of new platforms, operating systems and technologies. Current areas of significant technological change include mobility, cloud-based computing and the processing and analyzing of large amounts of data.
Our business is also subject to general risks and uncertainties that affect many other companies. Additional risks and uncertainties not currently 19 known to us or that we have not currently identified as being material may also impair our business, operating results, cash flows and financial condition.
Our business is also subject to general risks and uncertainties that affect many other companies. Additional risks and uncertainties not currently known to us or that we have not currently identified as being material may also impair our business, operating results, cash flows and financial condition.
The global economy has in the past been subject to severe disruptions in the credit markets, increased uncertainty about economic, political, global trade and market conditions, and periods of heightened volatility in a variety of financial and other 21 markets, including commodity prices and currency rates.
The global economy has in the past been subject to severe disruptions in the credit markets, increased uncertainty about economic, political, global trade and market conditions, and periods of heightened volatility in a variety of financial and other markets, including commodity prices and currency rates.
Although we believe that we have complied with our obligations under the applicable licenses for open source software that we use, there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses.
Although we believe that we have complied with our obligations 26 under the applicable licenses for open source software that we use, there is little or no legal precedent governing the interpretation of many of the terms of certain of these licenses.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion on the foreign currency translation impact on operating results and financial condition. We do not currently engage in material hedging activities.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion on the foreign currency translation impact on operating results and financial condition. 28 We do not currently engage in material hedging activities.
Further, if 22 our clients fail and/or merge with or are acquired by other entities that are not our clients, or that use fewer of our products and services, they may discontinue or reduce their use of our products and services.
Further, if our clients fail and/or merge with or are acquired by other entities that are not our clients, or that use fewer of our products and services, they may discontinue or reduce their use of our products and services.
The dollar amount of transactions processed or cleared is vastly in excess than the revenues we derive from providing these services.
The dollar 29 amount of transactions processed or cleared is vastly in excess than the revenues we derive from providing these services.
If that happens, we may be exposed to significant liability, our reputation may be harmed, our clients may be dissatisfied 24 and we may lose business.
If that happens, we may be exposed to significant liability, our reputation may be harmed, our clients may be dissatisfied and we may lose business.
Shares of our common stock were sold in our initial public offering at a price of $7.50 per share on March 31, 2010, and through December 31, 2022, our common stock has traded as high as $84.85 and as low as $6.64.
Shares of our common stock were sold in our initial public offering at a price of $7.50 per share on March 31, 2010, and through December 31, 2023, our common stock has traded as high as $84.85 and as low as $6.64.
Our international business is also subject to a variety of other risks, including: ● potential changes in a specific country’s or region’s political or economic climate, including the evolving situation involving Ukraine and Russia; ● the need to comply with a variety of local regulations and laws, U.S. export controls, the FCPA and the Bribery Act; ● potential expropriation of assets by foreign governments; ● difficulty repatriating any international profits; ● fluctuations in foreign currency exchange rates; ● application of discriminatory fiscal policies; ● potential changes in tax laws and the interpretation of such laws; and ● potential difficulty enforcing third-party contractual obligations and intellectual property rights.
Our international business is also subject to a variety of other risks, including: ● potential changes in a specific country’s or region’s political or economic climate, including the ongoing situation involving Ukraine and Russia, and the Israel-Hamas conflict; ● the need to comply with a variety of local regulations and laws, U.S. export controls, the FCPA and the Bribery Act; ● potential expropriation of assets by foreign governments; ● difficulty repatriating any international profits; ● fluctuations in foreign currency exchange rates; ● application of discriminatory fiscal policies; ● potential changes in tax laws and the interpretation of such laws; and ● potential difficulty enforcing third-party contractual obligations and intellectual property rights.
A substantial portion of our revenues are derived, and a substantial portion of our operations are conducted, outside the U.S. For the years ended December 31, 2022, 2021 and 2020 international revenues accounted for 29%, 28% and 27%, respectively, of our total revenues. We sell certain of our products primarily outside the U.S.
A substantial portion of our revenues are derived, and a substantial portion of our operations are conducted, outside the U.S. For the years ended December 31, 2023, 2022 and 2021 international revenues accounted for 31%, 29% and 28%, respectively, of our total revenues. We sell certain of our products primarily outside the U.S.
Additional factors that may lead to such fluctuation include: ● the costs, timing of the introduction and the market acceptance of new products, product enhancements or services by us or our competitors; ● the lengthy and often unpredictable sales cycles of large client engagements; ● the amount and timing of our operating costs and other expenses; ● the financial health of our clients; ● changes in the volume of assets under our clients’ management; ● cancellations of maintenance and/or software-enabled services arrangements by our clients; ● changes in local, national and international regulatory requirements; ● acquisitions during the relevant period; ● implementation of our licensing contracts and software-enabled services arrangements; ● changes in economic and financial market conditions; and ● changes in the types of products and services we provide.
Additional factors that may lead to such fluctuation include: ● the costs, timing of the introduction and the market acceptance of new products, product enhancements or services by us or our competitors; ● the lengthy and often unpredictable sales cycles of large client engagements; ● the amount and timing of our operating costs and other expenses; ● the financial health of our clients; ● changes in the volume of assets under our clients’ management; ● cancellations of maintenance and/or software-enabled services arrangements by our clients; ● changes in local, national and international regulatory requirements; ● acquisitions during the relevant period; ● implementation of our licensing contracts and software-enabled services arrangements; ● changes in economic and financial market conditions; and ● changes in the types of products and services we provide. 24 Additional tax expense or additional tax exposures could affect our future profitability.
Any of these events could adversely affect our business, results of operation and financial condition. We have substantial operations and a significant number of employees in India and we are therefore subject to regulatory, economic and political uncertainties in India. As of December 31, 2022, we had approximately 7,900 employees located in India.
Any of these events could adversely affect our business, results of operation and financial condition. 25 We have substantial operations and a significant number of employees in India and we are therefore subject to regulatory, economic and political uncertainties in India. As of December 31, 2023, we had approximately 7,500 employees located in India.
We estimate that our current levels of indebtedness as of December 31, 2022 will result in annual interest payments of approximately $434.8 million. Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future.
We estimate that our current levels of indebtedness as of December 31, 2023 will result in annual interest payments of approximately $463.7 million. Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future.
Additional tax expense or additional tax exposures could affect our future profitability. We are subject to income taxes in the U.S. and various international jurisdictions. Changes in tax laws and regulations, as well as changes in related interpretations and other tax guidance could materially impact our tax receivables and liabilities and our deferred tax assets and deferred tax liabilities.
We are subject to income taxes in the U.S. and various international jurisdictions. Changes in tax laws and regulations, as well as changes in related interpretations and other tax guidance could materially impact our tax receivables and liabilities and our deferred tax assets and deferred tax liabilities.
As of February 17, 2023, William C. Stone, our Chairman of the Board and Chief Executive Officer, beneficially owned approximately 13.7% of the outstanding shares of our common stock. We are party to a stockholders’ agreement with Mr. Stone, pursuant to which Mr.
As of February 20, 2024, William C. Stone, our Chairman of the Board and Chief Executive Officer, beneficially owned approximately 14.1% of the outstanding shares of our common stock. We are party to a stockholders’ agreement with Mr. Stone, pursuant to which Mr.
We own interests in unconsolidated entities and various real estate joint ventures. Our interests in such unconsolidated entities are subject to buy/sell arrangements, which could restrict our ability to sell our interests even if we were to determine it would be prudent to do so.
Our interests in such unconsolidated entities are subject to buy/sell arrangements, which could restrict our ability to sell our interests even if we were to determine it would be prudent to do so.
Risks Relating to Our Indebtedness Our substantial indebtedness could adversely affect our financial health and operations. We currently have a substantial amount of indebtedness. As of December 31, 2022, we had total indebtedness of $7,129.9 million and an additional $597.5 million available for borrowings under our revolving credit facility. This indebtedness could have adverse consequences.
Risks Relating to Our Indebtedness Our substantial indebtedness could adversely affect our financial health and operations. We currently have a substantial amount of indebtedness. As of December 31, 2023, we had total indebtedness of $6,755.1 million and an additional $598.7 million available for borrowings under our revolving credit facility. This indebtedness could have adverse consequences.
A variety of factors could affect our ability to successfully retain and attract clients, including: ● the level of demand for our products and services; ● the difficulty of potential customers to change software service providers; ● the level of client spending for IT; ● the level of competition from internal client solutions and from other vendors; ● the quality of our client service and the performance of our products; ● our ability to update our products and services and develop new products and services needed by clients; ● our ability to understand the organization and processes of our clients; and ● our ability to integrate and manage acquired businesses. 23 If we cannot attract, train and retain qualified employees, we may not be able to provide adequate technical expertise and customer service to our clients.
A variety of factors could affect our ability to successfully retain and attract clients, including: ● the level of demand for our products and services; ● the difficulty of potential customers to change software service providers; ● the level of client spending for IT; ● the level of competition from internal client solutions and from other vendors; ● the quality of our client service and the performance of our products; ● our ability to update our products and services and develop new products and services needed by clients; ● our ability to understand the organization and processes of our clients; and ● our ability to integrate and manage acquired businesses.
We believe that our success is due in part to our ability to attract, train and retain highly skilled employees. Competition for qualified personnel in the software and hedge fund industries is intense, and we have, at times, found it difficult to attract and retain skilled personnel for our operations.
Competition for qualified personnel in the software and hedge fund industries is intense, and we have, at times, found it difficult to attract and retain skilled personnel for our operations.
We have acquired and intend in the future to acquire companies, products or technologies that we believe could complement or expand our business, augment our market coverage, enhance our technical capabilities or otherwise offer growth opportunities.
We have acquired and intend in the future to acquire companies, products or technologies that we believe could complement or expand our business, augment our market coverage, enhance our technical capabilities or otherwise offer growth opportunities. For example, in October 2023, we consummated our acquisition of the Iress Managed Funds Administration Business.
Stone has the right to nominate two members of our board of directors, one of which will be Mr. Stone for so long as he is our Chief Executive Officer. As a result, Mr. Stone has significant influence over our policy and affairs and matters requiring stockholder approval.
Stone has the right to nominate two members of our board of directors, one of which will be Mr. Stone for so long as he is our Chief Executive Officer. As a result, Mr.
Investment decisions with respect to cash balances, market returns or losses on investments, and limits on insurance applicable to cash balances held in bank and brokerage accounts, including those held by us and as agent on behalf of our clients, could expose us to losses of such cash balances and adversely affect revenues attributable to cash balance deposit investments.
Any or all of these potential consequences could have an adverse impact on our business, results of operations and financial condition. 27 Investment decisions with respect to cash balances, market returns or losses on investments, and limits on insurance applicable to cash balances held in bank and brokerage accounts, including those held by us and as agent on behalf of our clients, could expose us to losses of such cash balances and adversely affect revenues attributable to cash balance deposit investments.
We do not maintain key man life insurance policies for any senior officer or manager. 26 If we are unable to protect our proprietary technology and other confidential information, our success and our ability to compete will be subject to various risks, such as third-party infringement claims, unauthorized use of our technology, disclosure of our proprietary information or inability to license technology from third-parties.
If we are unable to protect our proprietary technology and other confidential information, our success and our ability to compete will be subject to various risks, such as third-party infringement claims, unauthorized use of our technology, disclosure of our proprietary information or inability to license technology from third parties.
The loss of any of the members of our senior management may cause a significant disruption in our business, jeopardize existing customer relationships, impair our compliance efforts as a public company, and have a material adverse effect on our business objectives.
The loss of any of the members of our senior management may cause a significant disruption in our business, jeopardize existing customer relationships, impair our compliance efforts as a public company, and have a material adverse effect on our business objectives. We do not maintain key man life insurance policies for any senior officer or manager.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, standards and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our solutions.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, standards and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our solutions. Also, privacy concerns, whether valid or not valid, may inhibit market adoption of our solutions, particularly in foreign countries.
In addition, if our business liability insurance coverage proves inadequate with respect to a claim or future coverage is unavailable on acceptable terms or at all, we may be liable for payment of substantial damages. Any or all of these potential consequences could have an adverse impact on our business, results of operations and financial condition.
In addition, if our business liability insurance coverage proves inadequate with respect to a claim or future coverage is unavailable on acceptable terms or at all, we may be liable for payment of substantial damages.
Our ability to generate cash depends on many factors beyond our control; ● restrictive covenants in the agreements governing our indebtedness may restrict our ability to pursue our business strategies; ● the replacement of London Interbank Offered Rate (“LIBOR”) with an alternative reference rate may adversely affect interest expense related to our outstanding debt; Risks Relating to Ownership of Our Common Stock ● if equity research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline; ● the market price of our common stock may be volatile, which could result in substantial losses for investors in our common stock; ● William C.
Our ability to generate cash depends on many factors beyond our control; ● restrictive covenants in the agreements governing our indebtedness may restrict our ability to pursue our business strategies; ● loans under our Credit Agreement bear interest based on SOFR, and SOFR has a limited history; Risks Relating to Ownership of Our Common Stock ● if equity research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline; ● the market price of our common stock may be volatile, which could result in substantial losses for investors in our common stock; 20 ● William C.
In March 2021, the U.K. and E.U. agreed on a framework for voluntary regulatory cooperation and dialogue on financial services issues in a memorandum of understanding. 28 While these events provide some clarity regarding the future relationship between the U.K. and the E.U., there remains uncertainty, which may adversely affect our operations and financial results, as we generated approximately $573.1 million, $596.0 million and $569.9 million in revenues from the U.K. in the years ended December 31, 2022, 2021 and 2020, respectively.
While these events provide some clarity regarding the future relationship between the U.K. and the E.U., there remains uncertainty, which may adversely affect our operations and financial results, as we generated approximately $638.6 million, $573.1 million and $596.0 million in revenues from the U.K. in the years ended December 31, 2023, 2022 and 2021, respectively.
SS&C Holdings is a holding company with no operations or assets of its own and its ability to pay dividends is limited or otherwise restricted. As of December 31, 2022, SS&C Holdings has no direct operations and no significant assets other than the stock of SS&C.
As of December 31, 2023, SS&C Holdings has no direct operations and no significant assets other than the stock of SS&C. The ability of SS&C Holdings to pay dividends is limited by its status as a holding company and by the terms of the agreement governing our indebtedness.
Although we maintain redundant facilities and have contingency plans in place to protect against both man-made and natural threats, it is impossible to fully anticipate and protect against all potential catastrophes.
The potential for a direct effect on our business operations is due primarily to our significant investment in infrastructure. Although we maintain redundant facilities and have contingency plans in place to protect against both man-made and natural threats, it is impossible to fully anticipate and protect against all potential catastrophes.
Disruption in the financial market or the inability to renegotiate our Credit Agreement with favorable terms could have a material adverse effect on our business, results of operations and financial condition. 34 Risks Relating to Ownership of Our Common Stock If equity research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
Risks Relating to Ownership of Our Common Stock If equity research analysts do not publish or cease publishing research or reports about our business or if they issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
Our pro rata share of any losses due to unfavorable performance of those companies could negatively impact our financial results. 29 Some of our joint venture investments are subject to buy-sell agreements, which could, among other things, restrict us from selling our interests even if we were to determine it would be prudent to do so.
Some of our joint venture investments are subject to buy-sell agreements, which could, among other things, restrict us from selling our interests even if we were to determine it would be prudent to do so. We own interests in unconsolidated entities and various real estate joint ventures.
The other owners may have economic, business or legal interests or goals that are inconsistent with our goals or the goals of the businesses we co-own.
The other owners may have economic, business or legal interests or goals that are inconsistent with our goals or the goals of the businesses we co-own. Our pro rata share of any losses due to unfavorable performance of those companies could negatively impact our financial results.
Federal Reserve and central banks around the world, could result in economic volatility or uncertainty, which could adversely affect our business, financial condition, results of operations and cash flows.
Federal Reserve and central banks around the world, could result in economic volatility or uncertainty, which could adversely affect our business, financial condition, results of operations and cash flows. For example, our interest expense was $476.3 million in 2023 compared to $312.2 million in 2022 and $205.7 million in 2021, primarily due to increases in interest rates.
A failure to comply with these laws, rules or regulations, or allegations of such noncompliance, could adversely affect our business, reputation, results of operations and financial condition. 31 Our role as a fund administrator has in the past, and may in the future, expose us to claims and litigation from clients, their investors, regulators or other third-parties.
Our role as a fund administrator has in the past, and may in the future, expose us to claims and litigation from clients, their investors, regulators or other third parties.
Also, privacy concerns, whether valid or not valid, may inhibit market adoption of our solutions, particularly in foreign countries. 32 We could become subject to litigation regarding our or a third-party’s intellectual property rights or other confidential or proprietary information, which could seriously harm our business and require us to incur significant costs.
We could become subject to litigation regarding our or a third party’s intellectual property rights or other confidential or proprietary information, which could seriously harm our business and require us to incur significant costs. In recent years, there has been a high incidence of litigation in the U.S. involving patents and other intellectual property rights.
While our policies mandate compliance with these laws, there can be no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws.
While our policies mandate compliance with these laws, there can be no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws. A failure to comply with these laws, rules or regulations, or allegations of such noncompliance, could adversely affect our business, reputation, results of operations and financial condition.
If the indebtedness under our Credit Agreement were to be accelerated, we cannot assure you that our assets would be sufficient to repay in full that indebtedness and our other indebtedness. The replacement of London Interbank Offered Rate ( “ LIBOR ”) with an alternative reference rate may adversely affect interest expense related to our outstanding debt.
If the indebtedness under our Credit Agreement were to be accelerated, we cannot assure you that our assets would be sufficient to repay in full that indebtedness and our other indebtedness. Loans under our Credit Agreement bear interest based on SOFR, and SOFR has a limited history.
A war, terrorist attack, natural disaster, pandemic or other catastrophe may adversely affect our business.
A war, terrorist attack, pandemic or other catastrophe may adversely affect our business. In addition, the effects of global climate change, resulting in increased likelihood and severity of natural disasters and extreme weather events, could disrupt our operations.
The ability of SS&C Holdings to pay dividends is limited by its status as a holding company and by the terms of the agreement governing our indebtedness.
Stone has significant influence over our policy and affairs and matters requiring stockholder approval. 34 SS&C Holdings is a holding company with no operations or assets of its own and its ability to pay dividends is limited or otherwise restricted.
Removed
For example, in 2022, we consummated a number of acquisitions, including Blue Prism Group Plc (“Blue Prism”), Hubwise Holdings Limited (“Hubwise”), Tier1's sell-side CRM (“Tier1”), 5 M's Minerals Management, LLC (“MineralWare”), assets related to O'Shares exchange traded funds (“O'Shares”) and Complete Financial Ops, Inc. (“CFO”).
Added
If we cannot attract, train and retain qualified employees, we may not be able to provide adequate technical expertise and customer service to our clients. We believe that our success is due in part to our ability to attract, train and retain highly skilled employees.
Removed
For example, while we were not adversely affected by the COVID-19 pandemic in any outsized manner, it created significant volatility, uncertainty and economic disruption in the markets in which we operate. The potential for a direct effect on our business operations is due primarily to our significant investment in infrastructure.
Added
Although we seek to ensure that appropriate security and other standards are maintained by these third parties, these third parties are also subject to the risks discussed in the preceding risk factor, and there is no guarantee that they will maintain systems and procedures sufficient to protect against system failures and security breaches, including as a result of cyber-attacks.
Removed
In recent years, there has been a high incidence of litigation in the U.S. involving patents and other intellectual property rights.
Added
In March 2021, the U.K. and E.U. agreed on a framework for voluntary regulatory cooperation and dialogue on financial services issues in a memorandum of understanding.
Removed
The replacement of LIBOR with an alternative reference rate may adversely affect interest expense related to outstanding debt. At December 31, 2022, we had total debt of $7,129.9 million, including $5,129.1 million of variable interest rate debt and which may bear interest rates in relation to U.S. dollar LIBOR, depending on our selection of repayment options.
Added
Loans under our Credit Agreement bear interest at a rate based on the Secured Overnight Financing Rate (“SOFR”). Previously, our Credit Agreement could bear interest at U.S dollar London Interbank Overnight (“LIBOR”) rates.
Removed
On July 27, 2017, the Financial Conduct Authority (“FCA”) in the U.K. announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021.
Added
ICE Benchmark Administration, the authorized and regulated administrator of LIBOR, ended publication of the one-week and two-month LIBOR tenors on December 31, 2021, and ended publication of the remaining LIBOR tenors on June 30, 2023.
Removed
The administrator for LIBOR announced on March 5, 2021 that it will permanently cease to publish most LIBOR settings beginning on January 1, 2022 and cease to publish the overnight, one-month, three-month, six-month and 12-month U.S. dollar LIBOR settings after June 30, 2023.
Added
The Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”) was enacted in March 2022 to permit financing agreements that contain a LIBOR-based benchmark without adequate 33 “fallback provisions” to be automatically replaced by a benchmark recommended by the Federal Reserve.
Removed
Accordingly, the FCA has stated that it does not intend to persuade or compel banks to submit to LIBOR after such respective dates. Until then, however, FCA panel banks have agreed to continue to support LIBOR. On December 16, 2022, the U.S.
Added
In January 2023, the Federal Reserve adopted a final rule implementing the LIBOR Act that, among other things, identifies the applicable SOFR-based benchmark replacements under the LIBOR Act. SOFR has a limited history, and the future performance of SOFR cannot be predicted based on its limited historical performance.
Removed
Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, adopted a final rule identifying the benchmark rates to replace LIBOR in various types of financial instruments when LIBOR (at least in its current form) ceases to exist after June 30, 2023.
Added
Prior observed patterns, if any, in the behavior of market variables and their relation to SOFR, such as correlations, may change in the future. There could be unanticipated difficulties or disruptions with the calculation and publication of SOFR-based rates. This could result in increased borrowing costs for SS&C.
Removed
The U.S. dollar LIBOR will be replaced with benchmark rates based on the Secured Overnight Financing Rate (“SOFR”), a new index calculated by short-term repurchase agreements, backed by Treasury securities. Whether or not SOFR, or another alternative reference rate, attains market traction as a LIBOR replacement tool remains in question.
Removed
When LIBOR (at least in its current form) ceases to exist, we may need to renegotiate our Credit Agreement and may not be able to do so with terms that are favorable to us.
Removed
In particular, the method and rate used to calculate our interest rates and/or payments under the Credit Agreement in the future may result in interest rates and/or payments that are higher than, lower than, or that do not otherwise correlate over time with the interest rates and/or payments that would have been made on our obligations if LIBOR was available in its current form.
Removed
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Obligations – Senior Secured Credit Facilities” for additional information. The overall financial market may be disrupted as a result of the discontinuation, reform or replacement of LIBOR or any other benchmark rate or any uncertainty in respect thereof.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. P ROPERTIES We lease our corporate offices at 80 Lamberton Road, Windsor, CT 06095. We utilize facilities and offices in approximately 120 other locations in North America, South America, Europe, Asia, Australia and Africa. We lease approximately 65% of our office space as compared to owning 35% of our office space.
Biggest changeITEM 2. P ROPERTIES We lease our corporate offices at 80 Lamberton Road, Windsor, CT 06095. We utilize offices in 113 other locations in North America, South America, Europe, Asia, Australia and Africa. We lease approximately 63% of our office space as compared to owning 37% of our office space.
We believe that our facilities are in good condition and generally suitable to meet our needs for the foreseeable future; however, we will continue to seek additional space as needed to satisfy our growth.
We believe that our offices are in good condition and generally suitable to meet our needs for the foreseeable future; however, we will continue to seek additional space as needed to satisfy our growth.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn the opinion of our management, we are not involved in any litigation or proceedings that would have a material adverse effect on us or our business. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. PAR T II
Biggest changeIn the opinion of our management, we are not involved in any litigation or proceedings that would have a material adverse effect on us or our business. 36 ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeData for the Nasdaq Composite Index and the Nasdaq Technology Dividend TR Index assume reinvestment of dividends. COMPARISON OF CUMULATIVE TOTAL RETURN* Among SS&C Technologies Holdings, Inc., the Nasdaq Composite Index and the Nasdaq Technology Dividend TR Index * $100 invested in stock on 12/31/2017.
Biggest changeCOMPARISON OF CUMULATIVE TOTAL RETURN* Among SS&C Technologies Holdings, Inc., the Nasdaq Composite Index and the Nasdaq Technology Dividend TR Index * $100 invested in stock on December 31, 2018.
(2) Represents shares repurchased in open market transactions pursuant to the Common Stock Repurchase Program. (3) Share repurchases were made pursuant to our Common Stock Repurchase Program authorized by our Board of Directors in July 2022.
(2) Represents shares repurchased in open market transactions pursuant to the Common Stock Repurchase Program. (3) Share repurchases were made pursuant to our Common Stock Repurchase Program authorized by our Board of Directors in July 2023.
The following graph shows a comparison from December 31, 2017 through December 31, 2022 of cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Technology Dividend TR Index. Such returns are based on historical results and are not intended to suggest future performance.
The following graph shows a comparison from December 31, 2018 through December 31, 2023 of cumulative total return for our common stock, the Nasdaq Composite Index and the Nasdaq Technology Dividend TR Index. Such returns are based on historical results and are not intended to suggest future performance.
Issuer Purchases of Equity Securities The following is a summary of the repurchases of our common stock in the fourth quarter of 2022 (in millions, except average price per share): Period (1) (a) Total Number of Shares Purchased (2) (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under Plans or Programs (3) October 1, 2022 – October 31, 2022 — $ — — $ 785.5 November 1, 2022 – November 30, 2022 1.2 $ 49.78 1.2 $ 725.9 December 1, 2022 – December 31, 2022 0.6 $ 50.86 0.6 $ 694.8 Total 1.8 1.8 (1) Information is based on trade dates of repurchase transactions.
Issuer Purchases of Equity Securities The following is a summary of the repurchases of our common stock in the fourth quarter of 2023 (in millions, except average price per share): Period (1) (a) Total Number of Shares Purchased (2) (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under Plans or Programs (3) October 1, 2023 – October 31, 2023 — $ — — $ 902.2 November 1, 2023 – November 30, 2023 1.8 $ 53.86 1.8 $ 806.9 December 1, 2023 – December 31, 2023 0.6 $ 55.62 0.6 $ 772.5 Total 2.4 2.4 (1) Information is based on trade dates of repurchase transactions.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on The Nasdaq Global Select Market under the symbol “SSNC”.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on The Nasdaq Global Select Market under the symbol “SSNC”. As of January 29, 2024, we had approximately 208,000 beneficial shareholders of our common stock.
As of February 21, 2023, we had approximately 227,000 beneficial shareholders of our common stock. 36 Our equity plan information required by this item is incorporated by reference to the information in Part III, Item 12 of this annual report on Form 10-K.
Our equity plan information required by this item is incorporated by reference to the information in Part III, Item 12 of this annual report on Form 10-K.
Return calculations of indices assume the reinvestment of dividends. 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 SS&C Technologies Holdings, Inc. 100 112 154 184 209 134 Nasdaq Composite - Total Returns 100 97 133 192 235 159 Nasdaq Technology Dividend TR Index 100 98 131 155 202 158 38 ITE M 6. [Reserved]
Return calculations of indices assume the reinvestment of dividends. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 SS&C Technologies Holdings, Inc. 100 137 164 186 120 143 Nasdaq Composite - Total Returns 100 137 198 242 163 236 Nasdaq Technology Dividend TR Index 100 134 159 207 162 223 38 ITE M 6. [Reserved]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSS&C’s and SS&C SARL’s obligations under the Term Loans are guaranteed by (i) our existing and future U.S. wholly-owned restricted subsidiaries, in the case of the Term B-3 Loan, Term B-5 Loan, Term B-6 Loan and the Revolving Credit Facility and (ii) our existing and future wholly-owned restricted subsidiaries, in the case of the Term B-4 Loan and Term B-7 Loan.
Biggest changeSS&C’s and SS&C SARL’s obligations under the Term Loans are guaranteed by (i) our existing and future U.S. wholly-owned restricted subsidiaries, in the case of the Term B-3 Loan, Term B-5 Loan, Term B-6 Loan and the Revolving Credit Facility and (ii) our existing and future wholly-owned restricted subsidiaries, in the case of the Term B-4 Loan and Term B-7 Loan. 46 The obligations of the U.S. loan parties under the Credit Agreement are secured by substantially all of the assets of such persons (subject to customary exceptions and limitations), including a pledge of all of the capital stock of substantially all of the U.S. wholly-owned restricted subsidiaries of such persons (with customary exceptions and limitations) and 65% of the capital stock of certain foreign restricted subsidiaries of such persons (with customary exceptions and limitations).
To supplement our growth, we evaluate and execute acquisitions that provide complementary products or services, add proven technology and an established client base and expand our intellectual property portfolio or address a highly specialized problem or a market niche.
To supplement our growth, we evaluate and execute acquisitions that provide complementary products or services, add proven technology and an established client base, expand our intellectual property portfolio or address a highly specialized problem or a market niche.
(2) Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred 48 personnel costs were not adjusted to fair value at the date of the acquisitions, and (c) an adjustment to increase or decrease rent expense by the amount that would have been recognized if lease obligations were not adjusted to fair value at the date of acquisitions.
(2) Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred personnel costs were not adjusted to fair value at the date of the acquisitions, and (c) an adjustment to increase or decrease rent expense by the amount that would have been recognized if lease obligations were not adjusted to fair value at the date of acquisitions.
Pursuant to the Incremental Joinder, a new $650.0 million senior secured incremental term loan B facility (“Term B-6 Loan”) and a new $880.0 million senior secured incremental term 45 loan B facility (“Term B-7 Loan” and together with the Term B-6 Loan, the “Incremental Term Loans”) was made available to us, the proceeds of which were used to finance substantially all of the consideration for the acquisition of Blue Prism.
Pursuant to the Incremental Joinder, a new $650.0 million senior secured incremental term loan B facility (“Term B-6 Loan”) and a new $880.0 million senior secured incremental term loan B facility (“Term B-7 Loan” and together with the Term B-6 Loan, the “Incremental Term Loans”) was made available to us, the proceeds of which were used to finance substantially all of the consideration for the acquisition of Blue Prism.
Determining the fair value of stock-based awards requires considerable judgment, including estimating the expected term of stock options and the expected 51 volatility of our stock price. In addition, for stock-based awards where vesting is dependent upon achieving earnings per share growth targets, we estimate the likelihood of achieving the performance goals.
Determining the fair value of stock-based awards requires considerable judgment, including estimating the expected term of stock options and the expected volatility of our stock price. In addition, for stock-based awards where vesting is dependent upon achieving earnings per share growth targets, we estimate the likelihood of achieving the performance goals.
Our marketable equity securities and seed capital investments have readily determinable fair values in the market. We use net asset 49 value as a practical expedient for the fair value of partnership interests in private equity funds that are not accounted for under the equity method of accounting.
Our marketable equity securities and seed capital investments have readily determinable fair values in the market. We use net asset value as a practical expedient for the fair value of partnership interests in private equity funds that are not accounted for under the equity method of accounting.
The Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default, subject to customary thresholds and exceptions. In addition, the Credit 46 Agreement contains a financial covenant for the benefit of the Revolving Credit Facility requiring us to maintain a minimum consolidated net secured leverage ratio.
The Credit Agreement also contains customary representations and warranties, affirmative covenants and events of default, subject to customary thresholds and exceptions. In addition, the Credit Agreement contains a financial covenant for the benefit of the Revolving Credit Facility requiring us to maintain a minimum consolidated net secured leverage ratio.
Maintenance and services primarily consist of fees for maintenance services (including support and unspecified upgrades and enhancements when and if they are available) and, in some cases, professional services which focus on both deployment and training our customers to fully leverage the use of our products.
Maintenance and services primarily consist of fees for maintenance services (including support and unspecified upgrades and 51 enhancements when and if they are available) and, in some cases, professional services which focus on both deployment and training our customers to fully leverage the use of our products.
Consolidated EBITDA is not a recognized measurement under GAAP and investors should not consider Consolidated EBITDA as a substitute for measures of our financial performance and liquidity as determined in accordance with GAAP, such as net (loss) income, operating (loss) income or net cash provided by operating activities.
Consolidated EBITDA is not a recognized measurement under GAAP and investors should not consider Consolidated EBITDA as a substitute for measures of our financial performance and liquidity as determined in accordance with GAAP, such as net income, operating income or net cash provided by operating activities.
The increase in cash was primarily due to the decrease in cash and cash equivalents associated with funds held on behalf of clients. See Notes 8, 10 and 11 to our Consolidated Financial Statements for further discussion of acquisitions, debt and equity, respectively.
The decrease in cash was primarily due to the decrease in cash and cash equivalents associated with funds held on behalf of clients. See Notes 8, 10 and 11 to our Consolidated Financial Statements for further discussion of acquisitions, debt and equity, respectively.
At any time on or after March 30, 2022, we may redeem some or all of the Senior Notes, in whole or in part, at the redemption prices set forth in the following table, expressed as a percentage of the principal amount, plus accrued and unpaid interest to the redemption date: Redemption Date Price On or after March 30, 2022 104.125 % On or after March 30, 2023 102.750 % On or after March 30, 2024 101.375 % March 30, 2025 and thereafter 100.000 % We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing senior notes, through tender offers, in privately negotiated or open market transactions, or otherwise.
At any time on or after March 30, 2022, we may redeem some or all of the Senior Notes, in whole or in part, at the redemption prices set forth in the following table, expressed as a percentage of the principal amount, plus accrued and unpaid interest to the redemption date: Redemption Date Price On or after March 30, 2023 102.750 % On or after March 30, 2024 101.375 % March 30, 2025 and thereafter 100.000 % We may also, from time to time in our sole discretion, purchase, redeem, or retire our existing senior notes, through tender offers, in privately negotiated or open market transactions, or otherwise.
Consolidated net secured funded indebtedness is comprised of indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.
Consolidated net secured funded indebtedness 49 is comprised of indebtedness for borrowed money, letters of credit, deferred purchase price obligations and capital lease obligations, all of which is secured by liens on our property.
As of December 31, 2022 and 2021, we have two reporting units, one is our health business and the other includes the rest of our operations. To the extent that we do not achieve our revenue or operating cash flow plans or other measures of fair value decline, including external valuation assumptions, our current goodwill carrying value could be impaired.
As of December 31, 2023 and 2022, we have two reporting units, one is our health business and the other includes the rest of our operations. To the extent that we do not achieve our revenue or operating cash flow plans or other measures of fair value decline, including external valuation assumptions, our current goodwill carrying value could be impaired.
We consider a number of factors, including past operating results, budgets, economic projections, market trends and product development cycles in estimating future cash flows. Differing estimates and assumptions as to any of the factors described above could result in a materially different impairment charge, if any, and thus materially different results of operations.
We consider a number of factors, including past operating results, budgets, economic projections, market trends and product development cycles in estimating future cash flows. Differing estimates and assumptions of any of the factors described above could result in a materially different impairment charge, if any, and thus materially different results of operations.
Software Capitalization Significant management judgement is required in determining which projects and costs associated with software development will be capitalized and in assigning estimated economic lives to the completed projects. Management specifically evaluates software development projects, milestones achieved and the commitments to continue funding the projects.
Software Capitalization Significant management judgment is required in determining which projects and costs associated with software development will be capitalized and in assigning estimated economic lives to the completed projects. Management specifically evaluates software development projects, milestones achieved and the commitments to continue funding the projects.
Long-lived Assets, Intangible Assets and Goodwill We must test goodwill annually for impairment (and in interim periods if certain events occur indicating that the carrying value of goodwill or indefinite-lived intangible assets may be impaired) by comparing the fair value of a reporting unit to its carrying value. Judgement is required in the determination of goodwill reporting units.
We must test goodwill annually for impairment (and in interim periods if certain events occur indicating that the carrying value of goodwill or indefinite-lived intangible assets may be impaired) by comparing the fair value of a reporting unit to its carrying value. Judgment is required in the determination of goodwill reporting units.
When we determine that the carrying value of intangibles and long-lived assets may not be recoverable due to the existence of one or more of the above indicators of potential impairment, we assess whether an impairment has occurred based on whether net book value of the assets exceeds related projected undiscounted cash flows from these assets.
When we determine that the carrying value of intangibles may not be recoverable due to the existence of one or more of the above indicators of potential impairment, we assess whether an impairment has occurred based on whether net book value of the assets exceeds related projected undiscounted cash flows from these assets.
Consolidated EBITDA has other limitations as an analytical tool, when compared to the use of net income, which is the most directly comparable GAAP financial measure, including: • Consolidated EBITDA does not reflect the significant interest expense we incur as a result of our debt leverage; • Consolidated EBITDA does not reflect the provision (benefit) of income tax expense in our various jurisdictions; • Consolidated EBITDA does not reflect any attribution of costs to our operations related to our investments and capital expenditures through depreciation and amortization charges; • Consolidated EBITDA does not reflect the cost of compensation we provide to our employees in the form of stock-based awards; • Consolidated EBITDA does not reflect the equity in earnings of unconsolidated affiliates; and • Consolidated EBITDA excludes expenses and income that are permitted to be excluded per the terms of our Credit Agreement, but which others may believe are normal expenses for the operation of a business.
Consolidated EBITDA has other limitations as an analytical tool, when compared to the use of net income, which is the most directly comparable GAAP financial measure, including: • Consolidated EBITDA does not reflect the significant interest expense we incur as a result of our debt leverage; • Consolidated EBITDA does not reflect the provision (benefit) of income tax expense in our various jurisdictions; • Consolidated EBITDA does not reflect any attribution of costs to our operations related to our investments and capital expenditures through depreciation and amortization charges; • Consolidated EBITDA does not reflect the cost of compensation we provide to our employees in the form of stock-based awards; • Consolidated EBITDA does not reflect the equity in earnings of unconsolidated affiliates; and • Consolidated EBITDA excludes expenses and income that are permitted to be excluded per the terms of our Credit Agreement, but which others may believe are normal expenses for the operation of a business. 48 The following is a reconciliation of net income to Consolidated EBITDA attributable to SS&C common stockholders, as defined in our Credit Agreement.
Cost of license, maintenance and related revenues increased $37.2 million, or 11.8%, primarily due to acquisitions, which added $41.1 million in costs and an increase in organic costs of $4.6 million, offset by the favorable impact from foreign currency translation of $8.5 million. Fiscal 2021 versus Fiscal 2020 .
Cost of license, maintenance and related revenues increased $37.2 million, or 11.8%, primarily 41 due to acquisitions, which added $41.1 million in costs and an increase in organic costs of $4.6 million, offset by the favorable impact from foreign currency translation of $8.5 million.
Our covenant requirement for net senior secured leverage ratio and the actual ratio for the year ended December 31, 2022 are as follows: Covenant Requirement Actual Ratio Maximum consolidated net secured leverage to Consolidated EBITDA ratio (1) 6.25x 2.40x (1) Calculated as the ratio of consolidated net secured funded indebtedness, net of cash and cash equivalents, excluding $134.1 million of cash and cash equivalents held at DomaniRx, to Consolidated EBITDA, as defined by the Credit Agreement, for the period of four consecutive fiscal quarters ended on the measurement date.
Our covenant requirement for net senior secured leverage ratio and the actual ratio for the year ended December 31, 2023 are as follows: Covenant Requirement Actual Ratio Maximum consolidated net secured leverage to Consolidated EBITDA ratio (1) 6.25x 2.10x (1) Calculated as the ratio of consolidated net secured funded indebtedness, net of cash and cash equivalents, excluding $100.2 million of cash and cash equivalents held at DomaniRx, to Consolidated EBITDA, as defined by the Credit Agreement, for the period of four consecutive fiscal quarters ended on the measurement date.
License, maintenance and related revenues increased $214.2 million, or 26.9%, primarily due to acquisitions, which added $186.4 million in revenues, and an increase in organic revenues of $46.9 million. These increases were partially offset by the unfavorable impact from foreign currency translation of $19.1 million. 40 Fiscal 2021 versus Fiscal 2020 .
License, maintenance and related revenues increased $214.2 million, or 26.9%, primarily due to acquisitions, which added $186.4 million in revenues, and an increase in organic revenues of $46.9 million. These increases were partially offset by the unfavorable impact from foreign currency translation of $19.1 million.
Each of these estimates requires significant judgment on the part of our management. In addition, we evaluate the need to provide additional tax provisions for adjustments proposed by taxing authorities. As of December 31, 2022, we had $116.5 million in liabilities associated with unrecognized tax benefits.
Each of these estimates requires significant judgment on the part of our management. In addition, we evaluate the need to provide additional tax provisions for adjustments proposed by taxing authorities. 52 As of December 31, 2023, we had $134.5 million in liabilities associated with unrecognized tax benefits.
Our impairment analysis indicated that the fair values of our reporting units significantly exceeded their carrying values at December 31, 2022. We assess the impairment of identifiable intangibles, long-lived assets and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Our impairment analysis indicated that the fair values of our reporting units significantly exceeded their carrying values at December 31, 2023. We assess the impairment of identifiable intangibles and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
The following table sets forth operating expenses as a percentage of our total revenues for the periods indicated: Year Ended December 31, 2022 2021 2020 Selling and marketing 9.5 % 7.8 % 7.6 % Research and development 8.5 % 8.2 % 8.6 % General and administrative 8.0 % 7.1 % 7.5 % Total operating expenses 26.0 % 23.1 % 23.7 % The following table sets forth operating expenses (dollars in millions) and percent change in operating expenses for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2022 2021 2020 2022 2021 Selling and marketing $ 500.1 $ 394.1 $ 356.3 26.9 % 10.6 % Research and development 447.3 414.9 399.4 7.8 % 3.9 % General and administrative 425.0 358.0 352.3 18.7 % 1.6 % Total operating expenses $ 1,372.4 $ 1,167.0 $ 1,108.0 17.6 % 5.3 % Fiscal 2022 versus 2021 .
The following table sets forth operating expenses as a percentage of our total revenues for the periods indicated: Year Ended December 31, 2023 2022 2021 Selling and marketing 10.0 % 9.5 % 7.8 % Research and development 8.6 % 8.5 % 8.2 % General and administrative 7.6 % 8.0 % 7.1 % Total operating expenses 26.2 % 26.0 % 23.1 % The following table sets forth operating expenses (dollars in millions) and percent change in operating expenses for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2023 2022 2021 2023 2022 Selling and marketing $ 550.9 $ 500.1 $ 394.1 10.2 % 26.9 % Research and development 473.8 447.3 414.9 5.9 % 7.8 % General and administrative 418.2 425.0 358.0 (1.6 )% 18.7 % Total operating expenses $ 1,442.9 $ 1,372.4 $ 1,167.0 5.1 % 17.6 % Fiscal 2023 versus 2022 .
During 2021, this affiliate sold its primary asset, the hotel, for a gain that resulted in the significant increase in earnings of unconsolidated affiliates, net. Loss on extinguishment of debt, net .
During 2021, one of our affiliates sold its primary asset, a hotel, for a gain that resulted in the significant increase in earnings of unconsolidated affiliates, net. Loss on extinguishment of debt, net .
The following table sets forth the provision for income taxes (dollars in millions) and effective tax rates for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2022 2021 2020 2022 2021 Provision for income taxes $ 227.1 $ 236.4 $ 150.6 (3.9 )% 57.0 % Effective tax rate 25.9 % 22.8 % 19.4 % Our 2022, 2021 and 2020 effective tax rates differ from the statutory rate primarily due to the effect of our foreign operations and permanent book to tax differences.
The following table sets forth the provision for income taxes (dollars in millions) and effective tax rates for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2023 2022 2021 2023 2022 Provision for income taxes $ 249.1 $ 227.1 $ 236.4 9.7 % (3.9 )% Effective tax rate 29.0 % 25.9 % 22.8 % Our 2023, 2022 and 2021 effective tax rates differ from the statutory rate primarily due to the effect of our foreign operations and permanent book to tax differences.
We recorded a $5.5 million and $10.9 million loss on extinguishment of debt in 2022 and 2021, respectively, relating to the write-off of a portion of the unamortized capitalized financing fees and the unamortized original issue discount associated with additional prepayments on our term loans prior to their scheduled maturity.
We recorded a $2.1 million, $5.5 million and $10.9 loss on extinguishment of debt in 2023, 2022 and 2021, respectively, relating to the write-off of a portion of the unamortized capitalized financing fees and the unamortized original issue discount associated with additional prepayments on our term loans prior to their scheduled maturity. Provision for income taxes.
Loans based on Term SOFR bear interest at a rate between Term SOFR plus 1.25% and Term SOFR plus 1.50%, depending on our consolidated secured net leverage ratio.
Loans based on the Base Rate bear interest at a rate between the Base Rate plus 0.25% or 0.50%, depending on our consolidated secured net leverage ratio. Loans based on Term SOFR bear interest at a rate between Term SOFR plus 1.25% and Term SOFR plus 1.50%, depending on our consolidated secured net leverage ratio.
The following table sets forth the percentage of our total revenues represented by each of the following sources of revenues for the periods indicated: Year Ended December 31, 2022 2021 2020 Software-enabled services 80.9 % 84.3 % 83.4 % License, maintenance and related 19.1 % 15.7 % 16.6 % Total revenues 100.0 % 100.0 % 100.0 % The following table sets forth revenues (dollars in millions) and percent change in revenues for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2022 2021 2020 2022 2021 Software-enabled services $ 4,273.9 $ 4,256.1 $ 3,891.3 0.4 % 9.4 % License, maintenance and related 1,009.1 794.9 776.6 26.9 % 2.4 % Total revenues $ 5,283.0 $ 5,051.0 $ 4,667.9 4.6 % 8.2 % Fiscal 2022 versus Fiscal 2021 .
The following table sets forth the percentage of our total revenues represented by each of the following sources of revenues for the periods indicated: Year Ended December 31, 2023 2022 2021 Software-enabled services 81.6 % 80.9 % 84.3 % License, maintenance and related 18.4 % 19.1 % 15.7 % Total revenues 100.0 % 100.0 % 100.0 % The following table sets forth revenues (dollars in millions) and percent change in revenues for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2023 2022 2021 2023 2022 Software-enabled services $ 4,488.3 $ 4,273.9 $ 4,256.1 5.0 % 0.4 % License, maintenance and related 1,014.5 1,009.1 794.9 0.5 % 26.9 % Total revenues $ 5,502.8 $ 5,283.0 $ 5,051.0 4.2 % 4.6 % Fiscal 2023 versus Fiscal 2022 .
At December 31, 2022, we held approximately $106.4 million in cash that was available to our foreign borrowers under our senior secured credit facility and will be used to facilitate debt servicing of those entities.
At December 31, 2023, we held approximately $109.8 million in cash that was available to our foreign borrowers under our senior secured credit facility and will be used to facilitate debt servicing of those entities.
The following tables set forth each of the following cost of revenues as a percentage of their respective revenue source for the periods indicated: Year Ended December 31, 2022 2021 2020 Cost of software-enabled services 56.5 % 54.7 % 58.0 % Cost of license, maintenance and related 35.0 % 39.7 % 40.8 % Total cost of revenues 52.4 % 52.3 % 55.1 % Gross margin percentage 47.6 % 47.7 % 44.9 % The following table sets forth cost of revenues (dollars in millions) and percent change in cost of revenues for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2022 2021 2020 2022 2021 Cost of software-enabled services $ 2,414.8 $ 2,326.0 $ 2,257.3 3.8 % 3.0 % Cost of license, maintenance and related 352.9 315.7 316.8 11.8 % (0.3 )% Total cost of revenues $ 2,767.7 $ 2,641.7 $ 2,574.1 4.8 % 2.6 % Fiscal 2022 versus Fiscal 2021 .
The following tables set forth each of the following cost of revenues as a percentage of their respective revenue source for the periods indicated: Year Ended December 31, 2023 2022 2021 Cost of software-enabled services 55.1 % 56.5 % 54.7 % Cost of license, maintenance and related 37.4 % 35.0 % 39.7 % Total cost of revenues 51.8 % 52.4 % 52.3 % Gross margin percentage 48.2 % 47.6 % 47.7 % The following table sets forth cost of revenues (dollars in millions) and percent change in cost of revenues for the periods indicated: Year Ended December 31, Percent Change From Prior Period 2023 2022 2021 2023 2022 Cost of software-enabled services $ 2,472.0 $ 2,414.8 $ 2,326.0 2.4 % 3.8 % Cost of license, maintenance and related 379.0 352.9 315.7 7.4 % 11.8 % Total cost of revenues $ 2,851.0 $ 2,767.7 $ 2,641.7 3.0 % 4.8 % Fiscal 2023 versus Fiscal 2022 .
Year Ended December 31, (in millions) 2022 2021 2020 Net income $ 649.0 $ 800.6 $ 625.2 Interest expense, net 307.9 201.6 245.9 Provision for income taxes 227.1 236.4 150.6 Depreciation and amortization 671.6 667.4 725.3 EBITDA 1,855.6 1,906.0 1,747.0 Stock-based compensation 124.8 114.0 87.8 Acquired EBITDA and cost savings (1) 4.2 1.3 2.3 Loss on extinguishment of debt 5.5 10.9 4.2 Equity in earnings of unconsolidated affiliates, net (25.8 ) (25.4 ) 1.5 Purchase accounting adjustments (2) 9.4 6.3 6.9 ASC 606 adoption impact (1.9 ) 1.0 5.2 Foreign currency translation losses (gains) 11.2 8.1 (14.1 ) Investment gains (38.7 ) (30.1 ) (26.7 ) Facilities and workforce restructuring 32.3 30.0 34.0 Acquisition related (3) 41.5 45.0 — Other (4) (6.7 ) 1.0 8.2 Consolidated EBITDA $ 2,011.4 $ 2,068.1 $ 1,856.3 Consolidated EBITDA attributable to noncontrolling interest (5) (1.1 ) (2.0 ) — Consolidated EBITDA attributable to SS&C common stockholders $ 2,010.3 $ 2,066.1 $ 1,856.3 (1) Acquired EBITDA reflects the EBITDA impact of significant businesses that were acquired during the period as if the acquisition occurred at the beginning of the period, as well as cost savings enacted in connection with acquisitions.
Year Ended December 31, (in millions) 2023 2022 2021 Net income $ 608.6 $ 649.0 $ 800.6 Interest expense, net 469.8 307.9 201.6 Provision for income taxes 249.1 227.1 236.4 Depreciation and amortization 670.4 671.6 667.4 EBITDA 1,997.9 1,855.6 1,906.0 Stock-based compensation 159.4 124.8 114.0 Acquired EBITDA and cost savings (1) — 4.2 1.3 Loss on extinguishment of debt 2.1 5.5 10.9 Equity in earnings of unconsolidated affiliates, net (100.0 ) (25.8 ) (25.4 ) Purchase accounting adjustments (2) 9.3 9.4 6.3 ASC 606 adoption impact (3.1 ) (1.9 ) 1.0 Foreign currency translation (gains) losses (0.2 ) 11.2 8.1 Investment gains (19.0 ) (38.7 ) (30.1 ) Facilities and workforce restructuring 56.8 32.3 30.0 Acquisition related (3) (0.1 ) 41.5 45.0 Other (4) 7.5 (6.7 ) 1.0 Consolidated EBITDA $ 2,110.6 $ 2,011.4 $ 2,068.1 Consolidated EBITDA attributable to noncontrolling interest (5) (2.9 ) (1.1 ) (2.0 ) Consolidated EBITDA attributable to SS&C common stockholders $ 2,107.7 $ 2,010.3 $ 2,066.1 (1) Acquired EBITDA reflects the EBITDA impact of significant businesses that were acquired during the period as if the acquisition occurred at the beginning of the period, as well as cost savings enacted in connection with acquisitions.
We had other income, net of $20.8 million in 2022 compared to other expense, net of $18.2 million in 2021 and other income, net of $41.6 million in 2020. Other income, net for 2022 included net investment gains of $38.7 million, which includes fair value adjustments to increase the carrying value of our investments and dividend income.
We had other income, net of $20.7 million in 2023 compared to other income, net of $20.8 million in 2022 and other expense, net of $18.2 million in 2021. Other income, net for 2023 included net investment gains of $19.0 million, which includes fair value adjustments to increase the carrying value of our investments and dividend income.
Our contractual obligations to remit funds to satisfy client obligations are primarily sourced by funds held on behalf of clients. We had $966.3 million and $2,755.7 million of client funds obligations at December 31, 2022 and 2021, respectively.
Our contractual obligations to remit funds to satisfy client obligations are primarily sourced by funds held on behalf of clients. We had $2,615.6 million and $966.3 million of client funds obligations at December 31, 2023 and 2022, respectively.
At December 31, 2022, we held approximately $199.0 million in cash and cash equivalents at non-U.S. subsidiaries where we have made such a determination and in turn no provision for income taxes had been made.
At December 31, 2023, we held approximately $217.6 million in cash and cash equivalents at non-U.S. subsidiaries where we have made such a determination and in turn no provision for income taxes had been made.
Liquidity and Capital Resources Our principal cash requirements are to finance the costs of our operations pending the billing and collection of client receivables, to fund payments with respect to our indebtedness, to invest in research and development, to acquire complementary businesses or assets, repurchase shares of our common stock and to pay dividends on our common stock.
We are currently assessing the impact of Pillar Two on our financial condition and results of operations. 43 Liquidity and Capital Resources Our principal cash requirements are to finance the costs of our operations pending the billing and collection of client receivables, to fund payments with respect to our indebtedness, to invest in research and development, to acquire complementary businesses or assets, repurchase shares of our common stock and to pay dividends on our common stock.
We had interest expense of $312.2 million in 2022 compared to $205.7 million in 2021 and $249.9 million in 2020. The increase in interest expense for 2022 as compared to 2021 is due to higher average interest rates on debt and higher average debt balances.
We had interest expense of $476.3 million in 2023 compared to $312.2 million in 2022 and $205.7 million in 2021. The increase in interest expense for 2023 as compared to 2022 is due to higher average interest rates on debt.
Other expense, net for 2021 included 42 an expense of $43.4 million relating to the DST ERISA litigation, and investment gains and dividends totaling $30.1 million. The remaining portion of other expense, net consisted primarily of foreign currency translation gains and losses. Other income, net for 2020 consisted primarily of foreign currency transaction gains and investment gains.
Other expense, net for 2021 included an expense of $43.4 million relating to the DST ERISA litigation, and investment gains and dividends totaling $30.1 million. The remaining portion of other expense, net consisted primarily of foreign currency translation gains and losses. Equity in earnings of unconsolidated affiliates, net .
Cash flows from operating, investing and financing activities, as reflected in our Consolidated Statements of Cash Flows, are summarized in the following table (in millions): Year Ended December 31, Change From Prior Period Net cash, cash equivalents and restricted cash provided by (used in): 2022 2021 2020 2022 2021 Operating activities $ 1,134.3 $ 1,429.0 $ 1,184.7 $ (294.7 ) $ 244.3 Investing activities (1,757.6 ) (148.2 ) (210.5 ) (1,609.4 ) 62.3 Financing activities (1,184.5 ) 556.7 (1,428.1 ) (1,741.2 ) 1,984.8 Effect of exchange rate changes on cash, cash equivalents and restricted cash (26.0 ) (4.0 ) 2.4 (22.0 ) (6.4 ) Net (decrease) increase in cash, cash equivalents and restricted cash $ (1,833.8 ) $ 1,833.5 $ (451.5 ) $ (3,667.3 ) $ 2,285.0 Fiscal 2022 versus 2021 Operating activities: Cash provided by operating activities during the year ended December 31, 2022 resulted from net income of $649.0 million adjusted for non-cash items of $700.4 million, partially offset by changes in our working capital accounts (excluding the effect of acquisitions) totaling $215.1 million.
Cash flows from operating, investing and financing activities, as reflected in our Consolidated Statements of Cash Flows, are summarized in the following table (in millions): Year Ended December 31, Change From Prior Period Net cash, cash equivalents and restricted cash provided by (used in): 2023 2022 2021 2023 2022 Operating activities $ 1,215.1 $ 1,134.3 $ 1,429.0 $ 80.8 $ (294.7 ) Investing activities (268.4 ) (1,757.6 ) (148.2 ) 1,489.2 (1,609.4 ) Financing activities 712.8 (1,184.5 ) 556.7 1,897.3 (1,741.2 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1.5 (26.0 ) (4.0 ) 27.5 (22.0 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 1,661.0 $ (1,833.8 ) $ 1,833.5 $ 3,494.8 $ (3,667.3 ) Fiscal 2023 versus 2022 Operating activities: Cash provided by operating activities during the year ended December 31, 2023 resulted from net income of $608.6 million adjusted for non-cash items of $704.7 million, partially offset by changes in our working capital accounts totaling $98.2 million.
(2) We are obligated under noncancelable operating leases for office space and office equipment. (3) Represents our obligation under the Tax Act to pay the deemed repatriation tax on certain non-US earnings over eight years. (4) Purchase obligations include the minimum amounts committed under contracts for goods and services.
(2) We are obligated under noncancelable operating leases for office space and office equipment. (3) Represents our obligation under the Tax Act to pay the deemed repatriation tax on certain non-US earnings over eight years.
Our results of operations below include the results of our recent acquisitions from the date which they were acquired, including Captricity in March 2020, Innovest in May 2020, Millennium in December 2020, Capita in March 2021, Blue Prism and Hubwise in March 2022, MineralWare in May 2022, O'Shares in June 2022, Tier1 in August 2022 and CFO in December 2022.
Our results of operations below include the results of our recent acquisitions from the date which they were acquired, including Capita in March 2021, Blue Prism and Hubwise in March 2022, MineralWare in May 2022, O'Shares in June 2022, Tier1 in August 2022, CFO in December 2022 and the Iress Managed Funds Administration Business in October 2023.
Our revenues also increased due to acquisitions, which contributed $56.9 million in revenues as well as the favorable impact from foreign currency translation of $53.5 million.
Our revenues also increased due to acquisitions, which contributed $75.8 million in revenues as well as the favorable impact from foreign currency translation of $0.8 million.
Our effective tax rate for 2022 includes increases in valuation allowances on deferred tax assets, benefits related to stock-based awards and releases of uncertain tax positions due to statute of limitation expirations. Our effective tax rate for 2021 included benefits related to stock-based awards and recognition of tax expense related to a law change in the U.K.
Our effective tax rate for 2023 includes increases in uncertain tax positions and benefits related to stock-based awards. Our effective tax rate for 2022 included increases in valuation allowances on deferred tax assets, benefits related to stock-based awards and releases of uncertain tax positions due to statute of limitation expirations.
Significant changes in any of these items may result in discontinuing capitalization of development costs, as well as immediately expensing previously capitalized costs. We review, on a quarterly basis, our capitalized software for possible impairment.
Significant changes in any of these items may result in discontinuing capitalization of development costs, as well as immediately expensing previously capitalized costs. We review, on a quarterly basis, our capitalized software for possible impairment. Revenue Recognition Our revenues consist of software-enabled services and license, maintenance and related revenues.
While actual results during the years ended December 31, 2022, 2021 and 2020 were consistent with our estimated cash flows and we did not incur any impairment charges during those years, different estimates and assumptions in valuing acquired assets could yield materially different results. 50 Revenue Recognition Our revenues consist of software-enabled services and license, maintenance and related revenues.
While actual results during the years ended December 31, 2023, 2022 and 2021 were consistent with our estimated cash flows and we did not incur 50 any impairment charges during those years, different estimates and assumptions in valuing acquired assets could yield materially different results.
The following table lists the significant businesses we have acquired since January 1, 2020: Acquired Business Acquisition Date Acquired Capabilities, Products and Services Tier1 August 2022 Extended SS&C's customer relationship management offerings O'Shares ETF June 2022 Expanded the offerings of SS&C ALPS Advisors, SS&C's wholly-owned asset manager Minerals Management, LLC May 2022 Extended SS&C's offerings into the energy market while helping clients streamline operations across all asset classes and type Hubwise Holdings Limited March 2022 Enhanced SS&C's capacity to help customers create highly automated and efficient multi-asset, multi-currency and multi-wrapper strategies Blue Prism Group Plc March 2022 Added deep expertise in intelligent automation and robotic process automation Innovest May 2020 Added web-based trust accounting and unique asset servicing solutions Captricity March 2020 Added data transformation platform to extract handwritten and machine printed data from paper documents The discussion in this Part II, Item 7 of this Annual Report on Form 10-K includes the operations of the businesses listed in the table above for the respective time periods each was owned by SS&C.
The following table lists the significant businesses we have acquired since January 1, 2021: Acquired Business Acquisition Date Acquired Capabilities, Products and Services Iress Managed Funds Administration Business October 2023 Provided software and services for trading and market data, financial advice, investment management, mortgages, superannuation, life and pensions and data intelligence Tier1 August 2022 Extended SS&C's customer relationship management offerings O'Shares ETF June 2022 Expanded the offerings of SS&C ALPS Advisors, SS&C's wholly-owned asset manager Minerals Management, LLC May 2022 Extended SS&C's offerings into the energy market while helping clients streamline operations across all asset classes and type Hubwise Holdings Limited March 2022 Enhanced SS&C's capacity to help customers create highly automated and efficient multi-asset, multi-currency and multi-wrapper strategies Blue Prism Group Plc March 2022 Added deep expertise in intelligent automation and robotic process automation The discussion in this Part II, Item 7 of this Annual Report on Form 10-K includes the operations of the businesses listed in the table above for the respective time periods each was owned by SS&C.
Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily increased due to an increase in personnel costs, travel and entertainment, marketing costs and information technology related expenses. Fiscal 2021 versus 2020 .
Total operating expenses, excluding the impact of acquisitions and foreign currency translation, primarily increased due to an increase in personnel costs, travel and entertainment, marketing costs and information technology related expenses. Comparison of Fiscal 2023, 2022 and 2021 for Interest, Taxes and Other Interest expense .
Further, the Credit Agreement requires that Consolidated EBITDA be calculated for the most recent four fiscal quarters. As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or any complete fiscal year.
As a result, the measure can be disproportionately affected by a particularly strong or weak quarter. Further, it may not be comparable to the measure for any subsequent four-quarter period or any complete fiscal year.
While we have income from multiple foreign sources, the majority of our non-U.S. operations are in India and the U.K., where the statutory rates were approximately 29.0% on a blended basis and 19.0%, respectively, in 2022, approximately 31.0% on a blended basis and 19.0%, respectively, in 2021, and 29.1% and 19.0%, respectively, in 2020.
While we have income from multiple foreign sources, the majority of our non-U.S. operations are in the United Kingdom and India, where the statutory rates were 23.5% and approximately 33.0%, respectively, in 2023, 19.0% and approximately 29.0%, respectively, in 2022, and 19.0% and approximately 31.0%, respectively, in 2021.
General and administrative expenses consist primarily of personnel costs related to management, accounting and finance, information management, human resources and administration and associated overhead costs, as well as fees for professional services.
Research and development expenses consist primarily of personnel costs attributable to the enhancement of existing products and the development of new software products. General and administrative expenses consist primarily of personnel costs related to management, accounting and finance, legal, human resources and administration and associated overhead costs, as well as fees for professional services.
See Notes 8, 10 and 11 to our Consolidated Financial Statements for further discussion of acquisitions, debt and equity, respectively. 43 Client funds obligations include our transfer agency client balances invested overnight as well as our contractual obligations to remit funds to satisfy client pharmacy claim obligations and are recorded on the Consolidated Balance Sheet when incurred, generally after a claim has been processed by us.
Client funds obligations include our transfer agency client balances invested overnight as well as our contractual obligations to remit funds to satisfy client pharmacy claim obligations and are recorded on the Consolidated Balance Sheet when incurred, generally after a claim has been processed by us.
As a result, these amounts are not included in the above contractual obligations table. Senior Secured Credit Facilities On April 16, 2018, in connection with our acquisition of DST, we entered into an amended and restated credit agreement with SS&C Technologies, Inc.
Senior Secured Credit Facilities On April 16, 2018, in connection with our acquisition of DST, we entered into an amended and restated credit agreement with SS&C Technologies, Inc.
Our cash, cash equivalents and restricted cash and cash equivalents, including amounts held on behalf of clients, at December 31, 2022 were $1,337.6 million, a decrease of $1,833.8 million from $3,171.4 million at December 31, 2021. The decrease in cash was primarily due to the decrease in cash and cash equivalents associated with funds held on behalf of clients.
Our cash, cash equivalents and restricted cash and cash equivalents, including amounts held on behalf of clients, at December 31, 2023 were $2,998.6 million, an increase of $1,661.0 million from $1,337.6 million at December 31, 2022. The increase in cash was primarily due to the increase in cash and cash equivalents associated with funds held on behalf of clients.
Acquisition Accounting In connection with our acquisitions, we allocate the purchase price to the assets and liabilities we acquire, such as net tangible assets, completed technology, customer relationships, other identifiable intangible assets, deferred revenue and goodwill. We apply significant judgments and estimates in determining the fair market value of the assets acquired and their useful lives.
Intangible Assets and Goodwill In connection with the completion of our acquisitions, we allocate the purchase price to the assets and liabilities we acquire, such as net tangible assets, completed technology, customer relationships, other identifiable intangible assets, deferred revenue and goodwill.
Software-enabled services revenues increased $364.8 million, or 9.4%, primarily due to an increase in organic revenues of $263.2 million, and acquisitions, which added $56.9 million in revenues, as well as the favorable impact from foreign currency translation of $44.7 million.
Software-enabled services revenues increased $214.4 million, or 5.0%, primarily due to an increase in organic revenues of $187.9 million, and acquisitions, which added $23.9 million in revenues, as well as the favorable impact from foreign currency translation of $2.6 million. License, maintenance and related revenues increased $5.4 million, or 0.5%, primarily due to acquisitions, which added $51.9 million in revenues.
As of December 31, 2022, there was $2.5 million utilized of the letter of credit sub-facility and $597.5 million available of the Revolving Facility Amendment.
As of December 31, 2023, there was $1.3 million utilized of the letter of credit sub-facility and $598.7 million available of the Revolving Facility Amendment.
In December 2022, we entered into an amendment to our revolving credit facility, which is also described in Contractual Obligations, which increased the capacity of our revolving credit facility from $250.0 million to $600.0 million. 39 We generated $1,134.3 million in cash from operating activities in 2022, compared to $1,429.0 million and $1,184.7 million in 2021 and 2020, respectively.
In December 2022, we entered into an amendment to our revolving credit facility, which is also described in Contractual Obligations, which increased the capacity of our revolving credit facility from $250.0 million to $600.0 million.
Our revenues increased $383.1 million, or 8.2%, primarily due to an increase of $272.7 million in organic revenues driven by strength in the SS&C GlobeOp fund administration, Black Diamond, Geneva, Retirement Solutions, ALPS Advisors and virtual data room services and products.
Our revenues increased $219.8 million, or 4.2%, primarily due to an increase of $143.2 million in organic revenues driven by strength in the SS&C GlobeOp fund administration, virtual data room services, Global Investor and Distribution Solutions and Blue Prism products.
Revenues. As we have expanded our business, we have focused on increasing our software-enabled services. Since 2020, we have seen increased demand in the financial services industry for these services from existing and new customers.
Revenues. As we have expanded our business, we have focused on increasing our software-enabled services. Since 2021, we have seen increased demand in the financial services industry for these services from existing and new customers. We have taken a number of steps to support that demand, such as automating our software-enabled services delivery methods and expanding our service offerings.
Operating expenses increased $59.0 million, or 5.3%, primarily due to an increase in organic operating expenses of 29.1 million, the unfavorable impact from foreign currency translation of $16.7 million and acquisitions, which added $13.2 million in expenses.
Operating expenses increased $70.5 million, or 5.1%, primarily due to acquisitions, which added $42.7 million in expenses, and an increase in organic operating expenses of $32.0 million. These increases were partially offset by the favorable impact from foreign currency translation of $4.2 million.
The increase in the effective tax rate from 2021 to 2022 was primarily related to decreases in relative favorable impacts of stock based compensation in the current year, an increase in valuation allowances on deferred tax assets in the current year and the impact of uncertain tax positions.
The increase in the effective tax rate from 2022 to 2023 was primarily related to an increase in uncertain tax positions in the current year, decreases in relative favorable impacts of stock-based compensation in the current year, and a change in the composition of income before income taxes from foreign and domestic tax jurisdictions.
As of December 31, 2022, our liability for uncertain tax positions and related interest and penalties payable was $116.5 million and $28.4 million, respectively. We are unable to reasonably estimate the timing of such liability and interest payments in individual years beyond 12 months due to uncertainties in the timing of the effective settlement of tax positions.
We are unable to reasonably estimate the timing of such liability and interest payments in individual years beyond 12 months due to uncertainties in the timing of the effective settlement of tax positions.
In addition, the prior year effective tax rate was unfavorably impacted by tax expense related to a law change in the United Kingdom. Our effective tax rate includes the effect of operations outside the U.S., which historically have been taxed at rates lower than the U.S. statutory rate.
Our effective tax rate for 2021 included benefits related to stock-based awards and recognition of tax expense related to a law change in the U.K. Our effective tax rate includes the effect of operations outside the U.S., which historically have been taxed at rates lower than the U.S. statutory rate.
The table below provides a summary of the key terms of our Senior Secured Credit Facilities and Senior Notes: Amount Outstanding at December 31, 2022 Maturity Scheduled Quarterly Interest (in millions) Date Payments Required Rate Senior Secured Credit Facilities Term Loan B-3 $ 1,199.0 April 16, 2025 0.25% Variable rate (1) Term Loan B-4 974.8 April 16, 2025 0.25% Variable rate (1) Term Loan B-5 1,650.1 April 16, 2025 0.25% Variable rate (1) Term Loan B-6 520.7 March 22, 2029 0.25% Variable rate (2) Term Loan B-7 784.5 March 22, 2029 0.25% Variable rate (2) Revolving Credit Facility — December 28, 2027 None Variable rate (3) Senior Notes 2,000.0 September 30, 2027 None Fixed at 5.5% (1) Initially incurred interest at either LIBOR plus 2.50% of at the base rate plus 1.50%, and were subject to a step-down at any time our consolidated net secured leverage ratio was less than 4.75 times, to 2.25% in the case of the LIBOR margin and 1.25% in the case of the base rate margin.
The table below provides a summary of the key terms of our Senior Secured Credit Facilities and Senior Notes: Amount Outstanding at December 31, 2023 Maturity Scheduled Quarterly Interest (in millions) Date Payments Required Rate Senior Secured Credit Facilities Term Loan B-3 $ 997.2 April 16, 2025 0.25% Variable rate (1) Term Loan B-4 941.6 April 16, 2025 0.25% Variable rate (1) Term Loan B-5 1,586.4 April 16, 2025 0.25% Variable rate (1) Term Loan B-6 458.5 March 22, 2029 0.25% Variable rate (2) Term Loan B-7 771.5 March 22, 2029 0.25% Variable rate (2) Revolving Credit Facility — December 28, 2027 None Variable rate (3) Senior Notes 2,000.0 September 30, 2027 None Fixed at 5.5% (1) In January 2020, we entered into a pricing amendment, whereby the interest rate margin applicable to the term loans was reduced from LIBOR plus 2.25% to LIBOR plus 1.75%.
In 2022, we used our operating cash flow, $91.8 million in proceeds from the exercise of stock options and existing cash to fund acquisitions, pay $203.1 million in dividends, purchase $476.1 million of common stock for treasury and invest in capital expenditures in our business.
In 2023, we used our operating cash flow, $115.4 million in proceeds from the exercise of stock options and existing cash to purchase $471.6 million of common stock for treasury, pay down $374.7 million of debt, pay $220.9 million in dividends and invest in capital expenditures in our business.
The COVID-19 pandemic and ongoing macroeconomic conditions, such as increases in interest rates and inflation rates and changes in foreign currency exchange rates, could have impacts on our results that are uncertain and, in many respects, outside our control.
Ongoing macroeconomic conditions, such as increases in interest rates and inflation rates and changes in foreign currency exchange rates, could have impacts on our results that are uncertain and, in many respects, outside our control. Economic conditions are subject to rapid and possibly material change, which ultimately could result in material negative effects on our business and results of operations.
Cost of software-enabled services revenues increased $68.7 million, or 3.0%, primarily due to acquisitions, which added $40.1 million in costs, as well as the unfavorable impact from foreign currency translation of $30.0 million, partially offset by a decrease in organic cost of revenues of $1.4 million.
Cost of software-enabled services revenues increased $57.2 million, or 2.4%, primarily due to an increase of $47.4 million in organic costs and acquisitions, which added $15.3 million in costs, partially offset by the favorable impact from foreign currency translation of $5.5 million.
Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2022 that require us to make future cash payments (in millions): Payments Due by Period Contractual Obligations and Other Commitments Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Short-term and long-term debt $ 7,129.9 $ 55.7 $ 3,808.3 $ 2,026.2 $ 1,239.7 Interest payments (1) 1,622.6 434.8 695.9 389.7 102.2 Operating lease obligations (2) 357.6 69.9 104.6 69.6 113.5 Tax payable (3) 24.2 2.0 22.2 — — Purchase obligations (4) 280.7 131.3 107.0 42.4 — Total contractual obligations $ 9,415.0 $ 693.7 $ 4,738.0 $ 2,527.9 $ 1,455.4 (1) Reflects interest payments on our Credit Agreement at an assumed interest rate of one-month LIBOR of 4.38% plus 1.75% on our Term B-3, B-4 and B-5 facilities, one-month SOFR of 4.42% plus 2.25% on our Term B-6 and B-7 facilities and 5.5% on our Senior Notes.
Contractual Obligations The following table summarizes our contractual obligations as of December 31, 2023 that require us to make future cash payments (in millions): Payments Due by Period Contractual Obligations and Other Commitments Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Short-term and long-term debt $ 6,755.1 $ 51.5 $ 3,511.2 $ 2,025.0 $ 1,167.4 Interest payments (1) 1,261.4 463.7 482.6 294.9 20.2 Operating lease obligations (2) 300.8 63.4 91.5 63.3 82.6 Tax payable (3) 22.2 9.9 12.3 — — Purchase obligations (4) 303.7 163.2 131.9 8.6 — Total contractual obligations $ 8,643.2 $ 751.7 $ 4,229.5 $ 2,391.8 $ 1,270.2 (1) Reflects interest payments on our Credit Agreement at an assumed interest rate of one-month Adjusted Term SOFR of 5.47% plus 1.75% on our Term B-3, B-4 and B-5 facilities, one-month Adjusted Term SOFR of 5.46% plus 2.25% on our Term B-6 and B-7 facilities and 5.5% on our Senior Notes.
Such expenses also include amortization of intangible assets, the cost of branch sales offices, trade shows and marketing and promotional materials. Research and development expenses consist primarily of personnel costs attributable to the enhancement of existing products and the development of new software products.
Operating Expenses Selling and marketing expenses consist primarily of the personnel costs associated with the selling and marketing of our products, including salaries, commissions, travel and entertainment. Such expenses also include amortization of intangible assets, the cost of branch sales offices, trade shows and marketing and promotional materials.
Consolidated EBITDA is a non-GAAP financial measure used in key financial covenants contained in the Credit Agreement, which is the material facility supporting our capital structure and providing liquidity to our business.
Additionally, under the Credit Agreement, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is also tied to baskets and ratios based on Consolidated EBITDA. 47 Consolidated EBITDA is a non-GAAP financial measure used in key financial covenants contained in the Credit Agreement, which is the material facility supporting our capital structure and providing liquidity to our business.
Differences between actual results and these estimates could have a material effect on our financial results. A deferred income tax asset is recorded over the vesting period as stock compensation expense is recorded for non-qualified stock options. The realizability of the deferred tax asset is ultimately based on the actual value of the stock-based award upon exercise.
If we exceed our estimate earnings per share growth, we may need to record additional stock-based compensation expense. A deferred income tax asset is recorded over the vesting period as stock compensation expense is recorded for non-qualified stock options. The realizability of the deferred tax asset is ultimately based on the actual value of the stock-based award upon exercise.
Results of Operations Revenues We derive our revenues from two sources: software-enabled services revenues and license, maintenance and related revenues.
We will continue to evaluate the nature and extent of the potential impacts to our business, consolidated results of operations, liquidity and capital resources. Results of Operations Revenues We derive our revenues from two sources: software-enabled services revenues and license, maintenance and related revenues.
We had an average interest rate of 4.22% and 3.05%, respectively, for the twelve months ended December 31, 2022 and 2021. Our total debt balance as of December 31, 2022 was higher compared to the prior year due to the Incremental Joinder we entered into in connection with our acquisition of Blue Prism.
The increase in interest expense for 2022 as compared to 2021 is due to higher average interest rates on debt and higher average debt balances. We had an average interest rate of 6.65%, 4.22% and 3.05%, for the twelve months ended December 31, 2023, 2022 and 2021, respectively.
These expenditures were partially offset by net borrowings of debt totaling $1,127.3 million and $91.8 million received from the exercise of stock options.
These expenditures were partially offset by net borrowings of debt totaling $1,127.3 million and $91.8 million received from the exercise of stock options. We have made a permanent reinvestment determination in certain non-U.S. operations that have historically generated positive operating cash flows.
We also had $2,755.7 million and $1,227.4 million of client funds obligations at December 31, 2021 and 2020, respectively. Operating activities: Cash provided by operating activities primarily resulted from net income of $800.6 million adjusted for non-cash items of $689.7 million, partially offset by changes in our working capital accounts (excluding the effect of acquisitions) totaling $61.3 million.
Operating activities: Cash provided by operating activities during the year ended December 31, 2022 resulted from net income of $649.0 million adjusted for non-cash items of $700.4 million, partially offset by changes in our working capital accounts (excluding the effect of acquisitions) totaling $215.1 million.
Management uses Consolidated EBITDA to gauge the costs of our capital structure on a day-to-day basis when full financial statements are unavailable.
Management uses Consolidated EBITDA to gauge the costs of our capital structure on a day-to-day basis when full financial statements are unavailable. Management further believes that providing this information allows our investors greater transparency and a better understanding of our ability to meet our debt service obligations and make capital expenditures.
A future proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions could impact our periodic effective tax rate.
A future proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions could impact our periodic effective tax rate. On August 16, 2022, the Inflation Reduction Act was signed into law, which includes a 15% corporate alternative minimum tax and a 1% excise tax on stock repurchases.
Any default and subsequent acceleration of payments under the Credit Agreement would have a material adverse effect on our results of operations, financial position and cash flows. Additionally, under the Credit Agreement, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is also tied to baskets and ratios based on Consolidated EBITDA.
Any default and subsequent acceleration of payments under the Credit Agreement would have a material adverse effect on our results of operations, financial position and cash flows.
Management further believes that providing this information allows our investors greater transparency and a better understanding of our ability to meet our debt service obligations and make capital expenditures. 47 Consolidated EBITDA does not represent net income or cash flow from operations as those terms are defined by generally accepted accounting principles, or GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs.
Consolidated EBITDA does not represent net income or cash flow from operations as those terms are defined by generally accepted accounting principles, or GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. Further, the Credit Agreement requires that Consolidated EBITDA be calculated for the most recent four fiscal quarters.
The changes in our working capital accounts were primarily driven by increases in our accounts receivable and decreases in deferred revenue, partially offset by a decrease in our prepaid expenses and other assets. The increase in accounts 44 receivable was due to increases in revenues earned and an increase in days’ sales outstanding.
The changes in our working capital accounts were primarily driven by decreases in accrued expenses and other liabilities, changes in income taxes prepaid and payable and an increase in accounts receivable, partially offset by an increase in accounts payable.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2022, we had total debt of $7,129.9 million, including $5,129.1 million of variable interest rate debt. As of December 31, 2022, a 100 basis point increase in interest rates would result in a change in interest expense of approximately $51.3 million per year.
Biggest changeAt December 31, 2023, we had total debt of $6,755.1 million, including $4,755.1 million of variable interest rate debt. As of December 31, 2023, a 100 basis point increase in interest rates would result in a change in interest expense of approximately $47.6 million per year.
We estimate that a 100 basis point change in the interest earnings rates would equate to approximately $9.1 million of net income, net of income taxes, on an annual basis. The effect of changes in interest rates attributable to earnings derived from cash balances we hold for clients is partially offset by changes in interest rates on our variable debt.
We estimate that a 100 basis point change in the interest earnings rates would equate to approximately $9.4 million of net income, net of income taxes, on an annual basis. The effect of changes in interest rates attributable to earnings derived from cash balances we hold for clients is partially offset by changes in interest rates on our variable debt.
These transactions consist primarily of cross-currency intercompany balances and trade receivables and payables. As a result of these transactions, we have exposure to changes in foreign 52 currency exchange rates that result in foreign currency transaction gains and losses, which we report in other income (expense). These outstanding amounts were not material for the year ended December 31, 2022.
These transactions consist primarily of cross-currency intercompany balances and trade receivables and payables. As a result of these transactions, we have exposure to changes in foreign currency exchange rates that result in foreign currency transaction gains and losses, which we report in other income (expense), net. These outstanding amounts were not material for the year ended December 31, 2023.
Changes in equity values of our investments could have a material effect on our results of operations and our financial position. Foreign currency exchange rate risk During 2022, approximately 29% of our revenues were from clients located outside the United States (“U.S.”).
Changes in equity values of our investments could have a material effect on our results of operations and our financial position. Foreign currency exchange rate risk During 2023, approximately 31% of our revenues were from clients located outside the United States (“U.S.”).
The fair value of our investments that are subject to equity price risk as of December 31, 2022 was approximately $56.3 million. The impact of a 10% change in fair value of these investments would have been approximately $4.2 million to net income.
The fair value of our investments that are subject to equity price risk as of December 31, 2023 was approximately $49.0 million. The impact of a 10% change in fair value of these investments would have been approximately $3.6 million to net income.
Interest rate risk We derive service revenues from investment earnings related to cash balances maintained in bank accounts on which we are the agent for clients. The balances maintained in the bank accounts will fluctuate. For 2022, there were average daily cash balances of approximately $2.4 billion maintained in such accounts.
Interest rate risk We derive service revenues from investment earnings related to cash balances maintained in bank accounts on which we are the agent for clients. The balances maintained in the bank accounts can significantly fluctuate. For 2023, there were average daily cash balances of approximately $1.7 billion maintained in such accounts.

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