Press Release

For Immediate Release

SS&C Technologies Reports Q3 2018 Results


Q3 2018 GAAP revenue $992.4 million, up 137.3 percent, Fully Diluted GAAP Earnings Per Share $0.23, down 23.3 percent

Adjusted revenue $1,002.9 million, up 139.1 percent, Adjusted Diluted Earnings Per Share $0.79, up 58.0 percent

WINDSOR, CT, October 31, 2018 (PR Newswire) SS&C Technologies Holdings, Inc. (NASDAQ: SSNC), a global provider of investment and financial software-enabled services and software, today announced its financial results for the third quarter ended September 30, 2018.

GAAP Results

SS&C reported GAAP revenue of $992.4 million for the third quarter of 2018, up 137.3 percent compared to $418.2 million in the third quarter of 2017.  GAAP operating income for the third quarter of 2018 was $180.6 million, or 18.2 percent of GAAP revenue, compared to $103.9 million, or 24.8 percent of GAAP revenue, in 2017’s third quarter, representing a 73.8 percent increase.  

GAAP net income for the third quarter of 2018 was $57.0 million, down 11.2 percent compared to $64.2 million in 2017’s third quarter.  On a fully diluted GAAP basis, earnings per share in the third quarter of 2018 were $0.23 per share, down 23.3 percent compared to $0.30 earnings per share on a fully diluted GAAP basis in the third quarter of 2017.

Adjusted Non-GAAP Results (defined in Notes 1-4 below)

Adjusted revenue was $1,002.9 million for the third quarter of 2018, up 139.1 percent compared to $419.5 million in the third quarter of 2017.  Adjusted operating income for the third quarter of 2018 was $344.7 million, or 34.4 percent of adjusted revenue, compared to $170.1 million, or 40.5 percent of adjusted revenue, in 2017’s third quarter, representing a 102.6 percent increase.  

Adjusted net income for the third quarter of 2018 was $199.8 million, up 89.4 percent compared to $105.5 million in 2017’s third quarter.  Adjusted diluted earnings per share in the third quarter of 2018 were $0.79 per share, up 58.0 percent compared to $0.50 per share in the third quarter of 2017.

Third Quarter Highlights:

  • Adjusted net income was $199.8 million for Q3 2018, increasing 89.4 percent from Q3 2017’s adjusted net income of $105.5 million.
  • Adjusted consolidated EBITDA increased 104.6 percent to $365.9 million in Q3 2018. Adjusted consolidated EBITDA margin was 36.5 percent for the quarter.
  • Paid down $641.2 million in debt since acquiring DST Systems, bringing our leverage ratio to 4.02 times consolidated EBITDA as of September 30, 2018.
  • On September 6, 2018, SS&C announced a definitive agreement to acquire Intralinks Holdings, Inc. for a total consideration of $1.5 billion. The purchase price will consist of $1 billion in cash and $500 million in SS&C stock, with the per share price of the stock based on the volume weighted average trading price for 30 trading days prior to closing.

“SS&C Technologies is pleased to report Q3 2018 adjusted revenue of $1,002.9 million, and adjusted diluted earnings per share of $0.79, a strong beat of our previous guidance” said Bill Stone, Chairman and Chief Executive Officer. “We were able to manage our expenses at both DST and core SS&C better than we anticipated, and had solid growth anchored in multi-term renewals in our Institutional and Investment Management business, a high margin business. The acquisition of Eze Software closed October 1, and we are pleased with the early integration efforts.  We also announced our intention to acquire Intralinks, a strong business with high growth characteristics and world class technology. We believe this acquisition will strengthen SS&C’s technology stack and contribute to our revenue growth goals.”

Operating Cash Flow

SS&C generated net cash from operating activities of $322.4 million for the nine months ended September 30, 2018, compared to $308.5 million for the same period in 2017, representing a 4.5 percent increase.  Operating cash flow was impacted by approximately $210.0 million of transaction costs related to the acquisition of DST Systems.  SS&C ended the third quarter with $732.2 million in cash and cash equivalents and $6,759.4 million in gross debt, for a net debt balance of $6,027.2 million.  SS&C’s consolidated net leverage ratio as defined in our credit agreement stood at 4.02 times consolidated EBITDA as of September 30, 2018.

Guidance


 

 

Q4 2018

 

FY 2018

Adjusted Revenue ($M)

 

$1,075.0 – $1,085.0

 

 

$3,421.0– $3,431.0 

 

Adjusted Net Income ($M)

 

$210.0 – $220.0

 

 

$678.0 – $688.0

 

Cash from Operating Activities ($M)

 

 

 

 

$550.0 – $570.0

 

Capital Expenditures (% of revenue)

 

 

 

 

2.3% – 2.7%

 

Diluted Shares (M)

 

256.2 – 255.2

 

 

243.7 – 243.3

 

Effective Income Tax Rate (%)

 

 

26%

 

 

 

                     

SS&C does not provide reconciliations of guidance for Adjusted Revenues and Adjusted Net Income to comparable GAAP measures, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K.  SS&C is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures.  These items include acquisition transactions and integration, foreign exchange rate changes, as well as other non-cash and other adjustments as defined under the Company’s Credit agreement, that are difficult to predict in advance in order to include in a GAAP estimate.  The unavailable information could have a significant impact on Q4 2018 and FY 2018 GAAP financial results.

Non-GAAP Financial Measures

Adjusted revenue, adjusted operating income, adjusted consolidated EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures.  See the accompanying notes for the reconciliations and definitions for each of these non-GAAP measures and the reasons our management believes these measures provide useful information to investors regarding our financial condition and results of operations.

Earnings Call and Press Release

SS&C’s Q3 2018 earnings call will take place at 5:00 p.m. eastern time today, October 31, 2018.  The call will discuss Q3 2018 results and our guidance and business outlook.  Interested parties may dial 844-343-4183 (US and Canada) or 647-689-5128 (International), and request the “SS&C Technologies Third Quarter 2018 Conference Call”; conference ID #5254116.  A replay will be available after 8:00 p.m. eastern time on October 31, 2018, until midnight on November 6, 2018.  The replay dial-in number is 800-585-8367 or 416-621-4642; access code #5254116.  The call will also be available for replay on SS&C’s website after October 31, 2018; access: http://investor.ssctech.com/results.cfm.

Certain information contained in this press release relating to, among other things, the Company’s financial guidance for the fourth quarter and full year of 2018 constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance, underlying assumptions, and other statements that are other than statements of historical facts.  Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “expects”, “estimates”, “projects”, “forecasts”, “may”, “assume”, “intend”, “will”, “continue”, “opportunity”, “predict”, “potential”, “future”, “guarantee”, “likely”, “target”, “indicate”, “would”, “could” and “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.  Such statements reflect management’s best judgment based on factors currently known but are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated.  Such risks and uncertainties include, but are not limited to, the state of the economy and the financial services industry and other industries in which the Company’s clients operate, the Company’s ability to realize anticipated benefits from its acquisitions, including DST Systems, the effect of the customer consolidation on demand for the Company’s products and services, the increasing focus of the Company’s business on the hedge fund industry, the variability of revenue as a result of activity in the securities markets, the ability to retain and attract clients, fluctuations in customer demand for the Company’s products and services, the intensity of competition with respect to the Company’s products and services, the exposure to litigation and other claims, terrorist activities and other catastrophic events, disruptions, attacks or failures affecting the Company’s software-enabled services, risks associated with the Company’s foreign operations, privacy concerns relating to the collection and storage of person information, evolving regulations and increased scrutiny from regulators,  the Company’s ability to protect intellectual property assets and litigation regarding intellectual property rights, delays in product development, investment decisions concerning cash balances, regulatory and tax risks, risks associated with the Company’s joint ventures, changes in accounting standards, risks related to the Company’s substantial indebtedness, the market price of the Company’s stock prevailing from time to time, and the risks discussed in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which are on file with the Securities and Exchange Commission and can also be accessed on our website.  Forward-looking statements speak only as of the date on which they are made and, except to the extent required by applicable securities laws, we undertake no obligation to update or revise any forward-looking statements.

About SS&C Technologies

SS&C is a global provider of investment and financial software-enabled services and software for the global financial services and healthcare industries.  Founded in 1986, SS&C is headquartered in Windsor, Connecticut and has offices around the world.  Some 13,000 financial services and healthcare organizations, from the world’s largest institutions to local firms, manage and account for their investments using SS&C's products and services.  

Click here to view the financial earnings statement in PDF format.


Contact(s):

  Patrick Pedonti
  Chief Financial Officer
  Tel: +1-860-298-4738

  Justine Stone
  Investor Relations
  Tel: +1- 212-367-4705
  E-mail: InvestorRelations@sscinc.com