Press Release

For Immediate Release

SS&C Technologies Releases Q4 and Full Year 2019 Earnings


Q4 2019 GAAP revenue $1,203.5 million, up 8.3 percent, Fully Diluted GAAP Earnings Per Share $0.54, up 134.8%

Adjusted revenue $1,212.2 million, up 7.0 percent, Adjusted Diluted Earnings Per Share $1.08, up 13.7 percent

WINDSOR, CT, February 12, 2020 (PR Newswire) SS&C Technologies Holdings, Inc. (NASDAQ: SSNC), a global provider of investment, financial, and healthcare software-enabled services and software, today announced its financial results for the fourth quarter and full year ended December 31, 2019.

GAAP Results

SS&C reported GAAP revenue of $1,203.5 million for the fourth quarter of 2019, up 8.3 percent compared to $1,111.0 million in the fourth quarter of 2018.  GAAP revenue for the year ended December 31, 2019 was $4,632.9 million, increasing 35.4 percent from $3,421.1 million in 2018.  GAAP operating income for the fourth quarter of 2019 was $261.3 million, or 21.7 percent of GAAP revenue, compared to GAAP operating income of $212.4 million, or 19.1 percent of GAAP revenue, in 2018’s fourth quarter.  GAAP operating income for the year ended December 31, 2019 was $914.4 million, or 19.7 percent of GAAP revenue, compared to $429.1 million, or 12.5 percent of GAAP revenue for 2018, up 113.1 percent.

GAAP net income for the fourth quarter of 2019 was $141.6 million compared to GAAP net income of $58.7 million in 2018’s fourth quarter, up 141.2%.  GAAP net income for the year ended December 31, 2019 was $438.5 million, up 324.9 percent compared to $103.2 million in 2018.  On a fully diluted GAAP basis, earnings per share in the fourth quarter of 2019 were $0.54 per share compared to earnings per share of $0.23 on a fully diluted GAAP basis in the fourth quarter of 2018, up 134.8%.  On a fully diluted GAAP basis, earnings per share for the year ended December 31, 2019 were $1.66, up 295.2 percent from 2018’s $0.42 per share.

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

Adjusted revenue was $1,212.2 million for the fourth quarter of 2019, up 7.0 percent compared to $1,132.8 million in the fourth quarter of 2018.  Adjusted revenue for the year ended December 31, 2019 was $4,668.8 million, increasing 34.2 percent from $3,478.7 million in 2018.  Adjusted operating income for the fourth quarter of 2019 was $470.0 million, or 38.8 percent of adjusted revenue, compared to $421.5 million, or 37.2 percent of adjusted revenue, in 2018’s fourth quarter, representing an 11.5 percent increase and an increase of over 150 basis points in adjusted operating margin.  Adjusted operating income for the year ended December 31, 2019 was $1,742.7 million, or 37.3 percent of adjusted revenue, compared to $1,209.9 million, or 34.8 percent of adjusted revenue, for 2018, representing a 44.0 percent increase.

Adjusted net income for the fourth quarter of 2019 was $284.6 million, up 17.1 percent compared to $243.0 million in 2018’s fourth quarter.  Adjusted net income for the year ended December 31, 2019 was $1,010.9 million, up 42.1 percent compared to $711.5 million in 2018.  Adjusted diluted earnings per share in the fourth quarter of 2019 were $1.08 per share, up 13.7 percent compared to $0.95 per share in the fourth quarter of 2018.  Adjusted diluted earnings per share for the year ended December 31, 2019 were $3.83, up 31.2 percent from 2018’s $2.92 per share.

Fourth Quarter and Full Year 2019 Highlights:

  • Cash flow provided by operations for Q4 2019 was $573.3 million, up 80.5 percent from $317.7 million in Q4 2018.
  • Cash flow provided by operations was $1,328.3 million for the twelve months ended December 31, 2019 a 107.5 percent increase from $640.1 million for the prior twelve months.
  • Paid down $1,123.8 million of net debt in the twelve months ended December 31, 2019, and paid down $2,046.6 million of net debt since our April 2018 acquisition of DST Systems, bringing our net leverage ratio to 3.77 times consolidated EBITDA, and our net secured leverage ratio to 2.70 times consolidated EBITDA.
  • Adjusted operating income margins were 38.8 percent of adjusted revenue in Q4 2019 compared to 37.2 percent in Q4 2018.
  • Adjusted consolidated EBITDA increased 10.3 percent to $490.5 million in Q4 2019. Adjusted consolidated EBITDA margin was 40.5 percent of adjusted revenue.
  • In Q4 2019, SS&C increased its common stock dividend to $0.125 per quarter, a 25.0 percent increase.
  • SS&C completed the Algorithmics acquisition on December 2, 2019.

“SS&C finished 2019 strong, with fourth quarter record adjusted revenue of $1,212.2 million, up 7.0 percent, and record adjusted diluted earnings per share of $1.08, up 13.7 percent. Operating cash flow was up 107.5 percent in 2019, and we reduced our leverage ratio to 3.77x,” says Bill Stone, Chairman and Chief Executive Officer. “Going into a new decade, we are confident in our financial strength and the resiliency of SS&C’s business model. The financial services and healthcare markets we serve are complex and demanding. The investments we make in expertise, talent, innovative technology, and value-add services have and will pay dividends well into the future.”

Operating Cash Flow

SS&C generated net cash from operating activities of $1,328.3 million for the twelve months ended December 31, 2019, compared to $640.1 million for the same period in 2018, representing a 107.5 percent increase.  SS&C ended the fourth quarter with $152.8 million in cash and cash equivalents and $7,228.9 million in gross debt, for a net debt balance of $7,076.1 million.  SS&C’s consolidated net leverage ratio as defined in our credit agreement stood at 3.77 times consolidated EBITDA as of December 31, 2019. SS&C’s net secured leverage ratio stood at 2.70 times consolidated EBITDA as of December 31, 2019.

Guidance

 

 

Q1 2020

 

FY 2020

Adjusted Revenue ($M)

 

$1,150.0 – $1,190.0

 

$4,692.0 – $4,852.0

 

Adjusted Net Income ($M)

 

$248.5 – $264.5

 

$1,084.5 – $1,139.5

 

Cash from Operating Activities ($M)

 

 

$1,220.0 – $1,260.0

 

Capital Expenditures (% of revenue)

 

 

2.9% – 3.1%

 

Diluted Shares (M)

 

268.5 – 267.5

 

273.0 – 270.0

 

Effective Income Tax Rate (%)

 

26%

 

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 Q1 2020 and FY 2020 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 Q4 2019 earnings call will take place at 5:00 p.m. eastern time today, February 12, 2020.  The call will discuss Q4 2019 and Full Year 2019 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 Fourth Quarter and Full Year 2019 Conference Call”; conference ID #1291231.  In connection with the earnings call, a presentation will be available on SS&C’s website at http://investor.ssctech.com/results.cfm. A replay will be available after 10:00 p.m. eastern time on February 12, 2020, until midnight on February 19, 2020.  The replay dial-in number is 800-585-8367 or 416-621-4642; access code #1291231.  The call will also be available for replay on SS&C’s website after February 12, 2020; 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 first quarter and full year of 2020 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, Inc.,  the effect of 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 personal 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.  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.  

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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