For Immediate Release
SS&C Technologies Releases Q1 2020 Earnings
Q1 2020 GAAP revenue $1,173.6 million, up 3.2 percent, Fully Diluted GAAP Earnings Per Share $0.37, up 19.4%
Adjusted revenue $1,178.0 million, up 2.4 percent, Adjusted Diluted Earnings Per Share $1.03, up 13.2 percent
SS&C to Acquire Innovest for $120 million
WINDSOR, CT, April 30, 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 first quarter ended March 31, 2020.
Due to the uncertainty caused by COVID-19, we are withdrawing our quarterly and 2020 guidance, instead providing 2020 scenario analysis, based on a number of assumptions, which can be found in our Q1 2020 earnings results slides at investor.ssctech.com.
SS&C reported GAAP revenue of $1,173.6 million for the first quarter of 2020, up 3.2 percent compared to $1,137.2 million in the first quarter of 2019. GAAP operating income for the first quarter of 2020 was $218.8 million, or 18.6 percent of GAAP revenue, compared to GAAP operating income of $202.0 million, or 17.8 percent of GAAP revenue, in 2019’s first quarter, representing an 8.3 percent increase.
GAAP net income for the first quarter of 2020 was $99.2 million compared to GAAP net income of $80.8 million in 2019’s first quarter, up 22.8%. On a fully diluted GAAP basis, earnings per share in the first quarter of 2020 were $0.37 per share compared to earnings per share of $0.31 on a fully diluted GAAP basis in the first quarter of 2019, up 19.4%.
Adjusted Non-GAAP Results (defined in Notes 1-4 below)
Adjusted revenue was $1,178.0 million for the first quarter of 2020, up 2.4 percent compared to $1,150.0 million in the first quarter of 2019. Adjusted operating income for the first quarter of 2020 was $444.2 million, or 37.7 percent of adjusted revenue, compared to $420.9 million, or 36.6 percent of adjusted revenue, in 2019’s first quarter, representing a 5.5 percent increase and an increase of 110 basis points in adjusted operating margin.
Adjusted net income for the first quarter of 2020 was $274.0 million, up 14.5 percent compared to $239.4 million in 2019’s first quarter. Adjusted diluted earnings per share in the first quarter of 2020 were $1.03 per share, up 13.2 percent compared to $0.91 per share in the first quarter of 2019.
SS&C’s COVID-19 Response
SS&C is operating in a global public health crisis. Covid-19’s impact is devastating to many and nations are being tested from human and economic perspectives. As long as the duration and scale of the pandemic and economic slowdown remains we expect markets to be volatile. The slowdown in the global economy will take time to recover.
Due to this uncertainty, we are withdrawing our quarterly and 2020 guidance. We are providing 2020 scenario analysis, based on a number of assumptions, which can be found in our Q1 2020 earnings results slides at investor.ssctech.com.
First Quarter Highlights:
- Cash flow provided by operations for Q1 2020 was $147.7 million, up 7.5 percent from $137.4 million in Q1 2019.
- Paid down $2,142.3 million of net debt since our April 2018 acquisition of DST Systems, bringing our net leverage ratio to 74 times consolidated EBITDA, and our net secured leverage ratio to 2.67 times consolidated EBITDA.
- In the first quarter, SS&C drew down $246 million of its available capacity under the Revolving Credit Facility as a precautionary measure in order to increase liquidity and preserve financial flexibility in light of current uncertainty resulting from the COVID-19 pandemic.
- Adjusted operating income margins were 7 percent of adjusted revenue in Q1 2020 compared to 36.6 percent in Q1 2019.
- Adjusted consolidated EBITDA increased 4.5 percent to $463.5 million in Q1 2020. Adjusted consolidated EBITDA margin was 39.3 percent of adjusted revenue.
- SS&C acquired Captricity, the maker of Vidado data transformation platform on March 24, 2020.
- SS&C announced our plan to acquire Capita's Life Insurance and Pension Servicing business in Ireland on April 21, 2020. We expect this acquisition to close in Q2 2020.
- SS&C today announced our plan to acquire Innovest for a total consideration of $120.0 million. We expect this acquisition to close in Q2 2020.
“The COVID-19 global pandemic has quickly and broadly altered how the world conducts business. The health and safety of our employees and our clients is paramount, and SS&C moved swiftly to ensure our 23,000 employees were informed, protected, and prepared," says Bill Stone, Chairman and CEO of SS&C Technologies. “These times are unprecedented, and they call for focus, innovation and real customer commitments. The transition to working remotely was seamless, in large part due to the long hours worked by our CTO, Anthony Caiafa and his IT and infrastructure team, Blair Williams and his business continuity team, and all of our client service teams dealt with an influx of volume. SS&C’s products and services are mission critical, and now more than ever clients depend on our expertise and hardened infrastructure.”
Operating Cash Flow
SS&C generated net cash from operating activities of $147.7 million for the three months ended March 31, 2020, compared to $137.4 million for the same period in 2019, representing a 7.5 percent increase. SS&C ended the first quarter with $373.7 million in cash and cash equivalents and $7,377.0 million in gross debt, for a net debt balance of $7,003.3 million. SS&C’s consolidated net leverage ratio as defined in our credit agreement stood at 3.74 times consolidated EBITDA as of March 31, 2020. SS&C’s net secured leverage ratio stood at 2.67 times consolidated EBITDA as of March 31, 2020.
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 Q1 2020 earnings call will take place at 5:00 p.m. eastern time today, April 30, 2020. The call will discuss Q1 2020 results and business outlook. Interested parties may dial +1 833-968-2327 (US and Canada) or +1 778-560-2848 (International), and request the “SS&C Technologies First Quarter 2020 Conference Call”; conference ID #4970198. 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 April 30, 2020, until midnight on May 7, 2020. The replay dial-in number is +1 800-585-8367 or +1 416-621-4642; access code #4970198. The call will also be available for replay on SS&C’s website after April 30, 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 second 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 services and software for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in Windsor, Connecticut, and has offices around the world. Some 18,000 financial services and healthcare organizations, from the world's largest companies to small and mid-market firms, rely on SS&C for expertise, scale, and technology.
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Chief Financial Officer
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