Please ensure Javascript is enabled for purposes of website accessibility

SS&C Technologies Pulls Back After a Solid Quarter

By Steve Symington - Apr 29, 2017 at 8:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The investment and financial services software company dropped despite beating expectations and increasing guidance. Here's what investors need to know.

SS&C Technologies Holdings (SSNC -0.64%) announced first-quarter 2017 results Thursday after the market closed, highlighted by its 20th straight quarter of revenue growth and continued improvements in its balance sheet.

SS&C stock declined around 2.4% Friday on the news -- though shares did set a fresh 52-week high leading up to the report. Let's have a closer look, then, at how SS&C kicked off the year, and what investors can expect from the company going forward.

Stock market prices rising and falling on a digital board.

Image source: Getty Images.

SS&C Technologies results: The raw numbers


Q1 2017

Q1 2016

Year-Over-Year Growth

GAAP revenue

$407.7 million

$324.1 million


GAAP net income

$48.1 million

$7.0 million


GAAP earnings per share (diluted)




Data source: SS&C Technologies. 

What happened with SS&C this quarter?

  • On an adjusted (non-GAAP) basis -- which excludes purchase accounting adjustments to deferred revenue related to acquisitions -- revenue increased 19.4%, to $409.5 million.
  • Adjusted net income grew 23.2%, to $92.9 million, and adjusted net income per diluted share increased 18.9%, to $0.44.
  • Both the top and bottom lines were near the high ends of SS&C's guidance ranges provided last quarter, which called for revenue of $402.5 million to $408.5 million, and adjusted net income of $89 million to $92.5 million.
  • Adjusted recurring revenue rose 22.6% year over year, to $387.2 million, Within that, software-enabled services revenue increased 34.3% to $276.5 million, and maintenance and term licenses revenue rose 0.7%, to $110.8 million.
  • Adjusted non-recurring revenue declined 18.5%, to $22.3 million, including a 45.8% decline in perpetual licenses, to $2.8 million, and a 12.1% decline in professional services revenue, to $19.5 million.
  • Adjusted consolidated earnings before interest, taxes, depreciation, and amortization increased 14.2%, to $161.7 million.
  • Cash flow from operations totaled $56.5 million, up from $18.6 million in last year's first quarter.
  • The company paid down $60.2 million of debt, bringing the net debt-to-consolidated EBITDA leverage ratio to 3.74, down from 3.9 at the end of last quarter.
  • SS&C also amended its credit agreement to reduce spreads on term loans, which reduced interest rates and, consequently, annual borrowing costs by 0.75%.

What management had to say

SS&C CEO Bill Stone added:

SS&C had a strong start to 2017, with adjusted revenues up 19.4% and adjusted diluted earnings per share up 18.9% for the first quarter. Our businesses continue to perform, and hedge fund asset flow indicators suggest renewed confidence. We are also actively expanding our service offering for long-only and institutional outsourcing, as well as the creation of our newest SS&C GlobeOp division servicing real assets. We believe real estate, infrastructure, and property management solutions present a big opportunity.

Looking ahead

In the second quarter, SS&C Technologies expects adjusted revenue to be in the range of $408 million to $416 million, which should translate to adjusted net income in the range of $93.7 million to $98 million.

Given its performance so far in the year, SS&C also increased its guidance for the full year to call for adjusted revenue of $1.664 billion to $1.686 billion (up from $1.655 billion to $1.685 billion previously), cash from operations of $485 million to $500 million (up from $480 million to $500 million before), and adjusted net income of $399 million to $412 million (versus previous guidance for $392 million to $409 million).

In the end, this was a straightforward beat-and-raise from SS&C Technologies, so it might seem surprising that shares pulled back on Friday as a result. But shares are also still up around 28% so far in 2017, so it's hard to blame short-term investors for taking some of their profits off the table. However, as SS&C continues to deliver on its long-term growth strategy and pay down its debts incurred from previous acquisitions, it should emerge nicely positioned to continue generating shareholder value in the coming years. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SS&C Technologies Holdings, Inc. Stock Quote
SS&C Technologies Holdings, Inc.
$58.86 (-0.64%) $0.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.