SS&C Technologies Holdings (NASDAQ:SSNC) 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.

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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. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.