SS&C Technologies Holdings (SSNC 0.92%) announced solid first-quarter 2018 results on Tuesday after the market closed, highlighting global growth in line with expectations, and the closing of its enormous acquisition of DST Systems.

Still, shares of the financial-services software leader are down a modest 3.4% in response -- though they're still up nearly 30% over the past year as of this writing. So let's dig deeper to see what SS&C has accomplished over the past few months, as well as what investors should watch.

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Image source: Getty Images.

SS&C Technologies results: The raw numbers

Metric

Q1 2018

Q1 2017

Year-Over-Year Growth

GAAP revenue

$421.9 million

$407.7 million

3.5%

GAAP net income

$51.3 million

$48.1 million

 6.4%

GAAP earnings per share (diluted)

$0.24

$0.23

4.3%

Data source: SS&C Technologies.

What happened with SS&C this quarter?

  • On a non-GAAP basis -- which adjusts for the impact of recently adopted accounting standards and purchase accounting adjustments to deferred revenue from acquisitions -- revenue climbed 6.1% year over year to $434.6 million, near the high end of guidance provided last quarter for a range of $427 million to $437 million.
    • Within that total, software-enabled services revenue grew 6.6% to $294.8 million, and license and maintenance revenue grew 5% to $139.8 million.
  • Adjusted net income grew 23.6% to $114.8 million, and adjusted net income per share rose 20.5% to $0.53, near the low end of last quarter's narrow guidance of $0.53 to $0.54.
  • Adjusted EBITDA grew 10.5% to $178.7 million.
  • Cash from operations increased 20.8% to $69.9 million.
  • SS&C raised $7.4 billion in cash from debt, and $1.4 billion in cash from the sale of common stock to fund its previously announced acquisition of DST, which closed on April 16, 2018.
    • Recall when the combination was announced in January, SS&C stated it expected to create an industry leader with pro forma annual revenue of $3.9 billion, consolidated EBITDA of $1.3 billion, and the potential for $150 million of annual run-rate cost synergies over by 2020.

What management had to say

SS&C Chairman and CEO Bill Stone called it a "great start to 2018," pointing to SS&C's adjusted revenue growth as indicative of "the strength of our global business."

"We are delighted with our results, which we accomplished alongside the announcement, financing, and ultimately closing of our largest acquisition to date," Stone said.

Looking ahead

For the second quarter of 2018 (and this includes contributions from DST), SS&C expects adjusted revenue in the range of $895 million to $915 million, adjusted net income of $131.6 million to $140.8 million. Based on its anticipated diluted share count, that should translate to adjusted net income per share of roughly $0.53 to $0.57.

As such, SS&C anticipates full-year 2018 adjusted revenue of $3.344 billion to $3.404 billion, adjusted net income of $546.7 million to $575.3 million, and adjusted net income per share of $2.25 to $2.37.

By comparison -- and though we don't usually pay close attention to Wall Street's demands -- consensus estimates predicted SS&C would achieve slightly higher full-year earnings of $2.40 per share on revenue near the low end of its guidance range. That's not to say the market should be displeased. To the contrary, I think this was as solid a report as investors could have hoped for as SS&C successfully fostered its core business while simultaneously navigating the close of its mammoth DST transaction.