What happened
Shares of SS&C Technologies Holdings (SSNC +0.43%) were down 10.5% as of 3 p.m. EDT Wednesday, after the financial-services software company announced solid first-quarter results, but followed with mixed forward guidance.
On the former, SS&C's quarterly revenue skyrocketed 169.5% to $1.137 billion, largely driven by contributions from acquired businesses over the past year. That translated to 71.7% growth in adjusted net income per share to $0.91. Both the top and bottom lines were above the midpoints of SS&C's official guidance, which called for revenue of $1.132 billion to $1.162 billion, and adjusted earnings per share of $0.83 to $0.89.
IMAGE SOURCE: GETTY IMAGES.
So what
Within SS&C's top line, software-enabled services revenue more than tripled to $972 million, and license and maintenance revenue rose by nearly a third to $165 million.
SS&C chairman and CEO Bill Stone insisted the company is "delighted" with recent progress integrating its three large acquisitions (DST Systems, Eze Software, and Intralinks), noting that SS&C has already achieved nearly 90% of its $300 million cost-synergy goal since acquiring DST early last year.
Now what
"We continue to build software and cross sell our products and services," Stone added in a press release. "We are optimistic we will accelerate revenue in the back half of this year."
To that end, SS&C called for second-quarter revenue of $1.138 billion to $1.168 billion, with adjusted net income per share of $0.87 to $0.94. Analysts, on average, were looking for roughly the same earnings on slightly higher second-quarter revenue of $1.17 billion.
But SS&C also lowered its 2019 guidance for revenue to a range of $4.675 billion to $4.765 billion, compared to one of $4.69 billion to $4.79 billion previously. At the same time, the company increased its outlook for adjusted net income to between $993 million and $1.042 billion, versus $970 million to $1.015 billion before.
Of course, SS&C can't rely on operational improvements and acquisition synergies to bolster profits forever. So it's no surprise to see the market reacting negatively to its light revenue outlook today.
