SS&C Technologies Holdings (NASDAQ:SSNC) announced solid second-quarter 2019 results on Monday after the market closed, with revenue and earnings more or less in line with its latest guidance. But the financial services software specialist also significantly lowered its full-year guidance, leading shares to plunge nearly 20% in Tuesday's early trading as of this writing.

Let's look at what SS&C accomplished in the first half of the year and -- perhaps more important -- why management followed by tempering its expectations yet again for the remainder of 2019.

iPads displaying SS&C Technologies financial software.

SS&C financial software. Image source: SS&C Technologies.

SS&C Technologies results: The raw numbers

Metric Q2 2019 Q2 2018 Change

GAAP revenue

$1.148 billion

$895.8 million


GAAP net income (loss)

$121.1 million

($63.7 million)


GAAP earnings (loss) per diluted share




Data source: SS&C Technologies. GAAP = generally accepted accounting principles. 

What happened with SS&C this quarter?

  • Revenue climbed 27.2% to $1.156 billion, largely driven by incremental sales from acquired businesses. Those figures are adjusted for SS&C's adoption of new accounting standards and purchase accounting adjustments to deferred revenue from acquisitions.
  • Non-GAAP (adjusted) net income increased 57.1% year over year to $241.6 million, and climbed 46.8% on a per-share basis to $0.91.
  • These results were essentially in line with SS&C's guidance provided in May, which called for adjusted net income of approximately $0.87 to $0.94, and adjusted revenue of $1.138 billion to $1.168 billion. 
  • Adjusted software-enabled services revenue climbed 29.9% to $966.8 million.
  • Adjusted license and maintenance revenue increased 15% to $189 million. 
  • Adjusted consolidated EBITDA grew 53.6% year over year to $448.2 million.
  • SS&C has paid down $414.9 million in debt so far in 2019, bringing its leverage ratio to 4.21 times consolidated EBITDA.

What management had to say

CEO Bill Stone stated:

We have a strong business and market-leading products. Our management teams and sales force are charged with profitable revenue growth, and I am pleased they have delivered this quarter. Significant wins from SS&C Asset Management Solutions [formerly known as DST] and SS&C Advent lead the quarter, and our EBITDA margins increased over 600 basis points from Q2 last year.

Looking ahead

For the current third quarter of 2019, SS&C sees adjusted revenue between $1.123 billion and $1.153 billion, translating to adjusted net income of $227.5 million to $243.5 million. Based on the company's expected diluted share count next quarter, that should translate to adjusted net income per share of $0.85 to $0.91.

As such, SS&C now expects full-year 2019 revenue of $4.571 billion to $4.631 billion, and adjusted net income of $947.5 million to $988.5 million. Both ranges represent reductions from the company's guidance three months ago, which called for 2019 revenue of $4.675 billion to $4.765 billion, and adjusted net income of $993 million to $1.042 billion.

During the subsequent conference call, Stone reiterated that the company remains positioned to reaccelerate growth in the coming quarters. But as for that lowered outlook, he blamed a combination of lower trading volumes, slowing mergers & acquisitions activity, and attrition for hurting not only SS&C's three 2018 acquisitions -- namely Eze Software, Intralinks, and DST (now SS&C Asset Management Solutions) -- but also its core financial services businesses.

So until SS&C can show more tangible signs of an acceleration in growth, it's no surprise to see the market reacting negatively despite the reasonably strong second quarter.