SS&C Technologies Reports Q2 2016 Results

7/27/16

SS&C Technologies Holdings, Inc. (NASDAQ: SSNC), a global provider of investment and financial software-enabled services and software, today announced its financial results for the second quarter ended June 30, 2016.

GAAP Results

SS&C reported GAAP revenue of $373.1 million for the second quarter of 2016, compared to $212.8 million in the second quarter of 2015, a 75.3 percent increase. GAAP operating income for the second quarter of 2016 was $66.0 million, or 17.7 percent of revenue. This represents a 13.2 percent increase compared to $58.4 million, or 27.4 percent of revenue, in 2015's second quarter. GAAP net income for the second quarter of 2016 was $28.2 million compared to $39.1 million in the second quarter of 2015, a 27.9 percent decrease. On a fully diluted GAAP basis, earnings per share in the second quarter of 2016 were $0.14.

Adjusted Non-GAAP Results (defined in Notes 1-4 below)

Adjusted revenue in the second quarter of 2016 was $384.4 million, up 80.4 percent compared to $213.1 million in the second quarter of 2015. Adjusted operating income in the second quarter of 2016 was $140.5 million, or 36.6 percent of adjusted revenue. This represents a 64.3 percent increase compared to adjusted operating income of $85.5 million, or 40.1 percent of adjusted revenue, in the second quarter of 2015.

Adjusted net income for the second quarter of 2016 was $79.4 million, up 35.3 percent compared to $58.7 million in 2015's second quarter. Adjusted diluted earnings per share in the second quarter of 2016 were $0.39per share, up 18.2 percent compared to $0.33 per share in the second quarter of 2015.

Highlights:

  • SS&C adjusted revenue for Q2 2016 was $384.4 million, our 13th straight quarter with record adjusted revenue.
  • Second quarter R&D spend contributed to new releases of SS&C's CAMRA, Global Wealth Platform, Black Diamond, and SS&C Geneva, SS&C APX, SS&C Moxy, and SS&C TradeEx products.
  • SS&C paid off $125.5 million in debt in Q2 2016, and $415.3 million since acquiring Advent one year ago.
  • Our net debt to adjusted consolidated EBITDA leverage ratio has been reduced to 4.36x.

"SS&C once again delivers record adjusted revenues of $384.4 million for the second quarter of 2016, and we grew our adjusted consolidated EBITDA 65.0 percent to a record $147.5 million," says Bill Stone, Chairman and Chief Executive Officer. "After a full quarter of ownership, the Citi Alternative Investor Services group is adjusting nicely into SS&C's fast-paced, sales-oriented culture. Great strides have already been made in the integration, including a significant upgrade of the Geneva Platform, and a revitalized focus on top line growth."

Annual Run Rate Basis

Annual Run Rate Basis (ARRB) recurring revenue, defined as adjusted recurring revenue on an annualized basis, was $1,424.3 million based on adjusted recurring revenue $356.1 million for the second quarter of 2016. This represents an increase of 88.0 percent from $189.4 million and $757.6 million run-rate in the same period in 2015 and an increase of 12.8 percent from $315.7 million for the first quarter of 2016, an annual run rate of$1,262.9 million. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.

Operating Cash Flow

SS&C generated net cash from operating activities of $139.3 million for the six months ended June 30, 2016, compared to $100.7 million for the same period in 2015, representing a 38.3 percent increase. SS&C ended the quarter with $95.2 million in cash and cash equivalents, and $2,664.7 million in gross debt, for a net debt balance of $2,569.5 million. SS&C's leverage ratio as defined in our credit agreement stood at 4.36 times consolidated EBITDA as of June 30, 2016.

About SS&C Technologies

SS&C is a global provider of investment and financial software-enabled services and software focused exclusively on the global financial services industry. Founded in 1986, SS&C has its headquarters in Windsor, Connecticut and offices around the world. Some 10,000 financial services organizations, from the world's largest institutions to local firms, manage and account for their investments using SS&C's products and services. These clients in the aggregate manage over $44 trillion in assets.