Summary
SS&C Technologies reported GAAP revenue of $1,233.4 million for the quarter ended March 31, 2021, up 5.1% from $1,173.6 million in the prior-year quarter. Adjusted revenue came in at $1,235.4 million, up 4.9%, with adjusted organic revenue growth of 2.9 percent. Three items drove the top line: $25.1 million of organic revenue growth, $18.6 million contributed by acquisitions, and $16.1 million of favorable foreign currency translation. Management credited strength in the SS&C GlobeOp fund administration business, virtual data room services, and portfolio investment products. Chief Executive Bill Stone pointed to building pipelines and a growing salesforce as the pandemic recedes.
Profitability improved faster than revenue. Gross profit rose 10.1% to $559.1 million in the quarter, and gross margin expanded to 45.3% from 43.3%. GAAP operating income climbed 23.0% to $269.1 million, with operating margin up to 21.8% from 18.6%. Net income rose 76.3% to $174.9 million, and diluted earnings per share reached $0.65, up 75.7% from $0.37. On a non-GAAP basis, adjusted operating income was $475.8 million, up 7.1%, and adjusted operating margin was 38.5% against 37.7% in the prior-year quarter. Adjusted diluted earnings per share of $1.18 rose 14.6%. Net interest expense fell to $51.4 million from $77.4 million.
Cash generation held up. Net cash provided by operating activities was $185.7 million for the quarter, up 25.7% from $147.7 million a year earlier. Capital expenditures were $9.1 million, up 7.1% from $8.5 million. The company ended March 31, 2021 with $253.7 million in cash and cash equivalents and $6,576.4 million in gross debt, for a net debt balance of $6,322.7 million. The consolidated net leverage ratio stood at 3.35 times consolidated EBITDA and the net secured leverage ratio at 2.29 times, against a covenant maximum of 6.25 times on the secured measure. Client funds obligations were $2,030.0 million at March 31, 2021.
Capital allocation stayed aggressive. SS&C repurchased 2.7 million shares during the quarter at an average price of $67.15 per share for $181.4 million, and paid $41.2 million in dividends after raising the quarterly payout to $0.16 per share, up 14.3% from $0.14. The company closed the acquisition of Capita Life and Pension Services, which it said makes it the largest technology and service provider to the international life and pensions market in Ireland, and announced its intent to acquire Mainstream Group. Financing activities provided $653.7 million of net cash, largely from a $777.0 million net increase in client funds obligations.
Management's outlook covers the second quarter and the full fiscal year 2021. For the second quarter, adjusted revenue guidance is $1,190.0 million to $1,230.0 million and adjusted diluted earnings per share guidance is $1.10 to $1.16. For the full fiscal year, the company guided to adjusted revenue of $4,825.0 million to $4,965.0 million, adjusted net income of $1,213.0 million to $1,279.0 million, and adjusted diluted earnings per share of $4.54 to $4.76. Full-year cash from operating activities is projected at $1,280.0 million to $1,340.0 million, capital expenditures at 2.6% to 3.0% of revenue, and an effective income tax rate of 26%. The company does not provide reconciliations of the adjusted guidance to comparable GAAP measures.
Two items in the quarter deserve attention. Remaining performance obligations fell 7.6% to $575.7 million from $623.0 million, while current deferred revenue edged up 0.5% to $349.9 million from $348.0 million. The company also carries substantial indebtedness, and its filings list risks including the state of the financial services industry, customer consolidation, the intensity of competition, foreign operations and currency swings, evolving regulation and increased regulatory scrutiny, privacy concerns around the collection and storage of personal information, and the ability to realize anticipated benefits from acquisitions such as DST Systems. Management said COVID-19 has caused some client delays in committing to services and products but no direct material negative effects on results to date, while cautioning that conditions remain subject to rapid and possibly material change.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2021 | Q4 FY2020 | QoQ | Q1 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.23B | $1.20B | +2.5% | $1.17B | +5.1% |
| Gross profit | $559.1M | $550.6M | +1.5% | $508.0M | +10.1% |
| Gross margin | 45.3% | 45.8% | -0.4 pp | 43.3% | +2.0 pp |
| Research & development | $107.9M | $100.7M | +7.1% | $104.9M | +2.9% |
| Sales & marketing | $92.0M | $95.4M | -3.6% | $91.4M | +0.7% |
| General & administrative | $90.1M | $85.8M | +5.0% | $92.9M | -3.0% |
| Total operating expenses | $290.0M | $281.9M | +2.9% | $289.2M | +0.3% |
| Operating income (loss) | $269.1M | $268.7M | +0.1% | $218.8M | +23.0% |
| Operating margin | 21.8% | 22.3% | -0.5 pp | 18.6% | +3.2 pp |
| Net income (loss) | $174.9M | $197.1M | -11.3% | $99.2M | +76.3% |
| Net margin | 14.2% | 16.4% | -2.2 pp | 8.4% | +5.7 pp |
| Diluted EPS | $0.65 | $0.74 | -$0.09 | $0.37 | +$0.28 |
Risks
COVID-19 and related economic conditions remain uncertain and could cause client delays in committing to services and products. To date no direct material negative effects, but the situation remains dynamic and could result in material negative effects on business and results of operations.
The company continues integrating recent acquisitions including Captricity, Innovest, Millennium, and Capita. MD&A notes severance expense from personnel reductions tied to continued integration efforts within recently acquired businesses, which could disrupt operations and increase costs.
The company carries significant term loan and senior note debt and is subject to a consolidated net secured leverage covenant under its revolving credit facility. A breach could cause an event of default and acceleration of amounts outstanding, materially affecting results and liquidity. Actual ratio was 2.29x versus maximum 6.25x at March 31, 2021.
A substantial portion of indebtedness bears interest at variable rates primarily based on USD-LIBOR, and the company is assessing the impact of the LIBOR discontinuance on contracts, hedging relationships, and other transactions. This could affect future interest costs and financial condition.
The effective tax rate increased to 25.8% for the three months ended March 31, 2021 from 20.0% in the prior-year period, driven by decreased windfall tax benefits and changes in the composition of income by jurisdiction. Future changes in that composition could impact the periodic effective tax rate.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Summary, forecast, risks and KPIs are extracted from SS&C Technologies Holdings Inc's SEC filings for Q1 FY2021 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 6, 2026.