Summary
SS&C Technologies posted first quarter 2022 GAAP revenue of $1,295.0 million, up 5.0% from the prior-year quarter. Gross profit rose 10.9% to $619.8 million, and gross margin improved 2.5 percentage points to 47.9%. Operating income increased 8.4% to $291.8 million, with an operating margin of 22.5%, up 0.7 percentage points. The bottom line moved the other way. Net income fell 1.6% to $172.1 million, and diluted earnings per share came in at $0.64, down 1.5%.
Adjusted results were steadier. Adjusted revenue of $1,296.2 million rose 4.9%, and adjusted diluted earnings per share of $1.25 rose 5.9%. Adjusted operating income attributable to SS&C was $498.7 million, up 4.8%, and the adjusted operating margin held at 38.5%. Organic growth was 4.3%. Excluding healthcare, organic growth was 5.9%, and that part of the business represents 93% of revenues. Alternatives grew 10.7%, Intralinks grew 17.2% and Advent grew 10.4%. DST Financial Services managed 0.9% growth, Eze grew 3.7%, and IIM declined 1.9%. Healthcare revenue fell 15.5% on expected client losses, and management expects a strong recovery in 2023 as DomaniRx launches.
Cash generation held close to last year. Operating cash flow for the quarter was $183.5 million, down 1.2%, while capital expenditures rose 18.7% to $10.8 million. The contracted backlog expanded sharply, helped by acquisitions. Current deferred revenue of $487.4 million was up 39.3% from the prior-year quarter, and remaining performance obligations of $969.2 million rose 68.4%. The company also repurchased 2.3 million shares in the quarter at an average price of $75.22 per share.
Blue Prism and Hubwise both closed in March 2022, and the larger deal was funded with $1,530 million of new debt. Blue Prism is expected to add about $200 million of revenue in 2022 for 9.5 months of ownership, with slightly positive EBITDA margins this year, 15% to 20% margins exiting 2023 and 30% to 40% margins exiting 2024. Management warned that interest expense and short-term operating losses at Blue Prism will have a short-term negative effect on earnings. Adjusted consolidated EBITDA attributable to SS&C was $514.9 million for the quarter. Net leverage stood at 3.48 times, and the net secured leverage ratio was 2.51 times against a covenant of 6.25 times.
Guidance for the second quarter of 2022 calls for adjusted revenue of $1,328.0 million to $1,368.0 million and adjusted diluted earnings per share of $1.13 to $1.19. For the full fiscal year 2022, management guides to adjusted revenue of $5,350.0 million to $5,510.0 million and adjusted diluted earnings per share of $4.99 to $5.21, assuming a 26% effective income tax rate.
The risk list is long. Growth leaned on markets management called volatile and on a geopolitical backdrop it described as tumultuous, a combination it said made for a difficult environment for the company and its clients. Foreign currency translation worked against revenue while acquisitions added to it, so the mix behind the reported growth rate matters. Healthcare stays a drag until the expected client losses annualize. Blue Prism brings integration work and near-term losses. Leverage is meaningful, and the credit agreement ties covenants to Consolidated EBITDA while the shift away from LIBOR is still underway. The filings also flag client consolidation, competition, regulatory scrutiny, privacy concerns and the variability that comes with securities market activity.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.29B | $1.29B | +0.1% | $1.23B | +5.0% |
| Gross profit | $619.8M | $631.2M | -1.8% | $559.1M | +10.9% |
| Gross margin | 47.9% | 48.8% | -0.9 pp | 45.3% | +2.5 pp |
| Research & development | $105.8M | $108.5M | -2.5% | $107.9M | -1.9% |
| Sales & marketing | $110.9M | $108.0M | +2.7% | $92.0M | +20.5% |
| General & administrative | $111.3M | $94.5M | +17.8% | $90.1M | +23.5% |
| Total operating expenses | $328.0M | $311.0M | +5.5% | $290.0M | +13.1% |
| Operating income (loss) | $291.8M | $320.2M | -8.9% | $269.1M | +8.4% |
| Operating margin | 22.5% | 24.7% | -2.2 pp | 21.8% | +0.7 pp |
| Net income (loss) | $171.3M | $251.2M | -31.8% | $174.9M | -2.1% |
| Net margin | 13.2% | 19.4% | -6.2 pp | 14.2% | -0.9 pp |
| Diluted EPS | $0.64 | $0.94 | -$0.30 | $0.65 | -$0.01 |
Risks
The amended senior secured credit facility requires a maximum consolidated net secured leverage ratio of 6.25x; the actual ratio was 2.51x as of March 31, 2022, and any breach could result in an event of default and acceleration of debt. Total debt balance as of March 31, 2022 was higher compared to the prior year due to the Incremental Joinder entered in conjunction with the Blue Prism acquisition on March 22, 2022.
Operating expenses increased 13.1% for the three months ended March 31, 2022, driven by an increase in acquisition expenses of $23.4 million that included $11.0 million of transaction costs; investing activities used $1,553.1 million for business acquisitions, net of cash acquired. The company completed Blue Prism and Hubwise in March 2022 and Capita in March 2021, increasing integration and execution risk.
For the three months ended March 31, 2022, revenues were reduced by an unfavorable impact from foreign currency translation of $8.6 million, costs increased by $5.5 million, and other expense, net included foreign currency translation losses of $9.7 million.
The effective tax rate was 27.0% for the three months ended March 31, 2022 compared to 25.8% for the prior-year period; the change was primarily due to a proportionate change in the composition of income before income taxes from foreign and domestic jurisdictions. A future change in that composition could impact the periodic effective tax rate.
A substantial portion of indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR, and the company is assessing the impact of ASU 2020-04 on contracts, hedging relationships and other transactions as LIBOR is discontinued.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Adjusted Consolidated EBITDA Margin attributable to SS&C
Summary, forecast, risks and KPIs are extracted from SS&C Technologies Holdings Inc's SEC filings for Q1 FY2022 (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.