Summary
SS&C Technologies posted first-quarter revenue of $1,362.7 million, up 5.2% from the prior-year quarter. Adjusted revenue of $1,363.4 million rose 5.2% as well. Growth mixed acquisitions with organic expansion. Adjusted organic revenue growth was 1.9%, and it reached 2.5% once healthcare is excluded. Management credited large outsourcing wins in the alternatives and financial services businesses for its confidence in the 2023 revenue outlook.
Profitability moved the other way. Gross margin slipped to 46.7%, down 1.1 percentage points, and operating margin fell 2.0 percentage points to 20.6%. Operating income was $280.1 million, down 4.0%. Net income attributable to SS&C dropped 26.8% to $126.0 million, and diluted earnings per share came in at $0.49, down 23.4%. GAAP net income margin was 9.2%. Non-GAAP measures held up better. Adjusted operating income attributable to SS&C was $493.0 million, down 1.1%, and adjusted diluted earnings per share were $1.11, a decline of 11.2%. Adjusted consolidated EBITDA attributable to SS&C totaled $509.0 million, a 37.3% margin. The spread between GAAP and adjusted results reflects restructuring costs, stock-based compensation and acquisition-related charges that the company strips out.
Business-level trends were uneven. Alternatives grew 6.6% on a base of $1.25 billion, and private markets grew over 20%. Blue Prism grew 10.9% on a $200 million base. Global Investor and Distribution Solutions grew 3.6%, retirement 8.3%, and investment and institutional management 9.7%. Intralinks grew 3.2%, with sales to alternative managers up over 10%. Healthcare fell 8.2%. Advent declined 5.2% against a tough comparison with a big license renewal in the first quarter of 2022, and Eze/Financial Markets slipped 1.1% after the market volatility of the prior-year period.
Blue Prism sits at the center of the productivity push. Management said more than 40 processes are live, spanning investor statement processing, loan funding memos and investment bond redemptions, and the goal is for digital workers to represent 1,300 to 2,700 full-time equivalents by year end. Cash generation improved sharply. Operating cash flow was $254.8 million for the quarter, up 38.9%. Capital expenditures came in at $10.5 million, down 2.8%, while capitalized software spending was $42.6 million. Deferred revenue was $493.6 million, up 1.3%, and remaining performance obligations were $977.1 million, up 0.8%.
The company stayed active with shareholders and lenders. It repurchased 2.3 million shares for $134.7 million at an average price of $59.19 and paid $50.7 million in common stock dividends. It also paid down $44.6 million of debt, leaving a net leverage ratio of 3.38 times consolidated EBITDA attributable to SS&C and a net secured leverage ratio of 2.39 times. Management said the company remains in compliance with all financial and non-financial covenants.
For the second quarter of fiscal 2023, management guided to adjusted revenue of $1,334.5 million to $1,374.5 million and adjusted diluted earnings per share of $1.08 to $1.14. For the full fiscal year 2023, management guided to adjusted revenue of $5,455.0 million to $5,655.0 million, adjusted diluted earnings per share of $4.67 to $4.97, cash from operating activities of $1,275.0 million to $1,375.0 million, capital expenditures of 3.8% to 4.0% of revenue, and an effective income tax rate of 26%. The company does not reconcile the adjusted guidance to GAAP. Risks include the state of the financial services industry, customer consolidation, market volatility tied to the hedge fund business, foreign exchange swings, competition, evolving regulation, privacy concerns, and substantial indebtedness.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2023 | Q4 FY2022 | QoQ | Q1 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.36B | $1.34B | +1.8% | $1.29B | +5.2% |
| Gross profit | $637.0M | $647.4M | -1.6% | $619.8M | +2.8% |
| Gross margin | 46.8% | 48.4% | -1.6 pp | 47.9% | -1.1 pp |
| Research & development | $118.2M | $115.5M | +2.3% | $105.8M | +11.7% |
| Sales & marketing | $139.8M | $129.0M | +8.4% | $110.9M | +26.1% |
| General & administrative | $98.9M | $101.6M | -2.7% | $111.3M | -11.1% |
| Total operating expenses | $356.9M | $346.1M | +3.1% | $328.0M | +8.8% |
| Operating income (loss) | $280.1M | $301.3M | -7.0% | $291.8M | -4.0% |
| Operating margin | 20.6% | 22.5% | -2.0 pp | 22.5% | -2.0 pp |
| Net income (loss) | $126.2M | $207.6M | -39.2% | $171.3M | -26.3% |
| Net margin | 9.3% | 15.5% | -6.3 pp | 13.2% | -4.0 pp |
| Diluted EPS | $0.49 | $0.79 | -$0.30 | $0.64 | -$0.15 |
Risks
The filing states COVID-19 and ongoing macroeconomic conditions, such as increases in interest rates, inflation and changes in foreign currency exchange rates, could have material negative effects. In FY2023 Q1, revenue rose 5.2% but was partly offset by unfavorable foreign currency translation of $19.7 million, and net interest expense was $111.9 million compared with $49.3 million in FY2022 Q1 due to a higher average interest rate of 6.21% versus 3.11%.
The company carries significant senior secured credit facilities and senior notes, with a $75.0 million revolving credit facility outstanding at March 31, 2023 and a covenant requiring a maximum consolidated net secured leverage to Consolidated EBITDA ratio of 6.25x. The actual ratio was 2.39x as of March 31, 2023, but any breach could result in an event of default and acceleration of debt.
FY2023 Q1 results include recent acquisitions, including Blue Prism, Hubwise, MineralWare, O’Shares, Tier1 and CFO. Acquisitions contributed $63.2 million of revenue but added $39.7 million of operating expenses, and acquisition-related costs were $2.3 million in FY2023 Q1, creating integration and expense risk.
Total cost of revenues rose 7.5% and total operating expenses rose 8.8% in FY2023 Q1, outpacing revenue growth of 5.2%. Gross margin fell to 46.7% from 47.9% and operating margin fell to 20.6% from 22.5%, driven by wage inflation and personnel costs.
The effective tax rate increased to 29.4% in FY2023 Q1 from 27.0% in FY2022 Q1, partly due to lower windfall tax benefits from stock awards and a change in the mix of foreign and domestic income. The Inflation Reduction Act introduced a 15% corporate alternative minimum tax and a 1% excise tax on stock repurchases effective January 1, 2023, though it was immaterial to results.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Adjusted Revenue
Adjusted Consolidated EBITDA attributable to SS&C
Adjusted Operating Income attributable to SS&C
Organic Revenue Growth Rate
Organic Growth excluding Healthcare
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 FY2023 (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.