Summary
SS&C Technologies reported GAAP revenue of $1,259.0 million for the second quarter of 2021, up 10.6% from the prior-year quarter. Gross profit rose 16.4% to $595.0 million. Operating income climbed 29.7% to $312.9 million. Net income increased 12.0% to $189.8 million. Diluted earnings per share reached $0.71, up 10.9%. Operating margin expanded to 24.9%, up 3.7 percentage points. Gross margin improved to 47.3%, up 2.3 percentage points. For the first six months of 2021, revenue was $2,492.4 million, up 7.8%. Year-to-date operating income was $582.0 million, up 26.5%. Year-to-date net income was $364.7 million, up 35.7%. Year-to-date diluted EPS was $1.36, up 34.7%. Year-to-date gross margin was 46.3%, and year-to-date operating margin was 23.4%.
The top line got help from organic growth, acquisitions, and currency. Adjusted revenue was $1,261.0 million, up 10.5%. Adjusted organic revenue growth was 7.2%. Adjusted diluted EPS was $1.24, up 19.2%. Adjusted operating income was $495.8 million, up 15.3%. Adjusted consolidated EBITDA was a record $511.1 million for the quarter and $1,003.0 million for the first six months. Since the first quarter of 2020, the company added $400 billion to its alternatives platform. Management called out strength in SS&C GlobeOp fund administration, Black Diamond, Retirement Solutions, Global Investor and Distribution Solutions, ALPS Advisors, Healthcare, and virtual data room services. In July, SS&C announced a joint venture called DomaniRx to build a cloud-native, API-driven claims adjudication platform for pharmacy benefit management. As of June 28, 2021, it restructured management of former DST financial services products to align and integrate teams.
Cash generation and capital returns were mixed. Operating cash flow was $376.6 million for the quarter, down 7.7% from the prior-year quarter. For the first six months, operating cash flow was $562.3 million, up 1.2%. Capital expenditures were $17.6 million year to date, up 10.0%. Deferred revenue (current portion) was $335.7 million, up 3.0% from the prior-year quarter. Remaining performance obligations were $558.4 million, down 7.2%. The company paid down $183.1 million of debt in the first six months, bringing its consolidated net leverage ratio to 3.12x and its secured net leverage ratio to 2.09x. It repurchased 2.0 million shares in the quarter at an average price of $73.44 per share for $143.6 million. The board authorized a new $1 billion repurchase program, a $250 million increase from the prior program.
Guidance points to continued growth. For the third quarter of 2021, SS&C expects adjusted revenue of $1,205.0 million to $1,245.0 million and adjusted diluted EPS of $1.15 to $1.21. For the full fiscal year 2021, it guides to adjusted revenue of $4,921.0 million to $5,001.0 million and adjusted diluted EPS of $4.70 to $4.82. The company does not provide reconciliations of adjusted revenue and adjusted net income guidance to comparable GAAP measures, citing the unreasonable efforts exception.
Risks include the state of the economy and financial services industry, the ability to realize benefits from acquisitions such as DST Systems, customer consolidation, competition, litigation, disruptions to software-enabled services, foreign operations, privacy concerns, evolving regulations, joint venture risks, and substantial indebtedness. Management also flagged uncertainty from COVID-19, though it reported no direct material negative effects on results to date. The situation remains dynamic and subject to rapid and possibly material change. The company's substantial debt load and covenant compliance remain key items to watch, with a maximum consolidated net secured leverage to Consolidated EBITDA ratio of 6.25x against an actual 2.09x at June 30, 2021.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2021 | Q1 FY2021 | QoQ | Q2 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.26B | $1.23B | +2.1% | $1.14B | +10.6% |
| Gross profit | $595.0M | $559.1M | +6.4% | $511.3M | +16.4% |
| Gross margin | 47.3% | 45.3% | +1.9 pp | 44.9% | +2.3 pp |
| Research & development | $100.8M | $107.9M | -6.6% | $96.8M | +4.1% |
| Sales & marketing | $97.7M | $92.0M | +6.2% | $84.3M | +15.9% |
| General & administrative | $83.6M | $90.1M | -7.2% | $88.9M | -6.0% |
| Total operating expenses | $282.1M | $290.0M | -2.7% | $270.0M | +4.5% |
| Operating income (loss) | $312.9M | $269.1M | +16.3% | $241.3M | +29.7% |
| Operating margin | 24.9% | 21.8% | +3.0 pp | 21.2% | +3.7 pp |
| Net income (loss) | $189.8M | $174.9M | +8.5% | $169.5M | +12.0% |
| Net margin | 15.1% | 14.2% | +0.9 pp | 14.9% | +0.2 pp |
| Diluted EPS | $0.71 | $0.65 | +$0.06 | $0.64 | +$0.07 |
Risks
The MD&A states that the impacts of COVID-19 and related economic conditions on results are uncertain and outside the company's control. While no direct material negative effects have occurred to date, the company has experienced some client delays in committing to services and products, and the situation could ultimately result in material negative effects on business and results of operations.
The MD&A highlights obligations under the amended senior secured credit facility, including a financial covenant requiring maintenance of a minimum consolidated net secured leverage ratio. As of June 30, 2021, the actual ratio was 2.09x against a maximum of 6.25x; a breach could result in an event of default, acceleration of amounts outstanding, and a material adverse effect on results of operations, financial position and cash flows.
The MD&A notes that a substantial portion of indebtedness bears interest at variable rates, primarily based on USD-LIBOR, and the company continues to monitor the impact of the discontinuance of LIBOR or another reference rate on its contracts, hedging relationships and other transactions.
The effective tax rate for the three months ended June 30, 2021 was 28.8% compared to 14.8% for the prior-year period, and for the six months ended June 30, 2021 was 27.4% compared to 16.8% for the prior-year period. The MD&A attributes the change primarily to a U.K. law change, decreased windfall tax benefits, and the composition of income before income taxes; future composition changes could impact the periodic effective tax rate.
The MD&A notes continued integration efforts within recently acquired businesses, including severance expense related to personnel reductions. Recent acquisitions include Captricity, Innovest, Millennium and Capita, and integration may lead to increased costs or operational disruption.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Adjusted Organic Revenue Growth
Summary, forecast, risks and KPIs are extracted from SS&C Technologies Holdings Inc's SEC filings for Q2 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.