Summary
SS&C Technologies posted GAAP revenue of $1,328.7 million for the second quarter of 2022, up 5.5% from $1,259.0 million in the prior-year quarter. Total company revenue growth was 7.7% on a constant currency basis. Organic growth was 2.2%, and financial services organic growth excluding the healthcare business was 4.4%, which management says represents 94% of revenues. Adjusted revenue, a non-GAAP measure, was $1,330.0 million, up 5.5%. Acquisitions added $65.6 million in revenue, while foreign currency translation was an unfavorable $23.8 million. For the first six months, GAAP revenue was $2,623.7 million, up 5.3% from $2,492.4 million.
Profitability weakened. GAAP gross profit was $624.3 million, up 4.9%, but gross margin slipped to 47.0% from 47.3%, a decline of 0.3 percentage points. Operating income fell 21.5% to $245.6 million from $312.9 million, and operating margin dropped to 18.5% from 24.9%, down 6.4 percentage points. Net income was $110.6 million, down 41.7% from $189.8 million. Diluted earnings per share were $0.42, down 40.8% from $0.71. Non-GAAP adjusted diluted earnings per share were $1.10, down 11.3%. Adjusted operating income attributable to SS&C was $455.3 million, down 8.2%, and adjusted consolidated EBITDA attributable to SS&C was $470.8 million, down 7.9% from $511.1 million. Higher personnel costs, stock-based compensation, and acquisition expenses weighed on GAAP results. The company took an additional merit increase in the second quarter and now awards discretionary bonuses three times a year.
Organic trends were mixed by business. Alternatives grew 8.8% and private markets grew 15%. Intralinks grew 14.2%, Advent grew 8.2%, and Eze/Financial Markets grew 20.3%, or 7% excluding one-time partnership revenue. IIM grew 4.9%. DST Financial Services declined 3.5%, and Healthcare fell 24.3% on expected client losses. Management said Blue Prism revenue is ahead of schedule and that automating internal processes with Blue Prism should lead to a stronger margin profile exiting 2022. The company completed the acquisitions of Blue Prism and Hubwise in March 2022, MineralWare in May 2022, and O'Shares in June 2022.
Cash generation slowed. Net cash from operating activities was $264.0 million for the quarter, down 29.9% from $376.6 million. For the six months, operating cash flow was $447.5 million, down 20.4% from $562.3 million. Capital expenditures were $11.8 million for the quarter, up 38.8%, and $22.6 million for the six months, up 28.4%. Deferred revenue rose 40.5% to $471.6 million, and remaining performance obligations rose 67.2% to $933.4 million. The company paid down $234.7 million in debt during the quarter. Cash and cash equivalents were $438.3 million, gross debt was $7,354.1 million, and the net leverage ratio was 3.45 times, with a secured net leverage ratio of 2.48 times against a covenant requirement of 6.25 times.
Guidance points to continued growth. For the third quarter of 2022, SS&C forecasts adjusted revenue of $1,324.0 million to $1,364.0 million and adjusted diluted earnings per share of $1.15 to $1.21. For the full fiscal year 2022, the company guides to adjusted revenue of $5,320.0 million to $5,406.0 million, adjusted diluted earnings per share of $4.76 to $4.90, and cash from operating activities of $1,180.0 million to $1,220.0 million. Capital expenditures are guided at 3.2% to 3.6% of revenue, and the effective income tax rate is 26%. Risks include a weaker economic backdrop, foreign currency translation headwinds, wage inflation, rising interest rates, expected client losses in healthcare, substantial indebtedness, and the LIBOR transition.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.33B | $1.29B | +2.6% | $1.26B | +5.5% |
| Gross profit | $624.3M | $619.8M | +0.7% | $595.0M | +4.9% |
| Gross margin | 47.0% | 47.9% | -0.9 pp | 47.3% | -0.3 pp |
| Research & development | $118.4M | $105.8M | +11.9% | $100.8M | +17.5% |
| Sales & marketing | $139.3M | $110.9M | +25.6% | $97.7M | +42.6% |
| General & administrative | $121.0M | $111.3M | +8.7% | $83.6M | +44.7% |
| Total operating expenses | $378.7M | $328.0M | +15.5% | $282.1M | +34.2% |
| Operating income (loss) | $245.6M | $291.8M | -15.8% | $312.9M | -21.5% |
| Operating margin | 18.5% | 22.5% | -4.1 pp | 24.9% | -6.4 pp |
| Net income (loss) | $110.3M | $171.3M | -35.6% | $189.8M | -41.9% |
| Net margin | 8.3% | 13.2% | -4.9 pp | 15.1% | -6.8 pp |
| Diluted EPS | $0.42 | $0.64 | -$0.22 | $0.71 | -$0.29 |
Risks
Net interest expense increased to $67.7 million for the quarter and $117.0 million for the six months ended June 30, 2022, from $51.0 million and $102.4 million in the prior-year periods, driven by higher average interest rates and higher average debt balances after the Blue Prism acquisition.
The amended senior secured credit facility and Senior Notes include restrictive covenants and a maximum consolidated net secured leverage ratio of 6.25x; actual ratio was 2.48x at June 30, 2022, but a breach could accelerate debt and have a material adverse effect.
MD&A says COVID-19 impacts remain uncertain and outside management control. It has seen some client delays in committing to services and products and warns the situation could ultimately have material negative effects on business and results.
Unfavorable foreign currency translation reduced revenues by $23.8 million in the quarter and $32.4 million for the six months ended June 30, 2022, and other expense, net included foreign currency translation losses of $12.2 million and $21.9 million in those periods.
Operating expenses increased 34.2% in the quarter and 23.5% for the six months, with organic increases primarily from personnel costs including wage inflation, stock-based compensation, recruiting, travel and information technology expenses.
The company completed Blue Prism, Hubwise, MineralWare and O'Shares acquisitions, adding $65.6 million of quarterly revenue but also $55.6 million of operating expenses and about $68.0 million of Blue Prism transaction costs in operating cash flow, increasing integration and execution risk.
A substantial portion of indebtedness bears interest at variable rates primarily based on USD-LIBOR, and management is still assessing the impact of reference rate reform and LIBOR discontinuance on contracts, hedging relationships and other transactions.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Adjusted Revenue
Adjusted Consolidated EBITDA attributable to SS&C
Adjusted Operating Income attributable to SS&C
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 Q2 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.