Summary
SS&C Technologies reported fourth quarter GAAP revenue of $1.29 billion, up 7.5% from the prior-year quarter. Gross profit rose 14.6% to $631.2 million and operating income climbed 19.2% to $320.2 million. Net income reached $250.9 million, up 27.3%. Margins improved alongside the top line. Gross margin was 48.8%, up 3.0 percentage points, and operating margin was 24.7%, up 2.4 percentage points. The full year matched that pattern. Revenue of $5.05 billion rose 8.2%, operating income of $1.24 billion rose 26.0%, and net income of $800.0 million rose 28.0%. Diluted earnings per share for the year were $2.99, up from $2.35.
Cash generation stayed firm. Operating cash flow was $484.1 million in the quarter, up 12.7%, and $1.43 billion for the year, up 20.6%. Capital expenditures, a cash outflow, rose to $20.3 million for the quarter and $51.3 million for the year. Deferred revenue of $334.0 million was flat against the prior-year quarter. Remaining performance obligations fell 9.5% to $538.7 million, a smaller contracted backlog than a year earlier.
Adjusted results, which exclude amortization, stock compensation and other items, grew as well. Adjusted revenue was $1,296.2 million, up 7.5%, and adjusted operating income attributable to SS&C was $507.5 million, up 10.6%. Adjusted operating income margin was 39.2%, up 120 basis points. Adjusted diluted earnings per share were $1.28, up 13.3%. Adjusted consolidated EBITDA attributable to SS&C was $522.9 million for the quarter and $2,064.8 million for the full year. The quarterly adjusted consolidated EBITDA margin reached 40.3%, up 90 basis points. Adjusted organic revenue growth was 6.9% in the quarter.
Growth varied by business. Intralinks rose 23.0% and Alternatives 12.9%, while Software Businesses rose 6.3%. Eze grew 3.0% against difficult 2020 comparisons, DST Financial Services rose 2.3% and Healthcare rose 0.6%. SS&C formed a healthcare joint venture, DomaniRx, LLC, in July 2021 and consolidates it as a variable interest entity.
The balance sheet carried $564.0 million of cash and cash equivalents and $5,982.4 million of gross debt at December 31, 2021. Debt paydown in 2021 totaled $519.9 million. The consolidated net leverage ratio stood at 2.69x and the net secured leverage ratio at 1.72x, inside the 6.25x covenant requirement. The board raised the quarterly dividend to $0.20 per share, up 25.0%. The company repurchased $487.9 million of stock in 2021 but was barred from buybacks in the fourth quarter because of the pending Blue Prism acquisition.
Guidance for the first quarter of 2022 puts adjusted revenue at $1,258.0 million to $1,298.0 million and adjusted diluted earnings per share at $1.22 to $1.28. For the full year 2022, the company guides adjusted revenue to $5,130.0 million to $5,330.0 million, adjusted diluted earnings per share to $5.10 to $5.40, and cash from operating activities to $1,440.0 million to $1,510.0 million. Management pointed to pandemic-driven labor cost pressure and the pending Hubwise and Blue Prism acquisitions, expected to close in the first or second quarter of 2022. Customer consolidation, competition, substantial indebtedness and evolving regulation round out the risk list.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2021 | Q3 FY2021 | QoQ | Q4 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.29B | $1.26B | +2.4% | $1.20B | +7.5% |
| Gross profit | $631.2M | $624.0M | +1.2% | $550.6M | +14.6% |
| Gross margin | 48.8% | 49.4% | -0.6 pp | 45.8% | +3.0 pp |
| Research & development | $108.5M | $97.7M | +11.1% | $100.7M | +7.7% |
| Sales & marketing | $108.0M | $96.4M | +12.0% | $95.4M | +13.2% |
| General & administrative | $94.5M | $89.8M | +5.2% | $85.8M | +10.1% |
| Total operating expenses | $311.0M | $283.9M | +9.5% | $281.9M | +10.3% |
| Operating income (loss) | $320.2M | $340.1M | -5.9% | $268.7M | +19.2% |
| Operating margin | 24.7% | 26.9% | -2.2 pp | 22.3% | +2.4 pp |
| Net income (loss) | $251.2M | $184.7M | +36.0% | $197.1M | +27.4% |
| Net margin | 19.4% | 14.6% | +4.8 pp | 16.4% | +3.0 pp |
| Diluted EPS | $0.94 | $0.69 | +$0.25 | $0.74 | +$0.20 |
Risks
Demand for SS&C products and services is tied to the general economy and financial markets. The filing says unfavorable or uncertain conditions could cause clients to cancel, reduce or delay planned expenditures, impair their ability to pay, or process fewer transactions, and pricing in many agreements is adjusted based on assets under management.
Revenues from transaction processing fees are substantially dependent on levels of participation and activity in securities markets. The 10-K warns that significant market volatility or decreased participation would likely reduce revenues and profitability.
Certain acquisitions have increased the percentage of clients that are hedge funds or funds of hedge funds. Fees are based on market value of assets under management, assets under administration and transactions processed, so redemptions, withdrawals, market declines or shifts to passive strategies could reduce revenue.
The software-enabled services maintain and process confidential data and, following the 2018 Intralinks acquisition, platforms house sensitive client information. The filing says cyber threats are evolving and successful attacks could lead to data loss, business interruption, liability and reputational harm.
SS&C is subject to evolving and increasing U.S. and foreign regulation, including privacy, licensing, recordkeeping, investment adviser, broker/dealer and healthcare rules, with scrutiny from many regulators. The filing says violations could lead to civil or criminal liability, fines, sanctions, license revocation or suspension.
The company role as fund administrator has in the past and may in the future expose it to claims and litigation from clients, investors, regulators or other third parties. MD&A says other expense, net for 2021 included a $43.4 million legal accrual recorded in connection with the DST ERISA litigation.
SS&C had total indebtedness of $5,979.7 million as of December 31, 2021, with only $247.3 million available under its revolving credit facility. The filing estimates annual interest payments of approximately $184.5 million and says covenants restrict dividends, investments, asset sales and additional debt.
SS&C closed the Capita Life & Pensions Services (Ireland) Limited acquisition in 2021 and announced an intention to acquire Blue Prism Group plc. The filing says integration could disrupt operations, divert management, strain resources and fail to deliver expected synergies, and prior acquisitions have generated disputes and litigation.
Failures, mergers and consolidations among banks and financial services firms could reduce the number of clients and potential clients. Larger institutions could also have greater leverage in negotiations or move services in-house, reducing demand.
An increase in subaccounting services performed by brokerage firms has and will continue to adversely impact revenues. The filing notes subaccounting fees are generally lower per unit and that conversions have begun to extend to tax-advantaged accounts such as retirement and Section 529 accounts.
Competition for qualified personnel in software and hedge fund industries is intense, and SS&C has at times found it difficult to attract and retain skilled personnel. Failure to do so could prevent development and servicing of products and lead to lost clients and revenue declines.
SS&C had approximately 7,300 employees located in India as of December 31, 2021, creating exposure to regulatory, economic and political uncertainties in India. The filing says failure to successfully meet infrastructure, healthcare and education challenges could impair recruitment and operations, requiring relocation.
At December 31, 2021, total debt of $5,979.7 million included $3,974.5 million of variable interest rate debt that may bear interest in relation to U.S. dollar LIBOR. The replacement of LIBOR with an alternative reference rate may adversely affect interest expense related to outstanding debt.
The 2021 effective tax rate was 22.8%, up from 19.4% in 2020, and the provision for income taxes increased 57.0% to $236.4 million. The filing cites changes in tax laws and additional tax exposures, including a U.K. law change and GILTI, as risks to future profitability.
Because a significant portion of business is outside the U.S., SS&C faces exposure to adverse movements in foreign currency exchange rates. MD&A reports fiscal 2021 revenues benefited from a favorable foreign currency translation impact of $53.5 million while costs were unfavorably impacted by $34.9 million.
Client funds obligations were $2,755.7 million at December 31, 2021, up from $1,227.4 million at December 31, 2020, and client cash balances may exceed FDIC and SIPC insurance limits. The filing warns that a substantial loss in operational or client deposit accounts would have a material adverse impact.
The COVID-19 pandemic continues to create volatility and uncertainty. While SS&C was not materially affected in 2021, potential effects include failures or disruptions to key products, reduced demand, and strain on workforce and key personnel.
As of February 17, 2022, William C. Stone, Chairman and CEO, beneficially owned approximately 13.3% of outstanding common stock and has the right to nominate two board members. The filing says he has significant influence over policy and matters requiring stockholder approval.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Adjusted Consolidated EBITDA Margin
Adjusted Revenue
Adjusted Consolidated EBITDA attributable to SS&C
Adjusted Operating Income attributable to SS&C
Adjusted Revenue Growth
Summary, forecast, risks and KPIs are extracted from SS&C Technologies Holdings Inc's SEC filings for Q4 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.