Summary
SSNC closed fiscal 2022 with GAAP revenue of $1.34 billion in the fourth quarter, up 3.4% from the prior-year quarter. Full-year GAAP revenue reached $5.28 billion, up 4.6% from fiscal 2021. Gross profit for the quarter was $647.4 million, up 2.6% from the prior-year quarter. The bottom line moved the other way. Fourth-quarter operating income was $301.3 million, down 5.9% from the prior-year quarter. Full-year operating income was $1,142.9 million, down 8.0% from fiscal 2021. Fourth-quarter net income was $207.5 million, down 17.3% from the prior-year quarter. Full-year net income was $650.2 million, down 18.7% from fiscal 2021. Full-year diluted EPS was $2.48, down 17.1% from fiscal 2021. Gross margin for the quarter was 48.4%, down 0.4 percentage points from the prior-year quarter. Operating margin for the quarter was 22.5%, down 2.2 percentage points from the prior-year quarter. For the full year, gross margin was 47.6%, flat, and operating margin was 21.6%, down 3.0 percentage points from fiscal 2021.
Cash generation slowed. Fourth-quarter operating cash flow was $369.7 million, down 23.6% from the prior-year quarter. Full-year operating cash flow was $1,134.3 million, down 20.6% from fiscal 2021. Capital expenditures were $10.1 million in the quarter, down 50.2% from the prior-year quarter, and $63.4 million for the full year, up 23.6% from fiscal 2021. The balance sheet showed stronger deferred revenue and remaining performance obligations. The current portion of deferred revenue was $464.7 million, up 39.1% from the prior-year quarter. Remaining performance obligations were $1.00 billion, up 85.7% from the prior-year quarter.
Non-GAAP results show a different picture. Adjusted revenue was $1,339.1 million in the quarter, up 3.3%, and $5,287.3 million for the full year, up 4.5%. Adjusted operating income attributable to SSNC was $502.1 million, down 1.1%. Adjusted diluted EPS was $1.16, down 9.4%, and full-year adjusted diluted EPS was $4.65. Adjusted consolidated EBITDA attributable to SSNC was $518.6 million. The adjusted consolidated EBITDA margin was 38.7%, up 70 basis points from the third quarter of 2022. SSNC completed the acquisition of Complete Financial Ops, Inc., expanding fund administration capabilities for venture capital and family office funds. The company implemented 180 Blue Prism digital workers by year end 2022, with initial successes in its GIDS and fund services businesses. Organic revenue growth was 0.0% in the fourth quarter and 2.0% for fiscal 2022. Excluding healthcare, organic growth was 1.3% in the fourth quarter and 3.7% for fiscal 2022. Healthcare organic growth was 17.5% lower in the quarter and 19.5% lower for the year because of expected client losses. DST Financial Services organic growth was 3.2% lower in the quarter and 2.0% lower for the year. Intralinks grew 3.6% in the quarter and 10.2% for the year. Alternatives grew 4.5% in the quarter and 6.7% for the year. SSNC repurchased 1.8 million shares for $90.7 million in the quarter at an average price of $50.14. It paid down $166.2 million of debt in the quarter, leaving the net leverage ratio at 3.40 times consolidated EBITDA attributable to SSNC and the net secured leverage ratio at 2.40 times.
Guidance covers the first quarter of 2023 and the full fiscal year 2023. For the first quarter of 2023, SSNC projected adjusted revenue of $1,332.0 million to $1,372.0 million, adjusted net income attributable to SSNC of $282.0 million to $299.0 million, and adjusted diluted EPS of $1.10 to $1.16. For full fiscal year 2023, the company projected adjusted revenue of $5,455.0 million to $5,655.0 million, adjusted net income attributable to SSNC of $1,190.0 million to $1,285.0 million, and adjusted diluted EPS of $4.67 to $4.97. Capital expenditures are planned at 3.8% to 4.0% of revenue. SSNC does not provide reconciliations of adjusted revenue and adjusted net income guidance to comparable GAAP measures because it cannot forecast certain items without unreasonable efforts. The main risks include economic and financial services industry conditions, interest rates and inflation, foreign currency exchange rates, client consolidation, the company's focus on the hedge fund industry, securities market activity, client retention, competition, litigation, cybersecurity and privacy concerns, evolving regulations, substantial indebtedness, and tax matters. Goodwill impairment testing at December 31, 2022 indicated that the fair values of its reporting units significantly exceeded their carrying values.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.34B | $1.32B | +1.3% | $1.29B | +3.4% |
| Gross profit | $647.4M | $623.8M | +3.8% | $631.2M | +2.6% |
| Gross margin | 48.4% | 47.2% | +1.1 pp | 48.8% | -0.4 pp |
| Research & development | $115.5M | $107.6M | +7.3% | $108.5M | +6.5% |
| Sales & marketing | $129.0M | $120.9M | +6.7% | $108.0M | +19.4% |
| General & administrative | $101.6M | $91.1M | +11.5% | $94.5M | +7.5% |
| Total operating expenses | $346.1M | $319.6M | +8.3% | $311.0M | +11.3% |
| Operating income (loss) | $301.3M | $304.2M | -1.0% | $320.2M | -5.9% |
| Operating margin | 22.5% | 23.0% | -0.5 pp | 24.7% | -2.2 pp |
| Net income (loss) | $207.6M | $159.8M | +29.9% | $251.2M | -17.4% |
| Net margin | 15.5% | 12.1% | +3.4 pp | 19.4% | -3.9 pp |
| Diluted EPS | $0.79 | $0.61 | +$0.18 | $0.94 | -$0.15 |
Risks
SSNC had total indebtedness of $7,129.9 million at December 31, 2022 and estimated annual interest payments of approximately $434.8 million. Interest expense rose to $312.2 million in FY2022 from $205.7 million in FY2021, while operating cash flow decreased 20.6% year to date to $1,134.3 million.
SSNC completed acquisitions in 2022 including Blue Prism, Hubwise, Tier1, MineralWare, O'Shares and CFO, and paid $1,636.2 million for acquisitions net of cash acquired in FY2022. The filing warns integration may disrupt operations, divert management and require debt or write-offs, and certain acquisitions have generated disputes or litigation.
At December 31, 2022, $5,129.1 million of variable interest rate debt may bear interest tied to U.S. dollar LIBOR, which is being replaced by SOFR. The filing warns the replacement may result in interest expense that is higher than, lower than, or does not otherwise correlate with LIBOR-based payments.
MD&A states COVID-19 and ongoing macroeconomic conditions, such as increases in interest rates and inflation rates and changes in foreign currency exchange rates, could have uncertain impacts. FY2022 revenue growth was partly offset by $93.3 million of unfavorable foreign currency translation.
Certain acquisitions have increased the percentage of clients that are hedge funds or funds of hedge funds, tying significant revenues to assets under management, administration and transaction volumes. Declines in market value, redemptions or shifts among funds can reduce fees and results.
An increase in subaccounting services performed by brokerage firms has adversely impacted revenues and may continue to do so. The filing notes that subaccounting conversions have begun to extend to tax-advantaged accounts such as retirement and Section 529 accounts.
The effective tax rate increased to 25.9% in FY2022 from 22.8% in FY2021, and SSNC had $116.5 million in liabilities for unrecognized tax benefits at December 31, 2022. Changes in tax laws, transfer pricing or examinations could increase tax expense.
SSNC had approximately 7,900 employees in India as of December 31, 2022 and depends on senior management and skilled technical personnel. Competition is intense and failure to attract or retain employees could impair service delivery.
SaaS KPIs
All quarters →Adjusted Operating Income Margin
Adjusted Consolidated EBITDA Margin
Organic Revenue Growth Rate
Summary, forecast, risks and KPIs are extracted from SS&C Technologies Holdings Inc's SEC filings for Q4 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.