01—Abstract
Summary
Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.
SS&C Technologies Holdings, Inc. reported total revenues of $5,051.0 milliona for the year ended December 31, 2021, up from $4,667.9 million in 2020, with software-enabled services revenues of $4,256.1 million (84% of total revenues) and license, maintenance and related revenues of $794.9 million.
Net income attributable to SS&C common stockholders was $800.0 millionb, or $2.99 diluted earnings per share, compared with $625.2 million in 2020. Operating income rose to $1,242.3 million from $985.8 million, and cash provided by operating activities was $1,429.0 million. The company describes itself as the world's largest hedge fund and private equity administrator and the largest mutual fund transfer agent, serving financial services and healthcare clients.
The balance sheet carries substantial leverage: total indebtedness was $5,979.7 millionc at December 31, 2021, with $3,974.5 million of variable-rate debt tied to LIBOR, and annual interest payments were estimated at $184.5 million. Management ended the year with $837.1 million remaining under its $1 billion share repurchase authorization, and paid $174.0 million in dividends during 2021. Consolidated EBITDA under the credit agreement was $2,068.1 million, against a maximum covenant net secured leverage ratio of 6.25x and an actual ratio of 1.72x.
Key events include the 2021 acquisition of Capita Life & Pensions Services (Ireland) Limited and a pending acquisition of Blue Prism Group plc for approximately $1.7 billiond, expected to close in the first or second quarter of 2022 and funded with cash on hand and debt. The filing also discloses ongoing DST ERISA litigation, including a $43.4 million legal accrual recorded in the third quarter of 2021, and management's assessment that internal control over financial reporting was effective as of December 31, 2021.
02—Key points
Key Highlights
- Total revenues rose to $5,051.0 million in 2021 from $4,667.9 million in 2020, with software-enabled services at $4,256.1 million, or 84% of revenues.
- Net income attributable to SS&C common stockholders was $800.0 million ($2.99 diluted EPS), up from $625.2 million in 2020.
- Operating income increased to $1,242.3 million from $985.8 million, and operating cash flow reached $1,429.0 million.
- Total indebtedness was $5,979.7 million at year-end, including $3,974.5 million of variable-rate debt; estimated annual interest payments are $184.5 million.
- The company repurchased $487.9 million of common stock and paid $174.0 million in dividends in 2021, with $837.1 million remaining under its $1 billion repurchase authorization.
- A pending acquisition of Blue Prism Group plc for approximately $1.7 billion is expected to close in the first or second quarter of 2022.
- A $43.4 million legal accrual was recorded in Q3 2021 related to the DST ERISA litigation, which remains unresolved, with multiple arbitration awards under appeal.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, SS&C Technologies Holdings kept $0.16.
- Revenue$5.05B100.0%
- Cost of revenue−$2.64B52.3%
- Gross profit$2.41B47.7%
- Operating costs−$1.17B23.1%
- Operating income$1.24B24.6%
- Interest, other & tax−$441.7M8.7%
- Net income$800.6M15.9%
Where FY2021 revenue went
$5.05B- Cost of revenue: $2.64B, 52% of revenue
- Net income: $800.6M, 16% of revenue
- Other operating costs: $752.1M, 15% of revenue
- R&D: $414.9M, 8.2% of revenue
- Interest, other & tax: $441.7M, 8.7% of revenue
Kept 16% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 25, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $5.05B$4.67B | +8.2% |
| Cost of Revenue | $2.64B$2.57B | +2.6% |
| Gross Profit | $2.41B$2.09B | +15.1% |
| R&D Expenses | $414.90M$399.40M | +3.9% |
| Operating Expenses | $1.17B$1.11B | +5.3% |
| Operating Income | $1.24B$985.80M | +26.0% |
| Interest Expense | $205.70M$249.90M | −17.7% |
| Net Income | $800.60M$625.20M | +28.1% |
| EPS (Basic) | $3.13$2.44 | +28.3% |
| EPS (Diluted) | $2.99$2.35 | +27.2% |
| Shares Outstanding (Basic) | 255.60M256.40M | −0.3% |
| Shares Outstanding (Diluted) | 267.30M266.60M | +0.3% |
05—Questions
Frequently Asked Questions
How did SS&C perform financially in 2021?
Total revenues grew to $5,051.0 million from $4,667.9 million, and net income attributable to SS&C common stockholders increased to $800.0 million from $625.2 million. Diluted EPS was $2.99 compared with $2.35 in 2020. Gross margin percentage rose to 47.7% from 44.9%.
How much debt does SS&C carry and what are its repayment obligations?
Total debt was $5,979.7 million at December 31, 2021, consisting of senior secured credit facilities of $3,974.5 million and $2,000.0 million of 5.5% senior notes due 2027. Scheduled debt maturities are $47.4 million in 2022 and $3,845.5 million in 2025, with the term loans due April 16, 2025.
What is the Blue Prism acquisition and how will it be financed?
SS&C agreed with Blue Prism Group plc's board on a recommended acquisition valued at approximately $1.7 billion. The closing is expected in the first or second quarter of 2022, subject to conditions, and the company plans to fund it with a combination of cash on hand and debt.
What litigation risks does the filing disclose?
The filing discloses the DST ERISA matters, including the Ferguson class action, related individual arbitrations, and a DOL lawsuit. SS&C recorded a $43.4 million accrued liability in Q3 2021, and the ultimate resolution and any additional exposure remain uncertain. Management states it continues to vigorously defend these matters.
What is SS&C's capital return policy?
SS&C paid quarterly dividends totaling $174.0 million in 2021 and declared a $0.20 per share quarterly dividend on February 17, 2022. It repurchased $487.9 million of stock in 2021 under its authorization, leaving $837.1 million available as of December 31, 2021.
06—Continue