01—Abstract
Summary
Summary of the 10-K filed February 28, 2023. Cited figures are marked; the original filing is the authoritative source.
SS&C Technologies Holdings, Inc. reported total revenues of $5,283.0 milliona for 2022, up from $5,051.0 million in 2021, with 75% of revenues from North America and 25% from outside North America.
Software-enabled services revenues were $4,273.9 millionb (80.9% of total), while license, maintenance and related revenues rose to $1,009.1 million, driven largely by acquisitions. Net income attributable to SS&C common stockholders was $650.2 million, down from $800.0 million in 2021, and diluted EPS was $2.48 versus $2.99. Operating income was $1,142.9 million, compared with $1,242.3 million in 2021, as total operating expenses rose to $1,372.4 million, including acquisition effects.
The company's largest acquisition in the year was Blue Prism Group Plc, purchased for approximately $1.6 billionc in cash in March 2022 and financed through an incremental term loan. Total indebtedness at December 31, 2022 was $7,129.9 million, with $597.5 million available under the revolving credit facility after its amendment to $600.0 million. Cash provided by operating activities was $1,134.3 million, and the company paid $203.1 million in dividends and repurchased $476.1 million of common stock during 2022.
The filing describes SS&C as the largest hedge fund and private equity administrator and largest mutual fund transfer agent, serving over 20,000 clients with about 27,600 full-time employees. The company reported a 25.9% effective tax rate for 2022 and noted that management concluded internal control over financial reporting was effective as of December 31, 2022, excluding Blue Prism. Management also disclosed a $51.5 milliond accrued liability related to the DST ERISA litigation.
02—Key points
Key Highlights
- Total revenues rose to $5,283.0 million in 2022 from $5,051.0 million in 2021, with acquisitions contributing $223.6 million of the increase.
- Software-enabled services revenues were $4,273.9 million, or 80.9% of total revenues, and the company cites average revenue retention rates above 95% over the last five years.
- Net income attributable to SS&C common stockholders was $650.2 million, down from $800.0 million, and diluted EPS was $2.48 compared with $2.99 in 2021.
- Operating cash flow was $1,134.3 million, down from $1,429.0 million in 2021, partly reflecting about $68.0 million of Blue Prism transaction costs.
- Total debt was $7,129.9 million at year-end 2022, including $5,129.1 million of variable-rate debt and $2,000.0 million of 5.5% senior notes due 2027.
- The company returned capital through $203.1 million of dividends and $476.1 million of share repurchases during 2022, with $694.8 million remaining under its repurchase authorization at December 31, 2022.
- Interest expense rose to $312.2 million from $205.7 million, reflecting higher average interest rates and debt balances after the Blue Prism financing.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, SS&C Technologies Holdings kept $0.12.
- Revenue$5.28B100.0%
- Cost of revenue−$2.77B52.4%
- Gross profit$2.52B47.6%
- Operating costs−$1.37B26.0%
- Operating income$1.14B21.6%
- Interest, other & tax−$493.9M9.3%
- Net income$649.0M12.3%
Where FY2022 revenue went
$5.28B- Cost of revenue: $2.77B, 52% of revenue
- Other operating costs: $925.1M, 18% of revenue
- Net income: $649.0M, 12% of revenue
- R&D: $447.3M, 8.5% of revenue
- Interest, other & tax: $493.9M, 9.3% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 28, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $5.28B$5.05B | +4.6% |
| Cost of Revenue | $2.77B$2.64B | +4.8% |
| Gross Profit | $2.52B$2.41B | +4.4% |
| R&D Expenses | $447.30M$414.90M | +7.8% |
| Operating Expenses | $1.37B$1.17B | +17.6% |
| Operating Income | $1.14B$1.24B | −8.0% |
| Interest Expense | $312.20M$205.70M | +51.8% |
| Net Income | $649.00M$800.60M | −18.9% |
| EPS (Basic) | $2.56$3.13 | −18.2% |
| EPS (Diluted) | $2.48$2.99 | −17.1% |
| Shares Outstanding (Basic) | 254.00M255.60M | −0.6% |
| Shares Outstanding (Diluted) | 262.00M267.30M | −2.0% |
05—Questions
Frequently Asked Questions
How did SS&C perform financially in 2022?
Revenue grew 4.6% to $5,283.0 million, mainly due to acquisitions and organic growth in fund administration and other software lines. However, net income attributable to common stockholders fell to $650.2 million from $800.0 million, as operating expenses rose 17.6% and interest expense increased to $312.2 million.
What was the major acquisition in 2022 and how was it financed?
SS&C acquired Blue Prism Group Plc for approximately $1.6 billion in cash in March 2022. The company financed the deal through an Incremental Joinder to its credit agreement, adding $1,530.0 million of new term loans (Term B-6 and Term B-7).
How much debt does SS&C carry and when does it mature?
Total debt was $7,129.9 million at December 31, 2022. Senior secured term loans mature in 2025 and 2029, the revolving facility matures December 28, 2027, and the 5.5% senior notes mature September 30, 2027. The company estimates annual interest payments of approximately $434.8 million.
What are the main risks highlighted for investors?
Key risks include exposure to the hedge fund industry and financial markets activity, competition, cybersecurity and service disruptions, foreign operations (29% of 2022 revenue came from outside the U.S.), substantial indebtedness with variable-rate exposure, and the DST ERISA litigation, for which an accrued liability of $51.5 million was recorded.
Is SS&C's internal control over financial reporting effective?
Management concluded that internal control over financial reporting was effective as of December 31, 2022. The company excluded Blue Prism from this assessment, and PricewaterhouseCoopers LLP issued an unqualified opinion on the company's internal controls.
06—Continue