01—Abstract
Summary
Summary of the 10-K filed February 28, 2024. Cited figures are marked; the original filing is the authoritative source.
SS&C Technologies Holdings, Inc. reported total revenues of $5,502.8 milliona for 2023, up from $5,283.0 million in 2022, and net income of $608.6 million versus $649.0 million in 2022.
Software-enabled services revenues were $4,488.3 millionb (81.6% of total), while license, maintenance and related revenues were $1,014.5 million. Operating income was $1,208.9 million, and Consolidated EBITDA as defined under the Credit Agreement was $2,110.6 million. Diluted EPS was $2.39, compared with $2.48 in 2022.
The company stated that 73% of 2023 revenues came from clients in North America and 27% from outside North America, and that its largest client accounted for less than 5% of revenues. The balance sheet carries substantial leverage. Total debt was $6,755.1 millionc at December 31, 2023, and interest expense rose to $476.3 million from $312.2 million in 2022, which the company attributed to higher average interest rates.
Cash flow from operations was $1,215.1 milliond. In 2023 the company used cash to repurchase $471.6 million of common stock, pay down $374.7 million of debt, and pay $220.9 million in dividends. Cash, cash equivalents and restricted cash including amounts held on behalf of clients was $2,998.6 million, a large part of which relates to client funds obligations of $2,615.6 million.
The filing also covers the October 2023 acquisition of the Iress Managed Funds Administration Business for approximately $32.5 million in cash, and the settlement of the DST ERISA litigation, which was dismissed with prejudice in the fourth quarter of 2023. The auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the financial statements and on internal control over financial reporting, and identified goodwill impairment testing for the health business reporting unit as a critical audit matter.
02—Key points
Key Highlights
- Total revenues rose to $5,502.8 million in 2023 from $5,283.0 million in 2022, with software-enabled services at $4,488.3 million and license, maintenance and related revenues at $1,014.5 million.
- Net income was $608.6 million in 2023 versus $649.0 million in 2022; diluted EPS was $2.39 versus $2.48.
- Interest expense increased to $476.3 million from $312.2 million, reflecting higher average interest rates; total debt was $6,755.1 million at year-end.
- Operating cash flow was $1,215.1 million, which funded $471.6 million of share repurchases, $374.7 million of net debt repayment and $220.9 million of dividends.
- Research and development spending was $473.8 million, and capitalized software additions were $194.9 million.
- Consolidated EBITDA under the Credit Agreement was $2,110.6 million, and the actual net secured leverage ratio was 2.10x against a covenant maximum of 6.25x.
- Revenues are diversified: 73% from North America and 27% from outside North America, with no single client above 5% of revenues.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, SS&C Technologies Holdings kept $0.11.
- Revenue$5.50B100.0%
- Cost of revenue−$2.85B51.8%
- Gross profit$2.65B48.2%
- Operating costs−$1.44B26.2%
- Operating income$1.21B22.0%
- Interest, other & tax−$600.3M10.9%
- Net income$608.6M11.1%
Where FY2023 revenue went
$5.50B- Cost of revenue: $2.85B, 52% of revenue
- Other operating costs: $969.1M, 18% of revenue
- Net income: $608.6M, 11% of revenue
- R&D: $473.8M, 8.6% of revenue
- Interest, other & tax: $600.3M, 11% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 28, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $5.50B$5.28B | +4.2% |
| Cost of Revenue | $2.85B$2.77B | +3.0% |
| Gross Profit | $2.65B$2.52B | +5.4% |
| R&D Expenses | $473.80M$447.30M | +5.9% |
| Operating Expenses | $1.44B$1.37B | +5.1% |
| Operating Income | $1.21B$1.14B | +5.8% |
| Interest Expense | $476.30M$312.20M | +52.6% |
| Net Income | $608.60M$649.00M | −6.2% |
| EPS (Basic) | $2.45$2.56 | −4.3% |
| EPS (Diluted) | $2.39$2.48 | −3.6% |
| Shares Outstanding (Basic) | 248.30M254.00M | −2.2% |
| Shares Outstanding (Diluted) | 254.50M262.00M | −2.9% |
05—Questions
Frequently Asked Questions
How did SS&C's revenue and profitability change in 2023?
Total revenues increased to $5,502.8 million from $5,283.0 million. Operating income was $1,208.9 million compared with $1,142.9 million in 2022, but net income declined to $608.6 million from $649.0 million, mainly because interest expense rose to $476.3 million from $312.2 million.
How much debt does SS&C carry and how is it structured?
Total debt was $6,755.1 million at December 31, 2023. It consists of senior secured credit facilities of $4,755.1 million and $2,000.0 million of 5.5% senior notes due 2027. The filing states that $4,755.1 million of the debt bears variable interest rates.
What did SS&C do with its cash in 2023?
Operating cash flow of $1,215.1 million, together with $115.4 million from stock option exercises and existing cash, was used to buy $471.6 million of common stock, repay $374.7 million of debt, pay $220.9 million in dividends and fund capital expenditures and capitalized software.
Did SS&C make any notable acquisitions or divestitures in 2023?
In October 2023 SS&C acquired the Iress Managed Funds Administration Business for approximately $32.5 million in cash. The filing reports that this business contributed $3.6 million of revenue in 2023. No divestitures are described in the filing.
What legal matters affected SS&C's 2023 results?
DST ERISA litigation was resolved. DST, Ruane and Goldfarb paid a total of $124,625,000, of which DST paid approximately $55.1 million. The actions were dismissed with prejudice in the fourth quarter of 2023. The company stated it is not involved in any litigation expected to have a material adverse effect.
06—Continue