01—Abstract
Summary
Summary of the 10-Q filed May 1, 2024. Cited figures are marked; the original filing is the authoritative source.
SS&C Technologies Holdings, Inc. reported first-quarter 2024 total revenues of $1,435.0 milliona, up from $1,362.7 million in the prior-year quarter, with the filing attributing the $72.3 million increase primarily to $63.8 million of organic growth driven by the SS&C GlobeOp fund administration and virtual data room services businesses.
Net income attributable to SS&C common stockholders rose to $157.6 millionb from $126.0 million, and diluted earnings per share were $0.62 versus $0.49. Operating income increased to $332.9 million from $280.1 million, while general and administrative expenses grew 13.8% to $112.5 million. Interest expense, net increased to $116.0 million from $111.9 million, reflecting a higher average interest rate on debt of 6.86% compared with 6.21%.
Cash flow was weaker than the prior year: net cash provided by operating activities was $180.5 millionc versus $254.8 million, and the company repurchased $52.9 million of stock and paid $59.7 million in dividends during the quarter. Total debt stood at $6,644.3 million gross before discounts and issuance costs, including $4,675.2 million of senior secured credit facilities and $2,000.0 million of 5.5% senior notes due 2027. The company stated its intent to refinance $3,515.3 million of Term Loans B-3, B-4 and B-5 that mature on April 16, 2025, though it provided no assurance that such financing would be available on acceptable terms or at all.
Management reported compliance with all financial and non-financial covenants as of March 31, 2024, with a consolidated net secured leverage ratio of 2.02x against a 6.25x covenant maximum. For investors, the key considerations are the near-term maturity of the large term loan tranches, the higher interest burden, and the cash flow decline, balanced against revenue and profit growth and continued shareholder returns. Total assets were $17,386.8 milliond at March 31, 2024, and total equity was $6,492.7 million.
02—Key points
Key Highlights
- Total revenues rose to $1,435.0 million from $1,362.7 million, a 5.3% increase, with organic revenue growth of $63.8 million led by SS&C GlobeOp fund administration and virtual data room services.
- Operating income increased to $332.9 million from $280.1 million, and gross margin percentage rose to 49.3% from 46.7%.
- Diluted EPS was $0.62 compared with $0.49 in the prior-year quarter; net income attributable to SS&C common stockholders was $157.6 million versus $126.0 million.
- Net cash provided by operating activities declined to $180.5 million from $254.8 million, largely due to working capital changes.
- Interest expense, net rose to $116.0 million from $111.9 million, driven by a higher average interest rate of 6.86% versus 6.21%.
- Term Loans B-3, B-4 and B-5 totaling $3,515.3 million are due April 16, 2025; the company intends to refinance them but gives no assurance of acceptable financing.
- The company paid a $0.24 per share quarterly dividend ($59.7 million) and repurchased $52.9 million of common stock during the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, SS&C Technologies Holdings kept $0.11.
- Revenue$1.44B100.0%
- Cost of revenue−$727.8M50.7%
- Gross profit$707.2M49.3%
- Operating costs−$374.3M26.1%
- Operating income$332.9M23.2%
- Interest, other & tax−$175.3M12.2%
- Net income$157.6M11.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 1, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $1.44B$1.36B | +5.3% |
| Cost of Revenue | $727.80M$725.70M | +0.3% |
| Gross Profit | $707.20M$637.00M | +11.0% |
| R&D Expenses | $120.90M$118.20M | +2.3% |
| Operating Expenses | $374.30M$356.90M | +4.9% |
| Operating Income | $332.90M$280.10M | +18.9% |
| Interest Expense | $116.00M$111.90M | +3.7% |
| Net Income | $157.60M$126.00M | +25.1% |
| EPS (Basic) | $0.64$0.50 | +28.0% |
| EPS (Diluted) | $0.62$0.49 | +26.5% |
| Shares Outstanding (Basic) | 247.00M250.40M | −1.4% |
| Shares Outstanding (Diluted) | 253.30M257.00M | −1.4% |
05—Questions
Frequently Asked Questions
How did SS&C's revenue and profitability change in the first quarter of 2024?
Total revenues increased 5.3% to $1,435.0 million, primarily from $63.8 million of organic growth in the SS&C GlobeOp fund administration and virtual data room services businesses. Operating income rose to $332.9 million from $280.1 million, and net income attributable to SS&C common stockholders increased to $157.6 million from $126.0 million.
What is the company's near-term debt maturity risk?
Term Loans B-3, B-4 and B-5, totaling $3,515.3 million, are due April 16, 2025. The company intends to refinance them in the near term but states there can be no assurance it will obtain financing on acceptable terms, or at all.
Why did interest expense increase?
Net interest expense rose to $116.0 million from $111.9 million because of a higher average interest rate on debt, which was 6.86% for the first quarter of 2024 compared with 6.21% a year earlier.
How did cash flow and shareholder returns look this quarter?
Net cash provided by operating activities was $180.5 million, down from $254.8 million. The company repurchased $52.9 million of common stock and paid $59.7 million in dividends, and it had $412.5 million of cash and cash equivalents at March 31, 2024.
Is the company in compliance with its debt covenants?
Yes. The company stated it was in compliance with all financial and non-financial covenants as of March 31, 2024. Its consolidated net secured leverage ratio was 2.02x against a maximum covenant requirement of 6.25x.
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