01—Abstract
Summary
Summary of the 10-Q filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.
SS&C Technologies Holdings, Inc. reported second-quarter 2024 total revenues of $1,451.5 milliona, up from $1,362.6 million a year earlier, with software-enabled services revenues of $1,192.4 million and license, maintenance and related revenues of $259.1 million.
Operating income rose to $327.6 millionb from $288.2 million, and net income attributable to SS&C common stockholders was $190.3 million, or $0.75 per diluted share, compared with $130.7 million, or $0.51 per diluted share, in the prior-year quarter. The quarter's effective tax rate of 6.7% was lowered by $40.8 million of releases of uncertain tax positions and $5.7 million of tax refunds, both tied to closed audits. The balance sheet was reshaped by a May 9, 2024 refinancing.
The company borrowed $3,935.0 millionc of incremental Term B-8 loans and issued $750.0 million of 6.5% senior notes due 2032, using the proceeds to repay its existing term loans. Total debt stood at $6,614.1 million at June 30, 2024, and the Term B-8 loans carried a weighted-average interest rate of 7.34%. The company also recorded a $27.7 million loss on extinguishment of debt in the quarter.
Total assets declined to $16,905.2 milliond from $18,102.5 million, largely because funds receivable and client funds obligations both fell. Capital returns continued during the first half of 2024.
SS&C repurchased 4.5 million shares for $281.0 million, paid $119.8 million in dividends of $0.24 per share in each of March and June, and a new $1 billion repurchase program was authorized in July 2024. Net cash provided by operating activities was $565.4 million for the six months ended June 30, 2024, and the company stated that its cash, operating cash flows and Credit Agreement availability should be sufficient for at least the next twelve months.
02—Key points
Key Highlights
- Total revenues rose to $1,451.5 million in Q2 2024 from $1,362.6 million, with the filing attributing $86.4 million of the increase to organic growth.
- Diluted EPS was $0.75 for Q2 2024 versus $0.51 a year earlier; net income attributable to SS&C common stockholders was $190.3 million versus $130.7 million.
- Operating income increased to $327.6 million from $288.2 million, and gross margin percentage was 48.1% compared with 47.0%.
- The May 2024 refinancing added $3,935.0 million of Term B-8 loans and $750.0 million of 6.5% senior notes due 2032, with a $27.7 million loss on extinguishment of debt recognized in the quarter.
- Effective tax rate fell to 6.7% from 32.7%, helped by $40.8 million of releases of uncertain tax positions and $5.7 million of tax refunds from closed audits.
- Stockholder returns in the first half included $281.0 million of share repurchases and $119.8 million of dividends; a new $1 billion repurchase program was authorized in July 2024.
- As of June 30, 2024, the company reported a consolidated net secured leverage ratio of 1.60x against a 6.25x covenant maximum.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, SS&C Technologies Holdings kept $0.13.
- Revenue$1.45B100.0%
- Cost of revenue−$753.2M51.9%
- Gross profit$698.3M48.1%
- Operating costs−$370.7M25.5%
- Operating income$327.6M22.6%
- Interest, other & tax−$137.3M9.5%
- Net income$190.3M13.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 1, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $1.45B$1.36B | +6.5% |
| Cost of Revenue | $753.20M$721.50M | +4.4% |
| Gross Profit | $698.30M$641.10M | +8.9% |
| R&D Expenses | $128.70M$119.60M | +7.6% |
| Operating Expenses | $370.70M$352.90M | +5.0% |
| Operating Income | $327.60M$288.20M | +13.7% |
| Interest Expense | $113.30M$118.00M | −4.0% |
| Net Income | $190.30M$130.70M | +45.6% |
| EPS (Basic) | $0.77$0.53 | +45.3% |
| EPS (Diluted) | $0.75$0.51 | +47.1% |
| Shares Outstanding (Basic) | 246.20M248.50M | −0.9% |
| Shares Outstanding (Diluted) | 252.30M255.00M | −1.1% |
05—Questions
Frequently Asked Questions
How did SS&C's revenue and profitability change in the second quarter of 2024?
Total revenues were $1,451.5 million, up from $1,362.6 million, and operating income was $327.6 million compared with $288.2 million. Net income attributable to SS&C common stockholders was $190.3 million, or $0.75 per diluted share, versus $130.7 million, or $0.51 per diluted share, a year earlier.
What drove the lower effective tax rate in the quarter?
The effective tax rate was 6.7% for the three months ended June 30, 2024, compared with 32.7% a year earlier. The filing attributes the change primarily to releases of uncertain tax positions due to closed audits, which provided $40.8 million of tax benefits, and $5.7 million of tax refunds, also from closed audits.
What did the May 2024 debt refinancing change?
SS&C borrowed $3,935.0 million of incremental Term B-8 loans maturing May 9, 2031 and issued $750.0 million of 6.5% senior notes due June 1, 2032. The proceeds repaid its existing term loans B-3 through B-7. Total debt was $6,614.1 million at June 30, 2024, compared with $6,720.0 million at December 31, 2023.
How much cash did the company return to shareholders?
In the first half of 2024, SS&C repurchased 4.5 million shares for $281.0 million and paid $119.8 million in dividends of $0.24 per share in each of March and June. In July 2024, the Board authorized a new program to repurchase up to $1 billion of common stock.
Does management expect sufficient liquidity?
Management expects cash on hand, cash flows from operations and cash available under the Credit Agreement to provide sufficient liquidity to fund current obligations, projected working capital and capital spending for at least the next twelve months. At June 30, 2024, $596.9 million of the $600.0 million Revolving Credit Facility was available, and the company stated it was in compliance with all financial and non-financial covenants.
06—Continue