SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of investment and financial software-enabled services and software, today announced its financial results for the quarter that ended September 30, 2012.
"I am delighted to report that our third quarter adjusted revenue of $166.0 million rose 76 percent year-over-year," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies Holdings, Inc. "We continue to use our operating cash flow to strengthen our overall service and product offerings. Our clients are very demanding and our depth and breadth of products and services continue to expand to meet their needs. We have acquired PORTIA, GlobeOp, Gravity and Hedgemetrix this year which expands our geographic footprint, deepens our expertise and adds materially to our service and product offering. Since acquiring GlobeOp, as of today, we have paid down $96.6 million in debt. SS&C was named to the Forbes '100 Best Small Companies' 2012 list. Recognition by a prestigious business publication such as Forbes is always an honor and speaks to the dedication and capability of our 4100 personnel."
"Hurricane Sandy shows why a business continuity plan is critical for organizations to have in place," commented Stone. "Our superior cloud architecture and geographically dispersed data centers, together with our dedicated staff, allowed our customers uninterrupted service."
The Company reported GAAP revenue of $165.6 million for the third quarter of 2012, compared to $94.3 million in the third quarter of 2011. GAAP operating income for the third quarter of 2012 was $37.2 million, or 22.5 percent of revenue, up from $24.1 million in 2011's third quarter. GAAP net income for the third quarter of 2012 was $17.6 million compared to net income of $14.9 million in the third quarter of 2011. On a GAAP fully diluted basis, earnings per share in the third quarter of 2012 was $0.21 compared to fully diluted earnings per share of $0.18 in the third quarter of 2011.
Adjusted revenue (a non-GAAP measure defined in note 1 to the attached Condensed Consolidated Financial Information) in the third quarter of 2012 was $166.0 million compared to $94.3 million in the third quarter of 2011, an increase of 76.0 percent. Adjusted operating income (a non-GAAP measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the third quarter of 2012 was $61.8 million, or 37.2 percent of adjusted revenue. This represents a 64.1 percent increase compared to adjusted operating income of $37.6 million and 39.9 percent of adjusted revenue in the third quarter of 2011.Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the third quarter of 2012 was $32.1 million compared to $22.6 million in 2011's third quarter, an increase of 41.8 percent. Adjusted diluted earnings per share (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) in the third quarter of 2012 was $0.39 per share compared to $0.28 per share in the third quarter of 2011, an increase of 39.3 percent.
Annual Run Rate Basis
Annual Run Rate Basis (ARRB) recurring revenue, defined as the addition of maintenance and software-enabled services revenue, was $151.1 million for the third quarter of 2012, an annual run-rate of $604.5 million. This represents an increase of 82.4 percent from $82.8 million and $331.4 million run-rate in the same period in 2011 and an increase of 40.1 percent from Q2 2012's $107.9 million and $431.5 million run-rate. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.
Operating Cash Flow
SS&C ended the quarter with $80.3 million in cash, and $1,070.8 million in debt for a net debt balance of $990.5 million. We generated net cash from operating activities, after $28.6 million in non-recurring acquisition expenses, of $60.7 million for the nine months ended September 30, 2012, compared to $71.6 million for the same period in 2011.
Guidance Q4 2012 FY 2012
Adjusted Revenue ($M) $170.0 - $174.0 $550.9 - $554.9
Adjusted Net Income ($M) $32.7 - $33.7 $115.2 - $116.2
Cash from Operating Activities ($M) N/A $109.0 - $113.0
Capital Expenditures (% of revenue) N/A 2.9% - 3.1%
Regulatory Solutions Group Formed
The SS&C GlobeOp division announced the formation of a Regulatory Solutions Group to focus on Form PF (Private Fund) and FATCA (Foreign Account Tax Compliance Act), AFMID (Alternative Investment Fund Managers Directive), and other compliance and reporting rules. Michael Megaw, a New York-based Managing Director, will head up this new group.