Yahoo Finance SS&C Technologies Holdings Inc (SSNC) Q1 2024 Earnings Call Transcript Highlights: Strong ...
Adjusted Revenue: $1,435.8 million, up 5.3% year-over-year
Adjusted Diluted EPS: $1.28, increased by 12.3%
Adjusted Consolidated EBITDA: $556.8 million, record for Q1
EBITDA Margin: 38.8%
Adjusted Organic Revenue Growth: 4.7%
Recurring Revenue Growth Rate for Financial Services: 6.5%
Cash from Operating Activities: $180.5 million
Debt Repayment: Paid down $79.9 million in Q1 2024
Net Leverage Ratio: 2.95x
Net Secured Leverage Ratio: 2.02x
Share Buyback: 800,000 shares for $52.9 million at an average price of $63.24
GAAP Net Income: $158 million
GAAP Diluted EPS: $0.62
Adjusted Net Income: $324 million
Effective Tax Rate: 26% for adjusted net income
Cash and Cash Equivalents: $413 million
Gross Debt: $6.7 billion
Q2 Revenue Guidance: $1.412 billion to $1.452 billion
Q2 Adjusted Net Income Guidance: $295 million to $311 million
Q2 Adjusted Diluted EPS Guidance: $1.16 to $1.22
Full Year 2024 Revenue Guidance: $5.695 billion to $5.855 billion
Full Year 2024 Adjusted Net Income Guidance: $1.242 billion to $1.322 billion
Full Year 2024 Adjusted Diluted EPS Guidance: $4.93 to $5.17
Full Year 2024 Cash from Operating Activities Guidance: $1.302 billion to $1.382 billion
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the organic growth trends and how they relate to the current market environment and your go-to-market strategy changes? A: (William C. Stone - CEO) The improvement in organic growth is largely due to the development of new solutions for clients, particularly the integration of our trust product, OmniTrust, with Black Diamond, which now allows wealth advisers to handle trusts. Improved delivery and execution on implementations, along with more disciplined pricing, have also contributed to this growth.
Q: Regarding the $0.03 dividend income reported this quarter, was this included in the original guidance for 2024, and how should it be factored into future quarters? A: (Brian Norman Schell - CFO) The $0.03 was not part of the original guidance. It has now been included in adjusted earnings to provide clearer visibility. For the remainder of the year, expect about $0.01 in total additional adjustments from this dividend income.
Q: What drove the slight decrease in the upper end of the revenue outlook, and how does this relate to organic growth expectations for the rest of the year? A: (Rahul Kanwar - COO) The adjustment in revenue outlook is mainly due to tighter and more precise forecasting as the year progresses. The midpoint of the guidance has actually increased, reflecting continued optimism for the year.
Q: Can you elaborate on the strategic rationale behind the combination of divisions and what this means for cross-sell opportunities and potential margin benefits? A: (William C. Stone - CEO) Combining similar products under unified leadership, such as asset management products under Karen Geiger and Steve Leivent, allows for accelerated innovation, better scale, and more effective cross-selling opportunities. This restructuring is expected to enhance product delivery and operational efficiency.
Q: What was the growth rate in the private markets segment this quarter, and how does it compare to other segments? A: (Brian Norman Schell - CFO) The private markets segment grew by approximately 10% this quarter, with private credit showing particularly strong growth, although when averaged with other areas like private equity and real estate, the overall growth rate appears as 10%.
Q: How are pricing strategies affecting organic growth, and what are the expectations for price increases going forward? A: (Rahul Kanwar - COO) Pricing discipline has improved, with automatic price increases now built into contracts. This approach contributed approximately $150 million to revenue in 2023, with similar expectations for 2024. This methodical pricing strategy is expected to continue supporting organic growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
