SS&C Technologies Holdings Inc (SSNC) Q3 2023 Earnings Report Summary
SSNC's Q3 2023 GAAP revenue increased by 3.4% to $1,365.9 million, with Adjusted Diluted Earnings Per Share rising by 1.7% to $1.17.
The company generated net cash from operating activities of $826.7 million for the nine months ended September 30, 2023, marking an 8.1% increase compared to the same period in 2022.
SSNC bought back 1.7 million shares for $96.9 million in Q3 2023, and paid down $54.7 million in debt, bringing the net leverage ratio to 3.18 times consolidated EBITDA.
Revenue retention for the financial services business reached a record high of 97.3%.
SS&C Technologies Holdings Inc (NASDAQ:SSNC) released its Q3 2023 earnings report on October 26, 2023, revealing a 3.4% increase in GAAP revenue to $1,365.9 million. The company's Adjusted Diluted Earnings Per Share also saw a rise of 1.7% to $1.17. The company's financial performance was marked by strong margins, with adjusted consolidated EBITDA margins up 230 basis points sequentially and 110 basis points year over year.
Financial Performance
SSNC's GAAP operating income margin for Q3 2023 was 22.4%, while the adjusted consolidated EBITDA margin for the same period was 39.1%. The company reported GAAP net income attributable to SSNC of $156.0 million, down 2.5%, and adjusted consolidated EBITDA attributable to SSNC of $533.9 million for Q3 2023, up 6.4%.
Share Buyback and Debt Reduction
In Q3 2023, SSNC bought back 1.7 million shares for $96.9 million, at an average price of $55.82 per share. The company also paid down $54.7 million in debt, bringing the net leverage ratio to 3.18 times consolidated EBITDA attributable to SSNC.
Revenue Retention
SSNC's revenue retention for the financial services business reached a record high of 97.3% in Q3 2023, indicating strong customer loyalty and satisfaction.
Operating Cash Flow
SSNC generated net cash from operating activities of $826.7 million for the nine months ended September 30, 2023, marking an 8.1% increase compared to the same period in 2022. The company ended the third quarter with $447.6 million in cash and cash equivalents and $6,906.6 million in gross debt.
CEO Commentary
SS&C delivered strong margins for Q3 2023, with adjusted consolidated EBITDA margins up 230 basis points sequentially and 110 basis points year over year, says Bill Stone, Chairman and Chief Executive Officer. Our digital worker initiative is a large part of this margin expansion, as we have seen a 2,000 FTE headcount benefit year to date. We have hit our 2023 target for digital workers, and believe there is more runway ahead.
Explore the complete 8-K earnings release (here) from SS&C Technologies Holdings Inc for further details.
This article first appeared on GuruFocus.
