SS&C Technologies (SSNC) reported surging revenue in the second quarter, led by a significant increase in software-enabled services sales that helped the company reverse course from a net loss in the year earlier quarter. Headquartered in Windsor, Connecticut, SS&C provides software products and software-enabled services to the global financial services industry.
For the quarter ended June 30, SS&C reported revenue of $177.5 million, up from $120.9 million in the year prior quarter. GAAP net income totaled $26.1 million, or 31 cents per share, versus a net loss of $5.8 million, or 7 cents per share, in the second quarter last year. On an adjusted basis, which excludes stock-based compensation and other non-recurring items, net income was $41.0 million, or 48 cents per share, up from $27.24 million, or 33 cents per share, in last year’s quarter.
Wall Street was expecting adjusted profits of 45 cents per share on revenue of $177.15 million.
SS&C has now posted five straight quarters of growing sales and profits.
Operating income for the second quarter was $45.3 million, or 25.5 percent of revenue. This represents an increase of 114.4 percent compared to $21.1 million, or 17.5 percent of revenue, in the second quarter of 2012.
"Our second quarter results are further evidence that our business strategy is on target and our software-enabled services business continues to drive growth, with software-enabled services revenue up 62.6 percent over the same period in 2012," said Bill Stone, chairman and chief executive at SS&C. The company attributes the rise in software-enabled service revenue mainly to growth in its alternative investment services.
The company has employed an aggressive acquisition program in recent years, making 14 different acquisitions from 2009 through 2012, including the $897-million purchase of London-based GlobeOp Financial Services last year. SS&C also acquired Thomson Reuters’ Portia business, a middle-to-back-office investment operations platform, for $170 million in 2012.
Hitting the brakes, no acquisitions have happened so far in 2013. Stone said three months ago that some small deals are possible in coming months, but didn’t elaborate on anything in the works.
SS&C offered guidance of adjusted revenue between $714.0 million and $722.0 million for the full year 2013. Adjusted net income is expected in the range of $165.0 million and $167.5 million.
For the third quarter, the company sees adjusted revenue between $179.0 million and $183.0 million with adjusted net income of $42.5 million to $44.0 million. That roughly equates to profits of 49 cents to 51 cents per share. Analysts were anticipating earnings of 47 cents per share.
Shares of SSNC closed Thursday at $36.11, up 0.9 percent on the day. So far in 2013, shares have climbed about 56 percent.
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